Author: Site Staff

Technology is more vulnerable than intellectual capital in most companies, according to a new study of 1,400 CFOs by Robert Half.

The chief financial officers were asked: “In which of the following areas do you feel your company is most vulnerable?” The most common answer was disaster preparedness/recovery, cited by 37 percent of respondents. This was followed by security of information systems (24 percent); protection of intellectual capital (11 percent); detection of accounting fraud (10 percent); and theft (3 percent).

Not surprisingly, given this concern about information systems, 28 percent of the CFOs say that technology enhancement will be their biggest investment this year, while only 9 percent say that “additional personnel” will be their number one expenditure.

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edEx, which has a worldwide workforce of 210,000, provides health-care plans to all of its full-time and part-time employees across the country. As a company that relies on employees who are quick on their feet, the delivery enterprise requires a health-care benefits program that keeps employees as motivated and healthy as possible.

This year FedEx launched the first year of a five-year strategic health-care benefits plan, explains Kelly Jenkins, managing director, employee benefits and health communications. The enterprise continues to pay 86% to 96% of health-care costs for its workers, but like most companies has had to pass on to the staff some costs of rising insurance premiums. “We made some changes in 2004 to help employees share in the cost,” says Jenkins. “But at the same time we expanded choice.”

FedEx previously offered only managed-care plans. This year the firm introduced an open-access program that allows employees to choose from in-network or out-of-network plans. The employee who wants flexibility and an open choice of physicians and specialists has the option to take on a higher payroll deduction and co-payments. “Open access and that type of network approach is a little more expensive,” explains Jenkins. “It has different benefit levels but it’s the employees’ choice.” And instead of a two-tiered system, employees now have four benefit-package levels from which to choose. Adding such flexibility, says Jenkins, enables the company to meet the highly diverse needs of its workforce.

FedEx’s five-year benefits strategy is based on an intensive analysis of financial and workforce impacts. The company examined such factors as incremental health-insurance costs on company expenditures and on employees’ expenses. “Overall, you have to manage [benefits costs] on all fronts, continually pushing every lever,” Jenkins adds.

FedEx routinely conducts surveys of its workforce, a practice that plays into HR and benefits planning. As surveys confirm, FedEx employees are a demanding bunch; after all, they are the people we expect to deliver our packages any distance at lightning speed. To help satisfy this service-savvy staff, the company has worked to make benefits administration as accessible and empowering as possible. This includes an online decision-support tool that helps employees determine which plan fits their needs. In addition to providing a full range of health-care benefits to its workforce, FedEx offers access to voluntary benefits, such as homeowner’s, auto and legal-services insurance that employees can select online from a vendor at large-group rates.

On-site wellness centers and educational seminars are a large part of the company’s strategy to keep employees healthy. The company also offers a number of disease-management programs for chronic conditions like asthma, diabetes, cardiac, ulcers and arthritis, and continues to expand them. Because of the nature of deliverers’ work, FedEx also piloted a lower-back-pain program. FedEx is not alone; the Kaiser report found that many companies see disease management as one of the best ways to control health-care costs.

FedEx also is involved in improving the quality and cost-effectiveness of the nation’s health-care delivery. It is a member of the Leapfrog Group, a coalition of more than 150 public and private organizations that mobilizes employer purchasing power to provide education and programs for health-care safety. Other members include enterprises like Eastman Kodak Co. and Xerox Corp.

All FedEx employees also have access to 24-hour nurse lines. “That has really been helpful to people who have been diagnosed from a lifestyle health-care point,” says Jenkins.

So far, employee response has been positive to the first phase of the strategy, and she is not hearing complaints about increased payroll deductions. “Employees realize they do have to share in the cost — they recognize that it’s their responsibility, too.”

With much of its staff spread out across the country and highly mobile, communicating all of FedEx’s benefits information to employees is an enormous undertaking. The company has a call center that tracks all employees who call to enroll, make changes in their plans or ask questions. “We monitor trends and analyze them,” explains Jenkins. “And we use them for case management.” The company also puts out personalized newsletters to its national workforce of 125,000 employees. But the most useful information vehicle is FedEx’s internal TV network, which plays on screens at FedEx sites and delivers a plethora of health-care information. “Those have been enormously popular — more than printed materials,” says Jenkins. The company also provides presentation material to managers so they can hold meetings with their staffs to explain in detail any changes in the health-care program.

FedEx is now preparing for the next phases in its five-year plan and, with the assumption that health-care costs will continue to climb, is always seeking ways to lessen the impact on the company and its employees.

Read more about the Optimas Awards winning program FedEx developed at workforce.com/optimas/fedex

Dear Cold Shoulder:



Congratulations on your promotion. I know that there will be a lot of challenges associated with your new job, and the feelings of jealousy you have detected from your old teammates are just one of the first. While transitioning to a managerial position, you want to maintain their friendships; yet, you have the extra responsibility of managing their performance.

Situations like these take time. You and your teammates are dealing with a change, and there are a lot of elements that are unknown right now. These include things like how you should handle your new responsibilities, what effect these tasks will have on the team, and what expectations people should have about your leadership style. Think of this transition as a journey–it begins when the change was introduced, and will end when the change becomes a familiar way of doing things and everyone on your team has adapted to a new norm.

Your overall goal is to create an environment of respect and trust, one in which you as the leader are open and receptive to feedback. This will help others will feel the same way. Facilitate an open discussion with your team and explore some of their thoughts, feelings, and concerns about your new leadership role. Here are some key actions to take in your discussion:

• Take time to acknowledge that your relationship has changed dramatically, and that you will now work in a very different way than before. It will take some getting used to.
  
• Empathize with their feeling of uncertainty.
  
• Reinforce your team’s value to the organization.
  
• Capitalize on the intimate knowledge you have of your team’s strengths when planning new initiatives.
  
• Offer your support to the team. Investigate how much support–and what type of support–is needed during periodic update meetings. You should also ask for your team’s support in your new role.
  
• Don’t over-commit in your new role. This will build trust among your team.
  
• Finally, don’t deny your own feelings. Being able to make a statement such as “I am concerned about xyz” will show your own emotions in the situation and help you further build trust and respect.
  

In closing, allow time to adjust and focus on the long-term benefits for everyone involved in the transition. Your actions will go far in winning your team’s trust and respect and lessening feelings of jealousy in the long run.

SOURCE: Tacy M. Byham, consultant, Development Dimensions International, leadership solutions group, Bridgeville, Pennsylvania, Feb. 26, 2003.

LEARN MORE: Read more than 130 articles and tools aboutmanagement skills.

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 Self-Help:



Since flex plans emerged in the early 1980s, they have become one of the fastest growing ways of providing benefits to employees. A flexible-benefits plan offers employees the opportunity to choose from a variety of health and welfare benefits, such as medical, dental, disability, life insurance, and paid vacation time. With the addition of a 401(k) plan or other deferred compensation arrangement, a flexible compensation plan is created that offers flexibility in both compensation and benefits.

Flex plans may be structured in a variety of ways, ranging from simple “premium conversion” programs, which enable employees to pay their share of the cost of benefits with pre-tax dollars, to full flex (or “cafeteria”) plans, which offer employees a “menu” of benefits from which to choose. While any size employer can offer a “premium conversion” program, a full flex plan is most appropriate for employers covering at least 1,000 employees.

While there are many do-it-yourself resources for designing flex plans, employers may want to hire an experienced professional to help them work through the available options as well as the legal and regulatory requirements. Whichever option you choose, the first step in developing a successful flex plan is to determine your company’s needs and goals, as well as the monetary resources that will be available for the project. Setting goals establishes a baseline against which the success of the new plan can be evaluated.

Step two involves analyzing the current benefit program in light of the objectives that were set. Detailed demographic information about all employees must be gathered and analyzed, as well as data on the costs and funding of the program. This review should also look at the competitiveness of the program relative to the industry, national or regional norms, or any other measure deemed appropriate.

In step three, you assess employees’ needs by gathering information about benefit perceptions and attitudes. Typically this is done through surveys or focus groups. Armed with clear objectives, an analysis of the current plan, and employee feedback, development of the preliminary plan design can begin. This step will include the development of options, an aggregate budget, and specific prices for the options being offered.

A well-planned communication campaign is necessary to educate employees and shape their perceptions about the plan.

There are many more steps in creating a successful flex plan. Explore legal and administrative requirements, enrollment, documentation, and implementation before making the decision to proceed.

By offering employees an opportunity to select their own benefits, flex plans meet the needs of workforces that have a lot of variation as far as what employees want in benefits. They also help ensure that you don’t spend a ton of money on benefits that employees don’t want or don’t need. Because of their design flexibility, flex plans can be structured to reduce costs and manage the delivery and utilization of services.

SOURCE: Elizabeth A. Dudek, Vice President and Senior Consultant, The Segal Company, Washington, D.C., March 3, 2003.

LEARN MORE:Discuss in the Benefits Forum.

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.

Sutter Health undertook a six-month “continuity planning” project last year, evaluating 51 top managers across 26 hospitals to determine the extent to which each of their talents matched the organization’s needs.

It cost several hundred thousand dollars, and went a long way toward helping the company figure out who its future leaders are.

Sutter is the exception, not the rule. Only about 40 percent of not-for-profit hospitals and health systems have succession plans, according to a survey of CEOs at 544 organizations published by the Governance Institute.

Donald Wegmiller, chairman of Clark Consulting, tells Modern Healthcare that organizations should systematically evaluate managers to identify and cultivate potential leaders. What’s happening now, he says, is that CEOs are recommending their replacements without really knowing much about each manager’s capabilities.

“If you want to really determine who in the organization is going to step into roles permanently, you need to do a little more than write a name down on a piece of paper,” Wegmiller says. “To our view, there’s very little (real succession planning) being done.

We have seen organizations lose a great deal of talent because there wasn’t any clear-cut plan for those individuals to move forward in the organization.”

Three years ago, this publication marveled at the quarter-billion dollar contract signed by baseball’s Alex Rodriguez. At that time, the Rangers human resources department told Workforce Management that the contract was “like buying a company … or a country.”

The Yankees are now going to be employing Rodriguez, and his new contract is full of clauses rarely seen among non-executive employees. Rodriguez will be making $5 million less than he currently earns as a Texas Ranger. To compensate, he’ll receive his own hotel suite on road trips, according to ESPN. ESPN also reports that he’ll get a guarantee that “the deferred money won’t be wiped out by a work stoppage.” This “deferred money” refers to Rodriguez’s complicated contract, which calls for some of his salary to be deferred, to be paid starting in 2011. In the end, Rodriguez will still be receiving money in 2025–when he’s 49.

Rodriguez won’t have to worry about selling his Texas home. His contract includes a clause that requires the Rangers, Rodriguez’s current employer, to buy it from him.

Major league baseball commissioner Bud Selig says, “I am very concerned about the large amount of cash consideration involved in the transaction, and the length of time over which the cash is being paid. I want to make it abundantly clear to all clubs that I will not allow cash transfers of this magnitude to become the norm.”

Southern California isn’t the only place where Safeway has to worry about labor strife.

TheStreet.com reports that Safeway stores in San Francisco, Sacramento, Denver and Seattle will all see their contracts expire later this year. Contracts in the Washington, D.C. area expire next month. It’s possible that Safeway’s labor problems could “spread,” meaning that unions will be emboldened by any gains made by California employees.

Safeway estimates that the strike cost it 23 cents a share in the fourth quarter of 2003, according to TheStreet.com. Albertson’s and Kroger are also taking a major hit. Meanwhile, specialty stores such as Trader Joe’s and Whole Foods are benefiting from labor problems at the three largest grocery chains.

The China Business Post reports that China Construction Bank will fire more than 100,000 workers over three years.

China Construction Bank is China’s third largest bank. It will be giving $870 million in severance pay to a third of its workers according to the report, also mentioned in Bloomberg News and the International Herald Tribune.

Construction Bank’s chief executive, Zhang Enzhao, actually started cutting employees in November. Before loosening up its government grip on the economy, China used to guarantee employees jobs, health care and housing at government-run companies. Now, the country is becoming more capitalistic. There’s high demand for some skilled and managerial employees, and at the same time, hundreds of thousands of other people are losing jobs.