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Posted on July 19, 2007July 10, 2018

Dear Workforce What Are the Pitfalls of Salary Caps

Dear Coping With Caps:



One thing you should know at the outset is that you are facing a common problem. Many organizations struggle with this issue, and the solutions they come up with vary. Let me highlight a few points that I hope will be helpful.

First of all, you did not mention whether the organization already has formal salary ranges (with a minimum and maximum dollar value for each job). If you do not have such ranges, then you should consider implementing them (and communicating the rationale effectively to employees). This can help your workforce understand that every job has a marketplace maximum above which your organization may not be able or willing to pay, no matter how well employees perform in those jobs.

However, having salary ranges will not completely eliminate your problem. The reason is that employees with long tenure eventually will bump up against the maximum. Although employees may understand the concept of each job having a maximum marketplace value, psychologically they may still feel entitled to a salary increase. “What is my motivation to do a good job,” they will ask, “if there is no financial reward at the end?”

So an organization has to have a strategy for handling those cases in which individuals reach the maximum of the salary range. Here are two options:

  • Some companies take a hard line by saying that the individual is not eligible for a salary bump until the salary range itself is increased based on market data. Once the salary range is increased, which most organizations do annually, then the individual may once again be eligible for a salary increase, since his/her salary will then be below the maximum.
  • Other organizations provide one-time bonuses to employees in lieu of salary increases. Several organizations I have worked with provide a bonus that is equal to one-half of the amount a salary increase would have been had an individual received it. Their reasoning: A bonus should not equal the amount of a salary increase, as that would defeat the purpose of managing overall costs of employee compensation. In my experience, employee reactions to such schemes have generally been positive.

One word of caution: Whatever you decide to do, it should not be communicated as an action applicable only to your support staff. Even though those positions are the ones that concern you most at present, implementing a policy that focuses on one group of the population might create more problems than it solves. My recommendation is that any actions to treat this problem should be general enough to apply to all employees in your organization.

SOURCE: John D. White, JD White & Associates, McLean, Virginia, July 24, 2006.

LEARN MORE: Please see Four Ways to Lose Your Best People for information on how to retain top-flight employees.

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.

Posted on July 17, 2007June 29, 2023

CSuite June 2007

People moving into key executive positions


Lora Villarreal has been appointed executive vice president at Affiliated Computer Services. She has been with ACS for nine years, most recently as chief people officer.


Joseph Gabbert has joined McAfee Inc. as executive vice president of human resources. Prior to joining McAfee, Gabbert was executive vice president of worldwide human resources at EMC.


Diane Cook has been appointed vice president of human resources at Classic Residence by Hyatt. Previously, Cook was regional human resources director at Classic Residence by Hyatt. Before joining Classic Residence by Hyatt, she served as vice president of human resources and general counsel for Cookeville Regional Medical Center. She has also worked as a human resources director and labor relations counsel for ACS and Cummins Inc.

Joe Connell has joined MassMutual Retirement Services as managing director of institutional sales. Most recently he was regional director for RSM McGladrey Retirement Resources. Before that he was district manager for ADP Retirement Services.

Donna Regner Rizzo has joined MassMutual as managing director of institutional sales. Most recently she was mid-Atlantic corporate retirement sales manager for Merrill Lynch.

Clem Johnson has joined Crist Associates as full-equity partner. Johnson was previously at Russell Reynolds, where he was executive director of the Chicago office.

Cathye Smithwick has joined Delta Dental as group vice president of dental affairs. Prior to joining Delta, Smithwick was a principal and national practice leader for Mercer Health & Benefits.

Cynthia Miller has joined Castleton Group as a benefits specialist. Miller has six years of industry experience.

Martha Fay Africa has joined Hodge/Niederer/Cariani as a partner. She comes from Major, Lindsey & Africa, where she was also a partner.

Deborah A. Strain has joined Giamarco, Mullins & Horton, focusing on workers’ compensation law.

Tim Fielding has been named president and CEO of Snelling Staffing Services. Fielding was previously the company’s president and CFO.

Michael A. Ray has joined Crescent State Bank as Eastern Wake community executive. He is the associate vice president of the Franklin County Home Builders Association and has 13 years of banking experience.

Jennifer Tea has been promoted to vice president of compensation and benefits at Castleton Group. Prior to her promotion, Tea was director of client services.

Jeff Holmen has been named director of international business development at PreVisor. Holmen joins PreVisor from Hewitt Associates, where he managed European business development activities for the HR outsourcing business of its Amsterdam, Netherlands, office.

Scott Stimart has been named vice president of marketing and sales in the workforce development division at ACT. Prior to joining ACT, Stimart was vice president of sales and marketing at Fastek International.

Phillip Stewart has joined Kenexa as chief people officer. Prior to joining Kenexa, Stewart was the area human resources director for Dentsply International. Before that, he was with Sara Lee Corp. as an HR director.

Christopher Battaglia has been named publisher of Pensions & Investments. Battaglia joined Crain Communications, Pensions & Investments’ parent company, in 1991 and served in various sales positions, ultimately becoming ad director in 1998. Battaglia joined Pensions & Investments in 2002 as associate publisher.

Robert E. Gemignani has been appointed senior vice president and chief talent officer at Hill & Knowlton. Most recently, he was head of employee relations and HR activity at Horizon Blue Cross/Blue Shield. Prior to that, he was vice president of HR for College Sports Television and Vivendi Universal Entertainment. He has also held various HR positions with Barnes & Noble, Random House Publishing and McGraw-Hill.

Evan Davis has been named vice president of financial and strategic planning at MRINetworkTM. Most recently, he was CFO and vice president of Canadian operations for Yum Global Brands. Previously, he was senior director of field finance and planning in Yum Brands’ Dallas office.

James K. Foreman has rejoined Towers Perrin as managing director of HR services. Foreman worked at Towers Perrin for 20 years in a number of leadership positions, including managing director of the company’s health and welfare business before joining Aetna to become executive vice president of national businesses.

James J. Forese has been named nonexecutive chairman of the board of directors at Spherion Corp. Forese has served on the company’s board since 2003 and is operating partner and COO of Thayer Capital Partners.

Gary Bragar has been appointed HR outsourcing research manager at NelsonHall. Bragar joined NelsonHall from AT&T, where he was the HR outsourcing service delivery manager.

Patrick F. Goepel has been named president of HR services at Fidelity Employer Services. Prior to joining Fidelity, he served as president and CEO of Advantec. Before this, he was in marketing and sales position at ADP and Ceridian.

Jean-Baptiste Gruet has been appointed vice president of sales at Workplace Options. Prior to joining Workplace Options, Gruet was director of global business solutions at Shepell.fgi.

Warren Heaps has joined Birches Group as a partner. Before joining Birches, Heaps spent 20 years at Colgate-Palmolive Co., most recently as director of international compensation. Prior to this, he was a consultant with Towers Perrin.

Suzanne Siracuse has been named publisher of InvestmentNews. She joined Crain Communications, InvestmentNews’ parent company, in 1996 as a salesperson for Pensions & Investments. A year later she moved over to InvestmentNews to help with its launch. In 1998 she was promoted to advertising director, and in 2001 she was named associate publisher.

Richard Post has joined PeopleFilter Technology as practice lead of hospitality. Before joining PeopleFilter, Post held management, account executive and business development positions with several companies, including the Devine Group, Taleo Corp. and PwC Consulting.
 

Randle G. Havens has been appointed manager of finance and accounting at NelsonHall. Havens previously worked for Ernst & Young.

Scott Selin has been named partner at Arrow Partnership. Prior to his position at Arrow, Selin was a consultant at Accenture.

Darryl Green has been named executive vice president of Manpower Inc. Prior to joining Manpower, Green served as CEO of Tata Teleservices. Before that, he was CEO of Vodafone Japan. From 1989 to 1998, he held various positions at AT&T, including three years as president and CEO of its Japanese operations.

Matt McGreal has joined Crist Associates as principal.

Diane Hummon has been appointed vice president of global marketing at Personnel Decisions International. Hummon comes to PDI from Greater Twin Cities United, where she was senior vice president of donor relations and strategic marketing.

Tim Geisert has joined Kenexa as vice president of employment branding. Geisert previously held executive positions at Bailey Lauerman and the Martin Agency.

Carrie West has been promoted to customer service representative at Carpenter, Cammack and Associates. Prior to her promotion, West was branch service coordinator.

The following people have been promoted to senior client partners at Korn/Ferry: Gerd DeBeer, Michael DeCosta, Rodrigo del Campo, John Denson, Kevin Ford,Beth Kelshaw Fowler, Doug Greenberg, Andrew Hickman,Iain Manson, Jean-Francois Marliere, Clare Metcalf,Jairo Okret, Firoze Patel, Emilie Petrone, Vincent Poggi, Kim Shanahan, Hamish Shaw and Brad Westveld.

The following people have been promoted to client partners at Korn/Ferry: Sloan Baxter, Allen Brady,Maria Chow, Philip Darling, Sunita Devrani, Greg Gerson, Thomas Green, Joseph Huddle, Eva Kingston,Joylyn Largo-Afonso, Asheley Galloway Linnenbach, Sean McBurney, Scott Miller, Deborah Webster, Jan Westerink and Flaviano Zollo.

Yvonne Gemmell Keene has joined Cliff Consulting as senior consultant. Prior to joining Cliff Consulting, Keene worked as an independent consultant in business development for Ketera Technologies.

Danielle Comeaux has been promoted to managing partner of the Houston branch at Lucas Group.

Alix Miller has been promoted to managing partner of the Chicago legal branch at Lucas Group.

Kelly Blouin has rejoined Lucas Group as managing partner of the Washington, D.C., branch.

Katharina Grimme has been appointed research director of BPO for continental Europe at NelsonHall. Before joining NelsonHall, Grimme was director and principal analyst at Ovum.

J. Anthony West joins NelsonHall as sourcing and shared services consultant.

Robert G. Hogan has been appointed COO at Towers Perrin. Hogan has been with Towers Perrin since 1979. Most recently, he was managing director of HR services. Hogan will also be part of the office of the chairman, which consists of the CEO and COO.

Joseph Gabbert has joined McAfee Inc as executive vice president of human resources. Most recently, Gabbert was executive vice president of worldwide human resources at EMC.

Richard Grisolia has been appointed vice president of marketing at Arbella Insurance Group. Most recently, he was vice president and corporate officer of the personal insurance division at Atlantic Mutual Cos.

James C. Kilduff has been appointed senior vice president of underwriting at Majestic Insurance Co. Prior to joining Majestic, Kilduff created the workers’ compensation reinsurance and insurance facility at Professional Indemnity.

Mia Trujilo has joined Arrow Partnership as director of sales. Most recently, she was with Compuware Corp., where she was part of the West region sales team. Previously, she held sales and management positions at Hyperion, Gartner and Gillette.

Daniel Green has joined Begos Horgan & Brown as counsel member. Previously, he was an attorney with Jackson Lewis and, before that, at Ackerly & Ward.

Dino Farfante has joined American Barcode and RFID Inc. as president and COO. Farfante formerly was president of Insight Direct Worldwide. He has been a member of the board of directors at American Barcode and RFID since 2006.

Deepjot Chhabra has been promoted to president of Enwisen. He joined Enwisen in 2006 and was senior vice president of product strategy and business development. Before this, Chhabra was vice president of Oracle Global HCM Product Strategy.

Submit your move


Posted on July 17, 2007July 10, 2018

CFO Shuffle Surges

Turnover of chief financial officers spiked 20 percent in the second quarter compared with the first quarter, with a total of 646 executives shuffling in, out or around large U.S. companies, up from 536 in the first quarter.

Churn levels were consistently high: The total number of CFOs who joined, left, resigned, retired or changed positions internally exceeded 200 for the past three consecutive months—a first since Liberum Research began tracking the data in 2005.


“Keep in mind that the second quarter includes both proxy season and quarterly earnings,” says Liberum senior vice president Richard Jacovitz, who explained that the second quarter is typically the period with the highest level of churn each year.


“There are exceptions—when the economy tanks or something major takes place,” Jacovitz says. But barring those events, he said he expects the overall level of management change to drop over the next few months.


The total level of CFO churn was down 1.5 percent from the same period last year, when the second quarter saw an all-time high of 656 shuffles. June turnover, at 202, remained high, but a slowdown appears to have begun: The quarter began with a near-high 233 CFO management changes in April and slowed to 211 in May.


In fact, the number of CFO job changes in June dropped in every category with the exception of new hires, which increased 19 percent, to 82, from 69 in May.


Filed by Tara Kalwarsk of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Posted on July 17, 2007July 10, 2018

TiVo Rents New CFO After Two Years of Churn

Tiring of having changed CFOs three times in less than two years, digital video recording service provider TiVo has chosen to rent its new finance chief.


The Alviso, California-based company has retained Cal Hoagland as its chief financial officer. Hoagland, 50, is a principal of Financial Leadership Group, which provides CFO services and corporate board consulting.


He will serve as TiVo’s full-time CFO as the firm searches for a permanent finance chief, according to a filing July 11 with the Securities and Exchange Commission. The consulting agreement with Hoagland has an initial term of 90 days and can be extended by TiVo in two-week contracts thereafter.


TiVo also said it hired a search firm to find the new CFO.


Renting CFOs is becoming more popular as companies struggle to retain talent, thanks to the unprecedented amount of turnover among chief financial officers during the past several years. A record 2,302 CFOs left their posts in 2006, according to independent research firm Liberum Research, and high turnover is expected to continue.


As a result, companies spent $8.9 billion on temporary financial and accounting assistance last year, up 68 percent from 2002, according to Staffing Industry Analysts, a workforce research firm. Costs are projected to climb another 10 percent this year.


Hoagland replaces Steve Sordello, who resigned late last month to join an unnamed venture-funded company in Silicon Valley. Sordello’s departure marked the third CFO change since early 2006.


According to the regulatory filing, TiVo has agreed to pay Hoagland and Financial Leadership Group a base rate of $2,500 per day, with hours in excess of 55 a week billed at $350 an hour.


The company will also issue Hoagland $1,000 per day in fully vested shares of the company’s common stock. The company said the annualized rate is roughly 15 percent greater than the annual compensation for Sordello.


Filed by Jeff Nash of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 

Posted on July 17, 2007July 10, 2018

Employer Wellness Programs Must Follow Federal Criteria

Final regulations issued in December 2006 by the U.S. departments of Labor, Health and Human Services and Treasury provide guidelines for employers seeking to add incentives or penalties to encourage participation in wellness programs.

    Under the final Health Insurance Portability and Accountability Act rules, employers may vary the amount of premium contributions required from employees as long as the wellness program meets the following criteria:


  • The reward or penalty must not exceed 20 percent of the cost of employee-only coverage under the plan.
  • The program must be reasonably designed to promote health or prevent disease.
  • Employees must be eligible to qualify for the reward at least annually.
  • The reward must be available to all similarly situated individuals.
  • A reasonable alternative standard or waiver must be available to individuals for whom it is unreasonably difficult to satisfy the otherwise applicable standard due to a medical condition.

    Employers are also permitted to seek verification, such as a statement from an employee’s physician, when a health factor makes it unreasonably difficult or medically inadvisable for that employee to satisfy or attempt to satisfy the otherwise applicable standard.


    The complete HIPAA regulations governing wellness programs which apply to plan years beginning on or after July 1, 2007, were published in the December 13, 2006, issue of the Federal Register.

Posted on July 13, 2007July 10, 2018

Separate Paths for H-1B Policy, Verification

Now that a major immigration bill has collapsed in the Senate, business interests are waiting to see whether employer verification and H-1B visa policy will move separately through the legislative process.



So far, Capitol Hill leaders have not committed to returning to immigration in any form following the Senate’s failure in late June to end debate on a bipartisan bill that stoked political passions.



The legislation would have strengthened border security and work-site enforcement, sharply increased fines for hiring undocumented workers, created a guest worker program and established a path toward legalization for many of the estimated 12 million illegal immigrants.



In the end, neither verification nor H-1B issues were formally debated. But an amendment that would have rewritten the verification part of the Senate legislation was called a “deal breaker.”



The Senate bill would have required all 7 million employers to sign up for the government-run electronic employment verification system that is currently being used voluntarily by about 16,000 companies. HR groups call the mechanism inaccurate and inefficient, warning that it could cause hiring gridlock.



The amendment would have limited verification to new hires, rather than extend it to existing workers, as the underlying bill did.



The fact that easing the language could have caused a firestorm demonstrates the support for enhancing work-site enforcement. There’s a chance verification may resurface in other bills.



But that scenario is not likely, according to sources on and off Capitol Hill.



“The general consensus is that employer verification and modifying the employer sanctions program has to occur within the context of comprehensive immigration reform,” says Mike Aitken, director of government relations for the Society for Human Resource Management.



It may also be difficult to address immigration of highly skilled workers outside of a comprehensive measure.



“It’s been held as a bargaining chip for getting the harder parts of immigration reform done,” says Tod Loofbourrow, CEO of Authoria, a talent management software company. “It needs to move whether it’s separate or together [with other reforms].”



Advocates like Loofbourrow assert that U.S. high-tech companies desperately need to hire the foreign students who come to this country to earn science, technology, engineering and math degrees.



They point to a recent decision by Microsoft to open a software-development center in Canada so it can recruit talent that can’t stay in the U.S. under existing immigration rules.



The Senate bill would have raised the annual H-1B ceiling to 180,000 visas from the current 65,000 limit. Those slots were filled this year on the first day that the government accepted visa applications.



“If we don’t do anything, you’re going to see efforts to move operations overseas,” says Robert Hoffman, vice president of government and public affairs for Oracle. “It’s not an issue of whether we can hire [highly skilled foreign workers], but where we can hire them.”



Hoffman says that message resonates on Capitol Hill. He heads an interest group called Compete America that is lobbying lawmakers for H-1B reform.



“They understand the urgency for action,” he says. “It’s really a question of what’s doable this year.”



If attention returns to the H-1B issue, its supporters likely will have to battle congressional skeptics who will insist on proof that there are no U.S. workers available for the jobs that companies are seeking to fill with the visas.



On the verification side, challenges are emerging outside of Washington. Arizona, Colorado, Oklahoma and Georgia have approved immigration laws mandating that their employers use the government’s electronic system.



Such moves worry business. “We believe that immigration law is a federal issue and belongs at that level,” Aitken says.



—Mark Schoeff Jr.


Posted on July 13, 2007July 10, 2018

Stamping Out Workplace Bullies

Bullying in the workplace is angering enough people these days to be fueling a nationwide grass-roots legislative effort to force companies to draft and enforce policies aimed at stopping it.


Requiring such policies, according to those pushing the legislation, isn’t an attempt to spawn lawsuits, but an effort to force companies to deal with the problem.


Bullying is blamed for unnecessarily creating high costs of turnover, insurance claims and thwarted productivity. In his book The No Asshole Rule, author Robert Sutton reports one company estimating annual losses of $160,000 in turnover, overtime and other costs created by handling problems caused by one star salesman’s tantrums and insulting behavior.


One employer attorney, however, says laws already on the books to prevent employer discrimination based on sex, race or religion are now being interpreted in broadened contexts, and offer enough legal coverage to obviate the need for anti-bullying rules.


Nevertheless, anti-bullying rumbles are breaking out in state legislatures. Since 2003, 13 states—California, Connecticut, Hawaii, Kansas, Massachusetts, Missouri, Montana, New Jersey, New York, Oklahoma, Oregon, Vermont and Washington—have introduced 28 versions of the so-called “Anti-Bullying Workplace Bill,” says Bullybusters.org, a Web site tracking the legislation.


Bullying, according to the bill’s original language, is defined as repeated “health-harming mistreatment” of one or more employees, through verbal abuse, threats, “humiliating or offensive behavior or actions,” or sabotage that prevents work from getting done.


In Hawaii, a Senate resolution urges—but doesn’t require—employers to set up anti-bullying policies for managers and employees. The resolution notes that the National Institute for Occupational Health and Safety recognizes workplace bullying, defined as “the repeated intimidation, slandering, social isolation or humiliation by one or more persons against another,” as a form of workplace violence.


Gary Namie, director of the Bellingham, Washington-based Workplace Bullying Institute, says the original anti-workplace-bullying legislative language has been changed in various ways by states introducing it. Some call for studies to determine the prevalence of workplace bullying, and others dilute the legal power of the original legislation. The goal of the legislation is to “outlaw any abusive work environment that is health-hazardous,” he says.


“The real goal of the [proposed] law is not lawsuits,” Namie says, “but an anti-bullying policy that is enforced. It takes a law to compel [employers] to act. If the law is on the books, employers that have not bothered to correct bullying are going to be liable.”


So far, the legislation introduced in the 13 states has yet to result in any new anti-bullying laws.


“That tells me the arguments against it are very strong,” says Garry Mathiason, a San Francisco-based employer attorney with the firm Littler Mendelson.


Mathiason has no shortage of arguments against anti-bullying laws. High on his list is the difficulty in defining harassment. He sees a problem in defining whether a frustrated boss raising his voice at an employee who continues coming to work late is harassment—i.e., bullying—or good management.


“How do you distinguish between the two?” he says.


And corporate anti-bullying policies, he adds, “would make every disciplinary situation open for debate. Employers would be required to investigate, and when there are emotions, things are remembered differently. People can view actions as harassment when in fact it is nothing more than getting the job done.”


While anti-bullying policies can be adopted by companies, notes Mathiason, there is no guarantee they’ll be enforced. Meanwhile, he says, he’s already seen hundreds of cases of employers disciplining employees with behavior problems.


“I’m satisfied with where the law currently is and how it’s evolving, but I would not favor an anti-bullying statute,” Mathiason says.


He cites an example of a National Education Association case two years ago involving a verbally abusive boss who offended all employees indiscriminately as “an equal opportunity harasser,” regarding religion and gender, and not any select individual or group.


“But this case looks at it a little differently,” says Mathiason, noting that it examined which group the boss offended the most to show discrimination. “This is where I see the courts trying to push the line for some broadening of existing law.” If bullying, or harassing, is defined by the courts as a form of discrimination, he argues, existing law already forbids it.


Employer attorney Jim Hall of Los Angeles-based firm Barlow, Kobata and Denis agrees.


“I don’t see, for a human resources policy, a big difference between bullying versus any other form of harassment,” he says. “It’s subject to general anti-harassment policy.”


With a policy in place forbidding harassment over race, sex, age or religion, adds Hall, “The employer should treat bullying as a species of harassment and deal with it on that basis.”


But he stresses that companies need to stop bullies from working for them. “They should be concerned, because today’s bully could be tomorrow’s mass murderer,” Hall says.


Every time there’s a workplace shooting in the news, says Hall, he gets calls from concerned employers wanting to know how to fire an employee who has made threats.


In those cases, he says, most companies’ anti-harassment policies cover what action to take when threats are involved. If the policies don’t cover threats, he says, they probably should. That’s because as far as he’s seen, harassment claims aren’t showing any signs of going away.


Nothing new, but a problem
Bullying in the workplace is nothing new, Namie says. But he figures it has increased “because of pressure for investor-driven goals” put on companies. “They’re squeezing more production out of fewer folks.”


Increased bullying in the workplace takes a toll on bottom lines, he says, through employee turnover, absenteeism, disability insurance claims and possible litigation. “The No. 1 impact is the cost to employers,” he says.


Other byproducts of bullying, he says, are eroded morale and a tarnished reputation to the company as “the worst place to work.”


A no-bullying policy, Namie says, will bring visibility to abusive conduct, and employers will have to deal with it. And that’s good for both the employer and its employees, Namie argues.


Employer attorney Mathiason sees workplace stress contributing to workforce bullying cases. “There is intense economic competition worldwide,” he says. “There are increases in productivity demands, tighter schedules and lower ratios of managers to employees.”


He says that employers are already dealing with bullies for another big reason. There’s a demographic shift in the workplace in which baby boomers are retiring, and there aren’t enough qualified replacements to fill the gap.


“We’re entering into a deep and extreme skill shortage,” says Mathiason, quoting an estimate that by 2010 there will be 10 million skilled-job vacancies. In that context, he adds, “An environment that does not respect individuals is going to be very unwelcome by employers trying to attract and retain talent.”


Dealing with it
When a bullying case arises in a workplace, says Barbara Reeves, an Irvine, California-based mediator and arbitrator, she says the problem should be mediated as early as possible to prevent either side from digging in for a protracted fight. A mediator will allow an employee’s grievance to be heard by a neutral third party, which is a procedure that she recommends employers have in place to solve the problem before it escalates.


Another approach is to have a complaint hot line for employees connecting to an outside organization, she says. That organization then notifies the company’s human resources department to set up mediation.


Reeves is closely monitoring the legislative progress of anti-bullying measures. The Canadian province of Quebec already has laws in place on the subject, she says.


Quebec outlaws “vexatious behavior” that affects an employee’s “dignity or psychological or physical integrity.”


Among types of behavior leading to bullying complaints, Reeves says, are bosses criticizing an employee’s performance in front of other workers, dirty looks or intentionally ignoring a specific employee. In short, Reeves says, “These are things we are taught not to do. It’s analogous to the schoolyard bully: someone who has power who gets a charge out of using it by yelling at people.”


The newest generations entering the workforce, Reeves adds, “don’t want to put up with it.” They’re seen as more likely to complain than older generations.


But Reeves also thinks drafting new laws making merely rude behavior illegal “is kind of a nightmare. I’d hate to have to legislate a code of civility.”


Meanwhile, Atlanta-based workplace consultant Stephen M. Paskoff figures employers need to deal with bullying—even if it isn’t illegal now—to keep it from becoming a costly problem.


Paskoff—who has been a workplace consultant to Nike, Mayo Clinic, Coca-Cola and other corporations and wrote the book Teaching Bigshots to Behave—is seeing more frequent cases of workplace bullying these days.


“I think it arises because the behavior is not recognized as expressly illegal,” he says, “so it tends to get ignored until someone’s behavior hits the front pages.”


And employers tend to ignore bullying—particularly if it is someone who is a great producer, Paskoff says.


But even if the bully is a strong performer, the problem is that the behavior loses clients and costs the company business, Paskoff says. Or, in a health care setting, it can cost a life.


An article on bullying in the medical profession, published in February in the Journal of Vascular Surgery, cited an example of a surgeon with a reputation for “disruptive behavior” dealing with a new anesthesiologist: “After the tumor had been removed, the surgeon slipped into his disruptive pattern and verbally abused the anesthesiologist so aggressively that, in her distraction, she neglected to turn off the nitroprusside drip. The patient died.”


Paskoff has found that companies tend to ignore behaviors like bullying that aren’t explicitly illegal. “Employment lawyers look at it through the lens of ‘Is it legal or not?’ ” he says. “That’s how lawyers are trained. But that legal view is missing the whole point. It could be legal, but highly unsavory.”


He’s found that in-house attorneys tend to understand the implications of ignoring the problem better than outside lawyers do because they get an up-close look at the business consequences of bullying.


Putting an anti-bullying policy in place partly deals with the problem, Paskoff says. But he stresses it’s just as important to have an organizational standard of how all employees are to be treated.


“It’s very regrettable if companies don’t address bullying,” Paskoff says. “If they don’t, laws will jump in and be burdensome.”

Posted on July 12, 2007July 10, 2018

The Union-Free Good Times May Be Over in China

In 2006, Wal-Mart agreed to allow unionization of its workers in China. McDonald’s struck the same accord just several weeks ago.

    Is Starbucks far behind? What is happening in this supposed employer paradise of low wages, high productivity, an endlessly available labor pool and compliant employees?


    There is, of course, a union in China that claims to represent more than 150 million workers through its enterprise affiliates. It is known as the All-China Federation of Trade Unions (ACFTU), and it is the only legally recognized workers organization in China. Independent trade unions are not permitted. The ACFTU is also an arm of, and controlled by, the Communist Party of China.


    For years, the ACFTU and its enterprise affiliates have been passive insofar as foreign-invested enterprises in China have been concerned. While unionization was permitted under the law and even required when requested, where unions were in place in foreign-invested enterprises they were largely concerned with social events and keeping the workforce compliant. At more than one production facility, the head of the local enterprise affiliate union was the company’s director of human resources.


    But when Wal-Mart marched into China and continued its U.S.-style scorched-earth opposition to unions, it seemed to have rubbed even the compliant ACFTU the wrong way. Chinese union officials made a public example of Wal-Mart and used it to make the point that even the titan of Bentonville, Arkansas, wasn’t mightier than the Chinese Communist Party.


    Following the successful establishment of unions at Wal-Mart, the ACFTU appears to be intensifying efforts to establish enterprise unions in foreign-invested enterprises. In October 2006, it announced that it would begin “another wave” of unionization, with a target list that included Eastman Kodak, Dell and Foxconn Technology, a Taiwanese parts supplier for Apple’s iPods. The ACFTU goal for 2006 was to get 60 percent of foreign companies in China to unionize.


    That goal has been met, according to the ACFTU, and the federation set a target of 70 percent this year. The most recent example is McDonald’s, which in late May agreed to allow workers at its 750 outlets in China to unionize. That announcement followed by only two weeks an ACFTU claim that McDonald’s and Yum Brands, which owns KFC and Pizza Hut, were violating labor laws by underpaying part-time workers in the southern city of Guangzhou.


    In an interesting coincidence, Andy Stern, president of the U.S.-based Service Employees International Union, was visiting with ACFTU members just before the announcement of “another wave” and the list of target companies. It is a PR pressure tactic well honed by the 1.8 million-member SEIU in the U.S. in its own corporate campaigns.


    The global union movement also has taken note of the possibilities in China. At a recent UNI-Europa conference, a proposal by the U.K.-based union Amicus to build solidarity with workers in China was endorsed.


    “Whether we like it or not, China has a real impact, either directly or indirectly, on the working families that we represent in Europe,” said Amicus assistant general secretary Tony Burke.


    Why the newfound energy and aggressiveness on the part of the ACFTU, which cannot be occurring without the tacit approval if not direction of the Chinese Communist Party leadership? With all due respect to Stern and his persuasive powers as a labor leader, I suggest that at least two factors are at work.


    The first is that the widely known and growing disparity in China’s income between those that have and the have-not immigrant workers from more remote provinces has the government and party concerned. Unofficial unions and protests and strikes in certain areas, while not widely reported, are a potentially serious threat.


    What better way to provide a channel for this unrest and unhappiness than to use the establishment of enterprise unions as a safety valve and control mechanism? While this avenue is fraught with the risk that organized, compliant workers may not be so compliant in the future, party leaders may believe that they can control this situation better than one where independent trade unions are involved or no organized structure is in place.


    A second factor may be the same one that is affecting U.S. unions—the decline in membership dues-based revenue. If you don’t have members, you don’t have revenue.


    In the U.S., such revenue is based on a dues structure worked out as an agreed-upon amount between the elected union leadership and the membership. In China, when a union is established at an enterprise, 2 percent of payroll is paid by the company to the union.


    The ACFTU, like its U.S. counterparts, is learning all about the benefits of capitalism and revenue generation. For years, the ACFTU membership was stable because it represented workers in state-owned enterprises.


    With the decline of such enterprises and the rise of private ownership, they have suffered a serious membership and revenue drop. What better way to make up this shortfall than with foreign-invested enterprises?


    If all that were occurring in China was a slightly more aggressive posture by the ACFTU toward foreign-invested enterprises, then the situation might not be of much concern to business. However, there is another, more significant aspect of this newfound Chinese interest in protecting worker rights.


    In March 2006, the National People’s Congress released a proposed draft Employment Contract Law. That law would be China’s first national law specifically governing employment contracts.


    It would also have imposed new requirements and restrictions on the way companies manage their employees. Enterprise unions or employee representatives would have veto rights over adoption of employee manuals, codes of conduct and company rules.


    It would be more difficult for employers to terminate employees for poor performance and impose non-compete agreements. The proposed draft also would have given the union veto power over layoffs of more than 50 employees whether due to downsizing, merger or transfer of assets.


    After receiving some 190,000 comments from employees and employers about this initial draft, a new draft was presented to the Standing Committee of the National People’s Congress in December 2006. The new draft eliminated certain provisions of the initial version, including consent to change company rules and layoffs of more than 20 employees. On June 30, the new draft was passed to take effect on January 1, 2008. Most significantly, it gives the AFCTU the power to bargain with employers.


    At this point, it is not clear what the impact of this new labor law will be. It is safe to say, however, that the labor and employee relations landscape in China is undergoing change that will favor employees and unions insofar as foreign-invested enterprises are concerned. Multinational corporations will continue to move work to China and it will continue to be an attractive location both in terms of costs and its potential domestic market for goods and services. However, companies that move or expand operations in China going forward would be wise to pay close attention to these legislative and labor developments and factor them into their strategic planning.


    Can corporate management truly imagine an ACFTU with teeth? Can it imagine having to contend with a 150-million member union with a growing revenue stream? Maybe it’s time to start considering how to deal with that possibility.

Posted on July 11, 2007July 10, 2018

Automatic Retirement Savings Deductions Gain Broad Support

One of the goals of major pension reform legislation Congress approved last year was to get more Americans to save for retirement by allowing companies to automatically enroll employees in 401(k) plans.


But that didn’t help the estimated 75 million people who work for employers who don’t offer retirement benefits. Bills recently introduced in the House and Senate attempt to fill the gap.


The legislation requires companies with 10 or more employees to offer workers an automatic payroll deduction into an individual retirement account. Employers do not have to match employee contributions, and tax credits offset administrative costs. Employees can opt out of the plans if they wish.


“The unfinished business of the Pension Protection Act is the half of our workforce that doesn’t have a retirement plan,” says J. Mark Iwry, a nonresident senior fellow at the Brookings Institution in Washington and a former benefits tax counsel at the Treasury Department.


The idea has drawn bipartisan support in both houses of Congress. Sens. Jeff Bingaman, D-New Mexico, and Gordon Smith, R-Oregon, and Reps. Richard Neal, D-Massachusetts, and Phil English, R-Pennsylvania, are championing similar bills. Hearings could begin in the House this summer.


Support for legislation that spans Capitol Hill has been rare this year. Bills passed with gusto by the House tend to halt in the Senate.


But the atmosphere may be different for the automatic IRA measure, which also has united disparate think tanks like the liberal Brookings Institution and the conservative Heritage Foundation. AARP also is on board.


The proposal will avoid the political shoals that sunk President Bush’s idea to establish private Social Security accounts, Neal says.


“We’re adding on to Social Security, as opposed to subtracting something from it,” he says. “Not only is there going to be common ground between the two chambers, there’s going to be broad bipartisanship.”


Advocates stress that implementing IRA deductions won’t pose a burden on employers. It would just be another line item on the payroll.


“We haven’t gotten any serious opposition to this,” Bingaman says. “It’s not a major additional responsibility.”


The bill is a modest first step in encouraging companies to establish their own retirement benefits for employees, according to proponents. The hope is that the automatic IRA makes employers comfortable with payroll deductions and will lead to 401(k) plans.


“We regard the automatic IRA as a way of getting started,” says David John, senior research fellow at the Heritage Foundation.


It’s not just companies that will embark on the retirement savings path, but also employees. Pierre Randolph, a build­ing engineer at an apartment complex in Washington, says he is grateful that his employer, Borger Management, implemented an automatic IRA deduction 10 years ago.


Randolph, 44, has been able to save nearly $30,000 for retirement while two of his children have gone to college. A third one is about to enter.


Without IRA access, “I wouldn’t have had the opportunity to put this money away,” he says.


He encourages his colleagues to take advantage of an IRA. “There’s nothing to think about,” he says he tells them. “Your children are getting older and so are you.”


Mark Schoeff Jr.

Posted on July 11, 2007July 10, 2018

GE a Trailblazer in HR Development

General Electric’s 50-year-old Human Resources Leadership Program is perhaps the seminal program for developing future HR executives. As manager of HR development programs, Andrea Nunes says the program has produced at least half of the HR executives in the company’s six business divisions.

Most of the candidates entering the HRLP are straight out of graduate school in business or human resources. A minority are early-career transfers from another business function, such as the legal department or customer service. About half of HRLP candidates come from outside the U.S., reflecting the increasingly global nature of GE’s business.

“In interviews for the program, we’re looking for a certain profile in terms of leadership,” Nunes says. That profile includes “the ability to implement and drive a project, innovative abilities, problem solving [and] the ability to energize teams.”

The HRLP’s core is a series of three eight-month rotations, including one in a job outside the HR field, such as working on the corporate audit staff or managing a shop floor. But the HRLP’s most distinctive feature is the emphasis on networking. Twice annually, all the participants from around the world gather in one location for a week of training, workshops, presentations, and lunches and dinners with GE senior executives.

“There’s a strong correlation between your experience with the program and your success in the company,” says Nunes, a graduate of the program. “Five years later, most of my networking is still with people I met through the HRLP.”


Workforce Management, June 25, 2007, p. 35 — Subscribe Now!

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