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August 24, 2006July 10, 2018

A Brief Guide to Guarding Trade Secrets

4Create rewards programs that might include incentives and bonuses for keeping information secret, says Andrew Sherman, an attorney at the law firm of Dickstein Shapiro. “A lot of companies just need to take the time and make the awareness,” Sherman says.

4Use technology to your advantage and implement protection programs and cyber security technologies.

Richard Power, an expert on cyber crime, says there are a number of ways to make it harder for employees to snag company information. Power recommends firewalls, intrusion detection and “smart cards,” which when encrypted operate similar to the way ATM cards do at banks. Even though the cards are more expensive than using just an ID and password, hackers will have a harder time cracking them, Power says.

He suggests that companies monitor which Web sites employees go to, not allow laptops to be taken home, and change pass codes frequently. Some companies have gone so far as installing computer access based on fingerprint or retina scans.

4Create policies for which documents can be sent and received from hand-held devices such as the BlackBerry, says Amy Timmons, a corporate security expert at the Segal Co., a private actuarial consulting firm based in New York City.

4Don’t stop at checking references; expand to checking credit and doing background checks.

4Hire someone who serves as the gatekeeper for trade secrets to work with human resources and information technology in selecting policies to implement.

4Key management should sign confidentiality agreements and have an attorney present when discussing important information. Experts especially recommend this for startups and smaller companies.

4Before hiring a candidate, ask them if they have brought any contacts or trade secrets with them from their previous employer. Receiving that kind of information can get a company in trouble.

“It’s very important that when companies bring people in a company that they make sure they have been scrubbed,” said William Rooklidge, a lawyer specializing in intellectual property at Howrey LLP in Irvine, California.

4Define what information constitutes a trade secret and limit the information to select staff. Companies should restrict access to trade secret-related documents to only those people who need to know; track who is accessing those documents, and when. Changes to those documents should also be audited, says Segal’s Timmons.

August 24, 2006July 10, 2018

Intellectual Property Theft Lessons From Coca-Cola

First the bad news: In the age of high tech, employee theft—especially when it comes to trade secrets—is more common than companies would like to admit. Free e-mail accounts from companies such as Google and Yahoo, gadgets like the BlackBerry and an increasingly mobile workforce make company information more vulnerable than ever.

“Information can fall into the wrong hands. Employees (can) lie or sometimes they unknowingly take things from their job, not realizing the secrecy of the information,” says Joseph Re, an intellectual property attorney at Knobbe, Martens, Olson & Bear in Irvine, California. “Employers need to be more vigilant than ever.”

The issue recently was pushed into the spotlight because of events at Coca-Cola Co. Three people, including a Coca-Cola employee, were charged with attempting to steal the company’s formulas, including a new drink, and selling that information to Pepsico for $1.5 million. In this case, Pepsico blew the whistle to authorities, leading to the arrests and subsequent charges. But not every case will have a happy ending.

For companies, the bottom line is at stake. Employee theft can cost companies anywhere from $200 million to upwards of $1.2 trillion annually, according to the Segal Co. Twenty percent of businesses fail every year because of internal theft and fraud, according to the U.S. Chamber of Commerce.

Now the good news: Although intellectual property experts say there is no way to completely protect a company from theft, there are innovative ways to prevent damage.

Profiles International Inc. of Waco, Texas, plans to release several new products by the end of the year to add to an existing suite of employee screening services. A product called Employee Engagement Assessment gauges employees in six categories. The product also dissects the company’s culture and places it in four different categories: relationship-based, innovation-based, process-based and transaction-based.

There is a link between employee theft and employee attitude, says Jim Sirbasku, CEO of Profiles International. “The less engaged a person is, the more they are apt to see the company as a non-personal thing, and the more apt they are to take something,” he says.

Reference checks and even background checks aren’t enough today, experts say. Companies need to keep close tabs of their employees after the honeymoon period.

“Usually people engage in theft for financial reasons, or at times in their life when they are facing great stress,” says Thomas M. McInerney, an attorney specializing in labor and employment at Thelen Reid & Priest in San Francisco.

There are businesses that specialize in creating trade-secret protection programs for companies. Consor Intellectual Asset Management in La Jolla, California, creates information protection programs for companies to help them make the most money from their intellectual property. Consor also helps firms that have fallen victim assess the damage done.

What it comes down to is that companies need to spend the time and money to hire the right people at all levels.

“It’s not ‘Hey, this person is just an administrative assistant.’ It is what responsibility does this person have,” says Jason Morris, COO of Background Information Services Inc.

Also, companies should be “prepared financially and emotionally to go after someone who steals a trade secret,” says Don Kelly, CEO of Intellectual Asset Management Associates, an intellectual property consultancy based in Alexandria, Virginia. Trade-secret-proofing comes with a price tag (anywhere from $25 to $200 for a background check and as much as $50,000 for customized programs for smaller companies), but the investment makes up for the potential losses, Kelly says.

If nothing else, smart companies show that they have taken the steps to keep the information under wraps.

“It’s like in the movie ‘Jerry Maguire.’ There’s a line from Tom Cruise that goes, ‘Help me help you.’ The law works that way with trade secrets,” says Andrew Sherman, an attorney specializing in business growth with Dickstein Shapiro in Washington, D.C. “The stronger steps you take, the more likely the courts will give you protection.”

August 24, 2006July 10, 2018

Commentary Human Resource Management At the Table, or Under It

In order for the HR function to maximize its impact on the organization, HR-related issues and HR executives need to be “at the table.” This phrase means that HR is involved in devising strategy in addition to implementing strategy. This subject is one that has been discussed for many years, in textbooks, news articles, HR publications and elsewhere. The question that arises today is whether HR has “made it” yet, and I ask this question in a somewhat different way: Is HR at the table, or under it? If it’s under the table, is it holding up the table or hiding?

This question comes to the forefront of my thinking due to a research study that I recently completed. As part of an ongoing research study of global leaders, with about 4,000 having participated to date, I have been tracking leadership confidence, engagement, and studying other topics related to leadership in general and human resources management. The study involves sending very short “pulse” surveys to the sample of leaders every other month. About 10 percent of the leadership sample responds to each survey, and my analysis shows that the data are representative of our overall population.

The sample consists of approximately 50 percent C-level executives (CEO, CIO, CFO, etc.). About 80 percent of the sample are VPs and above. The respondents are from Fortune 1,000 firms, smaller businesses and women-owned firms, and they range in size, revenue, industry, etc. Although the sample is global, it is predominantly based in the United States.

A recent Leadership Pulse study, as the project is called, examined the items that “derail” execution of 2005 business strategies. Based on several reviews of the literature on strategy and prior Leadership Pulse study results, I identified 15 potential “derailers.” Those 15 items range from those that are external, such as budget and customers, to many that are internal to the firm, such as culture, the president of the company or the HR function. Below is a table that includes the means (or averages) for each item in addition to the percent of the sample who agreed that the particular item was a derailer. The survey used a 1 to 5 response scale. One means the item did not get in the way of strategy at all. Five means the item very much got in the way of executing strategy.

Factor	Mean (standard deviation)	Percent agreeing factor is derailer of strategy
Budget/funding	2.96 (1.17)	29 percent
Our past/habits	2.93 (1.23)	35 percent
Economic climate	2.93 (1.13)	29 percent
Company culture	2.61 (1.19)	23 percent
The way we work together	2.51 (1.21)	20 percent
Our customers	2.36 (1.04)	14 percent
Senior management team	2.33 (1.21)	18 percent
Lack of confidence	2.27 (1.06)	13 percent
Technology	2.27 (1.0)	11 percent
Our employees	2.26 (.88)	7 percent
Middle management	2.21 (1.01)	9 percent
Our policies	2.16 (1.03)	11 percent
Our CEO/president	1.94 (1.23)	13 percent
Human resource management in our company	1.88 (.96)	7 percent
Our reputation	1.84 (.98)	7 percent

    Notice that human resource management is at the bottom of the list in terms of derailers. One would think that this is good news for HR as a field. The HR function is not getting in the way of executing strategy. I have presented this data to a number of senior and junior HR executives, and rather than receiving positive feedback, the results tend to initiate rather interesting—and not very positive—discussions.

    It was not the low score for human resource management that generated the enthusiasm in the subject, but it was the fact that the past, habits, culture and the way people work together were all rated fairly high as derailers, while human resource management was rated low. The HR audiences that I have been speaking with seem to think this is a “disconnect” for HR. The question these HR executives asked was, “Are we not seen as being in charge of culture and the way people work together?”

    In order to understand the data better, I ran a more detailed analysis of the data. First, I conducted a factor analysis, which produces a grouping of the variables into overall scales. The general rule of factor analysis is that you keep an item in an overall scale, or factor, if the factor weight is 0.60 or above. This means that a given item, such as human resource management or culture, for example, “belongs” to factor or scale and not to the others.

    When I ran the factor analysis for these questions, the result was a three-factor solution. I labeled them as external factors, leadership and process. The question for HR is where human resource management falls in this scheme.

    The results show that human resource management should really be left out of the factors because in no case did human resource management “load” at the more than 0.60 level.

    The resulting factors with the items that belong to each are below:

Leadership	Senior management team, our company’s culture, way we work together, CEO or president, our past/habits, our policies
External factors	Our customers, economic climate for our industry/business, our company’s reputation
Process variables	Technology, our employees, middle management

At the table or not?
    Maybe HR is indeed at the table, having high impact on the business. Or, it may be that with all the outsourcing and downsizing, HR is fading out of sight. Thus the question: Is HR under the table?

    Perhaps HR is down there, holding everything up. Perhaps it is a support function that people may not see but that still remains active when it comes to strategy. That is the notion of HR holding up the table. Another possibility is that HR is hiding.

    This is a possibility that, frankly, my current research study cannot answer. I can follow up on this question in future surveys, but for now, what can be learned from these data that can help us find HR, or at least suggest where HR should be seated?

    First, the company’s past and habits are the No. 1 strategy derailer. So a key question for HR, no matter where it is in relation to the table, is how to help their organizations minimize the possibility of their past habits and policies getting in the way of strategic execution.

Alignment vs. realignment
In the survey, we asked leaders to comment on what’s getting in the way of their ability to execute strategy. We heard what we might expect from this dialogue: much discussion about aligning strategy with HR and making sure all employees are aligned to the new strategy.

But even when companies make the magic alignment act happen, leaders tell us that something still gets in the way. That something seems to be a key aspect for HR to understand. Perhaps the secret to execution of strategy is not alignment but something tangential to this subject. That is realignment.

We work very hard in HR to make sure we get our employees aligned. We change compensation, we alter selection, and we work on new slogans and educational efforts. But we do this a lot, and in many cases, employees have become immune to this activity. They have leaned to lay low and focus on some core behavior that will get them by until the next wave of strategic stuff hits them. It’s an inevitable part of business that once you get your organization aligned you will need to change it because the business environment is moving faster every day.

Companies that win will master the ability to realign. The skill set that they will teach leaders will focus on agility, not alignment; leaders and employees need to understand the language of ambiguity.

The difficult part of alignment is that when you work hard at alignment and then change your mind in any way, shape or form, employees become disengaged and disillusioned with management. They don’t trust that management knows what it is talking about.

In the June 2005 Leadership Pulse study, I asked respondents a question as a follow-up to the strategic execution results. I asked respondents to explain what exactly it is about their habits or past that is getting in the way of executing strategy. Below are some of the comments:

“The inability to adjust fast enough at the moment.”
“Failure to prioritize the key strategic initiatives and placing adequate resources and time to complete well.”
“Perhaps we’re a little slow to change our model to meet the market opportunities as competitively as we could.”
“Fear of growth.”
“We have a habit of having too many priorities. The workload is large and we never have enough staff.”
“Allowing the busy routine of daily business to get in the way of planning and implementing change.”
“Slowness in executing strategy.”
“Lack of effective prioritization mechanisms for significant strategic decisions.”

All these questions suggest another opportunity for HR leaders.

Challenging the alignment goal
The only way for HR to accomplish anything is to come out from under the furniture. And a good place to emerge is to address the needs of an organization where the past and old habits are deterring execution of strategy and so are slowing growth and business improvement. HR can be an active partner with the management team in making change happen.

One assumption to challenge is that alignment is the ultimate process for growth. Instead, consider these paths:

From alignment to realignment.
From big plans to setting priorities.
From learning to execute to learning to be agile.

You want to introduce the language of realignment as part of the basic business strategy because new opportunities should be explored on a regular basis. If the leadership team and workforce are ready to realign when new opportunities arise, your organization can move forward with tremendous momentum. This is because your new habits are the habits of change or the habits of movement and growth. Change, in a realignment culture, does not threaten the status quo, because change is part of what the organization values.

HR can play an incredibly important part in making this type of change because HR has at its disposal the key ingredient to agility, realignment, opportunities and priority-setting: the employee population. HR can be at the table with insights about the business obtained from employees because HR is the conduit to the employees.

HR can, through various initiatives that reach out to employees, obtain employee insights and ideas about the business. HR can be the table because HR will have information about the business that no one else in the organization has at present. Employees are the stealth ingredient to creating a realignment culture. If you ask employees for information, and you use their input to realign, they are now part of the change, which means they are much more willing to move forward with the leadership team.

Come out, come out
Our experience is that moving from under the table to sitting at it is a function of HR’s willingness to take risks. If HR is willing to go beyond the traditional role of HR as keeper of employee satisfaction and administration of HR, then HR can have an impact on culture, habits and management.

But this means that HR might step on the toes of many deeply entrenched habits and beliefs in your organization. One such organizational belief may be that HR belongs under the table, where it has always been.

If you emerge, people are going to notice. There will be an initial rejuggling to gain balance. HR has to be willing to let the shaking moments happen, and even risk a small crash. As the team sees you, they’ll interact with you. And it may not always be pleasant.

The move, then, is a big one–and not without risk and discomfort. But it will help your organization move toward the future in a bold, new way.

August 24, 2006July 10, 2018

Dear Workforce What Role Could Self-assessment Tools Play in Employee Development

Dear Not Sold:

Self-assessments typically are not valuable exercises for targeting development. It is like cutting your own hair: You just don’t have all the angles.

Studies have shown that inflated ratings are a problem with self-assessment. In fact, those who rate themselves the highest are generally the folks with the greatest development needs. Those who rate with self-awareness and honesty are more open to feedback and are likely to accurately target the areas they need to develop. Thus, the results may skew reality. It’s best not to use self-assessment data alone to determine an individual’s or a group’s development needs.

Self-assessment is useful and more accurate when coupled with feedback from a manager or others working closely with the individual. The real value comes from a discussion about the different perceptions that emerge, and an agreement on true development needs. Here too is where you can best communicate the importance of professional development. This does not need to be complicated. While numerous self-assessment and multi-rater tools are available, a simple piece of paper with a list of competencies and behaviors can facilitate this discussion.

Self-assessment alone can only be useful in a few situations. One is as an exercise to communicate and familiarize people with the competencies and behaviors expected of them, especially if these competencies are new to the organization. As long as you do not collect and use the data, it is a way to let people ponder their own personal development behind closed doors.

Another related use is as the first step to a multi-rater implementation. An initial self-assessment introduces the competencies to be rated in the future and lets people become familiar with the behaviors, the rating scales and the feedback tool. Again, do not use the data; just let people go through the exercise on their own as a warm-up.

Whether used as a discussion starter for development, a vehicle to introduce competencies or as the first phase of a 360-degree feedback process, make sure you clearly communicate your intentions for a survey. Any hope for honest answers depends upon it.

SOURCE: Jeff Eilertsen, Development Dimensions International, Pittsburgh, November 25, 2005.

LEARN MORE:How Could We Help Employees Develop Career Plans? Other information, including a reader’s forum, can be found in our Training & Development archive.

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.

August 20, 2006July 10, 2018

More Vacation Time to be Left on the Table in ’06

Employees in the United States may value vacations in theory—planning for them, negotiating for extra days when they’re hired—but in actual practice do the unthinkable: They forfeit paid time off.

Workers here already earn shorter vacations compared with those in other Western countries—14 days annually versus 24 in Great Britain, 27 in Germany and 39 in France. Now comes this surprising finding: On average last year, U.S. workers gave back three days, compared with one or two days in other Western countries. This year, entitled to two additional days, they’re expected to leave four unused, according to a survey conducted by Harris Interactive and Ipsos Reid for Expedia, the online travel agency.

The survey noted that workers in Western states spend the most time on the job: 41 percent don’t take all their vacation, compared with 33 percent nationally. Those workers give up an average of seven days. Overall, 574 million days of unused vacation will total an estimated $75.7 billion in wages this year. Expedia calls the trend toward “overworked, vacation-deprived” workers unsustainable.

Shortened vacations diminish revenue because overwrought employees lose productivity, says Gregg Lemley, a labor and employment attorney. “Vacation is a two-way street. It’s a benefit to employees to recharge their batteries. But it’s also a benefit to employers. They want employees well rested, ready to do their jobs mentally and physically.”

Lemley, who’s in the St. Louis office of international law firm Bryan Cave, doesn’t believe employers fuel the trend. “What we have is a generation of people who believe that work is paramount to the point it’s not healthy.”

Simple fear may also play a role. “American workers are overloaded and afraid that if they don’t give back some vacation, they might lose their jobs or promotions,” says D. Quinn Mills, professor of business administration at Harvard Business School and author of Having It All … And Making It Work: Six Steps for Putting Both Your Career and Your Family First.

Among the reasons workers relinquish vacation days are the need to schedule them in advance (14 percent), workload (11 percent) and the prospect of being paid for unused days (10 percent), though expectations of a payout may be misguided. States often regulate vacation policies, and while some have use-it-or-lose-it laws, most do not, Lemley says.

Occasionally, even in states that allow it, companies without well-drafted vacation policies can wind up paying almost a year’s salary upon an employee’s termination or retirement, Lemley says. Well-drafted policies are those that clearly state vacations must be taken in the year they’re accrued.

The survey didn’t ask respondents where they worked, but Lemley sees a growing number of industries, especially in emerging fields like technology, advocating vacations. “The reality of the situation is that you’re ultimately going to get more production and better work,” he says.

One challenge remains, however: Employees need to actually relax on vacation. Twenty-three percent check business voice mail or e-mail during that time, and 65 percent say they experience work-related stress—even though they’re off the clock.

—Betty Liddick

August 18, 2006July 10, 2018

‘Stringent’ Document Demand Results in Bias Claim

When hired by Elite Logistics Inc. of Kansas City, Kansas, in August 2001, Ramon Zamora presented an alien registration card, his Social Security card and a signed I-9 form. He had become a legal permanent resident in 1987. In 2002, learning that the INS might inspect its premises, Elite checked and found problems with the Social Security numbers of 35 to 40 employees, including Zamora.

On May 10, 2002, Zamora’s supervisor gave him 10 days to provide documentation to confirm that he was authorized to work in the U.S. On May 22, Zamora was suspended. The same day, Zamora gave Elite an INS naturalization application and a Social Security Administration earnings record, but there remained a question because the Social Security number had been used by someone else. When Elite finally offered to reinstate Zamora, he demanded an apology, which the company was unwilling to give. He was then terminated.

After Zamora filed a lawsuit, alleging that his termination violated Title VII of the Civil Rights Act, a U.S. district court dismissed his claims. On appeal, the U.S. Court of Appeals for the 10th Circuit in Denver held that Zamora’s claims could proceed to trial.

Given that Zamora had provided the information “a mere” nine months before and had provided his naturalization certificate the day he was suspended, and that his supervisor told him, “Just get the hell out of here” when asked to apologize, “a jury considering the entire context could determine that [there] was evidence of bias.” Zamora v. Elite Logistics Inc., 10th Cir., No. 04-3205 (6/5/06).

Impact: Employers are advised to afford employees reasonable opportunity to correct discrepancies in their employment eligibility documentation when questions arise.

Workforce Management, August 14, 2006, p. 11 —Subscribe Now!

August 17, 2006July 10, 2018

Personality Testing Controversial, But Poised to Take Off

You don’t act polite when you don’t want to. You are more relaxed than strict about finishing things on time. You have a lot of confidence in your ability to succeed.

These are among the statements job candidates are asked to respond to in a personality test created by software company Unicru, which recently was bought by HR technology firm Kronos.

The test, which is part of a broader applicant assessment that considers data such as educational background, is meant to uncover work-related personality traits such as conscientiousness and agreeableness.

Advocates of personality testing say such assessments offer useful and legitimate insights into how well people might fit into an organization. Critics, though, question personality tests’ effectiveness and suggest they can harm job candidates.

One thing seems clear: Personality assessment is likely to become a more prominent tool for employers.

“It will be used more and more, because new-hire turnover is very expensive,” says workforce management consultant Joyce Gioia. “It just makes sense to hire right the first time.”

About 35 percent of U.S. organizations use personality tests as part of their hiring process, according to the Association of Test Publishers, a trade group for makers of tests including education and employment assessments.

Companies paying for personality tests may be getting a raw deal, skeptics suggest. Scott Lilienfeld, associate professor of psychology at Emory University in Atlanta, says the testing industry has not been as open to public scrutiny as it should be, raising questions about the validity of personality assessments. “Most tests in the industry haven’t been subjected to adequate peer review,” he says. “That’s troubling.”

Lilienfeld says tests that seek to gauge a person’s integrity can wind up harming employers by screening out quality candidates who are willing to ask tough questions. “They tend to have a high false-positive rate,” he says.

Labor attorney Brad Seligman says false positives are a serious issue. “It can create an underclass of people who can’t get employed,” he says. “They just don’t test well.”

Personality tests sometimes result in false positives, but so do other selection tools such as interviews, says David Arnold, general counsel for the Association of Test Publishers. Arnold doubts employers would use the tests if they were missing out on large numbers of quality candidates. He also says the validity of personality tests has been shown in numerous studies.

Kronos said Unicru’s selection methodology has been reviewed in a number of peer-reviewed journals and at scientific meetings and research universities.

Integrity tests differ from other psychological tests that ask invasive questions about sexuality or political views, Arnold says. And there are few legal worries regarding the tests, he says.

Meanwhile, Arnold says, personality tests that focus on honesty and integrity can play a major role in deterring employee theft and fostering cultural fit among new hires ranging from entry-level workers to experienced executives.

“Bottom line, these tests do a good job of identifying people who are conscientious and don’t engage in counterproductive actions,” he says.

Workforce Management, August 14, 2006, p. 29 —Subscribe Now!

August 17, 2006July 10, 2018

Trials of the H-2A System

In the heightened security that followed the September 11 terrorist attacks, Luawanna Hallstrom discovered just how dependent she had become on illegal farmworkers from south of the border.

Hallstrom grows tomatoes on some 1,200 acres near Oceanside, California, including 600 acres leased from Camp Pendleton Marine Corps Base. After 9/11, the base stepped up security, which meant government officials carefully screened every one of her workers.

What they found startled Hallstrom: 75 percent of her laborers had fraudulent documents. Hallstrom typically hires 1,000 seasonal workers, but she suddenly couldn’t find enough legal workers to harvest her crop at Pendleton. Much of it rotted in the field. Hallstrom says she lost $2.5 million worth of tomatoes.

She’s still in business today and still using seasonal imported farmworkers. But now instead of hiring laborers who show up at harvest time, she contracts to bring in prehired temporary workers from Mexico under the H-2A farm guest worker program, a legal method for farmers to import foreign labor. Each year, she contracts for about 500 workers from Mexico through the program and sends them back home after the harvest is complete.

Few farmers have taken the H-2A route, and Hallstrom says she opted to use it only because she had no alternative for harvesting her Pendleton crops. Hallstrom, who is politically well-connected, decries the program’s complex rules and requirements, adding that she once had to call the White House for help when her H-2A application became hopelessly bogged down.

“H-2A is very difficult,” Hallstrom says. “It involves so many different agencies: the Department of Labor, Homeland Security, the American Consulate in Mexico, the California Employment Development Department. If you have a glitch, it can derail the whole process.”

Hallstrom and other farmers have been lobbying for a streamlined agricultural guest worker program that would provide a way for farmers to get legal foreign labor and stem the flow of illegal workers. While Congress debates the merits of a guest worker program more accommodating to farmers, Hallstrom is among those who continue to rely on H-2A foreign guest workers to harvest their crops.

But the ultimate goal for many farmers and for other businesses that rely on cheap immigrant labor is a set of rules that would allow easy access to temporary workers from outside the U.S. Although there are laws allowing guest workers on farms and in other industries, the measures are complex and difficult for employers to use.

To qualify under H-2A, Hallstrom has to demonstrate that she has tried and been unable to recruit domestic workers. She must then apply for a specific number of H-2A workers from a foreign country and guarantee they will have jobs for the duration of a contract.

She must transport the workers from their home country to their jobs and back again. Hallstrom must provide housing. And, she also must provide three meals a day at a cost to workers set by the Labor Department (the current rate is $8.76 per day).

The application process can be daunting. Hallstrom listed among her job requirements that applicants could not be colorblind. The Labor Department initially rejected the application, saying the requirement could be construed as discriminatory. Hallstrom had the rejection overturned by explaining that in harvesting tomatoes, pickers had to be able to discern shades of red.

Most farmers balk at having to provide room and board, yet Hallstrom had an edge. Her company built a dormitory-style worker housing complex in 1986 as a way of helping retain a steady workforce. It cost about $2.5 million, but Hallstrom said it paid off in a healthier and more reliable workforce. Now she is able to use the housing for her H-2A workers.

Despite the extra costs to transport, feed and house her workers, Hallstrom says she has still managed to make money on her farm using H-2A. But she’s unsure how long that will last. Wages under H-2A are set by the Department of Labor, which has steadily upped the hourly rate during the past three years. What started at $8.02 per hour went up to $8.55. This year the rate is $9, an increase Hallstrom says will cost her farm $500,000.

“You have to pay $9, plus free housing, plus three meals a day and transportation back and forth,” Hallstrom says. “That makes it near to impossible. The only reason my family is holding out is because we really believe that reform will happen.”

What Hallstrom and other farmers want is a less bureaucratic guest worker program that gives farmers easier access to foreign workers and greater control over their costs. But critics warn that giving farmers too much control over foreign workers can lead to abuses: low pay, poor working conditions and unsatisfactory housing.

“Cheap labor becomes a self-fulfilling prophecy,” says Ira Mehlman, media director of the Federation for American Immigration Reform. “It creates conditions that shouldn’t be tolerated in a country like the U.S.” Rather than allowing farmers to import cheap foreign labor, the government should encourage technological innovation like mechanization that would reduce the reliance on cheap labor, Mehlman says.

Hallstrom says the reality is that cheap labor is a necessity in a crop like tomatoes. “If we do not get immigration reform, we will not be here,” she says. “We will have to go to Mexico or someplace else.”

Workforce Management, August 14, 2006, p. 25 — Subscribe Now!

August 17, 2006July 10, 2018

Dear Workforce How Do We Construct Employee of the Month And Employee of the Year Programs

Dear Recognition Conscious:

Why do you want to initiate these programs? There is overwhelming evidence that such formal programs do little in the way of motivating employees and can actually be resented by your staff. Why put a quota on excellence in your organization? My guess is that your company will not be successful by one person having done a good job once a month. So why limit your recognition to this number and frequency?

I recommend that you discuss with your employees at each of the locations the types of things that would motivate them to do good work and achieve desired results, either individually or as a group. This might sound messier, but it will be more effective. This process will help ensure that what is done is something they value and will support. You want them to feel this is their program. It’s OK if this results in doing more than one thing at each location and having more than one winner. One size does not fit all.

It’s also OK to do different things at your different locations. This approach would be much more real, sincere and personal to your staff and–as a consequence–much more motivating.

You might also consider different types of recognition for different levels of performance. At the grass-roots level, anybody should be able to acknowledge anyone else who helped them do a good job–with no approval necessary from management. As the performance and results are more substantial, so should be the recognition that is given.

SOURCE: Bob Nelson, Nelson Motivation Inc., San Diego, December 2, 2005.

LEARN MORE: Nelson expands on this theme. Also, here are some do’s and don’ts about recognition programs.

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.

August 16, 2006July 10, 2018

Panel Begins Crafting PBM Standards

The latest effort to make more information about pharmacy benefit managers available to employers began July 25 when a committee of industry participants and observers began work on a set of standards that PBMs must meet in order to receive an industrywide seal of approval.

The meeting came a day after 10 PBMs—including two of the largest, Medco Health Solutions and Caremark Rx—agreed to pass on their rebates and follow a set of standards detailed by a 56-employer purchasing coalition created by the HR Policy Association. Members of the group include Caterpillar and IBM.

During the past five years, however, PBMs have come under attack for not acting in the best interests of their clients, particularly for not disclosing sweetheart deals with pharmaceutical companies and not passing savings from rebates on to their clients.

Despite fierce resistance from PBMs, insurance companies and chambers of commerce, laws governing the industry have been passed in several states and proposed in 24 others, much to the delight of doctors, drugstore chains and pharmacists.

Supporters say both the certification and accreditation will allow the marketplace to police itself.

“Mandates simply drive up the cost of doing business with PBMs for everyone,” says Marianne Fazen, who is part of the National Business Coalition on Health and a board member of URAC, the organization that will manage the accreditation program.

Some provisions in state laws could find their way into the accreditation process, says Debra Friedman, senior vice president at URAC. One of the more comprehensive laws passed in 2003 in Maine addresses the issue of transparency by requiring all PBMs to pass discounts on to customers.

That provision would not likely become an accreditation standard because “it would be too prescriptive,” Friedman says, though it is a part of the 56-employer coalition standards for certification.

Fazen says receiving rebates is “not the issue.” She would like to see standards that detail how PBM services are calculated. “The issue is, where is the money coming from and where is it going?” she says.

At the core of the Maine law is a provision requiring PBMs to act in the best economic interest of their customers, says one of its architects, Sharon Treat, a former Maine state legislator who is now executive director of the National Legislative Association on Prescription Drug Prices, a nonpartisan group working to reduce prescription drug prices.

Employers would like to see the concept of the fiduciary duty of PBMs adopted as part of an accreditation requirement, Fazen says.

PBMs, for their part, have a lukewarm attitude toward accreditation. Medco says it would support accreditation that “would highlight industry best practices,” but could not commit to participating in creating the standards. Once the standards are detailed this fall, the public will have a chance to comment.

—Jeremy Smerd