Author: Site Staff

Making the case that providing benefits pays off for employers isn’t easy, and measuring the payoff of an onsite day-care center is particularly tough. A new study offers a way to value day-care benefits, and finds that employers who offer the benefit are well rewarded.

Bowdoin College professors Rachel Connelly and Deborah DeGraff co-authored the study with University of North Carolina professor Rachel Willis. They surveyed 925 employees at three light manufacturing firms—two that offer on-site child care and one that does not. The report was partially funded by a grant from the W.E. Upjohn Institute for Employment Research, and was written up in Industrial Relations.

The researchers studied the cost-benefit of the on-site day-care centers mainly by measuring how much it’s worth to employees; in other words, how much employers would have to pay employees in wages had the centers not existed. They arrived at this number by asking employees how much they’d be willing to have deducted from their paychecks in order to keep their child care center open. In the case of the company that didn’t have child care, employees were asked what they’d pay to have it.

The upshot: firms offering the benefit save between approximately one-half and twice the cost of what the companies are paying to have their child-care centers open, including subsidies to employees and other costs. This does not include the expected cost savings arising from reduced turnover, higher productivity, goodwill in the community, a reputation as a place where potential employees want to work or lower absenteeism.

The report does say, however, that “we know from other studies that the breakdown of child-care arrangements is a source of stress for many parents and leads to a number of lost work days per year.”

Connelly adds that a key finding of the survey was that newly hired employees were willing to pay more than long-time employees for child care. “You want to convince certain new workers to work for you,” she says. “If they ascribe more value to the child-care, then your strategy is working. And that’s what we found.”

Interestingly, Connelly and her team found that while some employees without children view a child-care center as worthless to them, others would be willing to pay to keep it running. One 17-year-old male employee surveyed, for example, says he supports the benefit because, he says, “I don’t want my coworkers to lose day care.”

The professors hope the report offers employers some help in valuing child-care and possibly other benefits programs. According to the authors’ description of their findings in Industrial Relations, “measuring the benefits of employer-sponsored child care programs for employers is challenging given the complex interaction among working conditions, productivity, compensation and the makeup of one’s labor force. As a result, even companies with employer-sponsored child-care programs have found it difficult to quantify the value of the child care benefit they are offering. Many other firms may be contemplating offering an employer-sponsored child care programs but do not follow through because of the same difficulty in calculating the benefit versus the cost.”

One of the companies surveyed, Action Industries, opened a child care center in 1979, partially to retain his human resources officer. It was a decision he admits was based more on impulse than on detailed study.

For more information, also see “A Case for Child Care.”

The federal government will face a “daunting” challenge in the coming years as it competes with the private sector for scientists, engineers, nurses and other employees, according to a groundbreaking new report.

The New York Times Job Market provided a grant to the Partnership for Public Service and the National Academy of Public Administration to conduct the study. It’s a rare look at the hiring needs of every major U.S. government agency.

“The federal government is in triple jeopardy,” says Max Stier, president and CEO of the Partnership for Public Service. “It’s struggling to respond to the talent demands of the 21st century, baby boomers are retiring in record numbers, and the pipeline of available talent to replace them has run dry.”

To address the challenge, the report’s authors recommend that “workforce planning [should not be] just a process owned and performed by human resource professionals but one that evolves to be an essential component of day-to-day management.”

Among the other suggestions from the report: federal agencies should develop recruiting plans and update them annually; the way the federal government classifies jobs must be improved to be made more consistent with the job categories used by the Bureau of Labor Statistics; and the government should develop state-of-the-art recruitment materials to improve the image of professional government service.

Homeland security
In other government news: the U.S. Department of Homeland Security and the Office of Personnel Management have published in the Federal Register a description of how pay, performance management, labor relations and other human resources systems will work in the Homeland Security Department.

There has been favorable reaction so far to a groundbreaking plan that’s aimed at offering affordable health care insurance to 3 million uninsured workers and their families. The program involves a coalition of 60 Fortune 500 companies, and is sponsored by the HR Policy Association.

The program is “a noble effort” to tackle a formidable problem, says Pat Schoeni, executive director of the National Coalition on Health Care. The problem is coming up with an affordable package of benefits on the one hand, and convincing uninsured workers to buy into it on the other.

“We don’t think it’s the answer to the uninsured, but we certainly think it’s a positive step,” Schoeni says. Some 44 million Americans are living without health insurance.

The plan offers six tiers of service and six levels of price, ranging from a $5 a month discount card to a $400 a month major medical policy offered by a health maintenance organization.

Eligibility will be limited to part-time employees, contract workers, pre-65 retirees and some franchise employees with ties to one of the participating companies. Regulatory hurdles in some states must be overcome. Open enrollment is scheduled to begin Sept. 1.

Companies in the coalition will not help workers pay health plan premiums, but will use their existing provider networks and bargaining power to generate deep physician and hospital discounts. With 3 million eligible workers and their families in a single pool, employees are promised better price breaks than they’d get on their own. Sears Roebuck and Co., IBM and General Electric Co. are helping lead the coalition.

“Even a low-paid part-time worker will have something that fits their budget,” says Tom Beauregard, a health care consultant at Hewitt Associates, which will administer the program.

UnitedHealth Group will be the primary health care provider. Humana and Cigna Healthcare will also participate on a regional basis.

Alan Slavitt, managing director of UnitedHealth’s Center for Affordable Consumer Health, says it’s hard to predict what kind of acceptance the program will receive. “Nothing like this has ever been done,” he says. “We are trying to reach a population that we’ve never sold to before.”

Karen Davis, president of the Commonwealth Fund, a private health care research foundation, says offerings like a “wellness benefit” priced at $50 a month will help sell the program. The benefit pays $20 toward each prescription up to five a year, covers two dental visits and one vision visit annually, and covers 80 percent of in-network office visits costs and 100 percent of preventative care.

“For $50 a month they get a reasonable set of services,” she says. “Its not comprehensive health insurance, but it is certainly a set of primary and preventive care services.”

Even though the plan is not perfect, Paul Fronstin, a research associate with the Employee Benefits Research Institute, says just getting a plan off the ground can be considered a success. “You’ve created something where nothing existed before,” he says.

Best case, Fronstin says, the plan could take off and have a snowball effect.

Worst case, it’s back to square one.

—Douglas P. Shuit, staff writer

Dear Hurried:



Both chefs and short-order cooks are in the same business. Yet few would disagree that they have different perspectives about their jobs and their customers. Chefs prepare meals, whereas short-order cooks cook food. The recruiting experience all too often resembles that of a short-order cook, and the only way to break out of that role is to insist on being given credit for your culinary skills. The secret to the whole process is to be elevated by your customer, namely the hiring manager.

Deadlines
People who insist on unrealistic deadlines either don’t understand the staffing process or care little about quality. Instead, they believe that you can buy gold for zinc prices, or that zinc will somehow manage to equal the worth of gold. Just as software companies can’t rush out a new application suite, neither can human resources be expected to find the perfect candidate in a hurry.

If your client insists on unreasonably short deadlines, find out why. Present the issue to them in their own terms. If it’s a sales organization, ask if it can guarantee that it will take a cold-call candidate to a top revenue-producing client in two weeks. If the answer is no–as it surely will be–ask why (but don’t be snide about it). Or put it this way: is it possible to upgrade the e-mail system within 24 hours? The answer, of course, is no.

A job done badly in two weeks is worse than a job done well in four weeks. Your job is to make that case. Remind management that hiring should be neither an inconvenient activity nor one carried out with unnecessary haste. Point out that hiring is part of the ongoing growth and development of the business.

Turnover results when a hiring program aims either too high or too low. Overqualified candidates who realize they won’t achieve their career goals fail to stick around. Conversely, “bargain hires” who lack experience, maturity or talent are no surer bets to address your organization’s need for highly skilled individuals. They may fill the job, but if the person hired fails to measure up, brace yourself to begin the process anew.

Demonstrate how haphazard hiring and failing to stick to the script–the position description–negatively affect your company’s business. Focus on the “lost costs” that result from hiring and training the wrong person for the job (not to mention repeating this process several times before you find the right person). Put the recruiting and hiring challenges in dollars-and-cents terms to help your top management take notice. The hiring process has many partners and players, so failure–as well as success–is a group effort.

Try to elevate your management’s expectations, much as a chef does when preparing a gourmet meal. Otherwise, you’ll face a human resources career that’s the equivalent of slinging hash.

SOURCE: Ken Gaffey, principal, Kenneth T. Gaffey Consulting, Melrose, Massachusetts, March 19, 2004.

LEARN MORE:Curing the Turnover Disease.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear Nonstop Hiring Manager:



Reversing the trend of high turnover can be difficult, but hiring less-qualified people is not the answer. High employee turnover is typically an environmental issue resulting from a mismatch between the employee and the work environment.

When employees leave an employer, they often cite more money or returning to school as their reason for leaving. On the surface this may be true, but it may not be the real motive behind their departure.

To reverse your trend of high turnover, you must first determine three facts:

1. Circumstances leading up to the departure of employees from your company
   
2. Reasons why some employees choose to remain in your employment
   
3. Characteristics of the most successful employees
   

All departing employees should receive anexit interview, regardless of their reason for leaving. The survey should be structured to give employees the opportunity to discuss the good, bad, pretty and ugly about your company, without the fear of burning a bridge.

Remaining employees should be surveyed to determine why they stay. They too should be given the opportunity to discuss the good, bad, pretty and ugly about your company without fear of reprisal. If there’s the slightest doubt about the issue of trust between employees and management, then have the survey conducted by an outside organization.

Using a valid assessment tool, develop a profile of your ideal productive employees.

Incorporate the information from the exit interviews, the employee surveys and the profile into a hiring and retention strategy that includes a formal employee selection and retention process.

The most important step is to take it personally. Employees are not leaving your company; they are leaving you. Therefore, you have the power to change the situation. Accept nothing less.

SOURCE: Lonnie Harvey Jr., president, The JESCLON Group, Rock Hill, South Carolina, March 27, 2003.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

If the Bush Administration’s proposed reform for the defined benefit system passes as is, companies in the manufacturing, transportation and communication industries will be hit the hardest, according to a recent report by the Employment Policy Foundation, a non-partisan Washington, D.C.-based research foundation.

These companies, which are already being battered by increasing competition and the threat of outsourcing, may now be punished further by their own government for having older workforces, the report states.

“The issue that is really not being looked at is the circumstances of the companies on a company-by-company basis,” says Ed Potter, president of foundation.

At issue is the way in which companies would determine how much they need to fund their plans. Under current law, pension providers tie their liability to a four-year weighted average on a long-term bond rate. This assures that there are no volatile jumps from year to year and provides a standard for every company. The new proposal, however, would require that companies calculate liabilities based on the age of their covered employees.

This could mean a 3.5 percent increase in reported pension liabilities for workers aged 55 and older and a 2 percent increase for workers aged 50 to 54, according to the foundation’s report. This disproportionately hurts pension providers with older workforces, Potter says. “If you are in high tech and you have a young workforce, your costs, or the amount of money you have to put in the plan, are substantially less than a company that happens to have older workers.” For example, companies such as Motorola Inc. and Texas Instruments Inc. have traditional defined benefit plans.

The liability calculation isn’t the only issue that the foundation and other critics have with the administration’s pension reform proposal. The premiums that companies pay to the Pension Benefit Guaranty Corporation would also rise–up to $30 per participant from the current $19. While $11 per employee may seem like a small increase, the Employment Policy Foundation report notes that it can add up for large companies: Those in the manufacturing sector, which comprises more 16 million pension plan participants, will pay $179 million more in premiums under the proposal, according to the foundation report.

“I understand that the government does not want to get stuck with the bill, and the private sector does need to be responsible, but this seems that they are taking a large sledgehammer to a problem that only affects a few,” Potter says.

If the proposal passes, critics says, the result would be that even more companies will drop their defined benefit, deciding that they do not want to take on the added costs of these programs. The number of defined benefit pension plans in the United States has already decreased 25 percent from 1999 to 2003, according to the American Benefits Council, a national trade association that deals with employee benefit systems.

“Companies that are in a weak position may decide it’s easier, or that they have no choice, but to terminate the plan as a result of this proposal,” says James Klein, president of the American Benefits Council.

–Jessica Marquez, staff writer,
jmarquez@workforce.com

Satisfied and engaged employees–even those who do not deal directly with customers–bolster a company’s bottom line, according to a recent study from Northwestern University.

The report, “Linking Organizational Characteristics to Employee Attitudes and Behavior,” draws a link–albeit an indirect one–between employee satisfaction and improved financial performance.

Nearly 100 U.S. media companies representing 5,000 employees participated in the study, which was produced by the university’s Forum for People Performance Management & Measurement. It is based on employees who do not have a direct connection with customers but whose attitudes still affect the bottom line.

James Oakley, author of the study and assistant professor of marketing at Purdue University’s Krannert School of Management, says that the largest chunk of every company’s employee base does not deal directly with customers. “The linkage is through employees’ impact on customers. There is a relationship between attitude and profitability, but not a direct link. It’s an indirect relationship.”

That relationship is bridged by satisfied customers. There is a direct link between employee satisfaction and customer satisfaction, and subsequently between customer satisfaction and improved financial performance. As Oakley explains, a satisfied customer is less expensive to serve. “They don’t call and complain and you don’t have to serve the account in that fashion. You don’t have to acquire them again. (They) are more likely to return, and sales and marketing efforts for new customers no longer apply.”

Employee retention is another way to curb costs. “An employee’s intention to stay is highly correlated with satisfaction. Employees who are not satisfied are more likely to be looking elsewhere for another job,” Oakley says.

The study defines engaged employees as those who are motivated and inspired and who feel a sense of personal involvement in their work, as well as support from their organization. Satisfaction and engagement aren’t the same thing, but satisfaction drives engagement. And the only direct driver of satisfaction is communication that streams both up and down the organization’s hierarchy, Oakley says.

“The organizations that are exemplary in the study are the ones that have a system set up that allows for information to flow from the frontline employees to senior management, so the employees understand what’s going on and feel like they are being listened to,” Oakley says. He cites Pixar Animation Studios, Nordstrom, Starbucks and the Ritz-Carlton Hotel Co. as examples of companies that understand this concept, although they were not participants in the study.

Sue Stephenson, senior vice president of human resources at Ritz-Carlton, agrees that each hotel’s employees create satisfied customers. Satisfaction creates customer loyalty, which ultimately leads to the financial success of the hotel.

“Loyal customers share great stories about our business. Word-of-mouth is a valuable way of marketing our business,” Stephenson says.

She also concurs with the study’s findings that employees affect the financial success of the hotel regardless of their contact of lack of contact with guests.

“The employee washing dishes or cleaning silver never interacts with the customers in the restaurant, but they understand the role, which is that the cleanest dishes and shiniest silver will help create a great culinary experience in a restaurant,” she says.

Ritz-Carlton reinforces the connection to customers with a beginning-of-shift pep rally of sorts at which hotel management restates the company’s mission and shares exceptional customer service stories with employees. Each employee carries a “credo card,” which is a promise of excellence both to the employee and the customer.

Stephenson also agrees with the study’s finding that an empowered employee is a satisfied employee. At Ritz-Carlton, that empowerment includes authorization for each employee to expend up to $2,000 to “delight a guest” who has a customer service issue.

“For example, if a departing guest says, ‘I didn’t make that call,’ an employee can correct it off the check,” she says. “For the customer, it means they don’t have to wait. For an employee, it means they know we trust them.”

As with all things in workforce management, the question of dollar-and-cents results of such engagement arises. Oakley says the survey can’t supply that answer.

“One key drawback is there is no investment to measure, so (the survey) can’t give a return on investment,” he says.

His next study will examine the effect of various human resources practices on employee engagement. This study found that although the human resources function does not drive employee satisfaction or engagement, it has effects on other areas. Another study will explore what those areas are, he says.

For her part, Stephenson says Ritz-Carlton recognizes that compensation and rewards do affect engagement. The hotel group lowered its turnover rate from 51 percent in 1991 to 23.3 percent in 2004.

“If a company is not paying competitively and not providing competitive benefits, it can be a de-motivator,” she says. “You must do the right thing.”

–Gerelyn Terzo

After months of development, Tyson Foods unveiled a “Team Member Bill of Rights” which will be posted in all Tyson facilities throughout the country. Tyson Foods, Inc., was founded in 1935 with headquarters in Springdale, Arkansas, and is the second-largest food company in the Fortune 500. It has approximately 114,000 employees.

Tyson Foods, Inc.
Team Members’ Bill of Rights

Preamble
    Team Members of Tyson Foods enjoy many rights, benefits and responsibilities as members of the Tyson Foods Team. This document outlines information about many of those rights and responsibilities. These rights, benefits and responsibilities correspond with or are in addition to all other rights provided by state or federal law. Tyson reserves the right to amend these at any time and will communicate these changes to Team Members. This document is not a contract of employment.

1. The Right to a Safe Workplace
    Team Members within Tyson Foods are entitled to a safe workplace. Tyson Foods is committed to work with all appropriate governmental agencies to accomplish this goal. Team Members must be committed to accomplish this goal as well and must perform work tasks by following all safety procedures for which training has been provided. In this regard, Tyson commits to the following actions:

    Maintain Team Member safety committees to meet on a regular basis to examine safety practices and implement the best safety practices for all Team Members in accordance with federal/state laws. Safety committees will include both Salaried and Hourly Team Members. All Team Members are encouraged to refer at-risk behaviors to supervisors, at anytime, to support a safe working environment.

    Team Members shall have the right to file complaints with the plant safety committee without fear of reprisal in order to make the safety committee aware of safety concerns. The committee shall act promptly to assist the company in addressing safety and health hazards by making recommendations regarding corrective measures and notifying Team Members of the action taken. Team Members have the right to refer safety concerns to the appropriate state and/or federal agencies without fear of reprisal.

2. The Right to Existing State and Federal Benefits
    Team Members have a right to understand their rights and responsibilities under all state and federal employment laws. Tyson Foods shall provide Team Members information to educate the Team Members of any of their rights and duties under these laws.

3. Right to be Free from Discrimination and Retaliation
    Everyone has the right to respect and dignity, and to protection against discrimination and retaliation. This includes the right to equal employment opportunity without regard to race, color, age, veteran status, religion, sex, national origin, sexual orientation or disability. Team Members should treat their fellow workers with dignity and respect. Existing protections against retaliation, harassment, discrimination and intimidation will be enforced.

4. Right to Compensation for Work Performed
    Every Team Member has the right to expect payment of wages owed for work performed by the Team Member. Tyson Foods shall pay all wages due to its Team Members. Team Members have the right to contact the federal and state departments of labor for assistance in determining their rights under laws.

5. The Right to Information
    Most information regarding Team Members’ right and responsibilities is posted in common areas. In addition, each Team Member shall be entitled to receive, upon request, the following:

• A copy of Tyson Foods’ Team Member Bill of Rights
• A copy of Tyson Foods’ job bidding and posting policies
• A copy of Tyson Foods’ Leave of Absence policy
• A copy of Tyson Foods’ Code of Conduct
• A copy of Tyson Foods’ Rules of Conduct
• A copy of Tyson Foods’ Core Values
• A copy of Tyson Foods’ Harassment and Discrimination Policy
• A copy of Tyson Foods’ Drug and Alcohol policy

6. The Right to Understand Information Provided
    Team Members are entitled to understand their rights and responsibilities as Tyson Team Members. Team Members should contact their HR department or plant management with any questions, including any problems understanding these rights.

7. The Right of Choice
    Team Members have the right to choose whether they want to join together for collective bargaining purposes.

8. Right to Continuing Training Including Supervisor Training
    Tyson Foods shall provide on-going training opportunities to Team Members for enhanced skill development and business changes.

9. The Right to Adequate Equipment
    Each Team Member shall be entitled to use equipment that is adequate to perform the job task assigned. If it is believed that adequate equipment has not been provided, this may be reported to your supervisor or to the safety committee for review.

10. The Right to Adequate Facilities and the Opportunity to Utilize Them
    Tyson Foods agrees to provide its Team Members the following:

• Clean and working restroom facilities
• Adequate room for meal and rest breaks
• Reasonable time for necessary restroom breaks during shift production time.

11. The Right to Tell Tyson First
    Tyson Foods is committed to protecting the rights of Team Members through-out our organization. Tyson’s Human Resources Department offers various avenues to help Team Members resolve areas of dispute. Should Team Members have any issues, we encourage them to contact their corporate Human Resource Director through the Tell Tyson First Program. Moreover, if any Team Member feels that they are being treated unfairly with respect to any employment matter, they can Tell Tyson First by calling 1-888-301-7304.

12. Tyson Foods Core Values
    Tyson’s Core Values ensure our commitment that all Team Members are treated with dignity and respect. As a part of our shared Core Values and collective rights, all Team Members are expected to act responsibly in the workplace. Such areas of responsibility include treating all other Team Members with dignity and respect, abiding by the Code of Conduct, following all rules and policies, reporting policy violations, and working safely and ethically at all times.

John Tyson
Chairman & CEO

From aTyson Foods news release.

It looks like efforts by the Senate Finance Committee to change the “use-it-or-lose-it” rule governing flexible spending accounts may be stalled indefinitely because of competition from health spending accounts. HSAs, which the Bush administration introduced in 2004 and is energetically promoting, allow employees in high-deductible health plans to put aside pretax money to cover deductibles of several thousand dollars; whatever is not used by the end of the calendar year can be rolled over.

If the FSA use-it-or-lose-it rule is eliminated, HSAs could lose much of their allure, says Andy Anderson, an attorney who specializes in health spending accounts at Hewitt Associates. He may be right: Treasury Secretary John Snow estimates that the number of HSAs would be reduced by 10 percent if the rule were changed.

FSA flexibility arose as an issue in August, when Senate Finance Committee Chairman Charles Grassley, R-Iowa, wrote a letter to Snow asking if use-it-or-lose-it could be modified. Snow answered that Treasury didn’t have the authority to do it. He explained that the rule is in place to fulfill a congressional mandate that cafeteria plans not become vehicles for deferred compensation. A Senate Finance Committee aide said Snow’s argument is not compelling and blamed opposition on a lack of political will.

Anderson also says the squabble between Snow and Grassley “is not worth getting excited about.”

“The IRS now allows FSA money to be used for over-the-counter drugs, so there’s a far greater universe of things you can spend that money on,” he says. “And a lot of FSA administrators offer debit cards for spending down the account, so you don’t have to pay upfront and then submit a reimbursement form.”

When employers do a good job of communicating the benefits of an FSA or make it easy to use–as with debit cards–utilization goes up, he says.

Whether FSAs are easier to use or not, the Bush administration has shown a reluctance to change the rules for their use, policy-makers in Washington say. As for the estimate of a 10 percent reduction in the number of HSAs, Grassley aides are skeptical, saying there is no data to support it.

Lawmakers have tried to change the rule many times before, most recently in Medicare legislation passed in December 2003 that included a provision to allow a $500 rollover of FSA money to the following year. It failed, and that same bill created the HSA.

Right now, two very different groups are participating in HSAs, says Jon Kessler, chairman of WageWorks in San Mateo, California, an independent administrator of spending accounts in the United States. At one end of the spectrum are wealthy, self-employed people. At the other are people buying their own health insurance.

“The latter group doesn’t have the money to put into an HSA, so the primary beneficiaries are wealthy, self-employed people like small-business owners, doctors and lawyers,” Kessler says. “That is a solidly Republican constituency” that has little interest in making FSAs more flexible.

—Eilene Zimmerman