|
|
|
AFL-CIO Calls Out Firms for CEO Greed
As activist shareholders gather at corporate annual meetings this spring, the AFL-CIO is naming six companies whose compensation programs promote CEO “pay greed.” They are: Amgen, Sempra Energy, Coca-Cola, Dynegy, Sprint and Wal-Mart.
In an ongoing effort to reform “runaway” executive pay, the labor organization says it has selected the firms to highlight issues such as excessive compensation and golden parachutes for fired corporate leaders.
Union-sponsored retirement funds introduced shareholder proposals this year for the six companies. The reforms include restricting a CEO’s ability to cash out his equity awards, a requirement for shareholder approval for preferential executive pensions and the creation of performance benchmarks that must be met before restricted stock could vest.
The reforms are necessary because “excessive CEO pay takes money out of the pockets of shareholders, including the retirement savings of America’s working families,” the AFL-CIO contends.
“Investors are concerned not just about the growing size of executive compensation packages, but the fact that CEO pay levels show little apparent relationship to corporate profits, stock prices or executive performance,” the AFL-CIO says.
UPS 37 Principles for Managing People
The guidelines below spell out UPS’ vision for managing its workforce. They’re part of a larger “policy book” given to the company’s management team, which also includes principles for handling customers and shareholders.
We Build Our Organization Around People
The strength of our company is its people, working together with a common purpose. Although methods, equipment, and procedures are important, and we constantly strive to improve them, our most valuable assets are loyal and capable people.
We seek, through the use of our impartial employment and promotion practices, to have a diverse workforce. Our organization is strengthened by capable individuals with diverse backgrounds.
We assign responsibilities and duties to secure the full benefit of an individual’s talents and abilities and to provide each person with an opportunity to develop further.
All our people, and the jobs they perform, can make important contributions to our company. We maintain an environment that enables them to obtain personal satisfaction from their work.
We Place Great Value on Diversity
We value the diversity that exists within our workforce, our customers, those who provide goods and services to our company, and the communities in which we do business.
Managers are responsible for creating a workplace of fairness, dignity, and respect for all employees–an environment of inclusion, encouraging participation, and the best effort of everyone. The diversity of our workforce results from a sincere effort to hire and retain dedicated people from the communities in which we operate.
We strive to enhance our reputation as an organization that values diverse customers as well as suppliers and vendors. In addition, we support and work closely with organizations that believe fair employment practices are integral to a successful business.
We Treat Our People Fairly and Without Favoritism
We believe that impartiality is the foundation of a loyal, cooperative work group.
We want to treat our people as individuals, without causing the perception of special treatment.
We have the responsibility to avoid any relationship that may result in actual or perceived favoritism.
We Maintain an Environment Free of Discrimination and Sexual Harassment
All UPS employees have the right to work in an environment free of any type of harassment and discrimination. Sexual harassment and discrimination will not be tolerated.
Managers and supervisors are responsible for ensuring that they and their employees understand and comply with UPS guidelines and maintain a professional work environment. That responsibility includes reporting incidents to the appropriate management people.
We Insist Upon Integrity in Our People
We understand that integrity is fundamental to how we run our business and essential to maintain compliance with our policies and legal requirements. Operating with integrity means we provide an atmosphere in which our people can perform their jobs in an ethical manner. We present our company honestly to employees and, in turn, expect them to be honest with us.
We expect honesty from our people in all their duties, including their handling of money, merchandise, and property with which they are entrusted. We insist on integrity in the preparation and approval of all reports.
We also expect our people to be honest in their assessment of themselves, such as the time and commitment they give to their job performance, the fairness they seek in their dealings with others, or the objectivity they use in evaluating their own contributions.
The great majority of our people are of high moral character. However, when we do discover a dishonest person in our organization, we deal with that individual quickly and firmly. For our company to be known for its integrity, each one of us must meet high standards.
We Promote From Within
Generally, we fill management positions from within our organization. In doing so we take care to include for consideration and not overlook qualified people whose present jobs may make them less noticeable than other employees. We fill a vacancy from the outside when we cannot locate one of our own people who has the professional or technical skills required for a particular assignment.
Advancement is based on individual merit and performance. All who perform their tasks capably and have the capacity to assume greater responsibility are eligible. Observing equal opportunity guidelines, we select those who seem best fitted to the position.
All managers and supervisors are responsible for encouraging and developing capable people, not only for their own groups but also for openings elsewhere within our organization. We actively search for such capable people and give them opportunities to succeed.
We Maintain a Spirit of Teamwork
Throughout our organization, we capitalize on the advantages of working together in an informal manner. Although defined responsibilities are assigned to specific individuals in our company, we act as a cooperative team. Combined efforts, which help any part of our organization, serve to strengthen our entire organization.
We Compensate Our People Fairly
Our compensation programs keep pace with today’s changing business needs and compare favorably with those programs in other companies. Our employees’ compensation includes more than salary alone. When considering pay ranges and negotiating wage agreements, we weigh the value of the total compensation package. We also consider plans that give participants a stake in the financial success of the company and offer ways to enhance savings.
We Promote the Good Health of Our People
We provide a benefits package and other programs that help promote good health and well-being among employees and their families. Attention to employee health increases the safety of our operations and reduces the costs of injuries and illnesses.
We Transfer Management People to Meet Our Company’s Needs as Well as to Broaden Their Experience
One of our long-standing strengths is the willingness of our people to take job assignments where needed. Moves intended to strengthen our organization may involve promotions, lateral assignments, transfers or relocations. Assignment changes should be considered with the view of enhancing career opportunities.
Because we realize that transfers have profound effects on individuals and their families as well as the company, we carefully consider all transfers and never undertake them lightly.
We Look for People Who Have Potential for Development
We know that most of our future management people will come from within our organization. For that reason, we look for applicants who can progress beyond the immediate job. We also need people who can qualify and become skilled at their work without necessarily aspiring to more responsible jobs.
We Help People to Develop Themselves
One of the most important responsibilities of managers and supervisors is the development of people. We are responsible for seeing that all people in our immediate organization are fully prepared to perform their jobs well.
Through our support, coaching, counseling and example, we expect people to develop the knowledge and skills that are necessary for success in their current jobs and which can help them assume positions of greater responsibility. We expect them to take advantage of the training available to them from the company and from outside sources. In turn, we provide people with assignments and opportunities that allow them to demonstrate their skills and develop their capabilities.
We seek to give people assignments for which they are well-suited.
We Expect Our Managers and Supervisors to Train Their People
We conduct training schools, workshops, and other programs in order to meet the needs of our people. However, it is the responsibility of our management team to ensure that their people receive all the necessary training and that it is effective. We review training regularly to see that it is relevant to our current needs.
We Hold Frequent Evaluations With Our Employees About Their Performance
Reviews of each person’s performance enable us to arrive at a mutual understanding about progress toward meeting goals and objectives.
We hold formal evaluations periodically. However, there is no substitute for daily and weekly feedback on each person’s performance.
We follow up on the results of all evaluations to ensure the continued development of our people.
We Have Meaningful Discussions With Our People
Cooperation and teamwork among all our people are necessary for the continued success of our business. To foster this spirit, we seek to develop meaningful businesslike relationships and better communications by having regular and frequent planned individual and group discussions.
We Recognize Accomplishments
Our people deserve recognition for accomplishments in their regular jobs and for contributions made to other departments and operations. They also deserve recognition for the extra effort they make to satisfy customers and for their participation in efforts that benefit their communities.
All managers and supervisors are responsible for recognizing the accomplishments of people in their own groups. Our established programs are intended to ensure that deserving employees are recognized appropriately for their accomplishments. These programs, however, do not replace the important role of the manager or supervisor in employee recognition.
We Promote an Open-door Approach to Managing People
Every person should feel free to discuss matters with management people in our company. Accessibility, however, does not relieve anyone of the obligation to respect delegated lines of authority. Employees are encouraged to discuss their ideas or try to resolve a disputed matter with their immediate supervisor before seeking the counsel of others. One of our company’s strengths is the development of professional relationships among everyone, regardless of authority or responsibility level.
We Give Each Employee Complaint Prompt, Sincere Attention
If overlooked or neglected, even minor misunderstandings can escalate into major dissatisfactions.
We try to anticipate and eliminate causes of complaints. When a question exists, we give the employee the benefit of the doubt. The immediate supervisor has the initial responsibility for resolving a complaint. When necessary, we involve the next level of management and, if appropriate, the human resources manager.
We keep the employee informed about the status of his or her complaint. In the process of making a decision, we do our best to take action that is fair to both the employee and the company.
We Respect Each Employee’s Point of View
We listen with an open mind to suggestions and are attentive to problems.
By talking with and listening to employees, we can often help them in doing their jobs and, at the same time, learn things that benefit the company.
We train our managers in the skills necessary for talking with and listening to their employees and in translating what they learn into action.
We Encourage Participation and Suggestions
Managers and supervisors should invite help and encourage suggestions for improvement. In working together this way, we create an environment of teamwork that benefits our company and our employees.
We consider carefully any suggestion that might be of value. If we adopt a suggestion, we give full credit; if we reject it, we explain the reasons. We also encourage feedback on plans that have been implemented, knowing that the people involved can contribute to further improvements.
We Keep Employees Informed About Company Activities and Plans That May Affect Them or Their Work
Keeping our people informed helps them to understand the company’s objectives and to perform their jobs more efficiently.
To accomplish this, we hold prework and other periodic meetings. We supplement our face-to-face communications through a variety of media. Besides disseminating information to our people and their families, these communications give public recognition to employee achievements and encourage teamwork and cooperation.
We Address Each Other on a First-name Basis
Using first names helps to generate a friendly and informal atmosphere. We use corporate titles only when necessary. Within our company, use of a title is usually not necessary to define a person’s job and responsibilities. Knowledge, performance, and capabilities should be adequate evidence of a person’s position and leadership.
If it becomes necessary to use a title, we should select one that accurately describes our job and reflects our level of responsibility in commonly understood business terms.
We Are Considerate and Professional With All Applicants
We want applicants to think well of us, whether or not we hire them. We are careful not to misrepresent or make any unwarranted promises.
We welcome referrals from employees, customers and others who know us well, and we consider them along with everyone else. But the ultimate decision to hire is made impartially based on the applicant’s qualifications.
We look for people whose personal objectives are compatible with our company’s objectives and whose attitudes toward performing a job are consistent with our company’s ideals.
We select new employees on the basis of qualifications that will help them work capably and successfully within our organization. We are an equal opportunity employer and comply with all laws governing fair employment practices.
We Limit the Employment of Relatives
In order to help maintain equal opportunity of employment for the general public and equal opportunity of promotion for our employees, we limit the hiring of relatives. Relatives of current employees up to and including the level of center manager are eligible only for part-time employment in operations. Relatives of current employees at the level of division manager or above are ineligible for employment. Also, we do not hire relatives of former district managers or managers with equivalent or higher levels of responsibility.
This policy helps us avoid misunderstandings, acts of favoritism, or the perception of favoritism that could arise were an employee in a position to influence the hiring, work, or advancement of a relative.
For similar reasons, we discourage continuation of the full-time or part-time employment of any employee who marries another employee while either person holds a management position.
We Do Not Rehire Former Employees, Except Under Special Circumstances
We should not rehire former employees, especially those who left because they had become discontented or with whom we had become dissatisfied. Employees who left to further their education or for other valid reasons should be given the same consideration as new applicants. The decision to rehire a former employee should only be made with appropriate approvals.
We Try to Retain the Good Will of Former Employees
We are considerate of employees who are leaving us for whatever reason. We know that the good will and respect of former employees can be beneficial in future relationships.
At the time of an employee’s separation from the company, we seek an opportunity to conduct a friendly discussion regarding both the individual’s and the company’s views. Such discussions may point out ways in which we could improve our working environment or the company in general.
We Develop and Maintain Professional Relations With Labor Union Representatives
Many of our employees are represented by labor unions. We know that our people can be effective and loyal employees and, at the same time, be good union members. We consider the point of view of unions along with the interests of our customers, our people, and our company as a whole.
We negotiate fairly with labor unions for reasonable wage rates and working conditions. These negotiations should give due consideration to our unique operations and enable us to maintain the operating flexibility and efficiency needed to remain competitive.
We respect and fulfill the terms of our labor agreements. We also expect union leaders and members to cooperate in fulfilling the terms of such agreements.
We Stress Safety Throughout Our Company
The safety of our people and of the general public is of utmost importance to us. We train our people to avoid injury to themselves and others in all phases of their work. We do not tolerate unsafe work practices.
We encourage the involvement of all our people in safety awareness activities and give recognition to employees for safety accomplishments. We are all committed to fostering the most effective safe practices in all our work.
By meeting our own high safety standards, we will be contributing to the well-being of our people, our company, and the communities we serve.
We Plan Our Buildings and Facilities for Safe and Efficient Operations
We develop detailed plans for the design of our buildings and the installation of equipment in our facilities. We plan our buildings and facilities to be in compliance with governmental and regulatory requirements. Our plans take into consideration reasonable, anticipated requirements for growth. We arrange for specialized equipment and facilities as well as efficient and economical methods for handling and delivery. We provide safe, clean, and pleasant places to work.
We plan and select buildings that are functional and attractive and create a favorable impression of our organization.
We Keep Our Buildings and Equipment Clean and Neat
We believe this has an important effect on attitude, safety, and efficiency. Facilities and vehicles that are clean and neat indicate to employees and customers alike that we are proud of our company and that we give the same meticulous attention to our business that we give to our work environment.
We provide sufficient maintenance so every operating facility, office building, and vehicle will be maintained at a high standard of appearance and cleanliness every day. The exteriors of our buildings, parking lots, lawns, and shrubbery are kept neat and well maintained.
We Assign the Same Equipment to Each Employee Every Day Whenever Possible
We retain flexibility in the matching of equipment to the requirements of the job. Wherever practical, the same equipment should be assigned to each employee every day.
This results in employees feeling more responsible for the care of equipment and for reporting any special attention equipment may require. For example, drivers come to know their UPS vehicles as they do their personal cars and take the same pride in them.
We Expect Our People to Be Neat in Appearance
A neat appearance greatly impacts the way our customers view us and how our employees interact on the job. Our drivers and flight crews and certain other employees wear standard uniforms as a distinct reflection of our company and our service.
Just as we require our people who come in contact with the public to maintain a neat appearance, we expect our office people to be well groomed. We ask them to select clothes and accessories that are appropriate to our business environment.
Managers and supervisors take note of the appearance of their people daily and set the example through their own proper grooming and attire.
We Reimburse Our People for Appropriate Expenditures Incurred on Behalf of the Company
No one should gain or lose because of money spent for company purposes. We require our people to submit an itemized accounting of these expenditures.
Sound judgment is necessary in the management of such expenses. Questions concerning these expenses should be resolved in advance with one’s manager.
Approval of the expenses of those who report to us requires equally careful consideration, as well as attention to guiding them in future expenditures. We periodically review and adjust our reimbursement practices.
We Prohibit the Use or Possession of Alcoholic Beverages or Controlled Substances While Working
Employees are not permitted to start work or remain at work if they possess or are using any of the following:
-
an alcoholic beverage, regardless of its alcoholic content
-
any controlled substance or illegal drug or any derivative thereof
-
any other substance that could impair their ability to perform a job safely and competently
This rule governs employees from the time they report to work until they leave our premises at the end of the workday.
The rule reflects current laws and government regulations that strictly prohibit the use or possession of any illicit substances by those who operate our air and ground vehicles, as well as those in other specified jobs. These regulations also contain prohibitions against the use of alcoholic beverages by employees before they start work.
We Prohibit Gambling, Holding Raffles and Similar Activities on Company Time or Property
At best, these are unbusiness-like activities and inappropriate on the job. They also place our people under improper pressure to spend or contribute money.
We Prohibit Use of Company Time, Facilities or Materials for Personal Benefit
The use of company time, labor, supplies, equipment, tools, buildings or other assets for personal benefit is prohibited. Employees are required to pay for personal use of our delivery services. We also do not repair or wash private cars for employees or other individuals. Similarly, we do not sell gasoline, parts or other supplies from our inventories.
An exception to this policy may be made only in the case of an unavoidable emergency, when there is no reasonable alternative.
We Separate Business and Social Functions
Combining social and business functions can create conflicts, misunderstandings and jealousies that may adversely affect both the company and our people.
Families and friends normally do not attend our business meetings or travel to the meeting sites. They are, however, welcome at company open houses and at other social functions held primarily for their benefit.
Taking the Temperature at HotJobs
Yahoo HotJobs is a bit of an anomaly: It has deep ties to one of the best-known sites on the Web but still trails competitors Monster and CareerBuilder in terms of revenue and traffic.
In fact, Piper Jaffray & Co’s Brett Manderfeld says he expects Monster’s 2005 market share advantage to be “roughly two times CareerBuilder and five times HotJobs.”
In an interview with Workforce Management, HotJobs executive vice president and general manager Dan Finnigan says his site nevertheless offers advantages over the two industry leaders.
Workforce Management: Are customers’ budgets rising to reflect the uptick in hiring?
Dan Finnigan: People’s budgets are still aligned with the downturn of the economy even though they have aggressive hiring objectives. There’s migration from traditional recruiting media or services to more cost-effective, Internet-based services.
WM: Do recruiters and workforce management professionals have different demands than they did a couple of years ago?
DF: During the downturn, many companies became concerned that through layoffs the image they had in the job market may not be as positive as they’d like. Now they are interested in opportunities to buy a bundle that allows them to target people who may not necessarily be going to a job board right now.
Recruiters want to be smart: They want to have their dollar do more. They don’t want to just post their job on a job board and hope someone finds them. They don’t want to just look through the résumé database. They want to target the passive job seekers. And they want to build their brand as a great place to work and have the effort be cost-effective.
WM: And I imagine this emphasis on passive job seekers has changed the products you offer.
DF: Yahoo is rolling out Yahoo360, our own thing, that some people call a social networking site. People can save profiles of themselves, meet others and share photos and keep closer ties with friends and family members. It’s clear to us that as (online social networking) grows, the sharing of work experiences will become part of that.
WM: Are you trying to find some sort “killer app” or revolutionary killer application of technology? Or is there just a natural progression of adding features in time?
DF: I think it’s more the latter. When a critical mass is reached, people will say, “Can you imagine looking for a job in print?” It takes too much time. You talk to people who rely on Yahoo for news or sports scores, or what happened last night. No one said that on its own that this (type of service) was a killer app, but people make products like Yahoo a part of their life. I think that is going to happen on the job-seeking side. For the job seeker, a convergence is taking place that will allow a number of things to happen together.
There’s more innovation that hasn’t taken place, but is going to. If you look back four years, the Web sites people turned to for, say, music, have evolved. It’s the same for retail and travel. New players emerge and take advantage of new technology. That’s going to continue in the job marketplace. Job seekers will use sites that are comprehensive and allow personalization.
WM: Do you think the type of job seeker HotJobs attracts differs from those who use Monster or CareerBuilder?
DF: I don’t think there’s a dramatic difference in the quality of the audience.
There is a difference when someone types in one of those sites versus everyday using Yahoo and seeing a link for HotJobs and deciding to look, or use their Yahoo module to link to a job.
There are perhaps more of the passive job seekers who check to see what’s available on HotJobs even though they didn’t wake up that morning with the intention of going to HotJobs.
WM: One trend is the rise of the consolidator sites like Indeed and Workzoo that sweep the Internet for jobs and deliver “metasearch” results for a job candidate using a variety of job boards. Are they a friend or foe of HotJobs?
DF: I don’t see them as a foe. We believe we need to be the first and only place people think about when they search for something online. That is the core of our mission. There are always going to be startups in search products in any number of categories.
WM: HotJobs is distributing two games, one where the worker has to sneak over to a printer, and another where he has to cover up art depicting the boss. How important is viral marketing in your sector? How effective is it in attracting people?
DF: Our own research shows that people are spending several minutes playing these branded games, and in the case of this Spring Break campaign, there is an intuitive connection: If you’re constantly playing games at work, you should probably be looking for a new job. This campaign helps drive traffic to HotJobs and engages both active and passive job seekers with our brand.
We believe viral marketing will continue to play an important role in our industry, but we’ve found it’s most effective when part of a more comprehensive, integrated communications plan.
The Bully Backlash
Bad behavior, especially in the workplace, seems to be making news again.
On a recent morning, I read these stories within a few pages of each other in The Wall Street Journal:
On one page, there was a story about how the nomination of John Bolton to be the new U.S. ambassador to the United Nations was stalled in a Senate committee, largely because of allegations by some people who had worked for him about his bullying and abusive behavior.
A few pages later, there was a column discussing how mystifying it is that unqualified and abusive managers can continue to keep their jobs despite a clear track record of bad behavior and frequent abuse directed at people who work for them.
Bad business behavior isn’t any big surprise, of course, because it has been going on for years. What is surprising, however, is that so much is being written about it–and how little it seems to matter. Being nasty, brutish and short with subordinates has long been a basic staple of corporate behavior, made famous by executives from Leona Helmsley to Michael Eisner.
I’ve had my own experiences with this phenomenon.
One guy I worked with had no discernible skills at all except for his ability to bully and badger people. The only things he ever really produced were the threatening memos to underlings, and he spent most of his workday berating people behind closed doors as he read, line by line, from what he had written. He liked to start conversations with the vague but subtly threatening question “Are you happy with your job?” The office wags had a nickname for him: Torquemada.
At another company, one of the top executives insisted on scheduling one-on-one meetings with subordinates at odd times, say, 7:30 on a Friday evening when the employee was planning to attend her son’s annual football banquet. This was a torturous test of loyalty, and the executive used to brag that it worked because it showed who was truly “committed” to the company. “Committed” employees gritted their teeth, passed on the football banquet, and went to the meeting. The “uncommitted,” who dared to put their family first, eventually got canned.
Now, I’m not comparing John Bolton with these bad bosses. Bolton’s actions toward others, the Journal editorialized, were, at their worst, simply “rude.”
Being rude isn’t a crime, of course, but this line of defense makes me wonder: Shouldn’t we expect more of those who aspire to higher positions of power and authority? Isn’t it a given that those who manage others are expected to be kinder, more understanding, more civil and, yes, less rude?
Peter Drucker made this point in his classic 1954 book The Practice of Management: “A manager develops people. Through the way he manages he makes it easy or difficult for them to develop themselves. He directs people or he misdirects them. He brings out what is in them or he stifles them. He strengthens their integrity or he corrupts them. He trains them to stand upright and strong or he deforms them.
“Every manager does these things when he manages–whether he knows it or not. He may do them well, or he may do them wretchedly. But he always does them.”
All managers, from the CEO down to the lowest line-level supervisor, have a choice in how they treat those who work for them. As Drucker observed, the manager can either help make the workforce better or worse, either more focused and engaged in the job at hand, or preoccupied with what the boss is going to do to them next.
Sometimes those decisions are good, sometimes they are bad, but rarely are they forgotten.
Just ask John Bolton.
Workforce Management, May 2005, p. 8 — Subscribe Now!
Dear Workforce High Turnover at Our Bank Is Affecting Business. How Can We Turn Things Around
- Why do these people stay with the bank?
- Why do they stay with me?
|
|
|
Dear Workforce How Do We Develop Performance Yardsticks for Human Resources
Here you calculate the total cost of the human resources department, including salaries, divided by the number of full-time employees. It measures the cost of providing human resources services to each employee.
This is a measure of the ratio of human resources staff to employees, and is calculated by dividing the total number of employees by the number of human resources staff.
Make it an ongoing practice to measure the quality of service your human resources department delivers. Many organizations use annual surveys to gauge user satisfaction. Surveying people more regularly gives you an even better handle on service levels. Use follow-up surveys after individual human resources transactions. For example, send a brief satisfaction survey to the hiring manager and to a new employee regarding the recruiting process.
If you want human resources to be more than an administrative arm, you’ll need to track the strategic value it provides to the organization. First look at what your organization’s KPIs are and how they are influenced by the performance of the human resources department. For example, turnover can have a dramatic effect on many organization-wide metrics, such as revenue per FTE. If your human resources department helps curb turnover, then you should include it as a key performance yardstick. However you develop these principles, never lose sight of the reason behind your planning and strategy: to run your business more efficiently.
|
|
|
Legal Gender Bending
I live in Wichita, Kansas, a quiet town known for being the birthplace of Pizza Hut, Mentholatum and Cessna Aircraft. The big news recently was the capture of “BTK” (“Bind, Torture and Kill”), the self-named serial killer who had terrorized the Wichita community since the 1970s. Despite frequent communication with media and local law enforcement, BTK eluded capture for many years and finally disappeared from the public eye. Last year, BTK suddenly began to again taunt police by sending cryptic poems, puzzles and items removed from the murder scenes.
BTK’s capture dominated the local news, edging out the front-page story on the opening of Babes and Booze, a bar in Wichita’s newly renovated Old Town, where the waitresses wear only sprayed-on latex as work uniforms. Another big story in this Bible Belt community was the relocation of the local Hooters to an exclusive upscale eastside location.
As a lawyer who routinely defends gender discrimination cases, it is fascinating to observe how an employer such as Babes and Booze is able to impose a different standard of conduct for male and female employees within the confines of Title VII of the 1964 Civil Rights Act. Since 1964, U.S. employers have been required to provide equal treatment in the terms and conditions of employment regardless of gender, race, color, creed, national origin or religion.
Can an employer such as Babes and Booze or Hooters treat female employees differently than male employees and still comply with federal “equal treatment” requirements? The answer is: sometimes yes, sometimes no.
Sometimes yes
Newspaper and television commentators expressed consternation over a recent federal appeals court decision that Harrah’s Casino in Reno, Nevada, had the right to fire bartender Darlene
Jespersen for refusing to wear makeup. Harrah’s adopted a “Personal Best” grooming policy requiring Harrah’s employees to adhere to certain guidelines, including short hair and neatly trimmed fingernails for men. Men were barred from wearing makeup. Harrah’s female bartenders and beverage servers had similar grooming requirements, but were required to wear makeup.
Jespersen, a 21-year employee of Harrah’s, refused to comply with the policy and claimed that the differences in the policy for male and female beverage servers constituted disparate-treatment sex discrimination in violation of Title VII. The 9th U.S. Circuit Court of Appeals assessed the actual impact of Harrah’s makeup/no makeup policy on both male and female employees, weighed the cost and time necessary for employees of each sex to comply with the policy and ultimately agreed with Harrah’s approach.
The court noted simply that Jespersen failed to produce “some” evidence that the makeup requirement placed a greater requirement on female bartenders than the requirement that men maintain short haircuts and neatly trimmed nails. There was no evidence that these burdens were greater for women than men, and the court ruled that Harrah’s policy was not a violation of Title VII since it did not discriminate because of “immutable” or unchangeable characteristics, and because it imposed equal burdens on both sexes. In my opinion, Jespersen lost because of a technicality–the judges thought she needed more evidence to prove her case.
A similar case arose recently in Iowa. A male employee filed a lawsuit against his employer claiming he was discriminated against on the basis of gender because his employer told him he could not wear a stud in his ear. Female employees for the same employer were allowed to wear studs or earrings. The court ruled that wearing an earring stud was not an immutable characteristic–you could cover up the stud or take it out–and that federal law did not prohibit employers from establishing personal grooming standards that might treat males and females differently.
Sometimes no
A Michigan court of appeals, meanwhile, allowed the Michigan Department of Corrections to hire only female security guards for a detention facility housing females because of the state’s goals of security, safety, privacy and rehabilitation. But a federal court in Arizona ruled that it was a violation of Title VII for Marriott International to refuse to hire a male massage therapist merely because most customers requested female massage therapists. The court found that Marriott’s policy of assigning female massage therapists to females and males to males was driven by customer preference, not by a public policy interest. And the court reminded Marriott that the extra cost of hiring male therapists who might not be used by customers did not justify its gender-based hiring.
In another case, a topless club in Houston tried to limit the number of black dancers at the club in order to “keep a racial balance” among the clientele. The court said bluntly to the defendant that such a practice was intentional racial discrimination and that dancers could not be selected on the basis of race.
My favorite sex-based hiring cases are, of course, the Hooters cases. Hooters refused to hire men and claimed the restaurant was providing “vicarious sexual recreation” as a way to argue that female allure was a bona fide occupational qualification. The court noted that this ploy might have worked except for Hooter’s advertisements that it was a “family” restaurant. In one class action, Hooters agreed to pay $2 million to the males who were denied the opportunity to serve as “Hooters Girls,” paid $1.75 million in attorneys’ fees and was ordered to create three gender-neutral positions. Hooters Girls are now assisted by “Hooters Persons.”
Lessons for employers
At all costs, avoid grooming standards that are different for men and women. If you must impose a particular requirement, avoid standards for immutable or nonchangeable characteristics. If your policy requires nonchangeable characteristics, you will run into problems, or lawsuits, or both.
Keep your grooming standards as gender-neutral as possible. If there is a necessary difference, treat the standard as if it is an accountant’s ledger in which the requirements for males equal the requirements for females. Remember, these are disparate-treatment lawsuits.
No differences can be based on race. Period.
If you are going to use gender as a bona fide occupational qualification, think of the “qualification” as an essential function of the job–a topless female dancer must be female; and a male performer would probably required to play the role of Michelangelo’s David.
Employers sometimes face liability for treating one gender differently than another. And sometimes they don’t. Like BTK, sometimes employers just get away with it–for a while.
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.
Workforce Management, May 2005, pp. 12-14 — Subscribe Now!
Novel Ideas at Borders Lure Older Workers
When Barbara Kinzer began computer training on her first day of work at Borders Group in 1992, she didn’t know what to expect. Having been out of the workforce for more than 25 years, she couldn’t remember the last time she had been in an office, let alone in front of a computer. “They said, ‘OK, Barbara, let’s get started,’ but I didn’t even know how to turn the computer on,” she says.
To her relief, no one laughed. Kinzer, 62, attributes her quick rise in the ranks at Borders to the patience that managers had with teaching her the ins and outs of technology and how to work a register. “They recognized that my biggest strength was my knowledge of books,” she says. Today, Kinzer runs the corporate training program out of Borders’ headquarters in Ann Arbor, Michigan.
Recruiting and retaining older workers has been a strategy that consultants have been hammering into the heads of employers for years. The reason, they say, is that as the baby boomers begin to retire, there will be a shortage of experienced workers. According to Bureau of Labor Statistics data, the pool of U.S. workers ages 35 to 44 will shrink by 7 percent between 2002 and 2012.
But for Borders, the need to have older workers goes beyond that.
In the late ’90s, when online bookselling was sweeping the nation, Borders took a hard look at the demographics of its customer base. From that research, it discovered that 50 percent of the books bought in the U.S. were purchased by consumers over 45. To reach out to those customers and differentiate itself from the impersonal online booksellers, Borders created a formal hiring and retention initiative aimed at older workers, says Dan Smith, senior VP for human resources. “We found that they better related to our customers,” he says.
| According to Bureau of Labor Statistics data, the pool of U.S. workers ages 35 to 44 will shrink by 7 percent between 2002 and 2012. |
Today, 16 percent of Borders’ workforce is over the age of 50, up from 6 percent in 1998, when it started its recruitment effort. The book retailer has found other advantages to having older workers in its stores. According to Smith, the turnover rate for workers over the age of 50 is 10 times less than those under 30. Borders has seen its turnover drop 30 percent since it began its effort to recruit older employees. “These workers have a great passion to be connected to the community, and our bookstores provide them with that venue,” Smith says. Also, since the work is often part time, it’s a great fit for them.
To further attract and retain these employees, Borders recently added medical and dental benefits for part-time workers. Now the firm is planning to add a corporate “passport” program by which employees could work half the time in a store in one part of the country and the other half at a different store. The company already has a few instances where older workers live in a warm climate, such as Florida, during the winter and then in the Northeast during the spring and summer. Borders accommodates those needs on a case-by-case basis. “Right now it’s not easy for the employees because they have to do their own research and contact the stores on their own,” Smith says.
To help these workers, Borders is creating a section on its intranet where employees will be able to sign up to work in different parts of the country. For example, employees could post that they are going to be in Florida for four months, and conversely the general managers could see if there are potential employees they could put in their stores, Smith says. Borders hopes to have the tool up and running this year.
Kathleen Rapp, national program consultant at AARP, predicts that once Borders introduces its corporate passport program, other companies will follow. AARP just named Borders to its recently launched Featured Employer Program, which allows selected companies to advertise job openings to older workers through the group’s Web site. Borders is one of 13 employers named. “None of the other featured employers on our list have a program like this,” Rapp says. “It really goes a long way to retaining older workers.”
In another lure for older workers, Borders also is discussing adding an income annuity option to its 401(k) plan. This feature would allow employees to invest a portion of their salaries into a deferred-income annuity, which would guarantee them a set amount of monthly income after they retire for good.
Specifically, Borders is looking at Merrill Lynch’s Personal Pension Builder, which the company recently introduced with MetLife Retirement Savings.
Smith would not say when Borders would make a decision on adding the option.
Workforce Management, May 2005, p. 28 — Subscribe Now!
Phased Retirement Proposal Could Put New Hardship on Employers
Employers may have thought that the proposed regulation on phased retirement would put to rest their concerns about retaining older workers, but they could be in for a new round of headaches.
The rule, which was proposed by the Internal Revenue Service and U.S. Department of the Treasury, would allow older employees to work part time and receive benefits accrued in their pension plans, a seeming benefit for both employers and employees. There is a catch, however, in that employers would have to conduct annual audits of how many hours employees are working to determine how much in pension benefits they receive.
Under the proposal, employees’ benefits during phased retirement would be limited to the percentage by which they expect their hours to be reduced. For example, employees who expect to reduce their hours by 25 percent would receive up to 25 percent of their benefits during the phased retirement period. If employees end up working more than they expected, however, the employer would have to reduce the pension benefits being paid out to them.
This means that employers who pay employees annual salaries would not only have to count their employees’ hours during the phased retirement period, they also would have to know how many hours they worked when they were full-time employees. Such calculations will require hours of administrative work particularly for companies with salaried employees, versus those that pay by the hour. Many observers expect employers to rely on technology to help them with this burden. Creating an automated system to do the calculations would cost about $100,000 for a one-time implementation, according to Valerie Paganelli, senior consulting actuary in the Seattle office of Watson Wyatt Worldwide, who testified on the subject at a March 14 hearing before Treasury and IRS officials.
Counting employees’ hours and figuring out what percentage of a pension benefit they should receive becomes even more complicated given that employees’ hours often change from week to week. For example, an employee could work 20 hours one week and 30 the next. “This is just not practical,” says Bruce Schobel, chairman of the retirement security principles task force at the American Academy of Actuaries, who helped write the group’s comment letter to the Treasury Department and the IRS. Schobel says the academy views the proposal as a good step, but it does not believe that employers of salaried employees would be willing to implement systems to track their hours.
| “This is going to be incredibly burdensome, and human resources professionals are the ones who are going to have to deal with it.” –Wendy Wunsh, former manager of employment regulations at SHRM |
The Society for Human Resource Management and the American Benefits Council have expressed similar concerns. “This is going to be incredibly burdensome, and human resources professionals are the ones who are going to have to deal with it,” says Wendy Wunsh, former manager of employment regulations at SHRM. “We are not saying that we don’t want to do it, but we also want to make it easy as possible.”
Another concern about the proposal is that it would allow for phased retirement at 59½, which many believe is too late. In its testimony, the American Benefits Council argues that the age at which phased retirement begins should depend on the terms of the plan. Many employers’ plans allow employees to retire at 55, and if phased retirement does not kick in until 59½ it could cause employees to leave their jobs, take their pensions and then work somewhere else, notes Jan Jacobson, director of retirement policy for the American Benefits Council.
The other issue is that under current law, an employee who begins to take pension payments before 59½ gets hit with a 10 percent tax. Schobel says that if employees want to access their pension benefits and pay the penalty, it should be their prerogative. A Treasury Department official, however, says that the agency is unlikely to permit phased retirement before 59½ and subject employees to this tax because it would invite “misunderstanding and disappointment.”
Jacobson and others predict that the IRS and Treasury will come out with final rules by the end of the year and that the hour-counting will be part of it. “Employers will have to figure out if offering phased retirement is worth it,” she says. “A lot of employers may decide it’s not.”
Workforce Management, May 2005, p. 26 — Subscribe Now!