Category: Technology

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Manhattan Hotel Unveils High-Tech Videoconferencing Facility Designed to Help Reduce Travel and Training Costs

As business travel continues its long slump, Marriott International is ramping up a new high-tech videoconferencing service for sidelined road warriors.


The New York Marriott East Side is one of three Marriott properties to initially offer the service called Go There Virtual Meetings. The underlying technology is provided by AT&T and Cisco TelePresence.


A presentation of the service Wednesday, January 27, at the Lexington Avenue property connected hotel executives in Manhattan with colleagues at the Bethesda North Marriott Hotel and the Grosvenor House, a JW Marriott property in London. Those three properties are the first of 25 Marriott hotels to offer Go There Virtual Meetings. The demonstration also included Cisco executives in Santa Clara, California.


“It is a new revenue stream for us,” said David Marriott, COO of the hotel company’s Eastern region. “Many of our corporate clients have this technology at their headquarters.”


Marriott said he is not worried about cannibalizing his hotel room business because executives who participate in videoconferences or webinars were not coming to the hotel in the first place—not to mention that the fee for the service could exceed the cost of a room in some markets.


It costs $500 per hour to book a Marriott conference room equipped with the technology. And Marriott is sharing the expense of setting up the program with AT&T and Cisco. David Marriott said it is a $75,000 investment to build out a Go There Virtual room in a hotel.


In each of the rooms there are six chairs arranged around a curved conference table facing several large flat-screen panels. The executives who appear on the panels are sitting at an identical table, so that it looks as if they are seated at a large round table. The cameras are voice activated and follow whoever is speaking, allowing people to make eye contact.


Marriott said he expects people who book these rooms to spend money at the hotel on food and beverages.


“We see this as another reason to get people into our hotels, and once they are here, they’ll spend money at the property,” he said.


Cisco TelePresence and AT&T developed their product about three years ago and offer it around the world in about 700 locations at mostly large-company headquarters.


But Marriott International is the first hotel company to make such a significant investment in rolling out the service internationally, said Bill Archer, AT&T executive vice president of global strategy and transformation.


Workforce Management Online, February 2010 — Register Now!

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10 Social Media Commandments for Employers

With apologies to Shakespeare, who was quite the networker himself in Elizabethan times, to network or not to network is not the question. Social media is a fact of life for millions of people, so the real question is not whether we connect, but where and in what ways we should connect to benefit from online networking’s pluses and avoid its minuses. Because many, if not most, networkers are employees, the question is also how far employers can and should go to guide employees’ social networking activities to prevent or reduce employment-related problems.


Here are 10 social networking commandments for employers. If followed, they will enable employees to enjoy social media without employer static and interference:


1. Influence appropriate work-connected behavior and use by employees with a social media or networking policy. Privacy rights are gaining ground each day, particularly in employee-friendly states such as California and New Jersey. But rest easier, because employers have rights too. These include an employer’s ability to create and enforce reasonable policies to protect its employees, its property and its reputation from false or reckless actions by its employees. Reasonable and responsible employee use of social media starts with clear, work-connected policies, including a social media/networking policy, to frame acceptable and unacceptable e-behavior.


2. Use your social media policy to set employee boundaries. Every employer needs a simply worded social media policy to provide employees with practical guidelines to help prevent unthinking, harmful employee actions. Having no such policy is like having no curfew for teenagers. Few things are worse for employers or parents than hearing “You never told me that!” Tell your employees, nicely but firmly, what you expect from them.


3. Echo important employment considerations in your social media policy. Minimize accusations of being Big Brother. Assure employees that social networking can be wonderfully fulfilling. Like household appliances and tools that can cause death or serious harm, however, thoughtlessly using the Internet for social networking can cause serious harm to the company and our jobs. While socially networking, we must avoid:


• Illegal activity.

• Disclosing trade secrets or other confidential or sensitive information.

• “Watering down” patented or copyright-protected information.

• Harassing or otherwise being mean-spirited by spreading gossip—or even the truth—about others.

• Wasting our work time or that of others.


4. Consent for monitoring is crucial, but “sell” it to employees. Whether employers need to monitor should be a non-issue. “Playing ostrich” by failing to monitor invites a host of legal and public relations issues, because ignorance is not bliss and it’s certainly no legal defense. The only actual question is how an employer can monitor with the least legal exposure. The answer is obtaining employee consent to monitoring.


Obtaining signed or implied employee consent regarding the workplace use of social media is crucial to an employer’s ability to monitor employee use of social media and take action for unacceptable employee behavior. Monitoring employee use of social media without clear consent is like walking into a New York City bar with an unregistered handgun in the waistband of your sweatpants with the safety off. Things can happen, but nothing good.


Employees have options, as do employers. Among their options is to work for you or leave. They also have privacy rights that courts continue to recognize, refine and sometimes create. At work and beyond the workplace, however, employees can agree to and accept as reasonable the privacy standards that employers offer at the time of hire, or as a requirement for continued employment. Those most likely to agree to such standards—because they want employment—are job applicants. But when jobs are scarce, as they are now, existing employees can be equally “accepting.”


It’s not necessary for employees to consent in writing to privacy expectations. But written consent is easier to prove in case of a dispute or lawsuit. It’s also difficult, if not impossible, to deny. Obtaining written consent is easier from each applicant than all employees at one time.


Because obtaining signatures from a group is hard, implied consent for existing employees is the norm. It typically starts with an electronically and physically posted message to employees, announcing a change on a specific date for all employees. Employees who continue working after the effective date of the change have implied their consent. This form of consent works fine in most cases, unless, for instance, the change is forbidden in the work state. One example, from another employment-law arena, is a noncompete pledge that states such as California generally abhor.


Imagine the relative ease in defending your viewing of an employee’s Facebook page if you have this consent in hand:

If hired, I will comply with all Employer X policies, including, for example only, its non-disparagement policy and its social media policy. I encourage Employer X to monitor my compliance as it sees fit. I understand that monitoring can extend beyond Employer X-provided equipment and my at-work time to off-site social electronic sites such as MySpace, and to any Twitter or other social media account I maintain or visit. I agree, in advance, to provide Employer X with any needed password or other access to conduct employment-related monitoring.

To keep good and motivated employees, avoid force-feeding policies and coercing consent. That would only persuade more employable workers to defect to less draconian competitors. Note that even with consent, overbroad or intrusive monitoring will still spell trouble. To sell employees on a social media policy and obtain their consent:


• Provide examples of valuable, acceptable use of social media to encourage that kind of behavior.

• Alert employees to stories of how new Internet “friends” are not always who they say they are.

• Specify, with concrete examples, acceptable and unacceptable social networking.

• Minimize negative reactions by asking employees to reverse roles: “Imagine if an employee said this about you.”

• Specify easy-to-understand guidelines and require employees to meet them. Only then should you seek consent.


5. Always use the least intrusive search available. Once you have consent and before monitoring, decide how to monitor in the least intrusive way to seek needed information. In cases involving privacy issues, expect courts and juries to be offended and then punish employers that choose and use a more intrusive method over a less intrusive alternative.


6. Seek only necessary work-related information. An employer’s right to monitor and search extends only to information needed to protect its business and its people. Never seek other information.


7. Be yourself. Never pretend to be someone or something else to access and get information from a site. Violate this commandment, and you can brace for a lawsuit, and prepared to be called a predator—invoking the vision of a sexual predator to a jury—that is acting in violation of site-entry rules and federal and state electronic communication and other laws.


In 2009, for example, a federal court in New Jersey found that an employer, Hillstone Restaurant Group, had violated federal and New Jersey laws by accessing an invitation-only site by pretending to be an employee and using the password of an employee who had permission to be there. Read that decision here.


8. Know and obey applicable law. “Ignorantia juris non excusat” is Latin for, roughly, “Ignorance of the law does not excuse its violation.” It was smart advice in ancient Rome and it still applies. Laws that specifically or arguably apply to social media searches and monitoring include:


• The Federal Electronic Communications Privacy Act.

• The National Labor Relations Act.

• State statutes that outlaw adverse employment action for engaging in off-work activities that are not unlawful.

• Constitutional and court-created privacy and similar personal rights.


Keep abreast of the reach and depth of all possible laws that apply to monitoring and avoid inviting a lawsuit by stretching the envelope.


9. Act to protect. Discovery of dangerous or damaging information on a site demands immediate and effective action tailored to the particular facts. That typically means requesting that the site remove the offensive information. This is often done simply by learning and using the particular site’s terms-of-use policy to your advantage. This can result in not only persuading the site to remove the posting but also to block future messages from the poster. Disclosing confidential information, “trashing” your products or services and significant accusations of wrongful behavior by other employees are examples of circumstances that often trigger removal.


If that effort fails, however, depending upon your policy and employee consent, approach the offending employee, if that person can be identified, and persuade him or her to remove the posting by offering lesser discipline for cooperation.


It may become necessary, however, to seek court relief. One example is when the sender is anonymous and the site manager or Internet service provider is unwilling to divulge the poster’s identity. Another situation that might require court action is when the site refuses to remove the posting.


It is also important, but less time-sensitive, to investigate who is at fault and, if it was an employee, what employment action is appropriate.


10. Be a bit paranoid. There is a fine line between being sensitive and just a little paranoid. You should cross it often to remain diligent, aware and—it is hoped—safe and secure in protecting your business, your fine reputation, your employees and their morale.


Maintaining and enforcing an effective social media policy, monitoring sites that your employees frequent and enforcing your policy when necessary are musts for survival in an electronic arena where a thoughtless, reckless or vicious electronic rumor can doom a business.


Workforce Management Online, February 2010 — Register Now!

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Workers’ E-Privacy at Issue

A Supreme Court case involving a police officer’s text messages may provide guidance on the limits corporate HR departments can impose on electronic communication. When employees walk into an office, factory or other business operation, one part of the U.S. Constitution generally does not apply to them—protection from unreasonable search and seizure.


 


The Fourth Amendment prohibits government intrusion. An employer, however, can review the contents of a purse or a desk. This spring, a Supreme Court ruling may help set a standard for how much electronic privacy workers can expect. The case that the court will review involves Jeff Quon, a police sergeant in Ontario, California. In 2002, Quon exceeded the 25,000-character limit for text messaging on a two-way pager issued by the department, which had a policy allowing supervisors to monitor e-mail messages and Internet usage. It was silent on texting.


When the chief of police investigated Quon’s text overage, he obtained transcripts of Quon’s messages from the city’s wireless provider and found that many of Quon’s communications were sexual in nature.


In a suit against the city, Quon and three colleagues argued that an informal policy allowed them to use their pagers for personal matters as long as they paid the overage fees.


A district court ruled that Quon could not expect to maintain the privacy of the messages on his department pager. The San Francisco-based 9th U.S. Circuit Court of Appeals overturned the decision, holding that the department’s review of the message content was “unreasonable in scope.”


For the first time in more than two decades, the Supreme Court will rule on a significant workplace privacy issue, says Kent Richland, a partner at Greines, Martin, Stein & Richland in Los Angeles.


“It may be the first time the Supreme Court makes the law crystal clear in this area,” says Richland, who will represent the Ontario Police Department before the high court.


The circumstances of the case may limit its application to the private sector. Fourth Amendment rights are more relevant when the employer is the government. The Supreme Court would have to issue a broad decision for it to directly affect corporate practices.


Supreme Court Chief Justice John G. Roberts “has made it quite clear that the court is going to adhere to the tradition of ruling on the narrowest grounds possible,” says Zan Blue, a partner at Constangy, Brooks & Smith in Nashville, Tennessee. “If they do that, they’re not going to touch on the issues affecting the private sector.”


For instance, a legal question more relevant to companies involves the extent to which employees have a right to privacy when accessing personal e-mail accounts from a work computer, Blue says.


“There are traces left on the hard drive,” Blue says.


Nonetheless, the case may still provide guidance to corporate HR departments on the limits they can impose on e-mail, texting and Internet use, according to Michael McAuliffe Miller, a partner at Eckert Seamans Cherin & Mellott in Harrisburg, Pennsylvania.


“You’re getting to the point where you have to review your technology policy as often as you change your phone provider,” Miller says.


Workforce Management, January 2010, p. 3 — Subscribe Now!

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The Trouble With Online References

Imagine that one of your managers receives a note via LinkedIn one day from a former colleague. The manager knows that Joe White has left your organization, but isn’t quite clear on the details, since the company’s announcement merely noted his departure without explaining it. The manager knows that Joe had once been quite a company asset, and he writes a dozen glowing lines about Joe’s contributions. He sends it back to Joe, feeling he has done a good deed.


It sounds innocent, and it could be. But it could also fuel a wrongful termination lawsuit. And it’s a good example of the collision that’s taking place in organizations every day. Social networking on sites like LinkedIn or Facebook isn’t going away. Employee lawsuits aren’t going away either. HR plays an important role in balancing these colliding forces and educating their managers in when a recommendation is safe—and when it’s not.


Whenever I speak on this subject, people sometimes tell me that lawyers have overblown the recommendation issue and that managers should be allowed to use common sense. I wholeheartedly agree: Lawyers usually overblow simple issues, and common sense should dictate managers’ behavior.


But also consider this: When people sue my clients’ companies, alleging sexual harassment, I search MySpace for the each of their names, and about half of the time I find these folks, posing provocatively and using sexually suggestive language, which in many cases undercuts the allegations made in their suits or impacts their credibility. Workers’ compensation claims investigators also check MySpace and accessible Facebook pages to see if supposedly injured employees are actually recuperating, or are out cavorting. Now imagine: Do you think your ex-employee’s lawyer isn’t trolling LinkedIn to see what your managers have to say about their client, and how their assessments square with your reasons for an employee’s termination?


According to a survey released in May 2009 by the Society for Human Resource Management, nearly 20 percent of employees use online professional networking sites such as LinkedIn and Plaxo, while 16 percent use online social networking sites such as Facebook, MySpace and Friendster. LinkedIn, in particular, functions as both a job-search site and a networking site where laid-off workers can reconnect with—and get leads from—former colleagues and business contacts, including through a Recommendations function. In other words, your employees are quite possibly being bombarded with requests to recommend former co-workers. And it takes just a few keystrokes.


An employee’s reference on a social networking site could prove to be problematic in a number of ways. Here’s some background on the overall problem with giving references.


The original worrisome legal claim in the reference arena was defamation, also called libel or slander. This claim arises where a former employee alleges that a manager made an untrue negative comment in a reference check and it harmed him, usually in that he was rejected for a subsequent job. While these claims are often unsuccessful because of the need to prove that the comment was untrue and harmful, employees still bring plenty of defamation claims against former employers. Indeed, employees sometimes argue defamation against an employer that did not even give a bad reference, but merely refused to give a good reference. This is why you see many company policies that permit only neutral references.


Building upon a 2006 Supreme Court case that expanded the scope of retaliation claims under Title VII of the Civil Rights Act, several courts have held that an employer’s negative reference could be the basis for a retaliation lawsuit. This line of cases worries employment lawyers, and HR departments, because it indicates that the risk of a retaliation lawsuit does not die once the employee walks out the door.


Any HR professional unfortunate enough to have lived through a discrimination lawsuit knows that the crux of a discrimination claim focuses on whether the employee can prove that the company’s reason for termination was a pretext, which, put bluntly, means that every discrimination plaintiff seeks to prove his employer is lying about the reason for the firing. As a result, savvy attorneys will search the Internet for any comment that is inconsistent with the company’s official message about the reason for the termination. For example: A plaintiff’s attorney representing Joe White, who was terminated for poor performance, will consider it pay dirt if she finds a LinkedIn recommendation by his manager stating that Joe White was the best employee he ever had.


An additional risk arises if the employee using a social networking site reveals specific confidential information that the company would not want in the marketplace or to be accessible by competitors. For example: An employer in the confidential development stages of a new product may have significant concerns if Jan Jones’ Facebook status read, “Finally finished the marketing proposal for our new sugar substitute. Now I can go to sleep!” While this fact pattern may come up less frequently, the consequences could be immediate and irreversible for the company.


There is no one right answer here. A company that has weathered one too many legal disputes may take the most cautious route, prohibiting managers from using a social networking tool to speak about work—at all, period. For some employers, especially those with high turnover and legions of former employees with axes to grind, this may be a perfectly reasonable business judgment.


But some companies wish to find a social networking and reference policy that allows managers to help their former employees without putting the company at undue risk of a legal claim. That may be a reasonable judgment too. If your company struggles with this balance, consider these points:


Ensure solid policies in the first place. Several clients have asked me for a “social networking policy,” but I usually feel that anything we draft on this topic will be out of date in six months. Instead, I ask them to review their existing policies on confidential information, references and Internet usage to ensure that they cover evolving technology. As you look at your practices, ask yourself: Have you made it clear that employees should not be speaking about company strategy or detailing their work projects without your approval? Do managers understand whether they are allowed to provide a reference for a former employee and, if not, what do they do if asked? The same policies will apply to social networking situations.
Protect proprietary information at all costs. Start with a policy on confidential information. Describe the types of information you expect employees to keep confidential and stress that this policy applies to their use of the company’s technology. When you find employees Twittering about internal company strife, badmouthing the company’s business choices on a blog, or recommending as brilliant the underperforming CFO you just fired, they may have violated your policy, even if the behavior did not rise to the level of violating the trade-secret law. They can, and often should, be terminated for this behavior.
Control the message. A common reference policy dictates that all reference requests should be directed to HR, and HR will provide only dates of employment, position title and salary. This is certainly the least legally risky policy, and one I endorse unless a company fully understands and is willing to absorb a bit of legal risk in the name of helping former employees. If, however, you would like to allow managers more leniency to provide references, education is key. They need to understand that those references could possibly show up again in a lawsuit and they would need to be prepared to defend their words as accurate and consistent with the company’s position.
Distinguish between company references and personal ones. For the most part, a company should not have the time or interest in policing its employees’ off-duty conduct, and some state laws even make this illegal. For this reason, many companies will clarify that managers may give a purely personal reference if they choose, but they should not speak as a company representative in order to avoid inconsistent messages and potential defamation claims. This solution may strike the best balance between a company’s legal risk and a manager’s desire to “just be human.” HR can provide helpful examples to assist managers in understanding this distinction.
For example, this reference may be problematic if inconsistent with other company documentation: “Joe has worked for me for 10 years. Most recently, we worked on the strategic pricing project and Joe came up with the BuyLo initiative that increased revenue by 10 percent. Joe was a favorite with internal clients.”
This reference, however, is probably beyond the purview of the company’s HR and legal departments and would not be a problem: “I have known Joe for 10 years. I have observed that he is energetic, enthusiastic and innovative.”
The social networking recommendation issue, like most others confronting HR professionals, is all about balancing risk. Many HR departments legitimately decide that allowing managers to provide any reference is not worth the exposure. Others are willing to absorb a bit of risk. Ensure that your leaders are well educated on how their words matter to make this common-sense decision.

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Dear Workforce How Should We Craft a Blog Policy for Employees?

Dear Not Big on Blogs:

When considering a blog policy, your company should focus on two key questions. First, is the intent of the policy to prevent employee action or to encourage communication? Second, do you have existing policies that are applicable to curb the negative behavior of employees?

Could the offending behavior be prevented through your corporate-conduct policies (often outlined in an official employee handbook)? Most conduct policies are clear about which behaviors are and are not acceptable. As such, these policies should be your first line of defense when reprimanding employees.

However, there is a positive purpose to creating a blog policy that lays the groundwork and defines parameters for employees. Outlining the dos and don’ts enables you to foster positive communication, idea sharing and collaboration through blogs, thus benefiting from your employees’ rich knowledge base.

Helping employees understand these guidelines encourages more effective blogging while spreading best practices throughout your organization.

Some issues to think about when developing a blog policy:

• Which type of communication is the company trying to encourage (or discourage) by using blogs? Or are you trying to reinforce collaboration and knowledge management?

• At what level are you seeking to encourage employee blogging?

• Are organizational best practices easily disseminated using an intranet or blog?

• Should blogs be used to help in recruiting?

A blog policy helps employees understand the importance of internal communication and provides a vital outlet for communicating messages outside the organization.

SOURCE: Michael Rudnick, Watson Wyatt Worldwide, Stamford, Connecticut, November 16, 2006

LEARN MORE: Please read “Bloggers Find the Ax Is Mightier Than the Pen” for more coverage of this emerging topic.

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.

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.

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 Dear Workforce Newsletter
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Tips and Best Practices Using Social Media to Support Change

Employers ignore social media at their own peril, especially during times of change. Social media comes with risks but also with great reward. Here are six best practices for using social media in change management.




Tips and Best Practices: Using Social Media to Support Change


1. Accept that social media happens—whether you like it or not. Get ahead of the wave and plan for it.Companies with highly effective communication programs are far more likely to have a documented social media policy and build executive and legal support in advance of change.
2. Have a clear purpose for your social media tools—use the right media in the right situation. Are you looking for feedback and ideas, and hoping to build collaboration around a change?

Without clear scope or intent, the audience can commandeer media for different purposes. Test or do a pilot of social media methods on small groups first to shape a successful program.
3. Segment your audiences. But don’t make the mistake of thinking social media is “just for kids.”
 		In the U.S., the average worker age is 41, and almost one-third of “Facebookers” are 35 to 49; almost a quarter are over 50. Statistics are similar worldwide.

While younger generations have high expectations for work technology, many veteran employees are surprisingly open to new approaches.

Be aware of pockets of employees who could use a little extra coaching to be as comfortable as possible with social media.
4. Assess audience impact to focus your resources on the stakeholders you need to actively support change.
 		In any change, there are critical stakeholder groups in the organization that can be your change leaders. Determine whether building a “social” community within those groups would help them embrace change and lead the way.
 
5. Plan, prioritize, pilot. Then monitor and facilitate. As with any effective change program, you need to have a strategy before you launch. Using social media will give you more immediate feedback, so plan to be flexible. Monitor the conversation and be part of it where appropriate.
 
6. Measure.

 		Not everyone will “talk,” but many will participate, even if they are just observers. Be sure to measure your efforts to capture both active and passive social media voices.

Organizations with highly effective communication programs use measurement to assess not only activity but also awareness, understanding and ultimately behavior change.

Sources: Watson Wyatt 2009/2010 Communication ROI Study Report; 2009 Forrester Research Study


Workforce Management Online, January 2010 — Register Now!

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Labor Department Plans Free COBRA Extension Webcast

The Department of Labor will hold a free online webcast Friday, January 22, regarding the new requirements of the federal COBRA subsidy.


The two-hour webcast begins at 1 p.m. EST and includes officials from the Labor Department, the Department of the Treasury and the Internal Revenue Service. They are scheduled to discuss the new extension and notice requirements.


“If you are an employer trying to comply with federal COBRA regarding your health plan, or if you are a third-party administrator or a carrier with questions about the new law, this is your chance to hear from the federal regulators and have the opportunity to ask them questions,” said a Labor Department press release.


Late last year, Congress extended the COBRA premium eligibility period until February 28 and increased the maximum period for receiving the subsidy from nine months to 15 months. Eligible individuals pay 35 percent of their COBRA premiums, while the remaining 65 percent is repaid to the employer through a tax credit.


—Rick Bell 



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Social Media, E-Mail Remain Challenging for Employers

A recent survey is the latest reminder that companies are struggling to balance the benefits and risks of letting workers roam online realms such as Facebook and Twitter.


Half of companies have not set out a specific policy for workers’ online social networking activities, according to the report from two professional groups, the Health Care Compliance Association and the Society of Corporate Compliance and Ethics.


Although many organizations lack social networking policies, one-quarter of the nearly 800 compliance and ethics professionals surveyed said their organization has had to discipline an employee for activities on Facebook, Twitter or LinkedIn.


Social networking sites pose risks such as employee disclosures of confidential information, exposure to computer viruses and postings that can damage a firm’s reputation. On the other hand, some experts say social networking can help firms in ways including viral marketing. And companies can discourage employees from positive social networking activities by the use of draconian policies, said Lisa Guerin, an employment lawyer and author of a book about workplace technologies.


“It seems like we’re trying to find out what the limits are in employer monitoring,” Guerin said.


The social networking field has exploded. Facebook, for example, now claims more than 350 million active users, up from some 150 million in January.


Half of Facebook’s active users log on to the site in any given day, and more than 35 million users update their status daily.


Companies, though, are in the dark about much of this activity, according to the September report from the professional groups. Mirroring the lack of a usage policy, roughly half the respondents reported that their companies do not have an active monitoring system for checking employee activity on social networking sites.


A related but less glamorous topic is the potential for leaks of sensitive data through e-mails. This can include intentional and inadvertent zapping of information such as customer or employee financial data.


More and more companies are trying to stop such leaks with sophisticated software, said Don Harris, president of consulting firm HR Privacy Solutions. These tools, known as data-loss protection applications, can flag suspect messages, such as ones with large attachments or particular key words, Harris said.


“It just makes so much sense,” he said of the applications. “You don’t want to be reacting to things you can prevent.”


Another factor is the economic down¬turn, during which employers have axed many workers. Companies have to be wary of sabotage by disgruntled ex-workers or the prospect of former employees providing intellectual property to competitors.


Employers are taking increased steps to protect their data, said employment attorney Arnie Pedowitz. But they can go too far in their monitoring, he said, by improperly getting passwords to employees’ personal Gmail or Yahoo e-mail accounts and snooping in them.


He recommends that companies set clear policies on Internet use and employee privacy.


Guerin agrees that policies are needed in an era when so much intellectual property is in electronic form. But she argues that the intersection of data protection, employee freedoms and social media is a gray one.


“These are new areas for everyone,” Guerin said.


—Ed Frauenheim



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High-touch vs. High-tech

Nothing highlights divergent customer service styles at Amazon and Zappos more than the case of the disappearing novels.


The incident involved Amazon remotely removing books, including George Orwell’s 1984, from customers’ Kindle electronic readers. Customers complained they got an e-mail about a refund to their account but no explanation. The books had been entered into Amazon’s catalog in violation of U.S. copyright law, and observers agreed the company was within its rights to erase the novels from customers’ devices. But in contrast to Zappos’ tradition of bending over backward for customers with high-touch service, Amazon came off as a kind of high-tech Big Brother.


“How ironic that the book they deleted is 1984,” says Jennifer Benz, a San Francisco-based communications consultant.


In the wake of the dust-up, Amazon pledged that in the future it will not remove books from customers’ devices in such circumstances. Amazon chief executive Jeff Bezos also apologized in a user forum and called Amazon’s response to the problem “stupid, thoughtless, and painfully out of line with our principles.”


Amazon is no service slouch. It ranked first on BusinessWeek’s list this year of the “Customer Service Champs.” Zappos also did well, ranking seventh. But the firms differ in their approaches to service. On its Web site, Amazon defines what customers want as “low prices, vast selection, and convenience.” It relies largely on customer self-service over the Internet: The main home page does not list a phone number; nor does the “Help” main page, though users can click a button to contact the company by phone.


Zappos, by contrast, puts a 24/7 customer service number at the top of its home page. And it emphasizes the human touch—including extended phone calls with customer service representatives and handwritten notes from them.


In the BusinessWeek ranking, Zappos outperformed Amazon in a coveted category: percentage of customers who would “definitely recommend” the brand. Zappos scored a 69 percent, second only to insurance company USAA. Amazon ranked fourth with 64 percent.


Amazon has pledged to let Zappos run itself independently once acquired. Still, a firm’s customer service reputation can affect employee morale throughout an organization. So it’s conceivable the Kindle-Orwell incident may have dampened Zappos employees’ enthusiasm for the merger.


Aaron Magness, Zappos’ director of brand marketing and business development, says he is “very satisfied” with how Bezos handled the situation.


“He personally addressed the issue and addressed those affected by the decision,” Magness says.

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Can Zappos’ Corporate Culture Survive the Amazon Jungle

Executives at online retailer Zappos go to work in a jungle.


That is, green foliage hangs from the ceiling above their cubicles. The cluster of desks, nestled among other employees’ cubes at the firm’s headquarters outside of Las Vegas, is called “Monkey Row”—a reference to the CEO Tony Hsieh and his top lieutenants, who are known as the company’s “monkeys.”


The pretend Amazon captures Zappos’ playful, egalitarian culture perfectly. It’s not clear, though, how well shoe specialist Zappos will fit within another Amazon—the Internet giant that is acquiring Zappos in a deal worth upwards of $800 million.


In announcing the takeover in late July, Amazon framed it as the perfect match of like-minded companies. Both firms, Amazon said, are innovative long-term thinkers that are passionate about serving customers. Seattle-based Amazon also said Zappos’ management team will remain intact and that Zappos will remain an independent entity with its headquarters in Henderson, Nevada.


Zappos’ culture and brand “are huge assets that I value very much and I want to see those things continue,” Amazon CEO Jeff Bezos said in a video message.


Hsieh echoed the point. “We will continue to build the Zappos brand and culture in our own unique way, and we believe Amazon is the best partner to help us do this over the long term,” he said in a statement.


But questions remain about whether the combination will sap the energy of Zappos, which has cultivated fanatic customers and turned heads with its fun-yet-focused workplace climate. How much can Zappos’ extreme transparency—seen in legions of employee Twitterers and its great frankness about financial results—continue within the confines of a publicly traded company? Will Zappos’ perks such as a big employee discount, free food and generous benefits survive the harsh scrutiny of quarterly earnings reports? And what about Zappos’ obsession with high-touch customer service? Can it mesh with an Amazon approach to service that stresses high-tech convenience over the human touch?


Amazon’s efficiency—and its low-touch approach with customers—was evident shortly before the Zappos announcement, when the bookseller abruptly erased copies of George Orwell’s 1984 from customers’ Kindle devices. The company later apologized for how the matter was handled and said such removals won’t happen again.


Whether “Amazappos” will wow, satisfy or upset customers and employees remains unclear. But Zappos’ culture of digital candor means this merger will likely be a very open book, says Jennifer Benz, a San Francisco-based communications consultant.


“We’ll probably get to see how this plays out on Twitter,” she says.


Crux of culture
Just days before the Amazon news broke, Zappos’ famed culture was on display at its Henderson headquarters. The cluster of offices houses about half of Zappos’ roughly 1,300 employees. The other half work in the firm’s fulfillment operations in Kentucky.


Zappos feels like a holdover from the dot-com era. Tattoos and piercings are on display, thanks to a dress code allowing shorts and T-shirts. Guests on tour are greeted by the company’s various teams. One group of merchandising folks acts as if they are paparazzi snapping pictures. In another aisle of cubicles, employees don giant foam fingers signaling No. 1, while a stadium anthem plays. The cafeteria has free food and a stage with an open mike.


These features exemplify some of Zappos’ 10 “core values,” such as “Create fun and a little weirdness” and “Build a positive team and family spirit.”


But if Zappos is dot-com playful, it also has an edge. It pushes performance just as hard. “Do more with less,” “Embrace and drive change” and “Deliver WOW through service” also are on the values list.


That list amounts to the 10 commandments of the company’s culture. Zappos calls its culture its biggest asset, and the firm manages accordingly. About 50 percent of an employee’s performance review is based on how well she embodies the 10 values. Managers are encouraged to spend 10 to 20 percent of their time socializing and team-building. Everyone at Zappos is part of the team. Janitorial services were once outsourced, for example, but were brought back in-house about two years ago.


Call center representatives work without a script. Instead, they’re asked to focus on making customers happy with each call. The policy for employees who blog or Twitter is that they simply use good judgment. And many of them are exercising that discretion: More than 430 Zappos employees are included on a company Twitter page, and their tweets often concern work.


Making everyone happy
The result of the values, the perks and the freedom is a zany, high-energy work climate prized by both employees and executives. William Andre, who works for $14 an hour in facilities maintenance, recently was offered a construction job paying $20 an hour. He stayed at Zappos. “If you’re happy, they’re happy,” Andre says about employee-management relations at Zappos. “It’s love all the way around.”


That’s exactly how Hsieh (pronounced “shay”) sees Zappos. Hsieh, 35, invested in the company when it began in San Francisco 10 years ago, and took the reins in 2000. “It’s a brand about happiness, whether to customers or employees or even vendors,” he says.


Zappos has known sadness. The firm laid off 124 employees last year. But the axed employees got generous severance packages, including six months of paid COBRA health coverage. And Zappos was open about the cuts. Hsieh revealed the decision in a Twitter posting and blogged about the rationale.


If anything, the layoff helped burnish Zappos’ growing reputation as an “it” company. Enthusiastic customers who love the firm’s free shipping policy on both purchases and returns have added to the glow. So did the January announcement that Zappos had made its debut on Fortune’s list of the best American companies to work for, ranked 23rd.


Then there are the healthy financials. Zappos’ gross merchandise sales rose from $1.6 million in 2000 to more than $1 billion in 2008. Its net income last year was $10.8 million.


Amazon saw enough good things at Zappos to offer roughly 10 million shares of Amazon stock, equal to about $807 million based on the average closing price for the 45 trading days ended July17. In addition, the deal includes $40 million in cash and restricted stock units for Zappos employees. The acquisition is expected to close this fall.


The deal reinforces Amazon’s role as an online seller of goods. More recently, the 14-year-old firm has been promoting its upgraded Kindle electronic reading device and the ability to buy books as well as other content for it in a model resembling Apple’s iTunes system. Other Amazon operations include the Internet Movie Database, a movie-information Web site, and a range of technology services. Amazon’s net sales for the second quarter were $4.7 billion, and its net income was $142 million.


In a video message shown to Zappos employees, Bezos stressed that his 21,000-employee firm had no plans to interfere with Zappos and its mojo. “I get all weak-kneed when I see a customer-obsessed company, and Zappos certainly is that,” he said. “Zappos also has a totally unique culture. I’ve seen a lot of companies, and I have never seen a company with a culture like Zappos’.”


Hsieh also promised the merger did not mean getting lost within Amazon. “We plan to continue to run Zappos the way we have always run Zappos—continuing to do what we believe is best for our brand, our culture, and our business,” Hsieh wrote.


In late July, Hsieh and Zappos CFO Alfred Lin took steps likely to boost positive feelings about the deal. In a Twitter post, Hsieh said he announced a “big bonus” at an all-hands meeting and said he and Lin “are personally buying a Kindle for every employee.”


A fitting merger?
   But there are doubts about the next chapter in the Zappos story.


The company’s largest outside shareholder is venture capital firm Sequoia Capital, and reports and speculation that Zappos sold itself under investor pressure raise questions about future morale.


The deal took people by surprise and seemed a “bit of a shotgun wedding,” says Jeff DeGraff, a business consultant and professor at the University of Michigan’s Ross School of Business.


In a statement, Hsieh said: “The articles and rumors of Sequoia forcing us to sell are simply not accurate. … The Amazon deal got us the best of all worlds: We can continue to run independently and grow the Zappos brand and culture, our small and larger investors are getting rewarded for all their contributions to Zappos over the last decade, and we don’t have to deal with the headache and overhead of running a public company.”


Then there’s the question of overall compatibility between Amazon and Zappos. To be sure, there are some overlapping features between the Zappos and Amazon workplace cultures. These include a casual dress code, a focus on “frugality,” as Amazon puts it, and a lofty framing of the work the companies do. While Zappos says it is about increasing happiness, Amazon makes this pitch to job candidates: “Work hard. Have fun. Make history.”


But while Zappos prides itself on being a Fortune best place to work in America, Amazon has never appeared on the list.


In a July blog post, HR commentator Kris Dunn argued that Zappos’ culture will be modified if one of several events takes place, including cost-cutting by Amazon. “When a publicly traded company buys another company, change happens,” wrote Dunn, whose HR Capitalist blog is featured on Workforce Management’s Web site. “It’s not a matter of if, it’s a matter of when.”


Simply being part of a public company complicates Zappos’ commitment to core value No. 6: “Build open and honest relationships with communication.” Paradoxically, privately held firms may have greater latitude to speak freely about their operations, given the U.S. Securities and Exchange Commission’s disclosure rules for publicly traded firms. For example, in the wake of the merger agreement, Zappos entered into what’s known as a “quiet period” and is limited in what it can say about the deal.


Up to now, Zappos has been quite open with employees about financial matters. Zappos has shared information with employees about the amount of operating profit the company earned each year, and has disclosed financial and performance metrics on a daily, monthly, year-to-date and annual basis. Such financial candor, combined with employees’ freedom to express themselves, conceivably could add up to Tweets or blog posts at odds with regulations or Amazon’s preferences for shielding data from competitors’ eyes.


Asked about Zappos’ transparency in financial numbers, Amazon spokesman Craig Berman didn’t address the topic directly. But his response downplayed possible conflicts. “They are going to remain an independent and separate entity,” he says.


Consultant Benz argues it’s possible for a public company to have a candid culture while steering clear of revelations that run afoul of the SEC. She cites Best Buy as a good example. “I think there’s a balance there,” she says.


Effect on Amazon
DeGraff says the Zappos acquisition could help Amazon refresh its own commitment to customers. “What Zappos does is helps ‘rekindle’ some of the Amazon culture that got Amazon where it is,” he says.


Amazon’s decision to earmark $40 million for Zappos employees is a signal to the smaller firm that its culture truly is valuable, DeGraff says.


“It’s acknowledging that culture and saying, ‘We really like this culture,’ ” he says.


Amazon and Zappos officials declined to detail how the $40 million would be distributed among employees.


Takeovers sometimes include payments to retain employees of the acquired firm, though they typically do not get distributed to all workers, says Anne Orr, a senior consultant with advisory firm Watson Wyatt Worldwide’s global mergers and acquisitions team.


To Orr, the focus by the leaders of Amazon and Zappos on preserving the Zappos culture is convincing. “They’re saying what they mean in this deal,” she says. “Usually I don’t believe 90 percent of what I read in mergers and acquisitions.”


Doubters can always turn to the Twitter page devoted to Zappos employees. More than a week after the acquisition news broke, the firm’s morale seemed strong as ever. One Zappos employee gushed over the bonus and gift announced by Hsieh. “Free Kindle and a 40% bonus … how fabulous is that!!!” wrote Susan Walker, an employee in Kentucky. “I love Zappos!!”

Workforce Management, September 14, 2009, p. 18-23 — Subscribe Now!