Author: Sarah Fister Gale

Name: Circuit City Location: Richmond, Virginia Type of organization: Consumer electronics retailer Number of employees: More than 40,000

For years Circuit City used classroom training to get salesreps up to speed on new products and technology. But by the late 1990s, theclassroom model wasn’t fulfilling the company’s increasing training needs,says Bill Cimino, director of public relations. “Associates would be out ofthe store for a week to train, and by the time they got back and started to feelgood about what they’d learned, the technology would change again,” he says.They needed a faster, more flexible solution, so the training department beganexploring e-learning.

In late 2000, with the help of DigitalThink, they rolled outa company-wide custom e-learning program, and within a year, Circuit Cityemployees had completed more than 1 million courses. Cimino attributes the earlyhuge success of the program to two significant factors: tracking andcertification.

To ensure that the training is effective, the trainingdepartment tracks every user’s performance in the courses and on the floor.”We know, by associate, who takes what training, how much time they spend in acourse, how they scored on the tests, and how they are performing on the job.”DigitalThink and Circuit City’s training department use the data to evaluatecourse effectiveness and constantly improve the offerings. “E-learning has tobe organic,” Cimino says. “It has to grow with the company and change asemployees’ needs change.”

To reinforce the training on the job, many of the new productcourses feature “try it” exercises, in which associates are instructed to gointo the store to identify certain features on a product or to demonstrate theproduct for a manager who then signs off on the lesson. “The ‘try it’exercises are an example of our corporate culture,” Cimino says. “This isnot just a place to work, it’s a place to learn.”

To further tie training to performance, Circuit City rolledout an e-learning certification program in 2002. Product lines are now tied tospecific certificate tracks, and in order to sell those products, associatesmust first complete the learning for that track and pass the certification exam,Cimino says. The more training they take, the more products they can sell. Forexample, if associates are trained on Sony’s new digital camera, they can workin that area of the store, but if they have the full technology certification,they can work anywhere and sell anything, he says. “It’s a win-winsituation.” Because associates work on commission, the more products they cansell, the more money they can make.

The combination of tracking and certification is enough toinduce most Circuit City associates to seek out training opportunities, he says,which is why the learning program is such a success. While Cimino won’t quotespecific numbers, he says e-learning returned its investment within months ofimplementation and continues to add value every day.

Workforce, March 2003, pp. 60-62 — Subscribe Now!

George Faulkner was president of the aerospace division at Federal Mobil Corporation in 1989 when his group moved production of a line of fasteners for jet fighter airplanes from their California plant to a new facility in Tucson, Arizona. At that time, most of the technicians who worked the line were in their 50s and 60s. They had been with the company for years, and instead of moving to Arizona they opted to retire. That was fine, Faulkner says. The process for making the fasteners was documented, and they planned to train a new team once the facility was up and running. But there was one problem: the engineers at the new plant couldn’t figure out how the production process worked.

    “Over the years the original team found work-arounds and ways to tweak the process that were never recorded,” Faulkner says. “Without their depth of knowledge about that process, the engineers couldn’t reproduce it.” The company ended up rehiring the retirees and moving them to Tucson for three months–at company expense–so they could teach the new team how to build the fasteners.

    Problems like this are not uncommon for manufacturers that build highly technical products in very small quantities. Today, Faulkner is president of Kaiser Electroprecision, a manufacturer of defense systems and commercial aviation products, and he continues to face the same problem. When Kaiser wins a design/build contract, it becomes the sole provider of a customized product for the 15- to 20-year life of an aircraft, he says. Because the products are extremely complex, often having hundreds of components requiring detailed subassembly, but are produced only a few times a year, it makes sense for each member of the assembly team to take responsibility for one step in the process. “But if any of those people leave or get sick,” he says, “the whole production cycle comes to a halt.”

    Finding a way to solve the problem, however, is tricky. It doesn’t make sense to spend hundreds of thousands of dollars teaching the whole manufacturing team how to complete every step of every assembly process. At the same time, it’s dangerous to leave such critical knowledge in the hands of one or two employees. “Eventually, someone is going to leave,” Faulkner says. “It’s the nature of business.”

    Until recently, Kaiser relied solely on written documentation of the processes and drawings of the equipment to track production and train new employees. That’s all most manufacturing companies do, says John Walborn, manager of actuation operations, a business unit of Kaiser. But, as was proved at the Tucson plant, it isn’t enough. “So much of the process never gets written down–that’s what kills you.” The technicians are expected to document any changes they make, but the paperwork frustrates them, so they don’t do it. “They know how to do their jobs, and in their heads they will be here forever,” he says. “It doesn’t occur to them that someday they might leave.”

    Over the years the company had found no alternative that could meet such specific training needs on a reasonable budget until Faulkner heard about QuickLearns, a customized training tool developed by The Performance Engineering Group, a consultancy based in Santa Barbara, California. QuickLearns are condensed computer-based training modules that feature streamed video of subject-matter experts performing specific tasks while talking their audience through the process. Text blocks and audio instructions outlining the steps are coupled with the videos, and there are short quizzes with feedback at the end.

    QuickLearns are appealing because they are tailor-made for each individual training need but cost much less than most made-to-order courses, Faulkner says. They provide technicians with standards for their production processes and tools that can be used to train new employees in days instead of months.

Lights, Camera, Action!
    Initially, Walborn was nervous about how his team would react to participating in the QuickLearns. He wondered if they would be camera-shy or not speak clearly. He also worried that they might feel threatened. “In a manufacturing environment, people are wary when you ask them to share their knowledge. They think, ‘This is my job, my security. Why do you want to know what I know?’”

    Walborn went to great lengths to assure his team that their livelihoods were secure and that the goal of QuickLearns was to safeguard the company and standardize the processes, not to replace them.

    In 2002, development began on the first QuickLearn, which covered the production of a Boeing F-22 uplock assembly. The component, which locks the aircraft’s tail hook in an upright position, is a four-by-five-inch box that contains a web of intricate wiring, Walborn says. It was chosen because of the minute detail that goes into building the product and the inconsistencies that resulted from a lack of standard procedures.

    The technician responsible for the mechanical assembly of the component had frequently complained that the case never came back to him wired exactly the same way, forcing him to make adjustments to the internal components before he could put the final cover on. The team in charge of soldering the wires had drawings to work from, but the routing and lengths of the wires weren’t clearly defined, so there was no benchmark to follow, which led to discrepancies, Walborn says.

    Before they began filming, the engineers who designed the component and the mechanical and wiring technicians met with Chris Butler, president of Performance Engineering Group, to storyboard the manufacturing sequence and define exactly what the end product should look like. “That’s when all the little details came out,” Butler says. In fact, they relied very little on the formal documentation to produce the storyboards, focusing instead on what the technicians and engineers had to contribute. “We discovered a lot of little things the techs do that have never been written down,” he says.

    Butler’s team filmed the mechanical technician and a wiring technician in their work environments building and wiring the component while they explained to the camera what they were doing.

    Since then, everyone involved with the uplock assembly has taken the training, and the component now comes back wired correctly every time, according to the mechanical technician. The first course was such a success that Butler’s team is developing more than 50 new courses documenting similar processes at Kaiser.

    As an unexpected bonus, Walborn also discovered he can use the very detailed QuickLearns to certify operators as inspectors of some of their outputs and sequence steps.

    And sticking to his word, Walborn hasn’t laid off anyone as a result of this discovery. “We are stretched to our limits and never have enough available manpower. By certifying operators to inspect simple steps in the process, we can apply our inspectors’ skills in more critical areas.”

Workforce, July 2003, pp. 90-91 — Subscribe Now!

When Ron Coulthard turned 60 three years ago, he wanted a change. He had been an English professor for 31 years at Appalachian State University, part of the University of North Carolina system. While he didn’t want to continue working full-time, he wasn’t quite ready to retire. If he’d been in that quandary just a year before, he wouldn’t have had many options, but in late 1998, the university began a phased-retirement pilot program that allows faculty members over the age of 50 to work half-time at half-salary for up to three years while collecting partial pension benefits.

    “It was a pretty good deal,” says Coulthard, who joined the program and spent the next three years working full-time during the fall term and taking the other eight months off to enjoy his 11-acre mountain property and write an occasional poem. “If they hadn’t offered the program, I probably would have stayed a lot longer, for financial reasons alone.”

    The half-time salary, combined with his pension and a drop to a lower tax bracket, actually increased John Higby’s monthly income by several hundred dollars when he joined the same program that year. “It was perfect,” says the retired English professor, who opted to work part-time during both terms, which enabled him to teach every day while remaining exempt from committees and university politics. “It was an almost perfect life. I regret that I couldn’t do it for a few more years.”

    The program was a huge success. Today, almost one-third of retiring faculty members at the 16 UNC campuses take advantage of phased retirement, and the concept is slowly catching on in many other public and private organizations.

IRS presents obstacles
    Low unemployment and rapidly aging baby boomers sparked the push to create programs that allow older workers to ease out of their jobs by reducing the number of hours they work in the years leading up to or just after they reach retirement age. It’s an attractive option for individuals because they can continue to earn an income under more flexible terms. And companies benefit from having ongoing access to their most experienced personnel, often at a reduced cost because they work part-time, says Valerie Paginelli, senior retirement consultant at Watson Wyatt, a human resources and risk management consulting firm headquartered in Washington, D.C.

    Unfortunately, IRS laws that were designed decades ago to discourage retirees from working make it almost impossible for employees to maintain their previous income level through a combination of social security, pension and paycheck. For example, an earnings test for social security, which was only recently repealed, stated that retirees between 65 and 69 would lose $1 of social security benefits for every $3 they earned above the earnings limit. Even though the Freedom to Work Act of 2000 eliminated the test, pension rules still prohibit companies from giving partial payments to employees who want to reduce their hours before they reach retirement age, says Kyle Brown, retirement counsel for Watson Wyatt. “There are a lot of obstacles to phased retirement, but that’s the 600-pound gorilla.” (The professors using phased retirement at UNC are in a different situation—they actually have reached retirement age.)

    Further, many pension plans state that companies cannot continue to employ individuals and distribute their full pension payments after they reach retirement age, which means that if seniors want their complete benefits, they have to find a job elsewhere.

    These laws, combined with the now struggling economy, have made formal phased-retirement programs a rarity in many industries, even though the threat of a skilled-labor shortage increases every year, Paginelli says. At the moment, high unemployment has made this issue a low priority. But she predicts that within five years the rapidly aging workforce and lack of skilled replacements will force organizations to refocus their recruiting efforts on the retention of existing key talent. “When companies forecast the number of people they will have to hire in five years due to retirement and planned growth, it can be staggering. There won’t be a large enough volume of workers to replace them.”

    By 2010, 80 million baby boomers will begin to reach the age of 65. Today, one in three workers is over age 45, and by 2006 the median age of America’s workforce will rise to 40.6, up from 30 in the early 1960s. Industries such as nursing and manufacturing are already facing a tremendous loss of expertise as a result of downsizing and a rapidly aging workforce, and other industries will soon follow. However, most companies won’t respond until they experience the shock of a mass retirement, Paginelli says. “Pain determines how much energy they invest in reshaping their retirement plans.”

Universities lead trend
    Older organizations are the first to feel the impact of this knowledge loss, which is one reason why public universities were quick to embrace this trend. In 2000, 83 percent of academic institutions reported that 25 percent or more of their faculty were over the age of 50, according to a William M. Mercer study. Of all the industries covered in the study, universities had the oldest employee populations. “If everyone who was eligible retired at once, it would have devastating consequences,” says Betsy Brown, associate vice president of academic affairs at UNC, where more than half of the staff is over 55. Phased retirement, which was implemented in 1998, helps Brown spread the loss of veteran staff over several years without disrupting the academic environment.

    It’s a natural fit for a university because teaching positions can easily be converted to part-time by reducing the class load while still giving students access to experienced professors, she says. It’s a relatively cheap and attractive benefit to offer at a time when premiums are increasing and no one is getting raises. “There are no automatic costs to phased retirement, and even those who don’t take advantage of it appreciate having the option,” she says. And the program benefits the university financially because it frees half of the salaries of the highest-paid faculty to hire new full-time professors, giving the university additional staff for the same personnel costs.

    “The program gets rid of old folks like me to make room for the young firebrands who are hot to publish and get much lower salaries,” Coulthard says. When he went to part-time, his remaining salary was enough to hire another full-time faculty member. “After 31 years, even in the English department, you build up a big salary from cost-of-living increases alone. Financially, it was beneficial for me and for the university.” It also helps the university get out of long-term relationships with less-treasured employees, adds Robert Clark, professor of business management and economics at UNC. Tenured faculty are extremely valuable to the system, but they also have tremendous power over their retirement options. “There is no mandatory retirement age, and if they are tenured it is difficult to encourage them to leave,” Clark says. But in order to apply for phased retirement, faculty members must give up tenure and become term employees, setting a course for their departure from the system. “It has dramatically evened out the retirement cycle.”

    Private companies have been slower to embrace phased retirement because the financial and long-range ramifications are less apparent, Paginelli says. Unless a company has a large number of highly skilled employees who are eligible for retirement, such programs have little obvious impact on the bottom line. “There is savings from a reduction in recruiting and training costs and in retaining the value of experienced employees,” she says, “but those benefits are harder to quantify.”

    Companies that do adopt programs are typically in industries in which knowledge transfer among highly skilled laborers is a challenge. Ultratech, Inc., a maker of photolithography systems in San Jose, California, is one of the few companies in Silicon Valley that offers phased retirement, says Heidi Ordwein, director of human resources. She attributes their initial interest in the program to the company’s 25-year history. “Unlike most high-tech companies with youthful workforces, we have employees who have been with us for more than 20 years,” she says. “We look at our employees differently than younger companies.”

    Ultratech implemented phased retirement two years ago to stem a growing loss of retiring employees with critical expertise and knowledge. Employees as young as 50 have the option of reducing their schedule or work periodically on a contract basis. Employees love the program, Ordwein says. And it’s a “kick in the pants” for managers who work on what she calls a “truck system approach” to knowledge management: an employee has to “get hit by a truck” before someone else is trained for that job. “Phased retirement forces managers to create a transition plan for retirees and to think about mentoring in a replacement,” she says. It also helps retirees remain active in the company and to feel appreciated. “Staying connected is so important. We want our people to know we still value them.”

Homemade retirement plans
    Despite the overwhelming employee support of phased retirement at companies like Ultratech, very few organizations offer it as an option. But that’s not stopping retirees from working, Paginelli says. Studies show that many older workers are crafting their own phased-retirement plans, usually by taking full retirement benefits from one employer and going to work for another. With pension rules as they are, it’s often in retirees’ best interest to work for someone else so that they can maximize their income potential, she says, noting that some companies even take advantage of this situation by targeting retired seniors through their recruiting campaigns. At Republic Parking System in Chattanooga, Tennessee, for example, seniors make up more than 20 percent of the company’s 2,000 employees, says Bob Mitchell, senior vice president of human resources at the parking and transportation management company. He prefers hiring seniors because they are more reliable than younger employees, who he says are more likely to call in sick and have a weaker work ethic. “Senior citizens as a group are more dependable. They work because they want to.” He has also noticed that they are friendlier and tend to build relationships with regular customers, even though the only contact they have is when customers exit the parking ramp. “They learn about customers’ kids and families, and even exchange birthday cards,” he says. “They are a great resource, and they represent us well.”

    Legislators have begun evaluating the efficacy of pension rules, but there’s been little drive to push new laws through. Modification is inevitable, but it could be years before significant changes are made, says Anna Rappaport, a consultant for Mercer Human Resource Consulting in Chicago. That means that companies like Republic will continue to have access to a growing pool of highly skilled retirees looking for work.

    A 1999 AARP survey found that 8 in 10 baby boomers plan to work at least part-time during their retirement. Even though only 16 percent of companies have formal phased-retirement plans, a recent Congressional Research Service paper noted that 20 to 40 percent of workers in their 60s are already working part-time.

    “These people want to continue working, even if they have to create their own opportunities,” Paginelli says. “If you don’t have a phased-retirement plan, they may be taking their talents to the competition.”

There are so many financial implications associated with sending employees onassignments in foreign countries that it’s a wonder companies send anyoneabroad. The cost of sending an employee overseas has been estimated to run threeto seven times that person’s salary, annually. In other words, if an employeemakes a base salary of $100,000, it can easily cost half a million dollars forthat person to take a position overseas–and much of the additional cost is taxrelated.

    Tax equalization, country-to-country tax treaties, income tax, and propertytax are among the myriad issues that must be addressed when an employee takes onan expatriate assignment, says Brenda Fender, director of InternationalInitiatives for the Employee Relocation Council in Washington, D.C. “Thecomplexity of tax laws for expatriates is unlimited,” she says. “Taxes canbe the largest cost associated with overseas assignments, and there is anendless variety of situations that occur.” The country of origin, the hostcountry, the length of stay, and the present economy are all factors in managingexpatriates.

    The most frequently heard advice from individuals who have handled the humanresources side of an expatriate project is to get outside expertise early on inthe process. That doesn’t mean asking your regular tax guy to get involved,Fender says. You need a company with experience handling taxes in the hostcountry and representatives in that country who can meet with your employees tohelp them handle their financial situation.

    You also should have all of the financial aspects worked out before employeesand their families get on the plane, warns David Kolb, partner at Global TaxNetwork, a tax services company based in Denver. “If you wait until they arealready abroad to address tax and other financial issues, it’s going to costyou a lot more than it should have.”

    The biggest cost–and headache–comes from the additional income tax in thehost country. Income tax is comparatively lower in the United States than inmost European countries, which means employees are faced with surprising taxburdens in their new assignments. Most companies use the tax equalization law to reduce thatburden. Through tax equalization, the employer withholds the amount of money theemployees would have paid in U.S. taxes from their paychecks, then pays all oftheir taxes in the host country.

    That typically adds thousands of dollars to the cost of the assignment, saysTim Lenneman, managing partner at Global Tax Network, but it’s just thebeginning of financial complications for expatriates. Beyond taxes, you need toknow how other cost-of-living increases will be handled, and who pays forhousing and education expenses. You don’t want to just boost the employee’ssalary, because it sets expectations for compensation when he returns to theUnited States, he says, but the employee still needs a package that puts him ina comfortable financial situation.

“The cost of a failed expatriate assignment is huge.”

    To manage expectations, living, housing, and school costs are typically addedon to the employee’s base salary as allowances, but they still can count astaxable income, so it’s important to make educated choices, Kolb says. Whenyou work with a firm that understands the tax and financial situation in thehost country, you can find ways to reduce the burden. In some countries, forexample, if the company rather than the employee leases the housing, it’s nottaxable income. In Japan, a company can make a donation to a school in exchangefor free tuition to eliminate tax implications. “There are a lot of ways tomanage costs, and companies are motivated to find them,” Kolb says.

    However, it’s a tricky balancing act to find cost-saving measures that don’tbackfire, says George Doyle, president of Lexicon Relocation, Inc., a relocationsupport services company in Jacksonville, Florida. You want the best price butalso need to rely on the service. For example, you want your housing locatorabroad to find suitable housing for employees at a reasonable price. And youwant to be sure that the company delivering your employee’s household goodsgets them there on time so the employee’s family doesn’t have to live in a$400-a-night hotel for three weeks. “You need dependable relationships withpeople who have local knowledge,” Doyle says.

    You also want to be sure your employees have the financial guidance they needwhen they need it, says Lenneman. That means there is someone in their host citywho can answer their questions and help them deal with their financialsituations, whether it’s leasing a house or filing tax statements. It’s amatter of productivity and satisfaction, he says. If an employee is frustratedor feels abandoned in the host country, she is more likely to give up and comehome before the job is over. “The cost of a failed expatriate assignment ishuge,” he says.

Workforce, June 2003, p. 100-104 — Subscribe Now!

In a slow economy, no one can afford to make bad hiring decisions. Every failed hire causes companies to throw precious dollars down the drain retraining recruits for the same position. That’s why pre-employment assessment tests are more valuable than ever. While many areas of human resources are feeling the pain of belt-tightening, these staffing tools are growing in popularity because they have such a significant impact on the cost of hiring and turnover.

    An accurate assessment dramatically reduces the time that hiring managers spend interviewing because it automatically eliminates a percentage of the applicant pool. For a human resources team trying to do more with less, that saves valuable time and ensures that bad candidates don’t slip through the hiring process, says Mel Kleiman, managing partner of the Hire Tough Group, a division of Humetrics, an employee retention services company in Houston, and author of Hire Tough, Manage Easy. It also helps you to identify the best candidates by adding another level of evaluation to the process, he adds, and that is critical for success in today’s economy. “It’s no longer enough to hire good people. You have to hire the right people–and now is the time to do it.”

    When the economy is good, the candidate pool is smaller and you can’t be as selective as you might like to be, he says. But in a poor economy, there are extremely talented people looking for work. “A bad economy is an opportunity to change the future of your company because you have access to the best possible people for the job.”

    In order to hire them, however, you have to know how to identify them, especially when you are being inundated with applications. “You can’t use the same hiring standards today that you used two years ago,” Kleiman says. You have to re-evaluate everything in your recruiting process, from how you interview candidates to how you define job performance and expectations. For example, downsizing can have a huge impact on job responsibilities. Employees have fewer people to support them and are expected to do more with less training. If you are using the same job descriptions and the same evaluation standards in a downsized environment, you’re not going to identify the right people for the job.

    Assessment tests enable you to judge candidates on more than just work experience because they also evaluate cognitive ability, says Karen Timmins, assistant vice president of human resources and development for American First Credit Union in La Habra, California. Timmins uses a test from Wonderlic, Inc., a recruiting and retention services company in Libertyville, Illinois, to assess candidates going into her hiring process. At a time when good people from all industries are looking for work, this helps to identify those who best fit your culture and needs, she says. “I’m not limited to choosing people with bank experience. If I identify someone who’s bright and emotionally intelligent, I know they have greater potential for success and job satisfaction, regardless of their background.”

    And the impact of that goes beyond individual potential; it has a bearing on the entire staff, Timmins adds. “If you hire a person who conflicts with your core values, it’s amazing how much they stand out. Their disruptive behavior affects everyone.”

    To get the best results from assessment tests, many vendors use industrial psychologists to build custom profiles of ideal applicants by defining the high and low performers in that job. Then, using those profiles, they create a set of assessment questions that identify the most suitable candidates for the position.

    Identifying specific performance criteria is critical to the success of the hiring process, says Pat Rowe, vice president of assessment services at Spherion Corporation, in Fort Lauderdale. He recently worked with a telecommunications company that wanted to increase revenues in its customer-service call centers. After the requirements for the position were evaluated, it became clear that, even though the title was “customer service representative,” the most successful people were those with good sales skills. Within a year of targeting candidates with sales skills, turnover decreased by 50 percent and revenue per seat increased by 15 percent, he says.

    Getting the right people for the job is how you become a great company, says Charlie Wonderlic, president of Wonderlic, Inc. “The single greatest return on investment comes from the people you hire, yet most companies spend more time evaluating a $10,000 copy machine than they spend evaluating potential employees,” he says. “The cost of not hiring the right people is the cost of mediocrity and failure. How much is that worth to you?”

Workforce, April 2003, p. 64-68 — Subscribe Now!

When American Online and Time Warner Inc. first fell in love three years ago,they apparently didn’t receive effective spiritual counseling. A trusted advisorshould have emphasized this reality: Corporate marriages can be colossaltrouble. The drive to acquire companies may be endemic in corporate America, butalmost all mergers fail to produce intended business results, experts say.

A key reason is that companies don’t spend enough time evaluating the impactthat mergers have on employees, says Ron Elsdon, director of retention servicesat DBM, a human resources consultancy in New York. “Mergers have an unusuallyhigh failure rate, and it’s always because of people issues.”

With Steve Case’s departure from AOL Time Warner last month, executives inmany industries are rethinking how conglomerates wed. In most merger scenarios,the employees of the purchased company are given little information about theturn of events until well after the deal is settled. Rumors fly about what’sgoing on, and employees are left in limbo, bitter about the changes and worriedabout their jobs and their colleagues. If this goes on for too long, they canbecome less productive as a psychological protest, says Bill Belgard, presidentof The Belgard Group, a strategic transformation consultancy in Beaverton,Oregon.

The chance for success is further hampered if the corporate cultures of thecompanies are very different. When a company is acquired, the decision istypically based on product or market synergies, but cultural differences arerarely examined or even acknowledged. It’s a mistake to assume that you will beable to easily overcome philosophical or cultural differences, Belgard says. Forexample, employees at a small family-owned business might be used to having easyaccess to the boss, flexible work schedules, or a relaxed dress code. Whilethese issues may seem insignificant, taking away those unwritten privileges canresult in resentment and shrinking productivity.

“To be successful in a merger, you have to show respect for the acquiredcompany’s culture and ways,” he says. “Your goal should be to achievesomething together that neither company could do alone.” Unfortunately, oncethe deal is done, buyers often lose sight of that goal. They try to fold the newcompany into the existing one, squashing the acquiree’s creativity, leadership,and vision in the process.

That’s not to say mergers can’t be successful, says Bruce Mann, seniormanaging director in charge of merger and acquisition activity at WR Hambrechtand Co., a financial services firm in San Francisco. Even if cultures conflict,success is attainable if the human challenges are addressed early on. To achievethis, human resources specialists should be involved in the negotiation process,making sure that employees’ needs and culture issues are addressed and anintegration plan is developed, he says. As part of the due-diligence process,executives from the acquired company should be sharing employee evaluations,benefits expectations, organizational charts, compensation plans, and anythingelse that will help them make quick decisions about employment and helpassimilate the new staff as easily as possible. If human resources involvementcomes after the deal is signed, “it’s already too late,” Mann says.

Workforce, February 2003, p. 60 — Subscribe Now!

For decades, even the most experienced HR professionals have been forced tospend much of their time doing tedious data-entry tasks and fielding supportcalls. Because of the mountains of paperwork that flow into HR departments everyday, there is little opportunity to focus on critical human-managementinitiatives. A recent Forrester Research study found that, on average, HRmanagers spend nearly 80 percent of every day administering employee benefitsand answering routine questions.

    It’s a poor use of the HR team’s expertise, but because of paper-basedinformation-management processes, there’s been no way to avoid thesetasks–until now. Many medium-sized and large companies are upgrading their HRmanagement systems, adding self-service capabilities that will forever changethe roles of the HR team. Self-service puts the responsibility for manyinformation-management tasks, such as filing change-of-address forms andcompleting benefits enrollment, in the hands of employees, dramatically reducingthe amount of time that HR staffers spend on administrative tasks. It frees themto focus their energy on achieving more strategic goals for the company, such asreducing turnover and developing skills inventories. It can also enablecompanies to deliver the same HR services using fewer people.

“If a company wants to take better advantage of the skills of HR professionalsor reduce the size of the HR department, self-service is an increasingly populardecision.”

    If a company wants to take better advantage of the skills of HR professionalsor reduce the size of the HR department, self-service is an increasingly populardecision, says DJ Chhabra, vice president of global HRMS development at OracleCorporation, an enterprise software company in Redwood Shores, California. “Iteliminates non-value-added tasks, shifting the HR team’s efforts to thebusiness side of HR.”

    But the payoff of self-service is more than just happier HR people or even asmaller HR staff. It can also affect the bottom line in several areas, says DonChun, director of Global HRMS product strategy for PeopleSoft, Inc., anenterprise application software company in Pleasanton, California. “Costreduction drives the investment in self-service for most companies, and they areable to anticipate a quick return on investment in the software.”

    He estimates that most PeopleSoft clients see a return on investment in twoyears or less, as a result of improved accuracy in data collection, reduction intime to complete tasks, fewer calls to the HR department, and faster turnaround.For example, one of PeopleSoft’s clients documented spending roughly $10 toprocess a change-of-address form before moving to self-service. “Withself-service, that cost dropped to 25 cents,” Chun says.

    It’s an issue of efficiency. The $10 cost came primarily from the time ittook an HR staff person to copy an employee’s handwritten form into all of thedisparate databases. Using the self-service system, the employee enters the dataonce online and it’s automatically updated in all of the necessary databases.This level of savings is similar for every information-processing task formerlymanaged by the HR staff, Chun says.

    Paper and mailing costs can be dramatically reduced as well, Chhabra adds.Pay stubs no longer have to be printed and mailed out–which can be a hugemonthly effort and cost–and all HR-related documents can be completed and sentonline, eliminating the need to print and distribute them.

Younger employees who have been raised with the Internetexpect the freedom and rapid turnaround of self-service. They want access tocompany information and control of their own data.

    Self-service HR tools also improve productivity and help attract and retainqualified employees, says Tom Tillman, director of product management andmarketing for Best Software, Inc., a business management software company in St.Petersburg, Florida. Younger employees who have been raised with the Internetexpect the freedom and rapid turnaround of self-service. They want access tocompany information and control of their own data.

    “Self-service is an inevitability for most mid- to large-sized companies,”Chun says. That means in order to stay competitive, HR professionals mustevaluate and update their skill sets. As data-entry tasks are eliminated, so toois the need for lower-level administrative employees, he says. “To movesuccessfully into the future, HR professionals need to transform themselves intostrategic business advisers.”

Workforce, January 2003, pp. 60-62 — Subscribe Now!

For many well-meaning managers, getting employees to change their behavior isa frustrating, challenging, confounding task. Employees often don’t see thevalue of performing their jobs differently or taking on new roles, or they don’ttrust the reasons for change in the first place, says Chris Butler, president ofThe Performance Engineering Group. “If they don’t support the change, theywon’t alter their behavior and the project can’t succeed.”

Whether it’s getting people to use a new software system or changing thecompany’s approach to knowledge-sharing, employees want to see immediate andobvious personal payoffs before embracing a new system. The quickest way to makethat link is to tie a reward and recognition program to the appropriateperformance. “Adults are like children. If you reward the behavior you want tosee, it will get repeated,” says Diane Allessi, director of trainingdevelopment at the American Bankers Association in Washington, D.C. For maximumbenefit, the reward and the acknowledgment have to be immediate and public, shesays. “By recognizing employees in front of their peers, it not onlyreinforces the behavior in the individuals, it telegraphs to everyone aroundthem that this is the conduct you expect and value.”

It can be a casual approach, in which managers make a point of praising thosewho perform the new behaviors, or a formal incentive program that rewardsemployees with gifts every time they perform a new task. The important thing isto send the message to everyone that they will benefit from supporting thechange initiative, Butler says.

To most effectively use reward and recognition to support a changeinitiative, define the new behaviors in as much detail as possible, Allessisays. For example, you can’t just say that service reps should be friendlierto customers. You have to identify the characteristics of that behavior, such asgreeting customers warmly, asking if they have any other concerns, or addressingthem by name. Once you know what the behavior looks like, translate it in detailto employees and then reward them on the spot for doing it, she says.

“Employees need clarity about what’s expected of them,” says JulieBacon, vice president of marketing at Bravanta, an incentive and recognitioncompany in San Francisco. But they also need incentives to get started. Ifemployees know they will receive something of value when they perform a newtask, they will become personally invested in the initiative. “The rewards andrecognition program gets people motivated,” she says.

“Once they incorporate the new behavior into their routine, they will beginto see the intrinsic value of the change,” says Cindy Hubert, director ofknowledge management and connected learning for the American Productivity andQuality Center in Houston. “Eventually the tangible reward becomes lessimportant and the new behavior becomes inherent to their job performance.”

The biggest mistake managers make is rewarding the wrong behavior.

The biggest mistake managers make is rewarding the wrong behavior. “Theyfocus all of their attention on those who won’t change, and ignore those whodo,” Butler says. “That sends the message to employees that you don’tvalue the change, and it can cripple your project.”

Butler creates computer-based training courses called QuickLearns, whichinclude short videos of experts performing specific tasks. He was hired tovideotape a group of test technicians at an aerospace company performingproduction-line tasks, but they refused, fearing that the training would deprivethem of their job security, and even threatening to bring in a union lawyer.

Later, when Butler found a night-shift technician who agreed to do the video,he made a point of presenting him with a $100 gift certificate in front of hispeers, and asked the technician’s supervisor to do the same. When the originaltechs saw the payoff, they realized that their negative behavior had backfired,Butler says. And now, as the company considers layoffs, they have new reason tofear for their jobs. “They saw that a willingness to cooperate and shareknowledge was valued and rewarded. It’s a lesson they won’t soon forget.” 

Workforce, November 2002, pp. 80-82 — Subscribe Now!

In an unpredictable economy, companies that have a network of leadersthroughout the organization are the ones most likely to thrive. Employees whoare given the opportunity to develop leadership skills are more inclined to takeresponsibility and feel pride in their work. When they are empowered to makedecisions and be accountable for their actions, potential leaders take ownershipin the success of the company, and often become superior performers.

“The velocity of business is increasing and the pace of change has pickedup,” says Jim Concelman, manager of leadership development at the Pittsburghoffice of DDI, an employee selection and development company. An employee’sability to make independent decisions is especially critical as products andcustomer expectations evolve. In the wake of this change, the role of leadershipis shifting as well, Concelman says. Front-line employees are expected to leadteams, mid-level managers are heading up strategic initiatives, and downsizedstaffs are expected to take responsibility for more work with less guidance.

These new opportunities call for more than management skills. They alsorequire managers to arouse enthusiasm and establish an environment of respectand dependability, in which employees are encouraged and expected to contributetheir opinions.

Historically, leadership development has been limited to the executive teamand the few up-and-coming people who are groomed to replace them. That was finein an economy in which the core business strategy could go unchanged for years and a stablecorporate culture was the mainstay of success. This strategic model is no longerviable. Today, employees are given leadership titles and expected to figure outhow to handle their new roles, but aren’t effectively trained. Not surprisingly, they oftenflounder. The title “leader” in many organizations is met with scorn whenthe person assigned to the role has no idea how to behave in the new position.

“Offering leadership training is not just a feel-good issue, it’s acritical business strategy,” says Will Pilder, senior vice president ofKnowledgePool Americas, a talent-management company in Nyack, New York. Ascompanies battle for customer loyalty and new products emerge weekly, employeesmust have a developed set of leadership skills to foster the balance betweenfreedom and reliability.

A successful leader must be able to communicate, motivate, and solveproblems, Concelman says. But many managers aren’t getting the necessarysupport to develop these skills. “Managers are taught to do things by thebook, whereas leaders need to think of new ways to do things,” he says. “Thetwo skill sets are somewhat contradictory.”

Jon Katzenbach, senior partner of Katzenbach Partners LLC, a performanceconsulting firm in New York City, adds that leadership is about more thanfollowing a set course. “It’s a mind-set of adaptive responsiveness.” Thisquality is particularly important at the front lines, where performance isdirectly linked to a leader’s ability to inspire a team, and a service rep’s freedom torespond to unique customer needs can make or break a company’s reputation.

“Everyone benefits from leadership development,” Pilder says. It promptsemployees to work harder for the company and set more challengingcareer-development goals; it teaches managers to be better coaches to their owndirect reports; and it prepares the entire population to react more effectivelyto a shifting workplace environment.

“Leadership at every level is the only way to infuse an organization withthe values and morale to maintain productivity, even in the face of change,”Pilder says. It’s also the most effective succession-planning technique. Nolonger can you groom one individual for a specific job; you must have a pool oftalented people who can assume any leadership role when the need arises, hesays. When companies downsize or management positions open, companies must havethe skills and in-house experience to respond to the change immediately.

Workforce, October 2002, pp. 82-84 — Subscribe Now!

Medium Company

Name: Xilinix, Inc Location: San Jose, California Business: Provider of software design tools tools Employees: 2600

Peggy Phillips learned the importance of ERP training the hard way. Two years ago Xilinx rolled out a self-service HR application to the company’s 2,600 employees with only fleeting efforts directed at training. “We held informal sessions telling people that we would show them the new system if they wanted to see it.”

    The rollout team did little front-end needs assessment, so they had no idea what employees wanted or were capable of doing. For example, Phillips’s team assumed that managers wanted self-service options and that they understood how to perform administrative tasks such as documenting internal transfers or approving salary increases. It turned out that the human resources staff was handling all of those transactions and managers had no interest in taking them on. “It was challenging to get people to use the system and in the end was not accepted.”

    Now the company is in the middle of an ERP rollout, and Phillips is determined to learn from the past. “This will be even more challenging than the HR self-service tool, because it’s going to change everyone’s roles and responsibilities,” Phillips says. She has a dedicated team to handle all training and communication needs related to the ERP software. “We are focused on teaching users about the processes, not just how to use the technology.”

    This is especially critical since the company went with a generic version of Oracle’s enterprise application, an off-the-shelf system with little customization. That meant that all of Xilinx’s work processes, such as how to track performance reviews, change job titles, or transfer employees, had to be re-engineered to match the fields in the off-the-shelf tool. “With that level of change, there is going to be a lot of discomfort, but we are managing it by showing users the benefits,” she says.

    In all of the ERP training her team offers, which is a combination of Web-based and classroom-based courses, users learn what the new processes are and why it’s important to incorporate them into their daily routines. “Context is key. It’s not enough to tell them to do these transactions or even to show them how. They have to see the benefit,” she says.

    Because the system is self-service, many tasks that were formerly performed by HR now are the responsibility of managers and employees. “At first it just looks like more work,” she says, “so we talk a lot about the impact it will have on their productivity and benefits.” For example, managers are now expected to fill out Personnel Action Notification forms to alert management to changes in employee salaries or job titles. In the past HR had taken care of PANs, and Phillips began to receive complaints from managers about the added work. She responded by pointing out the dramatic reduction in turn-around time that would come from the new system. Inner-office mail delays and multiple sign-offs meant the old PANs took four to six weeks to be completed; now they take 48 hours. “By framing it properly, they can see the payoff to using the new process and they support it.”

    If the benefits of the new system are not enough to encourage employees to take on extra work, Phillips points out how not using them correctly will cause them to suffer. For example, when managers put off filing an internal employee transfer, they continue to pay the transferee’s salary even if that person is already working in another department. “Most managers understand the value if you put it into financial terms,” she says.

Workforce, September 2002, pp. 92-94 — Subscribe Now!