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Workforce Management Looks Back at Workplace History (1920s-1970s)

In many respects, we take today’s focus on workplace safety for granted. Sophisticated computer models test machines and equipment before they’re ever placed on an assembly line or put into service. High-tech sensors monitor and gauge working conditions and prevent industrial accidents. And a 24-7 news and information stream ensures that the public knows about any major accident or problem. There’s never been a greater emphasis on occupational safety and health.

But it hasn’t always been this way. In the 1920s, workplace injuries and deaths were common and, in many cases, labor conditions were nothing less than grueling. Movies played up unsafe conditions, including silent-film comedian Harold Lloyd’s iconic 1923 picture Safety Last!—where a worker is seen dangling perilously from the hands of a large clock near the top of a 12-story building. Government regulations were nearly nonexistent, workers’ compensation was still largely voluntary and labor unions hadn’t yet emerged as a significant force. “It was a different era with entirely different thinking,” says Tom Leamon, adjunct professor of occupational safety at the Harvard University School of Public Health.

Over the past century, changes in occupational safety have benefited society by radically reducing accidents and deaths. In 1913, the U.S. Bureau of Labor Statistics documented approximately 23,000 industrial deaths among a workforce of 38 million—a rate of about 61 deaths per 100,000 workers. Although the reporting system has changed over the years, the figure dropped to 37 deaths per 100,000 workers by 1933 and 3.5 per 100,000 full-time-equivalent workers in 2010.

Injuries and deaths continue to decline in many fields. These include transportation-related accidents, fatal falls, incidents occurring in warehouses and industrial sites, and at construction sites. “As a society, we have become a lot more conscious and focused on safe working environments,” says Jack Glass, principal consultant at J. Tyler Scientific Co., a Tabernacle, New Jersey-based environmental consulting and services firm. “We also witnessed remarkable advances in ergonomics and achieved a far greater understanding of what safety is and how to achieve it.”

“Although there’s no way to reduce risk to zero and there are still steps that industry can take to continue to make workplaces safer, the last century has brought enormous changes in thinking as well as our … ability to design work environments that minimize risks,” Leamon says.—S.G.

To read this story in its entirety, go to www.workforce.com/1920s.

To understand the 1930s and the origins of the Great Depression, you have to look back to the 1920s. In the Roaring ’20s, the United States went through a massive economic boom led by technology as a vehicle to bring conveniences to everyday life — from the emergence of radios that brought entertainment and news to peoples’ living rooms to the mass production of automobiles that allowed them to travel more efficiently or take a leisurely Sunday drive. Urbanization took hold and skyscrapers were built to show off the country’s strength and prosperity.

Some private companies and the public sector offered pension plans to help employees keep paying the bills after retirement, but who could be jazzed about retirement planning with The Charleston playing on the phonograph? With a prevailing carpe diem attitude and a soaring stock market, it must have felt like the party would never end.

For the U.S. and much of the world, the stock market crash in October 1929 ended the good times and brought about a Great Depression that would plague the country throughout the 1930s and lead to an unemployment rate of 37 percent. But for those people lucky enough to be employed in the 1930s, private pension plans, while still rare, survived. From 1929 to 1932, only 3 percent of workers with company pensions saw their plans discontinued, and, somewhat surprisingly, the number of company pension plans increased by 15 percent.

During this period, most elderly people had little means of support. Millions of Americans who saw their life savings swept away during the Depression were becoming more aware of a need to provide for their future economic security.

It’s no wonder that U.S. workers became increasingly interested in defined benefit retirement plans. “It’s hard for us to imagine the 1930s today, because what happened then would never happen now, because we have institutional safety nets,” says Randall Holcombe, DeVoe Moore professor of economics at Florida State University in Tallahassee. “If you lost your job, you had to rely on your family, and there was no guarantee of their financial security.”

Today, “Defined benefit plans are dead,” says Bob Pearson, CEO of Pearson Partners International in Dallas. “No company I know offers them even as a means to attract senior executives.”

Pearson, who works with small employers on their retirement plan offerings, says that today’s mainstream retirement device, the 401(k) plan, is not the answer. “For now, we can use stock options, grants, equity and cash, but once the war for talent heats up again … and it will … we will see improvements in long-term benefits from the current anemic state,” Pearson says.—L.B.

To read this story in its entirety, go to www.workforce.com/1930s.

For veterans returning from the devastation they had witnessed during World War II to the jubilance and “normalcy” that awaited them at home, the world must have felt like their oyster. Soldiers came back to heroes’ welcomes and ticker-tape parades. Just like they had conquered the world.

What might not have been top-of-mind for those veterans was the job market that awaited them. Much like today’s military personnel who leave behind the wars in Iraq and Afghanistan, World War II vets returned home to financial uncertainty. That economic anxiety was the result of not-so-distant memories of the Great Depression while today’s economy is shadowed by the ghost of the Great Recession. In both the ’40s and today, the issue of military personnel returning from service has created challenges for employers, policymakers and the soldiers themselves.

Assimilating veterans back into society has always been a challenge. Over the past several decades, members of the armed forces have returned from a variety of wars and conflicts. Along the way, they have faced different political, social and economic situations.

“Each generation of veterans is defined by the era in which they served,” says Glenn Altschuler, Litwin Professor of American Studies at Cornell University. However, no period had a greater influence on the military and society than World War II.

Although World War II revved up the U.S. economy and lowered unemployment, it also raised concerns about what would happen to the 15.7 million veterans after the war ended. “The sheer magnitude of returning servicemen prompted concerns about the impact on the economy and the possibility of another depression,” Altschuler says.

It was clear that some type of government program was required. A vigorous debate followed between Democrats and Republicans about how to best address America’s changing needs. But on June 22, 1944, President Franklin Delano Roosevelt signed into law the Servicemen’s Readjustment Act, better known today as the GI Bill. The Veterans Administration, as it was known then, was charged with carrying out the law’s key provisions.

In 2012, as the 2.8 million men and women who have served since 2001 leave military service and return to civilian life, the United States is again facing important decisions about how to get veterans back to work. To ease the transition, President Barack Obama has proposed a number of changes for veterans returning from service. He supports incentives for hiring veterans as police officers and firefighters as well as putting veterans to work restoring land and resources through a Veterans Job Corps program.

Make no mistake, veterans have played a key role in shaping the workplace and serving as a backbone for the U.S. economy. Meanwhile, the GI Bill—in all of its iterations—has not only put military personnel back to work but also profoundly affected the direction of the country. Peter Drucker once described the GI Bill as “the most important event of the 20th century.” He believed that it “signaled a shift to the knowledge society.”—S.G.

To read this story in its entirety, go to www.workforce.com/1940s.

In 1958, Mel Bloom started working for the CBS owned-and-operated television station in Chicago. The young journalist was eager to work in the fast-growing medium. After all, almost 90 percent of U.S. households owned a television by then, a tenfold increase since the decade’s dawn.

Bloom and others his age became known as the conformist “company men.” Bloom’s peers have largely left the workforce by now. But their experience is a reminder of the way each American generation finds its way into the world of work.

Dubbed the “Silent Generation” by Time magazine, those born between 1925 and 1942 had their entrance into careers eased by a thriving economy. Consumers were not only buying televisions but also cars and other big-ticket items unavailable during wartime shortages. Fueling spending, the postwar population was growing at a historic pace.” Builders raced to meet the demand for houses as new parents left cities for the plush parks and new schools of suburbs.

Some of the older workers in Bloom’s office grumbled about the new guys. After all, many of them weren’t old enough to remember the Great Depression and hadn’t fought in World War II.

“They talked about our generation not knowing what it was like to fight and struggle,” Bloom says. They were critical that “we never seemed to get excited or upset.”

In 2012, another large generation—this time, the millennials—is entering the labor market in a time vastly different than what their grandparents faced during the Eisenhower era. And unlike the baby boomers who pride themselves on working independently, millennials often ask first and make decisions later. Today, questions surrounding the aging of the workforce remain pressing. And four generations can be found in the labor force—more than ever before.

Meanwhile, retirement has moved out of reach for their baby boomer parents. Boomers increasingly gauge when to retire not by age but by personal savings. And collectively, they haven’t saved enough.

With boomers postponing their retirement, the talent pipeline has become clogged. Boomers are staying put in senior leadership posts, and Generation X sees little chance of advancing, at least anytime soon.

Forward-thinking companies are responding to the situation by exploring everything from special projects for Generation X to lateral moves for baby boomers.

Looking at just two of the four generations in today’s workplace—Generation X and the millennials—shows some of the differences that could give way to these sentiments. Generation Xers didn’t receive a lot of grooming and mentoring, says David Stillman, co-founder of generational consultancy BridgeWorks. “It was sink or swim,” he says. “Now they’re managing millennials who want endless collaboration, lots of group activities and tons of feedback. They’re clashing.”

The younger generation also seeks a different type of employer, says Neil Howe, president of the consulting firm LifeCourse Associates, who is credited with naming the millennial generation. They’re looking for “the perfect employer who will be their ally and take care of them.”—T.H.

To read this story in its entirety, go to www.workforce.com/1950s.

Just before noon on Aug. 28, 1963, a quarter of a million people began slowly moving toward the Lincoln Memorial. They were mostly African-American, but they represented all creeds and colors of U.S. citizens. The March on Washington for Jobs and Freedom was the largest demonstration ever staged in the nation’s capital.

The Rev. Martin Luther King Jr. was the last speaker of the day. His speech laid emphasis on freedom, the freedom he dreamed would someday “ring from every village and every hamlet, from every state and every city.”

Unspoken, but not forgotten, was the march’s emphasis on jobs. As the civil rights bill languished in Congress, the marchers called for a major public works program to provide jobs to African-Americans, the passage of a law prohibiting racial discrimination in public and private hiring, and a $2 minimum wage. The dramatic photos and newsreels of the demonstration had the desired effect. Congress finally acted to approve the bill and, the following year, the Civil Rights Act of 1964 became law.

Despite that milestone, racial disparities and tensions continue to plague the workplace nearly 50 years later. To some observers, rules designed to prevent job discrimination have gone far enough if not too far. But others say America remains far from a color-blind economy in which all people have an equal chance to thrive. And some advocates see this as a perfect occasion for companies to lead the way to the final fulfillment of King’s dream.

Lawsuits and U.S. Supreme Court decisions have changed the employment landscape, particularly in Southern states, such as Alabama and Mississippi, which drew the nation’s attention during the civil rights movement. Segregated workplaces, particularly in government agencies, eventually became integrated, according to Morris Dees, co-founder and chief trial attorney of the Southern Poverty Law Center in Montgomery, Alabama.

“In the workplace across the South today, you’ve seen an enormous number of lawsuits integrate public employment,” Dees says. “Some of the better jobs that African-Americans hold, especially throughout the Southeast, are government jobs.”

But as far as we’ve come since those tumultuous times in the ’60s, there’s still a long way to go.

“We need to understand how difference as a negative is ingrained in us,” says Georgette Norman, director of the Rosa Parks Library & Museum in Montgomery.—S.G.H.

To read this story in its entirety, go to www.workforce.com/1960s.

A new social movement took center stage in the 1970s. It followed the lead of the civil rights movement, as well as the mounting protests against the Vietnam War. In this volatile era, the women of the nation were determined that their voices be heard above the din of discontent.

“A woman needs a man like a fish needs a bicycle” was a popular slogan frequently used by activist Gloria Steinem. The phrase suggests an independence and stature for women that still four decades later is not fully realized.

“We take five steps forward and 10 steps back, but we try to keep moving forward and not get too discouraged,” says Nancy Kaufman, CEO of the National Council of Jewish Women, which supports social and economic justice for all women. “We really try to be advocates, and that’s what the women’s movement has been all about.”

Outspoken leaders of the women’s liberation movement, like Steinem and Betty Friedan, aimed to raise women up from home and work situations that they considered subjugation. And both forward-thinking college students and working women organized marches and protests for equal rights in the workforce. One of the more noteworthy rallies was the Women’s Strike for Equality where an estimated 150,000 women marched across the country in August 1970 to mark the 50th anniversary of the 19th Amendment, which gave U.S. women the right to vote.

“You’ve come a long way, baby,” was another popular saying of the 1970s, which originated on cigarette advertisements meant to acknowledge the giant strides of the women’s movement.

The women’s movement of the ’70s was in part a reaction against the type of happy homemaker that was often portrayed in television sitcoms of previous decades.

Today, women comprise nearly half of the U.S. labor force. While 70 percent of families in 1960 had a stay-at-home parent, now 70 percent of families have either both parents working or a single parent who works. In two-thirds of all households, women are either the main breadwinner or the co-breadwinners, according to the Center for American Progress. In 40 percent of all households, women are the only wage earners. Yet on average, women in the workplace earn 20 percent less than men doing comparable jobs,

As for the disparity between wages earned by men and women, there was slow but steady improvement in closing that gap after the 1963 Equal Pay Act became law. But once the female equivalent of a man-earned dollar passed 70 cents in 1990, progress began to sputter. The issue has not lacked attention. Indeed, it has its own unofficial holiday, April 17, which is meant to show how long a woman must keep working into the next year to earn the equivalent salary earned by a man in the previous year.—S.G.H.

To read this story in its entirety, go to www.workforce.com/1970s.

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Pros and Cons of Travel Per Diems

The authors of this article completed an extensive analysis to determine whether their company, International Approval Services Inc., as well as its clients and employees, would be better off using per diems rather than following the company’s policy of reimbursing for actual travel expenses. Their research indicated that continuing to pay actual expenses was the way to go for their organization. Here they share their findings to help you determine if your current policy supports your organization’s objectives.

Many companies have a cadre of employees who travel extensively on company business. These employees may, over the course of a year, spend hundreds of thousands of dollars on airfare, lodging and meals. This is especially true when it comes to international travel.

Some companies reimburse actual expenses. Others pay employees a set daily amount to cover some or all costs. But until you think about your company’s objectives, client-service practices and employee travel patterns, you won’t know which method makes most sense for your organization.

Popular uses of travel per diems.
According to a 1996 survey of 514 employers by The Bureau of National Affairs (BNA), virtually all U.S. companies reimburse their employees for meal expenses incurred while traveling domestically on business. The majority reimburse the full cost of the meal, often requiring that the expense be “reasonable.” One-third impose specific limits. On the other hand, 13 percent have established a fixed allowance for daily meal expenses.

Of the responding companies with domestic business travelers, 21 percent impose specific instructions on travelers’ lodging arrangements or expenditures. Many employers pay their employees based on in-state or out-of-state reimbursement rates, while others allow higher expenditures for lodging in certain cities. Per diems for lodging are rare, with just 10 employers (2 percent) using this method.

The BNA survey doesn’t track costs for international travel, but companies are certainly grappling with the same advantages and disadvantages for reimbursing their cross-border employees.

Advantages.
In many cases, per diem policies:

  1. Diminish record keeping. With per diems for travel expenses, employee record keeping is less of a burden. Employees whose companies dispense a $55/day meal per diem and a $75/day lodging per diem will receive $130/day without collecting and presenting receipts. And the diminished burden is shared with the employer who no longer has to review expense reports laden with receipts.

  2. Enhance employee choice. The employee can exercise greater control over the choice of restaurants and hotels. If the employee wishes to consume a higher-priced meal or book accommodations at a higher-priced hotel, it’s of little concern to the company. Conversely, if the employee wishes to consume a lower-priced meal (or skip a meal entirely) or stay at a lower-priced establishment, this too is of little concern to the employer from a financial perspective.

  3. Increase purchasing prudence. Per diems encourage employees to become partners with the employer in controlling travel expenses. Since employees receive a fixed amount, and presumably aren’t inclined to contribute their own money to cover excess amounts, the employee is motivated to keep the cost of meals and lodging at or below the per diem allowance.

  4. Ensure predictability of expenses. A per diem arrangement allows the employer to budget travel expenses more accurately because the expenses are predictable. If an employer knows that 10 employees will spend an average of 50 days a year traveling, the employer can easily calculate costs from the per diem amounts to budget the annual travel expenses. And if the employer is reimbursed for employee travel expenses by its clients, the employer will be ready to bill these expenses immediately following delivery of service, rather than having to wait for the employee to submit receipts. More timely billing results in improved cash flow.

Disadvantages.
These advantages have caused a number of companies to put per diem systems in place. But it’s also important to consider the disadvantages. Per diems:

  1. Can be difficult to develop and update. It’s difficult to establish a per diem rate that’s fair and equitable to employees and clients (since often clients ultimately pay the bills). One challenge is establishing rates that are fair when employees travel to both low-cost (such as Timbuktu, Mali) and high-cost (such as Kuwait City, Kuwait) areas. Even when employers establish urban and rural, and domestic and international rates, there will be localities with cost structures inconsistent with the low-cost or high-cost designations. Once developed, per diem rates need to be continually updated.

  2. Can result in inequities. Once established, per diem programs can unduly enrich some travelers while penalizing others. If a traveler consistently embarks on trips during the afternoon and according to company travel policy receives a full day’s meal per diem, he or she receives proportionately greater reimbursement than the traveler who consistently leaves first thing in the morning.

    Another potential source of inequity is the client-paid meal or lodging. If the client pays for dinner, the traveler’s meal per diem should be reduced. If it isn’t, the employee is reimbursed for an expenditure he or she didn’t make. And worse yet: The client could pay for the meal again through the per diem system.

  3. Sometimes result in undesirable behavior. While transforming employees into prudent purchasers seems like a good thing to do, some employees may respond with undesirable purchasing practices. Employees, attempting to keep travel expenditures to an absolute minimum (maximizing their income), may seek lodging in places that are unsafe or don’t reflect the company image. And freed from the burden of submitting receipts, employees may make inappropriate choices as to what they consume for meals (four martinis rather than one stuffed flounder, for example).

    Another potential opportunity for undesirable behavior is meals with clients. The company doesn’t want to discourage the employee from picking up the tab for a meal with a client if that’s the appropriate thing to do. In this circumstance, the meal shouldn’t “count against” the per diem.

    Many companies have decided the disadvantages associated with per diems outweigh the advantages and have stayed with the more traditional, cost-based reimbursement policies and procedures. But don’t decide this until you’ve weighed both sides.

Deciding factors.
There are several points to consider in deciding to investigate or implement a per diem policy.

Step 1: Consider whether the company’s current travel reimbursement policy is meeting the needs of employees. Does it fail to encourage employees to be prudent in the purchasing of meals and lodging? Is the current system of reimbursing actual expenses being abused? Are employees complying with the current policy, or have employees, in effect, placed themselves on per diems for meals below the amount required for receipts?

If the present system “isn’t broke,” it probably doesn’t make sense to “fix it.” If, on the other hand, the current system is being abused, or isn’t meeting the needs of the company or its employees, consider a per diem policy.

Step 2: Evaluate whether a per diem policy could be crafted that would minimize inequities and properly encourage employees to purchase meals and lodging prudently. To assess this issue, you may want to review the expense accounts of traveling employees to develop a sense of where people are going, what their purchasing practices for meals and lodging are, and what barriers might exist that would preclude or minimize the effectiveness of a per diem policy (such as client meals).

Step 3: Think about whether a per diem rate can be established that benefits the company, the employee and the client. Such a rate would minimize the expense while enabling the employee to be reasonably rewarded for prudent purchasing. Such a rate, however, won’t easily be determined and probably will require fairly extensive study by HR with the assistance of the accounting staff.

Step 4: If you determine that a per diem policy would be advantageous, you should develop one that can easily be implemented with a minimum of exceptions. Consider piloting a per diem system with a small group of employees before implementing the policy on a company wide basis.

The use of per diems isn’t a widespread practice, but it may meet your company’s needs. We recommend you look into it.

Global Workforce, March 1998, Vol. 3, No. 2, pp. 9-11.

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Working 8 p.m. to 8 a.m. and Lovin’ Every Minute of It!

Bob Grytdahl appreciates the merits of a 12-hour shift. Before he became deputy chief of the investigative division of the Duluth Police Department in Minnesota, he worked four days on and four days off. “What was really great about it is that I had two days to recuperate and do normal chores, such as cutting the grass and painting the garage. By the end of my four days off, I was anxious to come back to work.”


James Jones, a technician with Carollton, Kentucky-based Dow-Corning, agrees. He works a 3-day-on, 3-day-off, 12-hour schedule that flips every six days. Prior to that schedule, Jones worked an 8-hour, 7-2 (seven days on, two days off), 7-2, 7-3 schedule that rotated backward-a schedule he detested so much he requested and received a switch to straight days, with a major pay cut.


When asked by ShiftWork Alert, a publication of Circadian Technologies Inc. in Cambridge, Massachusetts, which schedule he preferred, Jones said: “The old 8-hour schedule was a killer. I had to work seven midnights in a row, and I also ended up working a lot of overtime when people called in sick. I would quit before I would do that again. With 12-hour days, it seems like I’m home more than I’m at work.”


Compressed workweeks like the one Jones describes aren’t for every organization-nor every employee. But according to West Columbia, Texas-based Shiftwork Benchmarking Institute (SBI), time-zone globalization increasingly is taking hold of corporations and government organizations. With this new mindset, nonstandard working hours are expected, and it’s the new way of work. Compressed schedules-some varying the hours each week-are now improving productivity, lifestyle and stress relief for 21 million American shiftworkers. (The 21.4 million figure is based on whether at least half of one’s work hours fall between 8 a.m. and 4 p.m. By this standard, 79.9 percent of the 106.5 million working Americans work fixed-day schedules. That leaves 20.1 percent or 21.4 million people as shiftworkers.)


Moreover, in an SBI survey conducted in 1994 among 600 North American companies, approximately one-third moved from standard shifts to 12-hour schedules. And the number is expected to increase. Among those companies that made the change:


  • Advanced Micro Devices in Sunnyvale, California, reports greater employee satisfaction since moving to a nonrotating, 12-hour schedule. Some of its married employees are splitting 12s (each taking different 12-hour shifts) to eliminate the high cost of child care.
  • Amax Coal in Gillette, Wyoming, experienced productivity improvement of more than 35 percent and an improvement in material output of 200 percent during the past five years.
  • Amoco Foam Products in Greensboro, North Carolina, put its employees on a 12-hour 2- and 3-day schedule.
  • Campbell County Hospital in Gillette, Wyoming, is one of many hospitals at which employees successfully work multiple shift configurations, including a 12-hour schedule.

Regardless of which 12-hour configuration a company selects, HR must ensure employees’ buy-in. Without education and including employees in the planning process-compressed workweek schedules are doomed for failure. Learn from those who’ve paved the way. Remember that the schedule is less important than how it’s selected and implemented.


Work scheduling is a means of empowerment.
Buzzwords such as participation, autonomy and independence are easy to embrace conceptually. In fact, most managers today know that employees want a voice in key decisions affecting them.


The compressed workweek, therefore, has become an increasingly popular form of alternative work scheduling. It reallocates employees’ time by condensing the total hours in the traditional workweek into fewer days (5 into 4 1/2, 5 into 4, 10 into 9, or 5 into 3). Total hours in compressed systems are generally held constant, with employees simply working more hours in each full day and fewer days per week or biweekly period.


Interest in the compressed workweek has, in part, been driven by the belief that a schedule that’s more attractive to employees will motivate more effective employee behavior and promote greater job satisfaction.


Emplyers experienced with compressed workweeks cite many benefits, such as decreased absenteeism.


A basic HR concern, however, is greater employee fatigue that causes a drain on psychological and physical energy, creativity, alertness and attention to safety. On the other hand, compressed work schedules could give employees larger blocks of time away from work. They would then be able to use these blocks for personal business and leisure-time activities. The reduced stress from the lessened nonwork demands on time coupled with the increased life satisfaction from recreational activities are benefits expected to spill over into the work domain.


Employers that are experienced with compressed workweeks also cite many company benefits: favorable worker attitudes; decreased absenteeism; greater utilization of existing equipment, tools and buildings; greater flexibility in meeting customer service; and wage incentives for working less-desirable shifts.


Who are today’s shiftworkers? According to ShiftWork Alert, most are disproportionately young, single and male. Younger people are more likely than older people to be shiftworkers. Approximately 24 percent of people age 18 to 29 work night or evening shifts, compared with 13.8 percent of those 30 to 44 and 12 percent of those 45 and older. Unfortunately, no governmental agency tracks and monitors U.S. shiftworkers, so recent statistics aren’t available. But most shiftworkers tend to be employed in the protective-service industries (police, firefighters), food service, health assessment and treating occupations, transportation and moving industries.


A hybrid schedule works for one company.
The James River Paper Co.’s paper manufacturing and converting facility in Ashland, Wisconsin, addressed the downside of shiftwork with the positive aspects of compressed workweeks. HR permitted two groups of production employees to start working a schedule that combined their forward-rotating shiftwork schedule with the compressed schedule-thereby creating a hybrid 12-hour, 8-day workweek (compressed shiftwork schedule, with four days on and four days off). It also compared this group with a similar group of production employees working the traditional 8-hour shiftwork schedule.


What James River discovered is that those employees working the compressed week, shiftwork schedule reported many positive effects. They were more satisfied with their hours of work, as well as with their leisure time. They also perceived that the alternative work schedule produced a favorable effect on their personal, social and family lives. Employees reported less physiological and psychological symptoms of stress than did the workers on the traditional shiftwork schedule. Despite working an additional four hours per shift under the compressed work schedule, workers didn’t indicate that either the stress or fatigue increased.


One major concern for HR professionals is whether the positive effects of any organizational change effort will be sustained or will fade after a short period of time.


To test the long-term effectiveness of implementing compressed work schedules, part of the examination of the James River work schedule included gathering data from two groups of employees who had been using the compressed shiftwork schedule for 12 months and 24 months, respectively. No evidence indicated that the positive effects deteriorated. In fact, there were virtually no differences between the two 12-hour, 8-day compressed shiftwork schedule groups in terms of their experienced levels of stress, organizational commitment, job satisfaction, leisure time satisfaction and attitudes toward the impact on one’s family and social life.


Compressed workweeks aren’t for everybody.
In spite of positive results experienced by James River, HR managers should also be aware that within a given organization, some jobs aren’t conducive to compressed workweeks. At the Duluth Police Department, for example, only uniformed patrol officers responding to 911 calls are allowed to work compressed workweeks, says Grytdahl. The department employs 140 police officers and 25 nonsworn staff-mainly in clerical positions. Its division of 40 investigators, however, aren’t scheduled for compressed workweeks.


Police officers who respond to 911 calls are better suited to 12-hour shifts. Their jobs, says Grytdahl, don’t require long-term continuity. They can move from one 911 call to another without having to know the follow-up details of a particular case. The benefits, he says, include the fact that officers return to work physically and mentally rested. “With police work, it’s the mental rest that’s most appreciated.”


But aren’t the 12-hour shifts exhausting? Yes. According to Martin Moore-Ede, founder and president of Circadian Technologies, one’s body is designed to sleep at night, making night work a challenge. Virtually all of one’s bodily functions have circadian rhythms, and these are controlled by the biological clock in the brain. This clock, in turn, is influenced by sunlight and darkness. “Understanding how the body works, therefore, is a first step toward successfully coping with shiftwork,” he says.


Virtually all one’s bodily functions have circadian rhythems controlled by the biological clock in the brain


Besides some fatigue, Grytdahl observes other downsides. Because the officers are gone so much (they work 4-day shifts), very often they return to work and are out of the loop. “In the policing field, officers hear and see all kinds of things all the time. So when they’re off for four days, there’s so much that’s gone on, they don’t have the time to catch up as much as they need to.” When the department switched schedules, the organization didn’t pick up the slack. Supervisors, he says, are still trying to create a mechanism by which officers can fit back into the groove. “We’re still working on that.”


But working such shifts is an improvement over the Duluth Police Department’s previously disruptive, 8-hour rotating shifts. “I remember working 10 years on rotating 7-day, 8-hour shifts. It’s a horrendous thought to ever go back to that,” says Grytdahl.


In spite of some drawbacks, the Duluth Police Department is reaping benefits from the new schedule. Once the patrol officers went on 12-hour shifts, others went on 10-hour compressed workweeks. The new schedules gave the department other scheduling options. Today, the department provides a range of flextimes with the approval of one’s supervisor. “We went from mechanically counting days off to counting number of hours worked,” Grytdahl says, cautioning HR to see when it’s beneficial and when it’s not. In addition, he warns there could be some resistance.


Overcome resistance by participatory management.
Moore-Ede offers some wise advice for HR dealing with naysayers. Unions often are hesitant to accept a 12-hour work schedule even when properly implemented 8-to-12 conversions have employee approval ratings of 80 percent or more. There’s unquestionably a negative history associated with 12-hour shifts (accidents, fatigue, low morale). And in many cases, it was only through the efforts of unions that certain practices were outlawed.


But the state of science and technology has changed. It’s now possible to develop a 12-hour shift schedule without the substantial health-and-safety costs. “The best strategy for getting buy-in is an open, honest education process and a participative decision-making process,” he says.


In handling resistant employees, Moore-Ede says that if there’s a lot of resistance at the end of the change process, the battle is lost. The time to address resistance is when developing the policy. Companies switching schedules should create an employee-management task force or a union-management task force to oversee the new schedule design and the implementation process. “Successful schedule conversions have 75 percent or more of the employees bought in before the policy is created,” he says.


HR should be prepared to spend time helping resistant employees adjust. Aversion to change is natural, and some who resist will come around with time. Others may not. So HR will have to watch out for the “one bad apple” effect and expect that a temporary increase in turnover may be one of the costs of making the conversion. “I can’t emphasize enough the critical importance of an honest and open decision-making process,” says Moore-Ede.


Workforce, July 1997, Vol. 76, No. 7, pp. 30-36.


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Amoco’s 7 Design Factors for a Better Career System

Amoco’s Career Management (ACM) process has enjoyed unusually high visibility and positive early response from Amoco employees and managers. Asked to reflect on the reason for this success, members of the design partnership identified the following factors:


  • ACM was initially well-positioned by the company as a response to business needs. Thus, it received early top managerial endorsement.

  • The system was envisioned as part of a change process, not a one-time training event.

  • Although the design process was lengthy, employee participation was high. Amoco concludes the payoff of good design is consistent employee buy-in into the system.

  • Beginning with the strategic renewal initiative, employees were encouraged to be more active in their development. Throughout the process, roles and responsibilities are defined. Career advisors (team leaders and supervisors) serve as information sources; they don’t supplant supervisors, whose people-development behaviors are now tied to variable pay.

  • Business units are empowered to put their own mark on the system. Business unit managers have responsibility for the system’s implementation, thereby ensuring it remains line-owned.

  • To avoid a job-shopping situation, ACM offers concrete development aids along with its electronic job-posting system. Assessment and planning precede job canvassing.

  • Baseline data collected from approximately 1,200 individuals have enabled ongoing refinements and changes to ACM. Because evaluation is viewed as a feature of Amoco’s continuous improvement process, not an end in itself, its usage is focused and practical.

Personnel Journal, February 1996, Vol. 75, No. 2, p. 81.


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Amoco’s Lesson From Career Management

Amoco continues to learn from the Amoco Career Management (ACM) process. Among the lessons learned are the following:


  • Tying development inextricably to business strategy creates support from top management and provides credibility for employees

  • Customization is very important-but so is knowing when to call it quits and proceed with implementing a less-than-absolutely-perfect system for which an eager audience is waiting

  • Communication is at least as important as design and implementation. Desk-dropped bulletins, focus groups, surveys, pilots-these and other “communications levers” should be pushed continuously

  • Linking career management to other HR practices makes sense both conceptually and practically; “synergy” is a fancy word for one hand washing the other. Individual HR practices are far more likely to achieve their desired effects when they send a collective message about the organization’s vision for the future

  • Senior managers should be introduced early to the purposes and possibilities of a career-development system, so they will champion it throughout the organization

  • A visible and exciting symbol of change, such as the electronic job-canvassing system, can help overcome employees’ skepticism about development-if they feel they have a hand in its creation and revision over time. Perfecting such a tool is less important, however, than using it to gain support for career development as a whole

  • The ultimate aim of a smart career-development system is to get people thinking about how to make themselves more marketable in the long term, not necessarily more movable or promotable in the short term

  • Patience is an undeniable virtue, but waiting for the perfect time to implement a career-development system isn’t virtuous-or realistic.

Personnel Journal, February 1996, Vol. 75, No. 2, p. 82.


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The Key to Your Career Growth May Be a Job Change

Over the years, Donald Holmes has made his share of career moves. The 45-year-old resident of Charlotte, North Carolina, has worked his way up through the ranks of human resources management, changing companies several times along the way. He’s worked in positions he liked and ones he despised. At various times, he has found himself discriminated against, lauded, challenged and stalled out. There have been moments he felt that his career was perfectly on track and that he was blazing forward like a bullet train; at other times he has wondered if he was about to derail and wind up as nothing more than wreckage on the corporate landscape.


Through it all, Holmes—who now serves as director of human resources for Sea-Land Service, one of the world’s largest cargo transport companies—has managed to continually gain experience and grow. He has used the negative and positive experiences to build a career path, and he believes in taking responsibility for his own success and satisfaction. “You have to be aware that nobody is going to manage your career for you. You can get counseling, you can get advice and you can read books, but unless you have a clear idea of what you’re seeking and have an idea how you might get there, you aren’t going to get the things you want and deserve. You’re going to wind up stalled out and unhappy,” he insists.


Experts agree that in today’s business climate it’s essential for those at the senior level of human resources to maintain flexibility and vision. It’s also crucial for individuals to maintain a sense of self, while keeping a laser-like focus on the corporate picture. To be sure, the playing field has changed and the rules have changed. Notes Jim Stewart, a senior HR consultant for Boston-based Watson Wyatt Worldwide: “Today, an HR professional must be a business person. [Individuals] must be able to take responsibility and break out of the old way of thinking. They must help the organization meet its goals, but it’s important that their own needs are taken care of. The golden handcuffs—staying at a company for many years and receiving automatic promotions—has been replaced by the need to grow and develop.” And that sometimes means changing companies.


Avoid a single strategy.
Be flexible and true to yourself. It’s tough enough to deal with the potholes of any career path. But for those at the top—senior-level HR managers and executives—the going can get especially rocky. Not only do fewer positions exist at the top rungs of the corporate ladder, many individuals now find themselves under greater scrutiny and pressure than at any time in the recent past—especially as organizations push to reengineer, downsize and restructure, while embracing new technology and new systems to process work. It’s certainly no news flash that today’s HR department is under greater pressure to become a strategic partner and perform. Those who manage at a senior level increasingly are expected to deliver solid results.


These days, changing jobs or companies requires plenty of thought and introspection. Of course, there are issues involving the timing of the move; whether changing jobs is actually going to advance one’s career or provide meaningful growth opportunities; how well one will adapt to a new environment; and deciding what is necessary to maintain a career path and vision for the future. Says Gary Krauthamer, founder and partner of Krauthamer & Associates, a Chevy Chase, Maryland-based firm that conducts executive searches for some of the nation’s top companies: “It’s an exceptionally difficult issue, and one that’s extremely personal. There’s no single strategy that works in every situation. It’s a matter of being flexible, adaptable and in touch with one’s own goals and ambitions. There are valid reasons to change jobs—and for companies to want change. It’s a matter of making all the pieces fit properly.”


Unfortunately, there’s no shortage of roadblocks along the career path. And it doesn’t take a Ph.D. in psychology to figure out that anxiety, frustration and even physical symptoms can develop if one feels trapped in a pool of corporate quicksand. Those on the front lines of senior-level HR certainly have discovered that phenomenon. Some have found themselves butting up against advancement ceilings; others have discovered that they’ve completely outgrown a position and must search for something new and challenging. A few have fallen into companies where they feel incompatible or uncomfortable; still others find themselves reacting to the winds of change within an organization—anything from reengineering to a major acquisition or divestiture. As Steve MacGill, an HR consultant in the Chicago office of Ernst & Young, explains: “There are as many issues as there are people. Yet for those willing to embrace change and adapt their lives and their careers, tremendous opportunities still exist.”


Just a couple of decades ago, most senior HR professionals found themselves overseeing the management of transactions and serving as an advocate for the employee. Today, senior HR professionals require a broad and general level of knowledge. They must be well-versed in business and be able to sit at the table with other members of the senior management team who represent production, sales, finance, marketing and other departments. “The career track is moving away from the highly technical side of the HR business and toward understanding and interpreting principles, concepts, programs and processes,” explains Bob Marshall, president of the Marshall Group, a Scottsdale, Arizona, firm that has worked with hundreds of companies to recreate and redesign the HR function. According to Krauthamer, those who are able to become a strategic resource will find themselves catapulted to greater heights than they might have ever thought possible.


Be aware of different roadblocks.
One of the first things Holmes learned was that there’s no magic formula for achieving success. There’s also no way to know that every career move is the right move. From his entry into Corporate America in the mid-’70s until today, Holmes has worked hard to maintain a perspective about his career and take responsibility for personal and professional growth. He has made decisions and then lived with them—choosing to use both the good and the bad as learning experiences. “You have to put energy into achieving the things you want, need and deserve,” he says.


With more than 1,800 employees under his leadership within North America, and with a company that rakes in $3.5 billion in revenues annually, one might speculate that Holmes has been on the executive fast track from the beginning. But that’s simply not the case. After earning a college degree and attending graduate school, he began working in actuarial science for Philadelphia-based Penn Mutual Life in 1973. Eight months later, he bailed out of the job when he realized that it wasn’t what he wanted to do with his life. That’s when he entered human resources, accepting a position as a recruiter at the same firm.


A couple of years later, Holmes accepted a position at a bank, where he established an affirmative-action program while serving as an employee-relations specialist. Then, after a stint at ARA Services, where he held the title of personnel manager in the company’s Philadelphia headquarters, he moved onto Smithkline Beckman (later to become Smithkline Beecham PLC), where he worked as manager of personnel relations in the company’s consumer products division. That was in 1983. After assuming a management development position in HR, he returned to consumer products as director of HR. Finally, in 1990, he moved to Sea-Land as director of HR for the company’s Atlantic Division. Two years later, Holmes became director of HR for all corporate staff functions and two of three major commercial divisions. He now serves as director of HR for operations, finance, labor, law and quality.


Interestingly, Holmes has had a different reason for every career move. At Penn Mutual, he eventually outgrew the job and felt that he was a big fish in a small pond. At ARA, he felt he had hit an advancement ceiling and was the target of discrimination. He believes that he wasn’t given the same opportunities for advancement as his colleagues because of race. In addition, he was the recipient of comments that were less than encouraging about his prospects for the future. Because of the merger at Smithkline Beckman, he recognized that his career opportunities would be limited in the future—despite the fact that he liked the job and wanted to remain at the organization. So, when the opportunity came to head HR at Sea-Land’s Atlantic Division—a $900 million division with 2,000 employees—he jumped at the chance.


“In every instance, I wasn’t sure that I was doing the right thing,” says Holmes. “At Smithkline Beckman, I felt somewhat hesitant because I didn’t know if I wanted to be taken out of a line position and wind up as a corporate specialist. It wasn’t until I left the position that I realized how much it had helped me.” Not only did he have an opportunity to achieve success and gain a reputation, the position gave him tremendous exposure to the organization and the inner workings of senior-level operations. “I never imagined the position would pay off the way that it did,” he says.


The one thing that Holmes learned early on is that new challenges and opportunities aren’t necessarily always linked to moving up the corporate ladder. “As companies have become flatter, a promotion or a more prestigious job title can’t be viewed as the only reward or gain,” he says. “You have to think about the next assignment or activity and how you can make an impact on the company. If you do that, you’re going to feel fulfilled and achieve success. It’s a different way of thinking about the organization.”


Such an approach is essential to surviving in a new corporate environment. “If you’re unable to gain the experience you need at one company, then it becomes necessary to acquire the knowledge and experience elsewhere,” Marshall says. Like Holmes, he believes that as the organization continues to flatten and the number of jobs at the top becomes limited, lateral moves that provide greater understanding, knowledge and exposure become more important. “What others might view as a move sideways actually might be helping one build a solid platform for moving upward in the future,” he says.


Grow or go.
The decision whether to stay at a company or move on to another can be difficult and painful. But in today’s complex corporate environment, coming to a crossroads in one’s career is as inevitable as an annual message from the president. Says Stewart: “Most people can use coping behavior and defense mechanisms only so long. If [people] aren’t valued for what they can bring to the table, they’ll find another place to go. If they don’t feel as though they’re growing, they’ll make a change.”


Diana Parkinson-Tripp is an example of a senior-level human resources professional who’s always on the lookout for new challenges. The 43-year-old is director of compensation and benefits at Haworth Inc., a $1 billion, privately-owned furniture manufacturer located in Holland, Michigan. Parkinson-Tripp previously worked at Skokie, Illinois-based Bell and Howell as corporate manager of employee benefits; and at Chicago-based Beatrice as manager of defined benefit plans, before moving onto Haworth, a company with 7,000 employees. She has been at the company since 1989.


“I have always looked for opportunities to grow and expand, but at the same time kept a base point within benefits and compensation,” she says. “Money has been important; family issues have been important. But the driving force for changing positions and companies has always been a feeling of getting stale and feeling like it’s time to move on. At times, I’ve felt like I’m listening to the same music at a different show.” During her six years at Haworth, she has managed to remedy the problem by asking for greater responsibilities—even if it hasn’t meant a promotion or a fancier job title. So far, the company has obliged. Most recently, she was given the task of overseeing the employee health and fitness centers.


Whenever Parkinson-Tripp does consider a new job at a different company, she takes several factors into consideration. Perhaps the most important issue, she says, is how the organization views human resources, and how much value and respect it puts on senior positions. “Some companies talk a great game. They put these wonderful words in their mission statements, but you find that there’s very little to back up all the rhetoric. They still view HR as little more than an adjunct.”


“You have to think about the next assignment or activity and how you can make an impact.”


How does she deal with that potential problem when she’s interviewing with prospective employers? To begin with, Parkinson-Tripp does as much research as possible on the firm—mostly by talking to colleagues, including outside consultants who’ve worked with the company. Then, while being interviewed, she asks plenty of questions. “Some companies like that and some don’t—they feel they’re being placed on the spot.” If she senses that there’s a feeling of uneasiness over her questions, she isn’t adverse to asking why. “They’re painting a picture by what they say, how they say it and what they don’t say. It’s important to pay close attention. At the senior level, they’ve already determined your capabilities and talent. It’s really more of a chemistry match between personalities, beliefs and cultural attitudes.”


Regardless of what’s discussed during the interview process, it’s clear that the norms are changing. In today’s work environment, people do change positions far more often than in times past. Stewart describes it as a portable career. In other words, a person stays at a company long enough to gain valuable experience and then moves on—if opportunities for advancement or growth don’t exist. Typically, that translates into a move every three to five years. Of course, the approach is far removed from the paternalism of the past—where employees were blindly loyal and stayed at the same company their entire career. “Today, there’s a quid pro quo,” says Stewart.


Corporate cultures vary. Walk softly.
Although changing companies may be the best move at a given time, it can be difficult and nerve-wracking. Making all the pieces fit can be a daunting task—regardless of an individual’s knowledge or a company’s reputation. When John Ritchie decided to make a switch to TDS Computing Services in Milwaukee six years ago, he examined the company closely to make sure it was a solid match. He found an organization that valued its work force, respected senior management, provided opportunities to contribute and utilized leading-edge technology within HR. Moreover, the company would pay for his MBA.


Ritchie, presently vice president of HR and total quality management at the 5,600 employee firm, nevertheless discovered that he had to make major adjustments. Although he had worked within the upper echelon of HR at other companies, his knowledge and expertise didn’t translate directly. “It’s a huge wake-up call when you start at a new company and you’re trying to apply previous experience to a new environment and new people. The rules are different, the entire ball game is different. Adapting to a new culture requires a degree of humility and an openness to change.”


Still, assimilating into the new culture is often a delicate and nettlesome issue. The challenge, says Stewart, is to bring the desired skills and qualities that one possesses into the new organization, while not rocking the firm to its foundation. In other words, a bit of sensitivity and introspection goes a long way toward meshing with the new culture. Says Parkinson-Tripp: “Above all else, you have to earn respect. And the only way to earn respect is to know and understand how things work and why. You can’t go in and make changes too quickly—even if you’re absolutely convinced it’s the right thing.” She believes that it’s important to serve as a facilitator and to listen carefully to what people are saying. It’s also crucial to understand the subtleties of the culture. “You don’t want to bring a Chicago answer to a Holland, Michigan, problem,” she says.


“If management asks you to sit at the table and become a strategic partner, and you aren’t ready, you have set yourself back and the company back.”


Sea-Land’s Holmes has learned that different industries require drastically different management styles—and that it’s a good idea to know that going into a new organization. Over the years, he has worked at companies, such as Smithkline Beecham, that have prided themselves on using a gentlemanly approach. Politeness, civility and a soft-spoken demeanor were emphasized. However, when he arrived at Sea-Land, he found himself immersed in a culture that was nothing less than macho. “Management is predominantly male dominated, people pride themselves on hard work and long hours, and everyone is very knowledgeable about the company. It became very clear that I couldn’t apply pharmaceutical-industry thinking. I had to adapt to the culture, while retaining my skills and applying my knowledge,” he says.


Family and personal issues also enter into the equation. For example, when Parkinson-Tripp took her present job at Haworth, the job required a move from Chicago—a place she had worked for more than 15 years. Because her husband is self-employed and her children were young, there weren’t any major roadblocks. In fact, the only real relocation issue for her was that she didn’t want to move away from the Midwest, a bias that nixed several possibilities. “There are things I will compromise on and things that aren’t negotiable,” she states.


And, more often than not, timing is everything. The right job at the wrong time can create enormous obstacles; being prepared for new challenges and positions is a key to seamlessly making a transition. Wood Kinnard, who spent 11 years at Sprint Corp. in Kansas City, Missouri, saw all the pieces fall into place for a major move earlier this year. The director of employee development felt he had outgrown the job and that he needed fresh opportunities and challenges. Giving up the corporate offices and 16 business units wasn’t easy. Nor was it painless to leave a company he genuinely liked, and one where he had a great benefits package, including a pension. He contemplated the issue for six months, finally realizing that he had to go outside Sprint—and that the timing was right. “I realized I couldn’t let a benefits package rule my life, and that if I didn’t take a risk, I might not have such an outstanding opportunity again.”


That opportunity came from Personnel Decisions Inc., a Minneapolis-based consulting firm with 500 employees, worldwide—about 10% of the employee base he worked with at Sprint. Although Kinnard has a law degree and corporate expertise, he wanted to remain within the HR field. So when PDI approached him with an offer to become general manager of the firm’s Chicago office, he engaged in extensive interviews and discussion. He examined the company’s business practices, its value system and its opportunity for growth. That made it clear that he had found the right job. But it also was the right time. The 42-year-old was no longer caring for his ill mother, who had died a year before. And his teenage children no longer required as much attention as in years past.


Kinnard also considered where he was in his life and how his values would be affected. “I knew that at this point in my life I can’t work at a company that doesn’t fit my value system. When I was younger—and when my children were younger—that might have been a bit different. I might have overlooked a lot of things. But I like to think that a person reaches a point in his life where he’s able to ignore things that are unimportant and superficial and concentrate on what makes him feel satisfied.” Two decades in Corporate America also have taught him that bigger isn’t necessarily better. “You can’t worry about all of society’s measures—you have to worry about your own,” he reasons.


Choices involve some risk.
Regardless of whether one stays at a company or moves to another, experts agree that the essential quality in the ’90s is flexibility. As organizations become flatter and broad-based teams become more common, senior-level HR professionals must understand how to adapt—and help workers adapt. As new technologies and new knowledge enter the organization, it’s crucial to upgrade skills. “A lot of what senior HR professionals will need to know in three to five years doesn’t exist today,” says Krauthamer. It’s also crucial to understand the broad perspective of the business. “If management asks you to sit at the table and become a strategic partner and you aren’t ready, you’ve set yourself back and the company back,” Krauthamer warns.


Marshall also believes that it’s essential to maximize learning opportunities. “These are the days of the senior generalist. An HR executive must have both knowledge in a wide array of areas and leadership skills. There are still those who will work at a company for several years in the same capacity, but it’s increasingly important to gain exposure to as many HR functions as possible. The bottom line is adding value, and if you’re able to do that, you’ll be considered an asset, wherever you’re working.” Adds Stewart: “Today, reputation is everything. One’s knowledge, ideals, vision, leadership, credibility, judgment, honesty and integrity are what companies look for.”


The way many see it, change is inevitable and desirable. The key is making good choices, and also learning and growing from occasional mistakes. Says Parkinson-Tripp: “Staying too long at an organization can hurt in the long run—for both employer and employee. The company needs fresh ideas and new people coming in to stir the pot, and individuals need to recharge and have new opportunities. My father worked at the same company for more than 40 years, and the question always was, ‘Why are you changing jobs?’ Today, the mindset is different. The question is: ‘Why aren’t you changing jobs?’ Growth is the most important thing.”


Personnel Journal, October 1995, Vol. 74, No. 10, pp. 100-107.


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Customer Service Drives 360-Degree Goal Setting

We’ve heard a lot about 360-degree performance appraisals. But that’s not the only practice revolving around the office these days. More and more, companies such as Federal Express and Digital Equipment Corp. are beginning to apply 360-degree goal setting as a natural companion to the appraisal process. This participative method offers a new way for organizations to tie employee goals to customer expectations. Moreover, it holds employees accountable for meeting those performance standards.


The 360-degree goal-setting process differs from the traditional management by objectives used by most companies today. With MBOs, supervisors obtain the subordinate’s input about his or her goals. But in reality, the subordinate’s feedback is limited because supervisors still assume the primary responsibility for setting goals in the organization. Even when applied correctly, the MBO process sets the employee’s and manager’s goals apart from the customer’s expectations. How do managers and employees really know what the customer wants? In this type of traditional system, an employee is accountable to the manager, rather than the customer. Despite these limitations, most companies still use traditional goal-setting methods even though the competitive pressure to set customer-driven performance standards has increased. But if you take the circular route—as some companies are doing—you’re less likely to land back at square one.


External and internal customers drive goals.
Similar to the performance appraisal, the 360-degree goal-setting process involves an employee or department and all of one’s various internal and external customers. Internal customers may include supervisors, top managers, subordinates, co-workers and representatives from other departments who interact with the employees. External customers may include clients, suppliers, community officials and consultants.


Human resources representatives at Memphis, Tennessee-based Federal Express provide a good example of how this goal-setting system can work with internal customers. At Federal Express, HR has pilot-tested the participative goal-setting process by writing the goals of their customers (the manufacturing department, a supervisor or peer) into an internal customer-service guarantee. The guarantee specifically states what services HR (the supplier) will provide in the next year to a given department (the customer). It includes items such as timely response, 24-hour turnaround for feedback and semi-annual training sessions.


The 360-degree goal-setting process can help break down barriers between departments. In many organizations, departments don’t have an in-depth understanding of other departments’ roles and objectives. For example, many departments frequently set unrealistic expectations for the HR department. Says Sally Wiggins, a senior human resources representative at Federal Express: “If employees don’t see personnel employees doing something, they wonder what you’re doing. Clarifying expectations is the key. The employees and managers want to know what you do. What can you do for them?” Similarly, Jay Kirksey, former HR director of Colorado Springs-based Hamilton Standard, adds: “We found there were [differences] in perceptions of what a person should be doing. Joint goal setting provided a much greater understanding of the roles that people play. Involving peers and teams aligned people and established role clarification.”


The process also allows for greater input and “two-way communication” between employees and their customers. Service quality experts argue that it’s important for companies and their employees to have a precise and in-depth understanding of customer expectations. That’s where 360-degree goal setting comes in. The process helps to explicitly state goals in terms of the customer’s (rather than the employee’s) words and language.


Employees also develop more rapidly after a 360-degree goal-setting process. A group of peers can suggest more insightful feedback on work objectives than a single supervisor. Karen Ripely, a materials manager at Maynard, Massachusetts-based Digital Equipment Corp., says: “This type of goal setting potentially identifies multiple skills of the employee, not just what the manager can identify.”


Another benefit of 360-degree goal setting is that an employee’s performance can be specifically evaluated by customers in the employee’s performance appraisal. This practice has worked particularly well in 360-degree performance appraisals that have recently been implemented in a number of companies. However, the effectiveness of 360-degree appraisal systems may be limited if employees don’t have a clear understanding of their customers’ expectations at the beginning of the year. Without clear goals up front, employees may feel the customers’ appraisals at the end of the year are unfair. Providing 360-degree goals helps to ensure clear and fair performance ratings. By linking 360-degree goals to appraisals, employees will be more accountable to their customers. Likewise, the customers who set the goals and expectations at the beginning of the year can provide employee-performance feedback at the end of the year.


HR at Federal Express has linked its goals to performance feedback by identifying six items for a customer-satisfaction survey. The appraisal can be scored on a one-to-five scale—from strongly disagree to strongly agree. These issues are then evaluated by a sampling of the customer’s employees at year end. This tight connection between customer-developed goals and customer-driven performance appraisals make employees explicitly accountable for their performance and can strongly motivate them to work toward the company’s desired behavior.


No pain, no gain.
Companies, however, must iron out a variety of problems in order to create effective 360-degree goal-setting systems. Although 360-degree systems are valuable, they have a number of potential disadvantages. First of all, 360-degree goal setting requires more time to administer than traditional goal-setting programs. Obtaining input from various customers inside and outside the company takes a lot of effort. Employees also may set overly detailed and complicated goals out of fear that they won’t live up to the expectations of their peers and those in other departments.


Kirksey recalls his previous experience with 360-degree systems at Hamilton Standard: “Simplicity is important. Before, we were too customer oriented and interactive with a lot of involvement. We tried to define goals that exceeded, met and didn’t meet our expectations. But there was too much detail—like putting exact dates on goal achievements. Put more general dates such as meeting a goal in the third quarter of the year instead of an exact date,” he says.


Keep the process simple.
Companies considering 360-degree goal setting should weigh the trade-offs between the time and effort involved and the actual benefit added to the goal-setting process. One suggestion is to limit the bureaucracy. “The key question is how much time is involved? What’s the worse-case scenario? You must look at the time involved to assess the value added,” says Kirksey. Adds Karry L. Jerman, a human resources manager at Aurora, Colorado-based XEL Communications: “The blindness you walk into is how much you have to give to it versus how much time you need to give to [conducting] your business.”


Although multiple customer feedback illuminates a greater role definition, it takes a great deal of effort and communication skills. Managers often still have to resolve the conflicts and develop the final performance plans.


Another important tip is to develop a flexible 360-degree goal-setting process. As customer goals and needs evolve, an employee’s work objectives also change. One point to consider is when a customer’s goals should be incorporated into an employee’s annual performance plan. Changing the employee’s plan can be time consuming—not to mention the time it takes for him or her to adapt.


To overcome these potential disadvantages, companies should proceed by securing the full support and commitment of top management for the 360-degree system. The process will inevitably create extensive changes in the status quo. Employees and managers must be clear on the intent of the system, and they should be trained on the specifics of the 360-degree process. “Training is vital. It took an extensive amount of time to explain the program, such as who’s the customer, peer and manager so that everyone understands their role,” says Jerman.


Organizations should also pilot test the system before implementing it throughout the organization. In most cases, the 360-degree process should be implemented incrementally as Federal Express is doing for its HR department. In doing so, organizations can better involve employees in the planning process to obtain their early input. Employee participation not only provides new ideas that improve the program, but it also helps to ensure employee buy-in.


Hence, 360-degree goal setting can enable organizations to obtain greater customer input into goals which, in turn, can be translated into written customer-service agreements with explicit performance expectations. Linking these goals to 360-degree performance appraisals can provide an effective mechanism for directing employees toward their desired performance goals. The 360-degree system may be more complex than traditional supervisor-subordinate practices, but when developed properly, it can provide more customer-driven input at both the front and back end of the performance time period. If you use it as a powerful lever in motivating employees, you’re bound to end up with superior performance.


Personnel Journal, June 1995, Vol. 74, No. 6, pp. 136-142.