Author: Site Staff

Chronic diseases have a huge impact on the health of American workers, and on the cost of health care in the United States. Planlinx prepared this look at four chronic conditions – asthma, depression, diabetes, and high blood pressure — their prevalence, the costs of illnesses, and the toll they take on the productive lives of employees:

Asthma: Asthma is a very serious chronic disease affecting more than 17 million Americans. Pediatric asthma is the leading cause of chronic illness in children, with an estimated prevalence as high as 8 percent, and is the cause of an estimated 13 million physician visits and 200,000 inpatient hospitalizations each year. Asthma is common in adults as well, affecting 5 to 10 percent by some estimates. Overall, between 9 and 12 million Americans are presently diagnosed as having asthma.

The incidence of asthma appears to be increasing. Between 1988 and 1997, the overall hospital discharge rate increased by 6.7 percent. From 1982 to 1996, the overall prevalence of the disease increased by 58.6 percent, with the highest increase (123.4 percent) seen in working-aged adults 18 to 44.

Between 1979 and 1997, a period during which the death rate attributed to all causes decreased by 17 percent and 8 out of 10 of the leading causes of death experienced decreases, asthma mortality actually increased by 55.6 percent. This rise in the incidence and mortality of asthma has been particularly notable in inner cities, possibly related to worsening environmental conditions such as outdoor air pollution.

Spread throughout industries
Occupational exposure may be another contributing factor. As many as 250 substances have been noted to trigger occupational asthma, some of which have the capability of causing illness which persists for years and is sometimes irreversible. Fifteen to 20 percent of all cases of adult onset asthma are thought to be work related. Contrary to intuition, cases of occupational asthma are not confined to the industrial sector. In one study, 39 out of 55 affected individuals worked in professional or service occupations such as nurse, cook, librarian, custodian, secretary, or sales director.

The total cost of asthma in 1994 was estimated at $10.7 billion. Direct medical expenditures accounted for approximately $6.1 billion or 56.8 percent of that total. The remainder consisted of indirect expenses such as time lost from work. For employer-sponsored health plans, the direct medical costs related to asthma are substantial. One 1992 study, using the enrolled children in a staff model HMO plan in Washington state, found that children with asthma had 88 percent higher medical expenses, received 65 percent more ambulatory visits, and had twice as many inpatient days as non-asthmatic children.

Data from the 1987 National Medical Expenditure Survey indicated much higher ratios nationwide. Asthmatic children were found to have 2.8 times the total medical expense, 1.9 times the ambulatory visits and 3.5 times as many hospitalizations as non-asthmatic children. For the employer, the indirect costs of asthma are significant as well. In 1994, for persons with asthma age 18 and older, there were an estimated 8 million work days lost at a cost of $1.3 billion. Over the period 1985-1994, adjusted costs associated with caregiver absence from work rose by over 38 percent. The cost of absences for adult asthmatics rose by over 395 percent during the same period, with an 80 percent increase in the total days lost.

Traditional methods failing
Traditional medical management approaches taken by health plans have done little to stem the increasing costs associated with asthma, much less do anything to promote better outcomes for and improve the quality of life of participants suffering from asthma. Utilization review programs may have some modest impact on length-of-stay in hospitalized patients but generally do little or nothing proactively to prevent the next ER visit or hospitalization. Greater physician compliance with asthma practice guidelines such as those published by the National Heart, Lung and Blood Institute could greatly reduce the morbidity associated with asthma but utilization review programs generally do not promote such compliance.

In recent years, more and more health plans have turned to disease state management as an answer to the asthma problem. Disease management programs utilize multidisciplinary care management, consultation by asthma specialists, treatment protocols based upon nationally accepted standards of care, and patient and caregiver education in a strategy aimed at preventing acute exacerbations, thereby reducing inpatient and emergency room utilization by asthmatics. Health and economic outcomes data is used to measure the effectiveness of the disease stage management program. Outcomes research has indeed proven that disease state management and intervention programs can be very effective at reducing morbidity and resource consumption associated with asthma. One 1998 study estimated $4,845 per patient in annual resource savings after 22.8 months of follow-up.

The principal problem with disease management programs for asthma is their reliance upon claims data analysis for case finding. Lack of standard criteria for identifying asthmatics and the reluctance of providers to label patients as asthmatic because of concerns about patient insurability mean that asthma is under-reported in claims data. Use of claims data typically involves delays of 3 to 6 months before a patient can be identified and disease management can be implemented. This delay results in increased morbidity and much lost savings opportunity.

Depression: The Global Burden of Disease Study has identified major depression as the fourth leading cause of death and disability worldwide. Depression was ranked behind lower respiratory infections, diarrheal diseases, and perinatal disorders, but, surprisingly, ahead of ischemic heart disease and cerebrovascular disease, conditions that we are used to thinking of as our most significant health problems.

According to the National Institute of Mental Health, approximately 18.8 million Americans — 9.5 percent of the U.S. population aged 18 and over — have a depressive disorder at any given time. One in 6 will suffer from major depression at some point in their lives. And there is evidence from epidemiological studies that the incidence of depression is on the rise. 1990 estimates put the annual costs of depression in the United States at $43.7 billion. Major depression has a high mortality rate — as much as 15 percent by some estimates — and increases morbidity and mortality associated with other chronic diseases.

No care given
Despite the fact that effective treatments exist for depression, large numbers of cases go without any care. Others receive care that is sub-standard. A study newly published in the Archives of General Psychiatry finds that while 83 percent of adults with a probable depressive or anxiety see a healthcare provider and 30 percent receive some appropriate treatment, most of the care provided is from primary care providers only. Only 19 percent of those receiving treatment from non-specialists were found to receive appropriate care (compared with 90 percent of those receiving care from a mental health specialist). Insurance coverage and income had no effect on rate of appropriate treatment.

The widespread inadequacy of treatment for depression has tremendous implications for employers seeking to control healthcare costs and maximize productivity.

Untreated depression is responsible for overall increases in medical care costs for an employee population. Depression has been repeatedly been shown to increase usage of non-behavioral health services.

A 1995 study, for example, published in the American Journal of Psychiatry, measured health care costs for 328 primary care patients in an HMO who had been screened for anxiety and depressive disorders. Patients with anxiety or depressive disorders had 70 percent higher health care costs ($2,390 vs. $1,397) than those with no such disorders. Cost differences persisted after adjustment for medical co-morbidities and were found to be related to increased utilization of general health services and not higher mental health treatment costs. Successful treatment of depression may normalize healthcare costs over time.

Affect on non-mental health
Unavailability of adequate mental health services results in increased utilization of general health services. An example involves a large self-insured U.S. corporation that, in an effort to control rising health care costs, instituted greater employee cost-sharing through large increases in deductibles and co-payments. In addition, illness-specific prior-authorization and utilization review procedures were instituted.

These measures resulted in a greater than one-third decline in the utilization mental health services over two years, three times the decline experienced for other health services. However, those employees who used mental health services experienced a 37 percent increase in use of non-mental health services (as well as significantly increased lost days due to illness). Non-users of mental health services experienced no such increases. Cost savings associated with decreased utilization of mental health services were fully offset by increased general health care utilization and sick days.

Untreated depression is common among patients suffering from other chronic conditions. Cost of illness, severity of symptoms, and compliance with treatment regimen can all be negatively impacted by the co-morbidity of depression. A recent study on depression in diabetes found a direct relationship between severity of depression symptoms and poorer diet and medication adherence, greater functional impairment, and higher health costs in primary care diabetics.

Depression was found to increase mortality as well as increase outpatient hospital contacts and inpatient readmissions among 848 1-year survivors of acute myocardial infarction. In addition to increasing the severity of pre-existing chronic conditions, untreated depression may actually be a predisposing factor to the development of chronic disease.

Indirect costs, too
Apart from the direct health care costs associated with untreated depression, it is clear that there are substantial indirect costs, such as increased absences, decreased productivity, and increased disability. A study among employees at First Chicago Corporation demonstrated longer average length of disability and higher disability relapse rate for those employees disabled by depression as opposed to other conditions. Another study found depressed workers have between 1.5 and 3.2 more short-term disability days in a 30 day period than other workers. A 2000 study in the American Journal of Psychiatry found depressive illness to be associated with a mean 9.6 annual sick days in a major corporation, significantly more than heart disease, hypertension, diabetes, or back problems.

Treatment of depression has been found to normalize productivity and absences. Berndt and Finkelstein, in a 1998 study of perceived work performance in depressed individuals, found that a reduction in depressive severity was associated with improved performance, and that improvements occurred rapidly, two-thirds of improvement by week 4 of treatment. VonKorff and Ormel, writing in the Archives of General Psychiatry, report a 72 percent reduction in disability days and 40 percent reduction in disability score in treated severe depressives. Moderately depressed individuals achieved a 36 percent reduction in disability days and a 45 percent reduction in disability score.

Diabetes: For this example of a serious chronic illness and its costs, we will consider a health plan that has 10,000 covered lives. An estimated 500 to 1000 are Type I and Type II diabetics. They may account for as much as $1 in every $7 you spend on healthcare. One in 3 of your subscribers requiring dialysis and 1 in 4 of those requiring kidney transplant may be found in this group. They are at risk for blindness, amputations, stroke, diabetic neuropathy, chronic ulcers, gastroparesis and other complications.

Despite this, perhaps 65 percent of those individuals have never attended an educational program on diabetes and 40 percent may have received no diabetes education whatsoever. Most of them do not monitor their blood glucose daily. About 50 percent do not receive HbA1C testing. 65 percent receive no fasting blood glucose testing. More than 90 percent do not receive regular foot exams. More than a third may have never seen a dietician. 30 percent may not receive retinal exams or have their lipid levels checked. This is a population crying out for disease management intervention yet conventional wisdom tells you that disease management cannot be cost effective.

The Diabetes Control and Complications Trial (DCCT) was a multicenter study sponsored by the National Institutes of Health between 1983 and 1993.

Dramatic results
The study demonstrated that a comprehensive diabetes management program aimed at keeping blood sugar as close to normal as possible could result in decreased long-term complications in Type I diabetics. Participants were trained to test their blood sugar and administer insulin 4 or more times per day. Insulin dosages were adjusted in accordance with food intake and physical activity. A diet and exercise plan was followed and patients received regular follow-up from an interdisciplinary team of health professionals. Results of the trial were dramatic. Risk of retinal complications was reduced by 76 percent, kidney disease risk by 50 percent, and neuropathy risk by 60 percent.

Given these favorable results, one might expect that comprehensive diabetes management such as that provided in the DCCT would be embraced by managed care organizations as a surefire approach to improving quality of care and reducing costs associated with diabetes.

But the DCCT doubled the cost of management of participants. Although this cost increase is offset by reduced medical expenses related to long-term complications, managed care organizations have been reluctant to embrace disease management programs modeled on the DCCT.

Given that the average subscriber stays with a managed care organization only about 18 to 24 months, a savings model based upon reduced long-term complications is a hard sell in the current environment. For employers hard-pressed to reduce healthcare premiums, short-term increases in cost associated with comprehensive diabetes management can be hard to swallow as well.

High absence rates
Most savings models, however, fail to account for the indirect costs of diabetes to an employer. Diabetics average 13.8 days of absence from work per year versus 3.0 for the general population. For our example group having 10,000 covered lives, this means between 5,000 and 10,000 extra sick days per year (20 to 40 FTEs). Diabetics are much more likely to use short-term disability benefits than the workforce as a whole, and for diabetics, periods of short-term disability average 26 days. 12-month recidivism (the likelihood of having a second short disability period in 12 months) is about 8 percent. Diabetics are also more likely to have physical disabilities such as amputation or visual impairment that restrict the types of work that they can do and require special accommodation in the workplace.

A second limitation of many savings models is the failure to account for the increased general medical expense (expense not related to the treatment of acute glycemic effects or chronic complications) associated with diabetes. Middle-aged persons with diabetes have been found to be hospitalized more frequently than non-diabetic middle aged, with a longer mean length-of-stay.

In 1992, when total medical expenditures for persons with diabetes were estimated at $105 billion, only 16 percent was attributed to diabetes care and acute glycemic events. Diabetics have been found to have a rate a prevalence of depression about three times that of the general population as well as increased incidence of generalized anxiety disorder and simple phobia. Although not yet quantified, additional direct and indirect cost related to increased mental health services utilization and decreased productivity can be reasonably be expected for an employer.

Comprehensive diabetes management have not universally failed to demonstrate short-term cost savings. Diabetes Treatment Centers of America published short-term results from their comprehensive diabetes management program, Diabetes NetCare, in the Journal of Clinical Endocrinology in 1998.

With 7,000 diabetic lives, at 1 year after initiation, gross adjusted economic savings reached $50 per diabetic member per month, hospital admissions were reduced by 18 percent over baseline, and bed days were reduced by 21 percent. Participants were significantly more likely to have received HbA1c testing, foot examination, eye examination and cholesterol screening.

Program costs were not published but the program was reported to break even at approximately 1,265 diabetic members. The $600,000 in adjusted gross savings per 1,000 diabetic members achieved in year 1 was projected, by DTCA’s model, to grow to $828,000 in year 2, $1,120,000 in year 3, $1,364,000 in year 4, and $1,510,000 in year 5. Analysis included only medical costs. It did not consider likely substantial savings from increased productivity and decreased work absences.

High Blood Pressure (Hypertension): About 1 in 5 Americans and about 1 in 4 American adults have high blood pressure. Hypertension was listed as a primary or contributing cause of more than 10 percent of all deaths in the United States in 1997. As many as 423,000 hospitalizations during 1997 could be directly attributed to hypertension. Hypertension is a leading cause of heart failure, end-stage renal disease, and stroke.

Based upon studies by the National Heart, Lung, and Blood Institute (NHBLI), direct medical expenditures for hypertension in 1995 were estimated at $17.07 billion, with another $6.67 billion in costs related to lost wages and productivity. These conservative estimates only reflect the direct costs of hypertension — not the staggering costs of its subsequent impacts.

Of those Americans with high blood pressure, according to the NHBLI study, 31.6 percent are unaware they have it. Another 26.2 percent are receiving medication but remain uncontrolled. 14.8 percent are receiving no medication. Using these statistics, it can be estimated that 18 percent of adult US health plan enrollees are presently at risk due to uncontrolled hypertension.

Large bills
Research findings presented at the American Heart Association’s 72nd Scientific Sessions during November 1999 indicate that a person with untreated severe high blood pressure will incur an average of $14,582 per year in medical bills due to hypertension and its complications.

A moderate hypertensive would incur an average of $5,646, and a mild hypertensive $3,678. The costs of effectively treated severe, moderate, and mild hypertensives averaged $895, $760, and $516 respectively. Using the weighted average cost for uncontrolled hypertensives ($5,492) and the maximum average cost for controlled hypertensives ($895), the average annual cost savings associated with effectively controlling hypertension can be estimated at $4,597 per individual.

Utilizing the figures above, it can be estimated that, for an employee group health plan with 15,000 covered adults, achieving control in just 10 percent of presently uncontrolled hypertensives can result in potential cost savings of over $1.2 million annually.

SOURCE: Planlinx. To read the fully footnoted versions of these stories, as well as another piece on heart disease, please visit Planlinx.

The editors of Workforce have looked into their 2002 crystal ball and identified what they think are the major issues affecting HR management today. Then they examined the impact of these issues on individual HR functions.

What’s happening in your company that contradicts or confirms these trends?

Read the quick synopsis below. Then to give your opinion, click on the Recognition & Awards Survey.

Workforce will tabulate these results and include them – and selected comments – in the next version of this article.

Major Trends Affecting Human Resources Management in 2002

Trend #1: Significant HR issues are intertwined with the current economic climate.

The economic climate has significant HR implications, and conversely, some HR issues are affecting the economic climate.

For instance, there is an ongoing labor shortage, obscured, in part by the current – but temporary – economic cycle. This labor shortage will have long-term effects on businesses’ ability to compete in the world marketplace. Therefore, HR must manage to that labor shortage, despite contrary evidence.

Trend #2: Tough times require continued cost-cutting beyond layoffs.

It looks as if the 9/11 events may have helped to delay the country’s economic recovery. Thus, many companies will continue to look for ways to cut costs.

In 2001, layoffs targeted less-skilled and marginal performers. In many organizations, only key employees are left. Additional staff cuts could hurt current business and hinder future economic recovery.

Companies cannot over estimate the importance of key employees to an organization and the continuing need to retain the best and the brightest.

As a result, HR will need to look at both trimming expenses and fulfilling HR’s demand to keep and attract the best employees.

Trend #3: “Re-engineering” – or its next iteration – will become an important way to cut costs.

Since downsizing won’t achieve the necessary cost-cuts, companies and HR departments will have to re-engineer their processes and do what they now do faster, cheaper, and smarter.

HR will have two roles:

• First, it will have to look at its own department and make HR more efficient, more cost effective, and a greater contributor to bottom-line stability.

  
  

• Secondly, HR will work with executive and line management to support their re-engineering efforts.

  
  

Trend #4: The pending economic recovery will lag unless there are qualified employees in place to make it happen.

Sustained economic recovery is in the hands of the intellectual capital of an organization – its remaining employees.

Because those employees are vital to long-term corporate success, HR is responsible for maintaining their commitment, well being, skill sets and continued employment.

Therefore, HR will use all of its traditional tools to develop and maintain a competitive workforce.

How These Trends Affect Recognition & Awards

1. Downward Pressure on Salaries
   Cost-control still puts downward pressure on salaries. Raises – if they exist – are kept to a minimum. HR must help management find ways to keep employees motivated and productive until the upturn occurs – without large expenditures of cash.

   
   

2. Recognizing and Rewarding Performance Still Key
   HR is looking for ways to recognize performance – and still not create new expectations or salary/bonus entitlements.

   
   

3. Awards Have Specific Benefits for Tough Times
   Awards still have a higher perceived value than cash. When companies are trying to conserve cash – and recognize employee performance – that perception of “a higher value” takes on a new importance.

   
   

   Awards are more conspicuous than cash. Cash is spent – the award reminds the employee of the achievement and the recognition.

   
   

   Awards have a wider circle of recognition among family, friends and co-workers, when they are displayed, worn, outing, trip, etc. There’s some reminder and/or event that gets the attention of others and reinforces the award, the accomplishment, and the praise.

   
   

4. New & More Frequent Awards Programs
   Thus, HR will work with line management to develop new applications for rewards and incentives programs.

   
   

   Management can do recognition and awards activity more frequently than a raise – and provide awards for very specific performances. Awards are a way to support short-term objectives and make only short-term reward commitments – but still recognize significant achievements.

   
   

5. Awards Are Tailored to Individuals
   To be most effective, awards need to be tailored to the individual. Thus, smart HR professionals will survey employees on their specific preferences and offer a broad award selection of awards to meet personal lifestyle preferences.

   
   

6. Awards Provide a Cost-Effective Solution
   Thus, even in tight times, awards continue to be purchased and even take on a new importance as a strong tool for recognition. They have a relatively low cost vis-à-vis their high value in helping to retain, motivate and inspire employees. They recognize individuals as well as teams. They trim costs and can raise internal competitiveness.

   
   

Source: Margaret Magnus, Publisher, and The Workforce Editors, January 2002.

If you areplanning on attending the Training 2002 Conference & Exposition this year inGeorgia, you don’t want tomiss the following special offers from these companies:

February 18-20, 2002 Georgia World Conference Center Atlanta, Georgia Thestrategic future of human resources Booth #1524 When Performance Counts, Simulate to Evaluate SitDown and Go Places Pathlore e-Learning Solutions Booth #1628

QDear Workforce:

What are the points to be covered in writing a business case to increasestaff?

– Needs to know, safety consultant, health care, Vernon, British Columbia,Canada.

A Dear Needs to Know:

As you plan your case, keep in mind the universal objectives of everycompany: using resources as efficiently as possible, having productiveemployees, and ultimately creating a successful business, sooner rather thanlater.

When considering any change that would have a significant impact on thecompany, test the waters and garner support first. “Trial balloon”your ideas with key colleagues and/or superiors to ensure that the written caserepresents the interests of all parties involved. They will then be much morelikely to lend their support.

The actual arguments that you use will vary depending on why you want to addstaff: do you want to increase productivity? Build the customer servicedepartment to have fewer dropped calls and therefore more satisfied customers?Create better back-up capacity among your staff? Hire someone with a specialtalent that will allow your company to venture into previously unchartedterritories? Whatever your goal, here are some steps to follow in writing yourcase:

1. State the reason for adding staff and all the anticipated benefits to thecompany, both short and long term. Ask and answer the question: “Can thecompany afford not to create this position/hire this person?”

2. Give details on reporting structure, and how the new position will affectand interact with existing positions. Note: if you have recently had layoffs,adding new positions may seem confusing to your staff. Careful explanation andan over-emphasis on communication are necessary to help maintain morale, andshould be part of your case. Keep in mind too that the opportunity for employeesto help create, recruit, supervise, or perhaps be promoted to a new position canbe attractive, and provide career growth — a great retention tool.

3. Anticipate and address objections and problems.

4. List the total cost, including benefits, training time, other staff time,furniture, business cards, etc. Consider how much money the company may belosing by not having a fully staffed team. For example, how many salesopportunities are you missing by not having an experienced sales and marketingrepresentative?

5. Focus on how the benefits will outweigh the costs; for example, how soonthe new position(s) will pay for itself. Note: How you choose to discuss thecosts can vary depending on your company’s financial situation. If you’re in acash crunch, the executives will most likely want to see immediate return oninvestment. If you’re in a more stable period, they may be able to appreciatethe advantages of a longer-term investment.

If you effectively address each of these points, briefly and concisely, whilekeeping in mind the overall goals of your company, you will have made your case.Good luck!

SOURCE: Lisa Kaminski, Liz Peterson and Bill Cooper, HR managers, PersonnelManagement Systems, Inc., Kirkland, Washington, Sept. 5, 2001.

LEARN MORE: See “Tactics to Tackle ToughTimes“

The information contained in thisarticle is intended to provide useful information on the topic covered, butshould not be construed as legal advice or a legal opinion. Also remember thatstate laws may differ from the federal law.

Ask a Question

Dear Workforce Newsletter

With the inauguration in 1922 of The Journal of Personnel Research, Workforce magazine’s first name, the fledgling field of personnel was officially born. Workers were leaving fields for factories, and businesses were swiftly learning about the complexities of managing people in an industrial world. For the past 80 years, the publication has served as a mirror of the U.S. workplace, and a bellwether for HR, helping it to find its way in a turbulent world.

To mark its 80th anniversary, editors, writers, and distinguished members of the business and academic communities have created a special issue chronicling 80 events that have shaped HR. Together the stories — offered without ranking — are an impressive collection of people, trends, innovations, and events that have had a profound impact on human resources and the workplace.

This magazine is one of the oldest and one of the largest continuously published periodicals in the country. What is less well-known is that it has been a family enterprise for most of its history. Workforce publisher Margaret Magnus succeeds her mother, Betty Hartzell, who was publisher of what was then called Personnel Journal from 1974 to 1990, and Hartzell’s uncle, Arthur C. Croft, who bought the publication in the late 1930s.

“Human resources fundamentally deals with human nature,” Magnus says. “HR strives to bring out the best in everyone.”

With a history that spans the full life of HR, Workforce has covered sweeping changes in the field from the industrial revolution to the information age. Throughout its tenure, HR has been at the vanguard of social change. Workforce is honored to have participated in helping to create its vision, tell its story, and chart its course.

Workforce, January 2001, pp. 26-56 — Subscribe Now!

---

The Workforce 80 was written by Shari Caudron, Sarah Fister Gale, Samuel Greengard, James E. Hall, Carroll Lachnit, Susan J. Marks, Todd Raphael, Janet Wiscombe, and Eilene Zimmerman. The following people shared their time and expertise in the creation of the list: Thomas Dougherty, University of Missouri; Dave Ulrich, University of Michigan; Matt Miklave and Jon Trafimow, Epstein, Becker & Green, P.C; Bob Gitter, Ohio Wesleyan University; John Boudreau, Cornell University; Maria Greco Danaher, Dickie, McCamey & Chilcote, P.C.; Daniel Mitchell and David Lewin, UCLA; Judson MacLaury, historian, U.S. Department of Labor, and Arnold Packer, senior research fellow, Johns Hopkins Institute for Policy Studies.

Use the form below to help youdetermine if your mentoring program is effective.

Date:

Mentor:

Protege/Mentee:

I am a __ Mentor __ Protege/Mentee.

Instructions

Please answer all questions using ascale of 1 (strongly disagree) to 5 (strongly agree). In order to help make theprogram stronger, please be as candid as possible.

The Program

1.	Thegoals and objectives of the program were clearly defined.	12 3 4 5
2.	Ifelt supported in this mentoring program from my manager.	12 3 4 5
3.	Thestructure of the program made it easy to perform my role in thisrelationship.	12 3 4 5
4.	Theprogram requirements were just right.	12 3 4 5
5.	Thetime commitment for each interaction was just right.	12 3 4 5
6.	Thematch between my mentoring partner and I worked.	12 3 4 5
7.	Ibelieve the program will benefit the organization.	12 3 4 5
8.	Ifelt supported by the program administrator.	12 3 4 5
9.	Theoverall expected outcomes for the program were realistic.	12 3 4 5
10.	Theprogram worked for me.	12 3 4 5

The Relationship

1.	Thematch between my mentoring partner and I met my needs.	12 3 4 5
2.	Wehave met regularly.	12 3 4 5
3.	Wecame prepared to use the time effectively.	12 3 4 5
4.	Wewere confident about what to do when we started.	12 3 4 5
5.	Mymentor understood what I was saying.	12 3 4 5
6.	Myprotege/mentee understood what I was saying.	12 3 4 5
7.	Iexperienced learning and growth during the process.	12 3 4 5
8.	Wewere open and honest with each other.	12 3 4 5
9.	Wehad meaningful conversations.	12 3 4 5
10.	Mymentor offered guidance and knowledge.	12 3 4 5
11.	Mymentor could be called a “developer of people.”	12 3 4 5
12.	Myprotege/mentee shared concerns and asked good questions.	12 3 4 5
13.	Myprotege/mentee enlightened me.	12 3 4 5
14.	Thisrelationship will continue beyond the formal process.	12 3 4 5

Benefits and Learnings

1.	Asa result of this mentoring relationship:
	Ihave grown.	12 3 4 5
	Ifeel better about my career.	12 3 4 5
	Ifeel more concerned about my career.	12 3 4 5
	Ifeel more a part of the organization.	12 3 4 5
	Ifeel it was worth my time and effort.	12 3 4 5
2.	Therules for success, both unwritten and written, were explored andconsidered.	12 3 4 5
3.	Developmentalareas were defined and recommendations made.	12 3 4 5
4.	Thisexperience increased my effectiveness.	12 3 4 5

Narrative Questions

What has been the greatest benefit youreceived from this experience?

What were the greatest challenges?

What conversations still need to takeplace?

Please provide specifics about thementoring relationship:

Strengths –

Weaknesses –

Recommendations –

Please provide specifics about theprogram:

Strengths –

Weaknesses –

Recommendations –

Reprinted with permission from”Getting Started WithMentoring,” by Myrna Marofasky & AnnJohnston (ProGroup, 2001).

QDear Workforce:

Can you provide me with examples of how companies calculate the cost ofinternal training for their employees?

– Calculating cost, HR Coordinator, manufacturing, Hingham, Massachusetts.

A Dear Calculating Cost:

There is some divergence between how companies calculate the cost of internaltraining and how they should calculate it, to get to the true economic costs.Most companies have a pretty good handle on the direct costs incurred by thetraining function, which typically include:

• Curriculum design and development costs.

• Program materials and supplies.

• Compensation (including benefits) of program deliverers.

• Travel expenses for the deliverer and other staff.

• Administrative costs (such as the costs of registering participants andcoordinating logistics).

• Facilities (room charges, audio-visual equipment, etc.).

• Incidental costs.

However, if one wants to measure the true economic cost of training (ifneeded for a credible ROI analysis, for example), one must also include theindirect costs. This means looking beyond the training department’s cost centerand including costs incurred by the other functions within the organization. Thecosts typically borne by the participant’s department include:

• Cost of taking the participants off the job.

• Cost of participants’ time spent on pre- and post-program activities.

• Cost of participants’ managers’ time spent on pre- and post-programactivities.

• Travel costs.

Finally, one should consider costs incurred by other functions in the designand delivery of the training program, such as the value of subject-matterexperts’ time spent assisting with design or delivery.

While it may seem like a daunting task to capture all of these costs,remember that it is rarely possible to capture all costs with 100% precision.One should instead strive for reasonable estimates of the costs that are moredifficult to measure.

SOURCE: Donna Neumann, CPA/MBA, senior consultant, Organizational SolutionsGroup, Personnel Decisions InternationalCorp., New York, New York, July 26,2001.

LEARN MORE: See “How an Industrial ManufacturingCompany Became an E-Trainer“

The information contained in thisarticle is intended to provide useful information on the topic covered, butshould not be construed as legal advice or a legal opinion. Also remember thatstate laws may differ from the federal law.

Aska Question

DearWorkforce Newsletter

Workforce received this letter to the editor from David Coelho, the director of administration and finance for a non-profit organization in Boston, Massachusetts..

Regarding your article on a “payroll tax holiday” to help end the recession: Much of what you wrote is interesting, from a fairness and equity standpoint. However, I find the “tax holiday” as an employment incentive a little baffling.

I cannot see where a payroll tax holiday would generate significant incentives to employers to add employees to their payroll. According to statistics from the U.S. Department of Labor (DOL), less than .2 of 1 percent (33 thousand of over 17 million) of the businesses in America employ more than 100 employees. The average annual salary in the United States is currently just under $26,000.

Using these figures, in order to generate enough savings from a one month Social Security tax moratorium, only companies with more than 204 employees would be able to hire a single individual for a year, and then only at an average salary in the company, with Social Security and Medicare taxes. This would not take into account any other benefits (health, retirement, and other basic benefits). Plus, the one-month savings in Social Security taxes needs to be made up to keep an already critical Social Security system from sliding further toward insolvency. The total savings for all workers/wage earners/employers exceeds $35 billion (probably a conservative figure) and the treasury would have to fill that gap.

The formula would generate additional jobs at these rates.

500 employees = 2.46 full-time employees;

1000 employees = 4.9 full-time employees;

5000 employees = 24 full-time employees;

10000 employees = 49 full-time employees, and so on.

If, on average, those 33,000 businesses employed 205 workers, a one-month holiday would generate enough money to employ less than an additional 33,400 employees for a year. While 33,000 new jobs would mean something, especially to those new employees, it is a one shot deal; it is dwarfed by current U.S. non-farm employment, estimated at over 130 million; and, the fact is that in December 2001 alone, payrolls decreased by 124,000 employees, and there are 2.6 million more unemployed as of December 2001 than in December 2000. The more likely scenario would be that companies would take any savings and at best keep a few people from becoming unemployed, and more likely plug holes in their insurance, energy, and utility budgets.

Would a payroll holiday help ease the recession? It would ease some people’s pain and belt tightening, and it would be the most equitable tax cut offered today, and it may even delay layoffs. However, the only real force that grows the economy is investment, and a payroll tax holiday for a month will not foster a long-term fix to minimize this recession or other future downturns.

A better choice would be to revamp the Social Security tax code, lower the rate, and apply it to all income levels, not just those under the current level of approximately $85,000. By reducing the rate and amount of tax on employees, and including all income levels, individuals would have an increase in their take-home pay over a sustained time. At that point, other incentives to save via traditional bank or investment options could be employed. The code could be changed to so that employers’ total Social-Security-tax liability is maintained at current levels, a fact that would almost be automatic as a lower rate is applied to all employees.

Would lower income workers save these funds versus spend them? Hard to say. Increases in energy, food, and health insurance costs hit lower income workers harder. The immediate impact of the recent tax cuts (up to $300 for an individual, and $600 for a two wage earning household — most did not receive the maximums) seemed to be that it reduced overall debt load, or was spent on a one-time expense. Some saved it, bought mutual funds, or bought a CD. Others donated it to a charity, the various 9/11 funds, or local social service organizations.

The key here is that most people do not understand the value of investment, and the time value of money. HR departments and 401(k) investment houses need to make it easy for employees to understand the mechanism, and the value of compounding. In addition, Congress and the financial industry need to make it easier to invest and to gain access to your money when you need it.

I enjoy reading your articles, as my experience in HR has mostly been a “seat of the pants” thing, and HR issues have become a significant part of my job. I used your site to research ideas for our employee manual and alternative work schedules. It has been very helpful in creating a very comprehensive HR system for a small organization. However, on this particular part of this tax holiday issue, I think the actual outcomes wouldn’t pass muster, plus the cost to the treasury would be in excess of $35 billion. That is a big number, and the $35 billion could be better applied to the unemployed for health care costs, to business loans and grants, to student loans and grants, and other areas where the investment of funds generates far greater returns.

 

61	TheEvolution of Compensation

    Until the early 1980s, compensation wasn’t linked in any way to performance. It was a paternalistic process that had little to do with business strategy, says Michael Thompson, national director of reward consulting for the Hay Group. Base salaries were standard, few workers received incentives for performance, and pay was based largely on economy and seniority.

In the last two decades, compensation transitioned from an administrative task to a complex balancingact between driving competitive advantage and managing workers’ needs.

    That began to change with the high inflation rates of the 1980s, Thompson says. “Organizations recognized that competitive advantage was not just dictated by access to capital or technology, but by people and talent.”

    In the last two decades, compensation transitioned from an administrative task to a complex balancing act between driving competitive advantage and managing workers’ needs. Individual performance plays a larger role in determining compensation, and performance reviews are now a key component of benchmarking the value of workers.

    But individual performance isn’t the only factor that determines worth in today’s workplace, Thompson says. To get a true measure of value, managers also evaluate the impact of a worker’s performance on the overall success of the company. The kind of performance that matters the most determines which jobs receive the greatest compensation. “That’s what defines the value of a worker,” he says.

62	WorkplacePrivacy

    At one time, HR grappled with privacy issues in the form of locked desks and locker searches. Now, privacy issues are high-tech. Given the rising threat of terrorism, the theft of intellectual property, and workplace fraud, many organizations are desperately searching for ways to combat criminal risks. With growing frequency, they’re turning to sophisticated surveillance techniques that allow the employer to monitor workers via video, computer keystrokes, Web page visits, and physical movements within a building. 

    Despite an outcry from privacy advocates, courts have consistently upheld the right of employers to monitor workers.

    For HR, maintaining security while avoiding an Orwellian workplace is no simple task. “Personal information collected legally through e-mail and surveillance allows a boss or someone else to further their agenda,” observes Simson Garfinkel, author of Database Nation: The Death of Privacy in the 21stCentury.

    Personal information collected in the workplace, such as Social Security numbers and home phone numbers, is finding its way into the outside world. Conversely, information from the outside, such as medical records and genetic data, is filtering into the workplace, creating new privacy risks. Organizations are searching for new ways of dealing with legitimate security risks while protecting private information.

63

TheTest

    For everything that HR wants to know, there’s a test: Personality. Honesty. Interests. Skills. 

During the industrial revolution, testing was more about fitting people into processes already established. Now, tests are used to figure out things like how a person can contribute to a business, and whether a person fits into a company’s culture.

    “Employers are now using tests to develop individual plans for maximizing employee satisfaction, increasing retention, and helping in the organization’s strategic objectives,” says Charlie Wonderlic, whose grandfather, Al Wonderlic, was testing for cognitive ability in 1937.

    Résumés and interviews weed out definitely unqualified job candidates, but tests are thought to provide much more information. Many tests, however, weren’t developed for job performance in the first place. “There has been a proliferation of bad tests,” says Dr. Wendell Williams, an industrial psychologist with ScientificSelection.com, which develops selection tools. 

    Williams says research shows that the best way to predict an employee’s potential is by measuring intelligence, particularly as it relates to solving problems similar to those that could occur in a business. This can be done, of course, with a test.

64	AbrahamMaslow

    Abraham Maslow did most of his important research in humanistic psychology in the 1950s, while chair of the psychology department at Brandeis University. It was there that he created his “hierarchy of needs,” determining that low-level needs must be satisfied before higher-level needs can be met. Maslow looked beyond the basics-air, water, food-and added five others in this order: physiological, safety, love and belonging, esteem, and self-actualization.

    The last level in his hierarchy-self-actualization-pertains to how a person fulfills her potential. It was a sign of the times; his work came into vogue during the 1960s, when people were looking for more meaning and purpose in their lives.

    Not everyone buys the hierarchy as a workplace motivator. John Boudreau, a professor of HR at Cornell University, cites the starving-artist syndrome, in which “a person would rather pursue their art than eat.”

65	Globalization

    Virtually everything that human resources managers do is done differently in a global environment. “HR has to take into account currency differentials and cultural differences that affect how you pay and the way people are paid, according to their class,” says John Boudreau, a professor of HR at Cornell University.

    Until 1970, globalization meant direct foreign investment going from the United States to other parts of the world, and American employees being sent to work overseas. After the 1980s, the concept changed to include foreign investment coming into the United States from Europe and Japan, and foreign companies building facilities on American soil. 

    The result is that many large multinational companies find that their organizational setup works well for operations in the United States, but not in other countries. “Many HR functions, like recruitment, selection, and training, are also optimized for U.S. operation,” says Peter Dowling, a fellow at the center and co-author of International Human ResourceManagement. “And HR finds it difficult to change because its experience base is domestic.” Whether the task is finding managers who can staff international offices, or training employees to work in other countries, change is slow. Typically, major changes don’t occur in HR until 60 percent of a company’s revenue is foreign.

66	IBMand the Birth of Corporate Culture

    In the 1930s and 1940s, few companies paid serious attention to corporate culture. The exception was Thomas Watson, founder of IBM.

    According to his son, Thomas Watson Jr., author of the best-seller Father, Son & Co. (Bantam Books, 1990), employees at IBM in the 1930s earned well-above-average salaries, worked in clean shops, attended free company-sponsored concerts, and were invited to night courses to learn how to get promoted.

    Early IBMers also adhered to a strict dress code while working alongside the now famous “Think” sign. Watson’s message? That employees would advance faster if they used their heads.

    The results of Watson’s culture-building were impressive: IBM dominated the market in the ’30s and ’40s, successfully expanded its monopoly overseas, and managed to avoid unionization.

67	HigherEducation for All

    Following World War II, the GI Bill greatly expanded the concept of higher education and the nature of work. Although a pension plan had been established for veterans after the Civil War, it was largely gutted after World War I. The broken promise ignited a march on Washington during the Depression by angry vets demanding recompense. They were attacked by federal troops. The debacle was so traumatic for the country that Congress vowed to treat veterans more generously. Thus was born the GI Bill, legislation making it possible for millions to pursue higher education. About 7.8 million World War II veterans received benefits, and 2.2 million of those used the bill for higher education. By 1947, half of all college students were veterans. 

    Colleges, in turn, received years of financial security. Grants became more prevalent, and student bodies exploded. “Practical” degree programs in fields such as business were established. Veterans of all backgrounds, ages, and religions poured into community and state colleges, changing the complexion of higher education and, consequently, the nature and needs of the workplace.

68	A.Philip Randolph

    In 1925, labor leader A. Philip Randolph organized the Brotherhood of Sleeping Car Porters, the first black union in American history. “The group fought the Pullman Company for 12 years, but they finally won recognition,” says Norm Hill, president of the A. Philip Randolph Institute. As a result of the organization’s success, Randolph became a visible spokesperson for African-American rights in the 1940s and 1950s. He focused on making sure that blacks weren’t discriminated against in government jobs. He also influenced the formation of the Fair Employment Practices Committee and was instrumental in the enactment of an executive order barring discrimination in the military. 

    In 1963, he led a march on Washington, D.C., for jobs and freedom, an event that rallied 250,000 people. Following the peaceful demonstration, Randolph, Martin Luther King Jr., and other black leaders met with President Kennedy, and within a year, the Civil Rights Act of 1964 was enacted.

    “In many ways he was the father of the modern civil rights movement,” Hill says. “Andas the workforce is increasingly populated by minorities and women, Randolph’s work with the brotherhood should serve as a model for the low-wage worker.”

69	Outplacement

    Employers haven’t always invested time, effort, and money in helping people they’ve laid off. Three decades ago, it was a novel idea to put aside resources for job counseling and placement to assist employees who had lost their jobs.

    It was a way of thinking about employees with more compassion, and one that began to evolve at a time of increasing layoffs, which were associated with waves of mergers and acquisitions, says John Challenger, CEO of the outplacement firm Challenger, Gray & Christmas, Inc., in Chicago. Many people were losing their jobs through no fault of their own, and all parties involved had a vested interest in creating a system that helped deal with it. HR managers felt responsible to employees, and companies wanted to avoid litigation related to layoffs.

    Recently, outplacement packages have gotten less generous and have been less effective in helping employees find new work, says Kate Wendleton, CEO of the Five O’Clock Club, a career counseling network based in New York. The firm’s COO, Richard Bayer, says employers today use outplacement services to help maintain the morale and productivity of the existing workforce.

70	IntangibleAssets

    In the 1930s, there was a surplus of labor and a shortage of financial capital. In an effort to better manage this limited resource, companies developed accounting and measurement systems that closely tracked their financial progress.

The growing importance of intangible assets such asemployee knowledge and skill setshas changed the role of HR.

    But over the years, the market has come to recognize that there is more to the valuation of companies than what is reflected in traditional accounting systems. Buyers and analysts are, increasingly, valuing companies at levels much higher than what is seen on the balance sheet. “We are entering a new era in which intangibles such as intellectual capital matter to stock price,” says HR professor John Boudreau of Cornell University. 

    The growing importance of intangible assets such as employee knowledge and skill sets has changed the role of HR. The good news is that HR activities have risen in stature. The bad news is that HR is being charged with the daunting task of determining how to measure and manage something so intangible.

“But the real challenge is not one of measurement,” Boudreau says. “It’s that we don’t have a logical point of view about how talent drives organizational success.” It will be up to HR professionals to create this new system of accountability.

71	Womenin the Workplace

    Of all the pivotal events affecting human resources in the 20th century, none had a more dramatic impact than the legions of American women who entered the job market. In the 1920s, about 20 percent of the nation’s women held jobs; by the end of the century, the number had tripled to 60 percent. (In 1995, 8 out of 10 women between the ages of 20 and 44 were employed.) 

    Born of the industrial revolution of the 19th century, the women’s movement of the 1960s was a major catalyst for political, social, and educational equality. From the beginning, feminists fought for issues directly affecting HR-ranging from access to employment, education, child care, contraception, and abortion, to equality in the workplace, changing family roles, the need for equal political representation, and redress for sexual harassment in the workplace. 

    In the second half of the 20th century, several key events thrust American women into a world of unimagined economic independence. The Food and Drug Administration approved the use of birth control pills (1960). The Equal Pay Act (1963) made it illegal for employers to pay a woman less than a man for the same job. President Lyndon Johnson’s expansion of affirmative-action policies ensured that women and minorities would have the same employment opportunities as white men (1967). Title IX of the Education Amendments led to a large increase in the number of women in athletic programs and professional schools (1972). The Pregnancy Discrimination Act ensured that a pregnant woman can’t be fired or denied a job or promotion because she is or might become pregnant.

    Despite extraordinary gains, the National Partnership for Women and Families reports that women are heads of most poor families and are still clustered in low-paying, traditionally female occupations.

72	EmployeeAssistance Programs

   These programs, now an expected benefit at most large companies, evolved out of alcoholism intervention in the workplace by fellow employees, unions, and/or employers in the mid-20th century, says Margaret Altmix, president of the Chicago-based accrediting group Employee Assistance Society of North America. They also were a natural outgrowth of the occupational health movement in the 1960s. 

    Employers began to recognize that their workers had the same problems that were reflected in the larger community, says Gregory P. DeLapp, immediate past president of the Employee Assistance Professionals Association Inc. in Arlington, Virginia. Companies were losing employees, and with them the resources that had been invested in them, because of illnesses and personal problems that were treatable with counseling. 

    Eventually, EAPs evolved to encompass many issues that affect the well-being of employees and their ability to perform at work — ranging from divorce to post-traumatic stress syndrome. What began as an employee-recovery social movement has evolved into part of the basic fabric of today’s workplace, DeLapp says. The catastrophic events of September 11, and the acute needs of the people affected, demonstrate the value of EAPs, he adds.

73	TheNational Labor Relations Act

    The HR community has been directly affected by the two dominant statutes governing labor-management relations: the National Labor Relations Act and the Labor Management Relations Act. These statutes created the National Labor Relations Board, a federal agency that has two roles. The board receives, investigates, and resolves unfair labor practice complaints against unions and employers. Unfair labor practices include employer or union interference with employee rights to engage or refrain from engaging in concerted activities; employer or union refusals to bargain in good faith; and discrimination in employment. Certain union picketing activities, such as secondary boycotts, are also banned. 

    The agency also oversees representation elections. There, employees and unions can request that the board conduct a secret-ballot election to vote on whether employees wish to have union representation.

74	ASecure Old Age

    Despite the reality that Generation Xers tend to be cynical about Social Security, it continues to be one of the most popular U.S. government programs ever created. It began as a way of caring for the elderly, and as a way of opening up jobs for younger workers. 

    Over the years, there have been attempts at supplementing Social Security with employer pension plans, in which a company would invest money for an employee based on tenure. The popularity of such plans, though they still are used in many companies, is starting to fade as jobs have become more portable. 

More recently, plans such as 401(k)s have helped employees with retirement. Many people, however, don’t fully understand the concept, and don’t participate, or cash in too early to fully benefit.

    Steve Sass, author of the book The Promise of Private Pensions (Harvard University Press, 1997), says Social Security has made a huge difference in workers’ lives. “Old people are no longer poor, and once they were.”

75	TheAmericans with Disabilities Act

    For the past eight decades, HR professionals have been expected to be keen students of changing laws, savvy interpreters of new employment and discrimination legislation, and authoritative spokesmen for the rights of both employer and employee.

    The Americans with Disabilities Act of 1990, for example, was a child of an earlier federal law, the Rehabilitation Act of 1973, which had been limited to federal contractors and entities that were receiving federal financial assistance. The ADA prohibits employment discrimination against qualified individuals with disabilities in the private sector, and in state and local governments. The EEOC was given enforcement power over the federal act. 

    The next year brought the Civil Rights Act of 1991. Among other things, it provides monetary damages in cases of intentional employment discrimination and was a key piece of legislation with direct impact on the workplace. Following a congressional vote to overturn a series of conservative Supreme Court decisions related to workplace discrimination, Congress went further, providing that, as with the Age Discrimination in Employment Act, jury trials would be available in ADA cases. For the first time, compensatory and punitive damages could be awarded.

76	FrederickWinslow Taylor

    Frederick Winslow Taylor’s theory of scientific management made him extremely unpopular with workers in the 1890s, says Robert Kanigel, MIT professor of science writing and author of The One Best Way: Frederick Winslow Taylor and the Enigma ofEfficiency. Taylor’s theory says that production efficiency can be greatly enhanced by closely watching individual workers in order to find and eliminate the wasted time and motion in the operation.

Taylor’s influence onimproving cost-effectiveness in mass production can’t be dismissed.

    With precise observation, management could identify the “one best way” to do a job, determine the correct productivity level, and set a pay rate based on that level, Kanigel says. Those who did not make that level would earn less money. 

    Though the system provoked resentment, Taylor’s influence on improving cost-effectiveness in mass production can’t be dismissed, Kanigel says. “We live in a world where common daily products are dirt cheap, and part of that derives from efficient production. When we condemn his excesses, it’s important to remember we owe him some of our material prosperity.”

    Kanigel says Taylor’s theory is bad management practice: “People don’t like to be told in elaborate detail how to do their jobs.”

77	TitleVII of the Civil Rights Act

    This sweeping legislation created job protections and opportunities that have served as the foundation of HR employment practices for nearly four decades. The Civil Rights Act of 1964 principally addressed race discrimination, sex bias, and also discrimination based on color, national origin, and religion. The law created an administrative charge-processing system that gave a complaining employee or applicant the right to file a suit in federal court. 

    At first, most of the significant litigation involved class actions to dismantle race-based seniority systems and restrictions against blacks in blue-collar industries. Then, in 1972, Title VII was amended to give the Equal Employment Opportunity Commission its own enforcement authority. This meant that the EEOC, along with its investigation and conciliation of charges of discrimination, could file its own lawsuits.

    Along with its increased enforcement authority, bureaucratic headaches surfaced for the EEOC. The agency itself became mired in an increased backlog of charges of discrimination that never seemed to be investigated. Over the next 20 years, the EEOC increased its professionalism and reduced its backlog.

78	HamburgerUniversity

    It started 40 years ago in an Illinois basement, with about 10 students in a management-training class. Today, 200 pupils attend classes at Hamburger University, and more than 65,000 managers are graduates. 

    “McDonald’s was really on the leading edge of what was taking place 40 years ago,” says Pat Burke, a vice president for Drake Beam Morin and a training expert. “Then, a number of other organizations started paying attention.”

    The global giant was one of the first to consider different ways of educating employees. Over the years, its menu has changed, and so has its training. Courses are now available in 22 languages. To accommodate a growing range of cultures and languages, the corporation is using more animation and graphics and less text in its training materials. McDonald’s has 10 training centers worldwide, including facilities in England, Japan, Germany, and Australia. 

    There’s now a digital component to the university: e-training that students can access on the Web.

79

HRFads

    The history of HR is laced with management initiatives that promised to solve some vexing business issue. In the 1970s, transactional analysis was the rage. In the 1980s, the one-minute manager and quality circles held sway. And in the 1990s, TQM, self-directed teams, re-engineering, empowerment, and emotional intelligence all had their 15 minutes of fame.

    Although these efforts are well-intentioned, and many have successfully transformed companies, the endless cycle of management programs has created legions of workplace skeptics who regard the latest directive from management as nothing but a flavor of the month.

    “A lot of so-called HR fads have been influential,” says HR professor John Boudreau of Cornell University. But problems arise when HR professionals begin to chase fads simply because other companies do. “If HR continues to look externally for answers, it will continue to be regarded as a profession that can’t think independently and account for its impact.” 

    Sure, it’s hard work not to follow the herd, especially when conferences, magazines, and HR leaders join together in support of a particular profit-building initiative. But for HR to become strategic, that’s exactly what must happen.

80	TheAge Discrimination in Employment Act

    The law was enacted in 1968 to protect employees 40 and older. Very little litigation developed under the ADEA until the late 1970s, when corporations started restructuring and reducing their over-40 workforces. Plaintiff lawyers also discovered that age-discrimination lawsuits had some punch because jury trials were available, and juries were sympathetic toward older workers who were fired.Gradually, the upper age limitation on the ADEA was shifted from 65 to 70, and then entirely removed. Enforcement authority transferred from the Department of Labor to the EEOC.

    Employers, sensitive to the risks of age-discrimination lawsuits and the threat of whopping jury verdicts, developed counter tactics. For a little extra severance pay, terminated employees were asked to sign general releases agreeing not to sue. Congress then adopted legislation regulating the “when” and “how” of releases.

Workforce, January 2002, pp. 48-56 — SubscribeNow!