Author: Site Staff

There’s nothing worse than hearing about an employer that wants to do something good, but ends up being told it’s up to no good.

   This is happening to one California company. Even though it had only 75 employees, the firm opened a two-room child-care center in October 2000.

   Ten children spend about eight hours a day at the center. Their parents pay $150 a month, a fraction of the cost of most child care in California. For employees who don’t have an alternative, private child care can run $1,000 per month.

   The kids range from a few weeks to three years old, and the company’s child-care center is well staffed. Three people work in the center, and there is a minimum ratio of one caretaker to every four children at all times.

   The center has two rooms: one a nursery, the other for toddlers. The kids get fresh air each day when parents take them out for food or play during lunchtime. In fact, parents aren’t even allowed to leave the building without taking their kids.

   According to the company’s CEO, if it weren’t for the child-care center, some employees would quit because they don’t have alternatives. Only two employees have left the company voluntarily in the past year.

   Sound too good to be true? It is. The company found out a couple of months ago that the center is illegal. The state government could shut it down anytime. Under California law, an employer’s child-care center has to have an outdoor playground with 75 square feet per child. This company, located in a business park, doesn’t have room for a playground.

   California isn’t alone in having such a rule. In Illinois, for example, the Department of Children and Family Services tells me, meeting the square-footage requirements (space per child) for acceptable playground space is one of the greatest challenges for an employer wanting to offer child care in their state.

   The problem with regulations, guidelines, and rules isn’t that all of them are bad, or that they were made with bad intentions. It would certainly be nice for kids to have fresh air, playgrounds, and other amenities. (It would be nice for adults to have fresh air, too.)

   Generally speaking, however, the more government rules you have about anything, the more it costs businesses, and the harder it is for them to offer a benefit. And in the child-care arena, there are rules aplenty, from diapering guidelines to rules about posting menus to long explanations about the amount of light your child-care center must provide when children are playing.

   Small businesses know that each time you add regulations, no matter how seemingly innocuous, it costs money. Small businesses have to pay their lawyers to pore over these mandates. The result? Child care gets more expensive for employers, it becomes more complicated to implement, and businesses don’t do it.

   The result isn’t pretty. According to the U.S. Department of Labor, in companies with fewer than 100 employees, only 4.5 percent of employees have access to child care or child-care assistance through their employers.

   “You set up too many restrictions and you price child care out of a lot of people’s means,” says Tom Shanahan of the department of health and welfare in Idaho, which governs child care in that state.

   “But Tom,” you might say, “no amount of money is too much to spend to protect our children, is it?”

   That’s a good line, because it makes it sound as if anyone who does not favor government regulation is heartless and does not care about toddlers. But we live in a free-market economy. In a free market, the government is not the best party to protect our children; conversely, government mandates can lull us into a false sense of security.

   Employers have to provide safe child care. If they don’t, three things could happen.

   One, employees would vote with their wallets by refusing to pay to put their kids in the facility. The facility would close down, and it would have proved to be an enormous waste of an employer’s time and energy.

   Two, employees could leave to go work for your competitor. Specifically, they’ll go to a larger company with a more attractive set of work/life benefits.

   Even more likely than the first two options is the third: employees would sue the daylights out of you. Money, turnover, and the potential of a massive lawsuit are enough to put fear in the mind of any employer.

Workforce, December 2001, p. 88 — Subscribe Now!

In The Loyalty Effect and Loyalty Rules, Frederick F. Reichheld highlights several companies that have built value by building loyalty among customers and employees. One of them, Chick-fil-A, an Atlanta-based fast-food chain, has exploded from one diner to more than 960 restaurants in 34 states and South Africa in the past half century.

In an industry where the average turnover rate among store operators is 35 percent, it’s less than 5 percent a year at Chick-fil-A. Store-operator candidates are graduates of such places as West Point and Annapolis. They’ve had jobs in major management consulting firms. So why do they go to Chick-fil-A? Reichheld says, “Founder Truett Cathy has so effectively marshaled loyalty-effect economics that he can afford to let his operators earn double or triple industry average while still generating sufficient cash to grow the chain while remaining a private company.”

Chick-fil-A “aligns the interests of outlet operators with those of the company, and gives the customer ultimate power over both,” Reichheld says. The company offers operators the chance to earn $200,000 to $300,000 a year, with only a $5,000 up-front franchise fee. Every operator gets a $30,000 salary, and 50 percent of the store’s net profits. If the store succeeds, they succeed. (And if the operator decides not to continue with the company, she gets her $5,000 back, as long as the restaurant’s books are in order.) The operators “concentrate on building their store’s profit pool by providing customers with the best possible value and service,” Reichheld says.

The company also targets high-performers for its counter help (where turnover is a bigger issue: Chick-fil-A’s is 125 percent, versus the industry average of 300 percent). The company seeks out the upper range of high-school students, “typically higher achievers and more dedicated workers who have long-term intentions of attending college.” Chick-fil-A also offers part-timers $1,000 to $2,000 in scholarship money. Dozens of employees are annual recipients of scholarships of up to $18,000 for Berry College in Rome, Georgia, Reichheld says. “The firm has also created a pipeline of talent for its full-time recruiting needs; more than half of the new restaurant operators have worked previously at Chick-fil-A stores as part-timers.”

Q

Dear Workforce:

Why do companies restructure, and what problems do they typically face duringthe process?

— Pondering change, human resources, manufacturing, Triolet, France.

A Dear Pondering in France:

Companies restructure for many reasons, including:

• Cutting costs
• Improving competitive advantage
• Sharpening strategic focus on key accounts, core products, and new technology
• To better leverage talent.

Problems typically faced

• “The more you change, the more you stay the same.” Sources ofcost inefficiencies and strategic misalignment are often rooted in the cultureand habits of both leaders and followers. Their line of attack may carry theseeds of the same weaknesses they seek to correct. Social systems are complexand self-correcting, like thermostats set on one temperature. The culture (andoften inadvertently its individual members) resist change rather effectively.Sometimes the most important changes are the ones least contemplated, such asseeking a new CEO, a new chairman, even a new board of directors.

• The goal of cutting costs is often driven by an immediate, even urgentneed for change, particularly in public companies concerned with their EarningsPer Share, share price, and vulnerability to takeover. Unfortunately, thisimmediate problem may be the outcome of long-term trends in the industry thathave changed the rules of the game, leaving a once-viable business modelfloundering. Typically, once-successful organizations do not scrap theirbusiness model at the first sign of trouble, nor should they. However, it is notuncommon to see organizations rely too heavily on old tactics that, rather thancorrecting the problem, actually aggravate it. This path of action and reactionsets the company on a viscous downward cycle. By the time the truth is accepted
  — that the old solutions no longer work — the changes required may be morethan can be absorbed.

• Companies in the U.S. in particular are quick to cut costs, especially byreducing their workforce. While this ruthless nimbleness may allow the companyto limit its short-term losses, it rarely creates competitive advantage in andof itself. Many sage consultants observe that you don’t save yourself to growth.Typically, the most successful changes require more than mere cost reduction.The best companies combine strategic refocus with organizational realignment inroles, processes and structure, thereby rationalizing a targeted reduction inforce. This is like trying to ski faster downhill while resetting yourwristwatch and calling the ski patrol on your cell phone. Not many leadershipteams can pull it off.

• Organizations are often not well informed about their own talent. Thetalent they need most during restructure is often invisible to senior leaders.These people are found in the middle levels; they are found in outside fieldsthat may not be considered; they show a different profile of style and talentthan what the senior leaders are used to appreciating; and they come fromdifferent angles and experiences than those that shaped the last generation. Ittakes a bold leadership team to reorganize a company around the young Turks, oddbirds, and raw potential they actually need to call on to lead new change.

SOURCE: David J. Armstrong, senior consultant, Personnel DecisionsInternational Corporation (PDI), Organizational Solutions Group, Minneapolis,Minnesota, June 22, 2001.

LEARN MORE: See “Should I Reassign Instead ofFiring?” for advice before making changes.

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

QDear Workforce:

Can we require our salespeople to attend a two-day seminar aimed at improvingsales techniques and boosting their overall sales? The company is paying for allexpenses, but none of our salespeople want to attend.

– Flummoxed Human ResourcesCoordinator,publishing/communication/advertising, Cedar Falls, Iowa.

A Dear Flummoxed:

Career and skill development is a two-way street, and both the employer andthe employee need to take responsibility for it. Your organization is offering adevelopment and learning opportunity, but your employees are not interested. Theimportant question to ask isn’t whether you can require the seminar; rather, whyaren’t your salespeople interested?

This is a chance to have an exploratory discussion with your sales force tounderstand what it considers valid learning opportunities to be. You did notmention whether your employees receive commission for their sales. Often whenthat is the case, paying for the seminar and accommodations is not enough. Yoursalespeople may feel they are losing valuable time that could be better utilizedby making sales calls. Perhaps if you offer to compensate them for the value ofany lost commission, they will not see the overnight stay as a roadblock toperformance.

The overnight stay might make the seminar unattractive for another reason:The issue of childcare. In most families today, both parents work; therefore,the responsibility of childcare rests on each partner equally. It may bedifficult for your employees to arrange for childcare when one parent is awayovernight.

The most important information you need to find out is why your employeesdon’t want to attend this particular seminar. You may want to explorealternative programs that do not require an overnight stay. You also should askemployees to suggest development programs they would be interested in attending.Perhaps they’ll even have specific seminars in mind.

In any relationship, communication is the key to success. Within yourorganization there is a crucial relationship between decision-makers and thoseaffected by those decisions. The lines of communication should remain open toensure the maximum development of both your employees and the organization. Ifeveryone is aware of mutual goals and expectations, you won’t have thedisconnection you currently experience.

SOURCE: Kim Rutherford, regional vice president, operations, Drake Beam Morin, Chicago, Illinois, July 17, 2001.

LEARN MORE: See “How to InspireEmployees“

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

Q

Dear Workforce:

How do I keep up morale and motivation for a team whose project will likelyend in the next six months to a year? The employees will have jobs in thecompany, but not the same job.

— Striving to motivate, supervisor, finance/insurance/real estate, MercerIsland, Washington.

A Dear Striving to Motivate:

The project team should have a clear vision of its purpose, goals, anddeliverables. In addition, the leader should meet with the team members todiscuss next opportunities for them. Whenever possible give people choices abouttheir next opportunities. If choice is available, talk with people about: theircurrent experience — what they did, what they learned, and how the experiencecontributed to their capabilities. Discuss interests, skills, career goals, andtheir ideas about their next role.

If there is little choice, talk with the team members about the role you havein mind for each. Discuss why you believe this role would be of interest andgood for them. Remember that at the end of the conversation you would like tohave each person excited about the new role and feeling that their skills andtalents are valued.

SOURCE: Susan Gebelein, executive vice president for Personnel DecisionsInternational Corp. (PDI), June 28, 2001.

LEARN MORE: A self-assessment to determine the motivation level of yourorganization.

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

Most benefits administrators spend at least half their time trying to crawl out from under mountains of paperwork. These HR professionals should be focusing on strategic planning, but are instead trapped by unpaid claims, inaccurate invoices, and illegible enrollment forms. Dealing with paperwork consumes as much as 80 percent of most HR departments’ time, reports Forrester Research, a technology research firm located in Cambridge, Massachusetts. Paper-based processes are inefficient and error-ridden, and add considerably to the already high price of health care. Administration costs consume more than 20 cents of every dollar spent on health care (a higher percent than in any other industry,) according to Forrester’s August 2000 report “Health Claims’ New Intermediaries.” Claims processing is considered the primary culprit.

Benefits administrators have had enough. They are clamoring for a paperless way to manage their health-care plans, and providers are reluctantly complying by moving at least some of their processes online.

“Bringing claims-related transactions online is a priority for insurers,” says Douglas Johnston, author of the Forrester report. His research shows that 60 percent of insurers are using the Web for some claims-related transactions, while 90 percent say processing is a very or extremely important element of their e-commerce strategy. Increased operational efficiency and cost savings — not customer service — were cited as the most important reasons for the move.

The early benefits processes to hit the Web are administrative tasks, such as managing open enrollment, finding a provider, and checking the status of a claim. Some larger providers, including Aetna U.S. Healthcare and Humana, are also adding interactive member tools that let customers review plan descriptions, get contact information, use health-risk-assessment tools, and comparison shop.

For HR professionals, reductions in cycle time, paperwork, and errors are the most attractive aspect of Web-based benefits tools. It allows them to shift their focus to strategic planning and other HR tasks more critical to business goals, says Mindy Kairey, e-business leader of the health-care management practice for Hewitt Associates LLC, an HR consulting firm in Lincolnshire, Illinois. The integration and availability of data is what appeals to employees, who are eager to take a more active role in choosing and overseeing their health-plan options. “The Web puts benefits information right in the hands of the people who need it,” Kairey says. Employees want to track their claims, review their current coverage levels, and compare their options. “They want to take responsibility for their health plans.”

Fortune 1000 companies are the first to benefit from these Web-based options. They spend the most money and have the greatest amount of paperwork, so it’s crucial that they find ways to streamline health-care administration, she says. Some companies are building custom tools in-house; others are using their influence with providers to demand changes in their services.

Smaller companies will have to wait a few years for these options, because they have so little clout with providers, she adds. “It’s not as feasible for smaller companies to ask their providers to put their plans online, and they can’t afford to build their own tools in-house.”

Regardless of a company’s size, however, the true impact of the Web on health care is still several years away, says Bradford Holmes, a Forrester Research analyst. Today only 36 percent of insurers give members the ability to check claim status and look up providers online, even though these are the most highly sought-after benefits-administration tools. “It will be three to five years before these services are common,” Holmes says. “And 10 years before the doctors, providers, employers, and employees are all linked into a single streamlined system for health-care management.”

But it will happen eventually, Kairey says. It’s not a fad. “It’s the way it will be.”

Q

Dear Workforce:

I manage a small raingear business and have trouble getting employees show upand work a full eight hours. Since we’re a small company, when someone is outour production suffers. Any suggestions?

— Stressed out GM, manufacturing, Attleboro, Massachusetts.

A Dear Stressed Out:

Whenever you deal with employees not performing the basic duties of the job,you might want to consider the following:

Do you have a current policy about attendance and tardiness? Is itwritten?

Writing the policy is very important to avoid potential misinterpretationsand to ensure that all employees receive the same information.

Are all employees aware of the policy and the consequences for violatingit?

Make sure all your employees receive a copy of the written policy. You maywant to require a signed acknowledgement form as well. Some attendance policiesinclude specific consequences for non-compliance but that may be too cumbersomefor your small company. At the very least, be sure your policy includessomething about “failure to follow this policy may result in disciplinaryaction up to and including termination.” This will put the teeth in yourpolicy that allow you to enforce it.

Are your current managers pushovers for the crew? Do they let things slideor are they able to enforce the policy as it comes up?

This, of course, is an internal training issue. If your supervisors aren’tconsistently and fairly enforcing the policy you’ve written, they may needcoaching on performance management or documentation practices.

However, if your problem is widespread and many of your employees are beinglax about their schedule, you’ll want to take some additional steps:

1. Develop your infrastructure as above, but also hold a meeting with youremployees.

2. Clarify your scheduling expectations and explain to them howtardiness affects their co-workers and production.

3. As much as possible, involveyour employees in coming up with solutions. They may surprise you with some verycreative solutions. You may also find out information that will help youunderstand any underlying reasons for this uncommitted attitude toward doingtheir jobs.

Make sure to follow through with the solutions and with any consequences.This should be a great start. Good luck.

SOURCE: Cheryl Lawler, HumanResources Manager, and Robin Bruins, Senior Human Resources Manager, Personnel Management Systems,Inc., Kirkland,Washington, June 19, 2001.

LEARN MORE: See a “Sample Attendance Policy” for language to usewhen crafting a policy.

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

Q

Dear Workforce:

Our president wants to re-hire a former employee who was fired for bakingmarijuana into brownies and serving them at a function attended by companyemployees. Company practice has been to not rehire employees terminated forcause, but the boss says the employee has learned his lesson. How do I convincethe boss this is a bad idea?

— Holding out on hashish, AssistantHuman Resources Manager, manufacturing,Auburn Hills, Michigan.

A Dear Holding Out:

I can empathize with your dilemma. The employee’s behavior showed a prettyoutrageous lack of judgment, not to mention put the company in potential legaljeopardy. If the boss is not willing to consider your viewpoint, you mightsuggest he speak to other company presidents for a second opinion.

Still, if your boss is determined to be forgiving, then your best bet is toconvince the boss of the necessity for a three-way rehiring interview with theemployee. Let the boss play good cop while you play bad cop. Raise all yourarguments that run counter to employment, yet be reluctantly willing to give theemployee a second and last chance. While willing to forgive, the boss mustemphasize that he’s not totally willing to forget. And the boss must alsoacknowledge in front of the employee the validity of your serious concerns.

If the decision is to rehire, then I would have a meeting with thisemployee’s supervisor also, again letting him or her know the trial nature ofthis process and that initially there will be close supervision, as if theindividual is a new employee. (A definite probationary period will be ineffect). If all parties can agree with this plan then I believe the employeewill, over time, either prove his professional reliability, or his liabilitywill quickly be exposed.

SOURCE: Mark Gorkin, LICSW, “The Stress Doc” and American Online’s”Online Psychohumorist,” Washington, D.C., May 31, 2001.

LEARN MORE: See “Starting a Drug-TestingProgram“

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

The following could be placed in every applicant’s file prior to applicantcoming onto premises:

Applicant:
Position:
Location:

Notes (Use back of sheet, if necessary. Initial and date all entries):

©Lester S. Rosen, Employment ScreeningResources, 2001

The information contained here is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.