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Posted on December 14, 2004July 10, 2018

Employment Outlook Looking Up

The job market is “decidedly more upbeat” for 2005 than it was at the start of 2004, according to Manpower.


Of the 16,000 U.S. employers surveyed in the quarterly Manpower Employment Outlook Survey, 24 percent expect to increase hiring during the first quarter of 2005. Ten percent expect to decrease staff levels.


Manpower says that the Canadian and U.S. employers it surveyed are upbeat. Europe’s a mixed bag. Germany’s employers aren’t as optimistic about hiring, while U.K. companies generally have a positive outlook.


Beyond Manpower’s study, other hiring indicators are also bright.


  • Mark Anderson, president of ExecuNet, a community of senior executives, says that “recruiters continue to grow more bullish on the executive employment market.”


  • Corzen, a firm that tracks recruiting metrics, reports a recent increase in the number of human resources jobs posted on Monster, HotJobs and CareerBuilder. Human resources employment is sometimes looked upon as a proxy for the health of the job market in general. Bob Plummer, director of indicator services, says that “there’s a direct correlation between HR postings and the overall increases on Monster, CareerBuilder and, to a certain extent, HotJobs. I don’t think any other category tracks so similarly to the overall gains we’ve seen in 2004.” Plummer says that overall “job postings have been very strong on Monster and CareerBuilder” from the second quarter of 2004 until about Thanksgiving of this year, when there was a “seasonal swoon,” as is typical.


  • A look at Korn/Ferry’s most recent financial results–released December 8–look very positive as well. The executive recruiting firm, whose results are often cited as a harbinger of good or bad times in the job market, says its fee revenue during its most recent fiscal quarter was $108.5 million, an increase of 42 percent from $76.7 million in the same quarter of the prior fiscal year.  “Not only is overall demand for recruitment services up, but we are seeing increased activity in every product offering and in every region we serve,” says Paul C. Reilly, chairman and CEO. “It appears that many companies are moving into growth mode, and recruitment and development activity is on the rise.” Korn/Ferry’s own expenses are up because it’s paying more in comp and benefits. Much like its clients, Korn/Ferry is in a hiring mode.


  • Scot Melland, president and CEO of Dice, a tech job board , says, “The IT job market continues to have a nice steady increase month to month” despite a slight end-of-year slowdown. “The big news here is there’s just been this continuous improvement in the tech job market,” he says. Melland says there are about 59,114 jobs currently posted on Dice, up about 90 percent from this time last year.

Posted on December 10, 2004July 10, 2018

Nonprofits Offer the Best Benefits

There may be some truth to the notion that a nonprofit job is low in pay but comes with good benefits, according to Mercer Human Resource Consulting. Mercer analyzed the benefits programs at more than 1,000 large employers—both for-profit and nonprofit–in the United States.


The study indicates that large nonprofits offer the highest level of total benefits at 128 percent of the market median. Government employers offer 127 percent of the market median, and education employers’ benefits are 121 percent of the median.


Among for-profit employers, the utilities, mining and insurance industries offer the most generous benefits packages. The hospitality and retail sectors offer some of the leanest benefits.


A chart showing the level of benefits by industry is available online.

Posted on December 10, 2004July 10, 2018

Is Your Human Resources Department Unwittingly a Socialist Institution

We all know that in the age-old economic battle between capitalism and socialism, capitalism won.



    Unfortunately, if you were to classify the actions of many human resources departments, more than a few of their actions come across like socialist actions rather than capitalist ones. As a strong capitalist, I am wondering out loud here: How do so many human resources departments get so out of focus? Some examples to illustrate the point:


Human resources as the advocate of the weak vs. the top performer
   
Some human resources thought leaders and a good number of human resources departments actually declare that they are “employee advocates.” In addition, it’s a common practice for the human resources department to focus on poor-performing employees and managers despite the fact that human resources has no statistical evidence or metrics to show that focusing on poor performers results in them ever becoming top performers.


    The truth is that it’s fairly routine for the employee relations and training departments to spend a disproportionate amount of time and resources trying to “fix” poor performers. Most human resources organizations develop progressive discipline, job simplification and second-chance opportunity programs for those employees who consistently fail. But they offer little in the way of programs that support or improve the productivity of top performers.


    The problem is so widespread that I defy you to find a human resources program that focuses on improving or supporting the performance of top performers.


    From a capitalist viewpoint, all human resources organizations would spend the majority of their time and resources on the best-performing assets–in this case, top performers. Unfortunately, the reality is that top performers seldom see or get help from human resources, so their issues are seldom addressed. In a capitalist-dominated world, survival requires you to rapidly shift resources from bottom-performing assets to top-performing ones. Incidentally, I find that most companies fire less than 1 percent of their workforce for performance reasons, which is clearly an indication that poor performance is widely tolerated.


Human resources as supporters of equal pay vs. differential pay
    Capitalists learn that you must differentiate rewards in order to improve performance. What is needed is not “reward them all equally” or “reward each according to their need,” but rather “reward those who produce the best results.”


    In contrast, most compensation departments act like socialists when it comes to pay. They frequently give across-the-board cost-of-living raises that reward everyone equally for just showing up. They also frequently institute across-the-board pay freezes, which essentially punishes everyone equally. When they do reward performance, there is often less than a 15 percent differential between a top and average performer, which isn’t much of a reward differential for producing great results.


Human resources focused on seniority vs. relevant and recent performance
    Capitalist principles tell you to reward based on results. Unfortunately, all too many human resources departments instead reward based on seniority. They give preferences in job promotions, vacations, transfers and even pay increases to those with the most experience, even though others may have a higher performance level.


    In addition, by giving 10-year pins but not giving out top-performer pins, human resources is demonstrating that it is more willing to reward time in the job than it is to publicly recognize performance in the job. Although many human resources socialists and union leaders believe in seniority, capitalists measure and reward performance, regardless of one’s tenure at the firm.


Equal treatment of departments and managers vs. resources based on results
   
Firms routinely prioritize their business units via the budgeting process. Chief financial officers disproportionately allocate resources based on the department’s results and its return on investment. Human resources departments, in direct contrast, routinely treat everyone, every job and every department equally.


    For example, human resources almost always puts the same dollars, time and effort into hiring individuals in low-priority departments as it does in high-priority departments. Human resources routinely treats all managers and problems equally, even though they should prioritize service offerings so that the most time and resources are spent on the most productive and high-ROI managers, jobs and business units.


Human resources as consensus decision-makers vs. innovators
    It’s quite common for human resources departments to make decisions in a meeting based on a vote or, even worse, consensus decision-making.


    A capitalist realizes that although input is important, it is essential that those with the most information and knowledge make the most critical decisions. In a world that requires risk-taking and innovation, consensus decision-making essentially dooms you to reducing all “wild ideas” to the average and the mundane.


Human resources as the protector of people and jobs vs. being a champion of profit
    Firms are in business to make a profit. Human resources professionals are often overly focused on defending people and jobs, even though that approach may be detrimental to the overall profitability of the firm.


    Human resources’ resistance to the practice of cutting the workforce is an illustration of its overconcern about protecting people. Human resources will recommend the cutting of training and the freezing of salaries and hiring in order to preserve jobs for the weak–instead of layoffs– even though freezing salaries and training, for example, might cause the majority of workers to become frustrated and less productive.


    Layoffs are a chance to cull out the weak and the unnecessary and are a method for reducing overall costs. It’s easier to find a Republican who wants to raise taxes than it is to find a human resources person who actively supports layoffs. Offshoring is another efficiency practice that human resources resists in order to protect jobs for the “little guy.” This insistence on maintaining local jobs raises costs and hurts the firm’s competitive advantage. The difference between the two approaches is clear: Socialists champion “saving” the lowest common denominator, while capitalists champion profit.


A bias toward people over capital investments, no matter what the ROI
    It’s time to face facts. In the business world, investment dollars go to the assets with the highest rate of return.


    CEOs and CFOs generally show no “human” bias, and shareholders, without a doubt, show little particular favoritism for the human element. They all just want high returns from their investments whether they are investments in people, equipment or financial instruments. In direct contrast, human resources often sees itself as an employee advocate with little or no concern about comparing the productivity of human assets versus those of technology and finance.


    Human resources inevitably sides with the people element. Capitalist human resources looks at people costs as a business investment that is no different from any other business asset. CEOs and CFOs invest money in resources based on their ROI, whether it is marketing, R&D or people; they have no preset preferences. They expect all assets to demonstrate a return, and, naturally, they invest the most dollars in those assets that provide the highest rate of return, require the least upfront capital, have the lowest risk and the shortest payback. It’s time to stop fooling ourselves by automatically believing that “human assets” have some special standing and instead support expenditures in whichever assets produce the highest return.


Other indicators that a human resources department leans toward socialism
    Additional characteristics of socialism and the bureaucratic approach to human resources might include:


  • A large emphasis on “showing-up pay” (100 percent base pay and large benefit packages are all show-up pay) sends a message that showing up is more important than performing.


  • An emphasis on process, organizational charts, building relationships and meetings are all indicators of a bureaucracy.


  • Striving to eliminate any “special treatment” means turkeys and eagles get the same treatment.


  • Tracking and maintaining headcount (thereby considering all employees the same) rather than actual employee costs (salaries and benefits) and their ROI.


    Human resources needs to be a unit that increases workforce productivity efficiencies, not a creator or protector of jobs. Businesses make money by being efficient. In the area of people management, efficiency means increasing workforce productivity (which is the dollar difference between the costs of paying and employing people and the value of the output that these people produce).


    It’s rare to find a human resources department that talks about workforce productivity at all, and only one in 1,000 actually measures its workforce productivity as a regular part of its performance measurement activities.


Why such a socialistic focus in human resources?
    Now you might be thinking, “I agree some social work mentality does exist, but why does human resources have such a social work focus?”


    It’s hard to point to a specific reason why human resources focuses on equal treatment and loves to delve into social and community issues. The best evidence I’ve seen indicates that the primary causes for this anti-capitalist approach is that most of the people in human resources do not have degrees in business, nor do they have extensive experience managing a P&L business unit. Let’s face it: Too many people in human resources are there because they “like to work with people” rather than because they like to make the firm a lot of money by increasing “people productivity.”


    You can also see this socialist bias in some human resources publications that frequently place social concerns at center stage. Even though the human resources department is a business function, some of the people who write about human resources seem more focused on outside social issues than the publication of any other business function.


    These human resources publications routinely focus on issues in the community. I’ve never met a CFO or CEO anywhere who said the role of a human resources department is to make the world a better place or to worry about the little guy. However, quite frequently I see the cover of human resources magazines highlighting social issues, obesity, housing issues and even concerns for a happy retirement. Maybe it’s because most of the writers for human resources publications are freelancers with no degree in business.


Conclusion
    The war between capitalism and socialism is over, and capitalism won because it’s a superior approach. Now is the time to pass that message along to the numerous junior psychologists, former teachers and social workers in human resources that just haven’t heard the message yet. Incidentally, these are also the individuals that fight the use of technology, ROI and metrics in human resources because they feel that they “dehumanize” people in the people function.


    OK, remember that I never said that all human resources departments are socialistic, but it is certainly true that a truly capitalistic performance culture is more of an exception then it is a rule.


    Firms like GE, Intel and Nucor are famous for their capitalist practices, while all too many human resources departments act more like government agencies that emphasize equity over differentiation based on performance.


    Now is the time for proud capitalists in human resources to become the champions of differentiation and employee productivity.


    If your goal is to increase your company’s people productivity through the effective use of human resources tools and strategies, it’s time to change the DNA of human resources. It’s time to change human resources so that it focuses on top performers and ensures that it spends most of its time and budget on high-ROI activities. In brief, it’s time for human resources to become a profit center.


Reprinted with permission from John Sullivan. E-mail editors@workforce.com to comment.

Posted on December 9, 2004July 10, 2018

Benefit Value Comparisons by Industry

Benefit Value Comparisons by Industry


Industry Total benefits Time-off benefits (vacation, personal days, other leave) Retirement/ savings benefits Health/group benefits
Accommodation and food service 64% 80% 42% 74%
Chemical manufacturing 108% 98% 100% 111%
Computer and Electronics manufacturing 90% 101% 77% 97%
Durable manufacturing 98% 96% 94% 101%
Educational services 121% 116% 123% 115%
Finance 104% 105% 121% 94%
Information (media/ publishing) 94% 103% 81% 103%
Insurance 109% 102% 114% 108%
Government 127% 106% 129% 134%
Health care 91% 99% 87% 94%
High technology 93% 102% 79% 100%
Mining 114% 97% 138% 108%
Nondurable manufacturing 94% 93% 100% 92%
Nonprofit organizations 128% 111% 156% 115%
Pharmaceutical and medicine manufacturing 108% 105% 84% 115%
Professional, scientific and technical services 86% 103% 72% 95%
Retail 75% 87% 60% 77%
Transportation 102% 96% 84% 109%
Utilities 117% 99% 129% 116%
Wholesale 75% 86% 85% 84%
Source: Mercer Human Resource Consulting, 2004 Spotlight on Benefits Report

Posted on December 7, 2004July 10, 2018

Consumer-Driven Health Could Get Momentum With Merger

The $300 million purchase of a consumer-driven health care specialist by a mainstream HMO could “legitimize” the consumer-driven model and spur innovation, according to Business Insurance.


UnitedHealth Group, a Fortune 100 company, is acquiring Definity Health, which has been offering consumer-driven health care options to 23 of the Fortune 500 companies.


The acquisition could affect the health care market in three ways, according to Business Insurance. For one, it could force UnitedHealth’s rivals to more quickly adopt consumer-driven options in order to compete. Secondly, it could expand the number of consumers who have access to a consumer-driven option. Many employers would like to offer a consumer-driven plan but don’t want to switch vendors. UnitedHealth clients now won’t have to switch.


Also, the acquisition could do what many acquisitions do on Wall Street: usher in a wave of investment and consolidation because it’s a sign that “there’s definitely money to be made in consumer-driven health care,” according to Business Insurance.


One interesting wrinkle in the acquisition: It’s a near lock that UnitedHealth will have thousands of new enrollees in consumer-driven plans next year. That’s because the company is moving all of its own employees to high-deductible health care plans.


“Much to learn”
Alexander C. Domaszewicz of Mercer Human Resource Consulting says that the deal with be both positive and negative for employers.


On the positive side, Domaszewicz says, “Definity now has access to very deep pockets for development and growth.” Also, it may improve service for UnitedHealth customers who want to offer a high-deductible option to their employees. “UnitedHealth has much to learn and to borrow from Definity in terms of a new health care delivery model, tools, choice, design and consumerism. This knowledge transfer will be much more than UnitedHealth adding Definity Web capabilities to its tool box.”


As for negatives, he says, “Integrations and mergers are never pretty operationally or culturally, and this one will be no exception.” He says that if Definity continues to run semi-independently for a while, it could mitigate some of the transition problems. And Domaszewicz says the merger could slow down, not increase, innovation. “UnitedHealth owning Definity will reduce the likelihood that Definity will continue to revolutionize health care and push the envelope in terms of cost and quality transparency,” he says.


This, he says, is because while UnitedHealth has been innovative over the years, “they have a very large vested interest in continuing some version of the system that has allowed them to become one of the two largest providers of private health care in the country.” He notes that in the late 1990s, when the founders of Definity approached UnitedHealth about starting a consumer-directed health plan together, UnitedHealth turned down the offer.


Also, “the existing structure of behind-the-scenes negotiated discounts through provider networks is one of the largest value propositions of established carriers like United,” Domaszewicz says. Startups such as Definity and Lumenos have more transparent business models and have been challenging the status quo.


For more information:


  • Not Everyone Sees Health Savings Accounts as a Panacea
  • A Wait-and-See Approach to Health Savings Accounts
  • The Alphabet Soup of Health Accounts (comparison chart)
  • Benefits Forum (bulletin board)

Posted on December 6, 2004June 29, 2023

The Countdown Is on at Wynn Las Vegas

When Arte Nathan went looking for employees for a new Las Vegas hotel and casino, he did what any employer might do: He took out an ad in the local paper. The single full-page ad ran on the cover of the classifieds and cost $8,800. Four months later, Nathan, the chief human resources officer for Wynn Las Vegas, has received more than 100,000 applications. “Not a bad return,” he says. Three smaller ads followed, along with a full-page community thank-you on January 2.



    The ad was the easy part. Before developer Steve Wynn’s $2.5 billion destination resort can open its doors, Nathan must oversee the massive enterprise of identifying, interviewing, hiring and training more than 9,000 poker dealers, housekeepers and cocktail servers.


    With about two months to go before opening day, the monumental effort is nearing completion. Since January, Nathan and his team have been interviewing an average of 550 people a day, and finished on February 12. They’ve hired1,200 people so far and have made tentative hiring decisions for 8,400 more. “We’re almost done,” Nathan says.


The online edge
    Hiring so many workers in such a short period of time may sound overwhelming. But Nathan, who has been helping Wynn open resorts since 1983, believes that he has an edge: an online system that he helped design, combining what he terms “extraordinary technology” with his own years of human resources know-how.


    Job seekers who log on to wynnjobs.com can apply for positions and track their progress online. Managers can access the system anywhere and at any time to watch the hiring process as it happens. They can see how many people have applied to be poker dealers, for example, and how much experience those would-be dealers have. They can even sort applicants by the specific casinos they’ve worked for.


    Nathan collaborated with Recruitmax, a Jacksonville, Florida, recruiting software maker, to design a system that would address the unique problems and demands posed by large-scale hiring. Nathan says that he looked at 18 different systems before settling on Recruitmax. “We discussed our processes with all of the vendors, and they were the only ones who both understood what we were describing and were willing to build a system that met our needs,” Nathan says. He estimates that the software is worth $2 million, but Nathan and his team purchased it at a deep discount because they “provided the intellectual capital to design and test it.”


    Nathan had complete faith in his new online employment center, which opened for business at midnight October 31. But he still had some doubts about whether the pool of applicants he was targeting would have the computer skills–or even the Internet access–necessary to complete job applications online.


    “I was concerned that there would be some percentage who either didn’t have access to a computer or didn’t speak English,” Nathan says, “so we set up other ways for applicants to communicate with us. If you wanted, you could make an appointment to come in.”


    There’s even a call center staffed by 25 workers, mostly students from the nearby University of Nevada, Las Vegas, who speak eight languages including English, Spanish, Korean and Tagalog.


    Of the 97,000 people Nathan has heard from so far, however, about 94 percent have submitted their applications electronically. Less than 10 percent have visited the Wynn employment center to fill out an application. And nearly 80 percent of the applicants have e-mail addresses, a number that Nathan says cuts across the demographics of the people applying for jobs.


    The online application process is customized for people coming from the hospitality industry–specifically, the myriad hotels and casinos that line the Strip. Have experience dealing craps at a local casino? The application provides a pull-down menu of Sin City’s top resorts to choose from.


    “There was thought behind this,” Nathan says. “We wanted to make the process of applying for jobs as effortless as possible. And we wanted to attract people who’d worked on the Strip at hotels of a certain size.”


The ratings game
    The online job search is also intended to make the process of weeding through tens of thousands of applicants easier for Wynn’s managers, who oversee such key resort departments as guest services and dining.


    Based on their responses to queries about where they’ve worked and for how long, every would-be Wynn employee is assigned a rated value. Only those who score above the designated cutoff number are invited in for an interview. And while technology is key in the beginning stages of the hiring process, in the end it’s humans who make the call about who will be asked to work at Wynn Las Vegas. “Software is just a tool, but something like this requires a great deal of human intervention,” Nathan says.


    The style that Nathan has honed over the past 15 years depends in large part on blending the new with the old, the cutting-edge with the tried-and-true. After all, when the human resources chief sought to reach tens of thousands of Nevadans, his chosen method wasn’t e-mail or text messaging but that relatively archaic newspaper ad.


    And for all the emphasis on computerized scoring and rated value, Nathan often turns to a far more traditional tool when it comes to making hiring decisions: his individual knowledge of the people applying for jobs. Of the applications received thus far, he notes, the vast majority have come from within Las Vegas. “Not surprisingly, I know many of the folks who’ve applied. The ranking is only part of it.”


Plunder or be plundered
    Nathan makes no secret of the fact that he’s trying to lure the Strip’s best cocktail servers, baccarat dealers and massage therapists to work at Wynn Las Vegas. In fact, rumor has it that Nathan and his representatives aren’t exactly favored guests of rival casinos these days, so heated is the competition for quality labor. For his part, Nathan dismisses such speculation, saying simply that “it’s the reality of Las Vegas. Somebody is going to open a place, and we’ve all been the victim or the pirates.”


    To appeal to the cream of the service industry here, though, Nathan and Wynn have to do more than offer a smart online application; they also have to promise–and provide–premium wages and working conditions.


    “Steve Wynn is known as an employer who treats his workers well and gives them the ability to move up,” says D. Taylor, secretary treasurer of Culinary Workers Union Local 226, the union that represents more than 50,000 service workers in Las Vegas hotels and casinos.


    While Wynn Las Vegas is not yet a unionized facility, the union has a card-check agreement with Steve Wynn, granting workers union representation if a majority of them sign cards. “Wynn has a great reputation for his commitment for training, and we share that,” Taylor says. “You can move from kitchen worker to gourmet food server here. That’s a big deal.”


    Since January 3, Wynn’s managers have been doing their hundreds of daily interviews at the Wynn Employment Center. Home to every aspect of the hiring process, the state-of-the-art center can seem as busy as the resort the applicants hope to staff. “We’ve used the facility for multiple purposes throughout this process,” he says.


    Some come for job interviews. Those seeking “performance” jobs such as card dealer or masseuse must also audition for their positions. Applicants who have made it past the first interview are there for follow-up sessions or drug tests. And the lucky ones who have effectively survived every hurdle of the hiring process come to the center to receive a job offer.


    Once job offers have been extended and accepted, the real fun begins: training all of those people for up to three weeks. “This is the unbelievable process,” Nathan says. “We have to certify all 9,000 people in up to 15 tasks each. That’s 145,000 certifications.”


Training for “dummies”
    To make sure that Wynn’s new employees are familiar with the operating procedures of their new departments, and understand every aspect of the jobs for which they’ve been hired, Nathan and his team will rely on reams of paper, also known as employee training guides. These how-to guides break down key positions into as many as 20 tasks, Nathan says. They explain the task, why it’s done, how to do it, and what supervisors look for when evaluating employees.


    Nathan also thinks he has solved the problem of people not reading the employee handbook. Wynn’s comes in format of the “Dummies” books. Nathan hopes this will get employees to actually read the document.


    Beginning in April, the new employees will receive hands-on training from 550 trainers, part of an intensive 13-day crash course in hospitality education. Then, in the days before the resort opens its doors, the new staff will perform their roles, half playing the parts of employees, the other acting as guests, just to make sure that they have them down.


    The goal of this concentrated training course is simple: When Wynn Las Vegas opens at end of April, the surroundings will be brand new, but Nathan wants the employees to be so smooth and capable that it will seem to guests as though the resort has been open for months.


    “That’s how it will feel when they walk in,” he says.


Workforce Management, March 2005, pp. 65-67 — Subscribe Now!

Posted on December 6, 2004July 10, 2018

Acceptance of Gays, Lesbians Is A Big Part of Kodak’s Diversity Picture

Laura Brooks, a former regional manager for logistics at Eastman Kodak Co., recalls her first inkling that the workplace might feel hostile for gay co-workers.



    The company was conducting a culture audit of the warehouse and distribution operation and took pains to ensure anonymity when planning a focus group of gay employees. A consultant, not someone from Kodak, would facilitate the meeting. It would be held off-site so co-workers wouldn’t see participants. And invitations would be sent through the gay employee resource group.


    “Despite all of the effort to maintain confidentiality and to do it in a way we thought would be safe for people, nobody came,” says Brooks, now operations manager for Kodak’s engineer design center. “That was our first data point.”


    To understand what gay employees might be facing, Kodak asked other focus groups–based on everything from years of service to race–whether they thought that they had any gay co-workers and whether gay jokes were part of the usual workplace banter. “It validated that there was a pretty good dose of harassment,” says Brooks, who became involved in gay diversity programs at Kodak after her best friend and co-worker came out as a lesbian, telling Brooks that keeping the secret had been a burden to her.


    “We had made some progress on gender and race in our community,” Brooks says, but harassment toward gay, lesbian, bisexual or transgender employees “still was rampant.”


    Brooks worked with peers at Kodak to curb harassment and educate employees about their “GLBT” co-workers. The acronym stands for gay, lesbian, bisexual and transgender. The last is a blanket term for transsexuals and others who cross gender lines.


    Unlike managers in some organizations, Brooks had ample resources to achieve her goals. Kodak offers a novel approach to diversity training and a wide range of programs. The company has not one but five education programs that address workplace inclusion of GLBT employees. They’re available to any work group in or near Rochester, New York–from the senior management team in Kodak’s world headquarters to the third shift in the sprawling Kodak Park manufacturing complex.


    CEO Dan Carp has declared diversity as a business imperative as the company cultivates teamwork, and the GLBT initiatives are just one part of a comprehensive effort encompassing myriad dimensions of diversity. Employees risk termination for practicing any kind of discrimination or harassment, and Kodak has fired employees who have acted counter to its GLBT policies. Managers emphasize, however, that attending the gay-awareness programs is voluntary. The training complements a workplace strategy Kodak calls its Winning and Inclusive Culture, which outlines the basis of teamwork and serves as the social foundation of the Kodak Operating System, the company’s lean-manufacturing framework.


    “If you don’t have a workplace that is free of harassment, free of mistrust and free of disrespect, the teamwork that leads to breakthrough ideas–the creativity (that fuels) the productivity solutions–isn’t going to occur,” says David Kassnoff, manager of communications and public relations.


    The result: The company has eliminated waste and improved productivity in manufacturing and finance, Kassnoff says, though he declines to provide statistics or specifics because of competitive reasons.


    Kodak’s commitment to diversity also helps it attract and retain a diverse workforce, Kassnoff says. The company’s efforts have earned it a perfect score on the Corporate Equality Index published annually by the Human Rights Campaign, the nation’s largest gay rights organization. And Kodak executives believe that providing equitable treatment toward gay employees makes Kodak products more appealing to the 14.2 million domestic gay consumers, who tend to be brand-loyal.


    “They clearly are doing a lot of things right,” says Selisse Berry, executive director of Out & Equal Workplace Advocates, a nonprofit organization that supports GLBT workers and has honored Kodak for its inclusive policies. “The fact that Kodak is in Rochester, New York, also speaks volumes for the work that they’re doing, because they’re not in a huge metropolitan area where (GLBT programs at work are) ho-hum. It still is a big deal in Rochester, New York. And it is a very, very old and traditional company.”


Biases persist
    Whether in liberal metropolitan areas or more conservative communities, national attitudes about working with and for gay men and lesbians have remained relatively consistent in recent years, painting a mixed picture of workplace coexistence among gay and straight workers.


    In July, marketing firm Witeck-Combs Communications and research firm Harris Interactive surveyed 2,242 Americans, 6 percent of whom self-identified as gay, lesbian, bisexual or transgender. Forty percent of GLBT respondents said they were treated fairly and equally in their workplaces, echoing results from 2002, while 22 percent of heterosexuals–the same share as in 2003–said they would be uncomfortable working with GLBT co-workers. It’s hardly easy terrain for employers, who are trying to hire and keep the best employees, regardless of their sexual preferences.


    “Corporations understand the value of making sure they can attract the best and brightest workers,” says Wesley Combs, president of Witeck-Combs, which specializes in marketing to the GLBT community. “In order to have the best and brightest, they have to create an environment that respects all people, regardless of sexual orientation, race, family structure.”


    Much of Kodak’s training to create such an environment was developed after employees formed the Lambda Network, a gay employee resource group, with the encouragement of George M.C. Fisher, then-president and CEO of Kodak. In 1995, the group held the first Lambda Network Education Event, a night of skits and speakers focusing on gay workplace issues. “The president of the company asked senior leaders to attend,” says Patti McGory, president of the 100-member Lambda Network. “It ended up being an extremely favorable turnout and a great event. We have benefited from it since that day. Each president of Kodak has been extremely supportive.”


    The company’s commitment to its GLBT employees occasionally causes some consumers to stop buying its products. “Frankly, we don’t get a lot of those e-mails,” says Kassnoff, adding that such objections have not created a business issue. “When we do, it usually comes as a result of some misinformation published on someone’s Web site.”


    Activists from fundamentalist organizations such as Concerned Women for America, which denounced these diversity programs as supporting “ghastly” consequences, have criticized Kodak for offering domestic-partner benefits. But the accolades the company has received “far outweigh the occasional criticisms,” Kassnoff says.


    One of the first places any Kodak employee hears about sexual orientation is a series of presentations called the 52 Weeks: Diversity in Action Conversation Series, administered worldwide by Kodak’s global diversity and community affairs office. The series explains the company’s mission, the business case for diversity and its corporate values of respecting and valuing differences, including sexual orientation. “It’s sort of an entrée to GLBT issues,” says Antonia Bernard, director of diversity initiatives. Kodak seeks an “inclusive environment in which employees leverage diversity to achieve company business goals.”


    Departments can request a more in-depth session called “Can We Talk?” “It was the brainchild of a couple of Lambda members who thought about how they might create a safe environment for individuals to learn about GLBT issues and ask all of the questions that they may have been afraid to ask,” says Lambda’s McGory, a finance director at Kodak. “It continues to be our most powerful education tool.”


    In addition to answering questions, McGory and others share personal stories such as the extra anxiety they’ve experienced when starting new jobs, unsure how they would be treated because of their sexual orientation. “It’s made a huge difference in my life, in my being able to feel comfortable talking about my family and issues that affect me with people in the workplace,” says McGory, who joined Kodak three and a half years ago. “It is safe to be who you are, and the opportunity to grow here is equal for all.”


    Kodak also offers “advocate training,” a nine-day session that includes workshops on such topics as developing awareness of racism and sexism. One day focuses on how straight employees can become allies for their GLBT peers. Graduates are offered magnets to display which indicate that GLBT colleagues should feel safe coming out to them and turning to them for help.


Fun but informative
    One of the newest additions to the portfolio of GLBT education programs is modeled after the game show “Hollywood Squares.” Straight and gay peers sit next to, above and below one another on a portable set built out of pipes, curtains and risers to create the giant tic-tac-toe board. An emcee asks the nine “stars” questions such as “What percentage of the approximately 64,000 worldwide Kodak employees are estimated to be gay or lesbian?” and “What percentage of Fortune 500 companies offer health-care coverage to domestic partners of employees?” Managers call it fun but informative.


    All of the training was developed in-house, guided by the Lambda Network. Kodak conducts its Diversity in Action Conversation Series globally and will begin offering its advocate training to global operations in 2005. General Motors Corp. and several other companies have emulated Kodak’s approach to GLBT training, particularly the “Can We Talk?” sessions.


    Kodak logistics manager Brooks and her team tapped all of the GLBT resources available after seeing the warehouse’s culture audit. “We started at the top with our leaders,” Brooks says. “Then we developed an ally base. Then we went to the shop floor and provided a GLBT 101 in the ‘Hollywood Squares’ game-show format, and we delivered that to our shop floor across all three shifts.” The education used internal resources. All associates undergo renewal training each year.


    Informal follow-up surveys have provided what Brooks calls “a cautiously optimistic sense that things are getting better. We’ve also had three people in leadership positions come out and begin functioning as out-of-the-closet leaders in our community. They clearly are in a different place than they were before we started our GLBT education journey as an organization.” wƒm


Workforce Management, December 2004, po. 68-70 — Subscribe Now!

Posted on December 3, 2004June 29, 2023

Lost Time Vacation Days Go Unused Despite More Liberal Time-Off Policies

Frank Bednar remembers a time when he might have lost his job had his employer not been so flexible about time off. A senior collector for personal home loan accounts at financial services giant HSBC, Bednar experienced upheaval in his personal life a few years ago because of a divorce and a time-consuming court battle for custody of his son.



    His employer, a Carmel, Indiana-based subsidiary of finance corporation Household International Inc., which was purchased last year by the London-based HSBC Group, offered a flexible paid-time-off program that lumped personal, sick and vacation days into one pool instead of a more traditional vacation and sick leave package. Bednar says that the flexibility of this program saved him his job.


    “I was able to take care of a lot of personal business, which was very, very important, and still maintain my standing in the company,” Bednar says. “It was very handy to be able to do that because a lot of my commitments came up last minute, and I had to do what I had to do.”


    Because of the freedom in his time-off plan, Bednar says that he was not required to make a difficult choice between his family life and the job he had held for more than 10 years. This kind of flexibility, which enables employees to balance their work and personal lives, is a priority in the American workforce, experts say.


    As the end of the year approaches, companies usually see a surge in requests for time off, driven either by the holidays or some states’ use-it-or-lose-it vacation-time provisions. That push is further accentuated by attitudes of baby boomer and post-boomer employees who demand more freedom when it comes to utilizing their time off, according to a recent study by the Society for Human Resource Management. Respondents ages 55 and younger ranked work/life balance as the fifth most important factor affecting their job satisfaction level–just below overall benefits, compensation and feeling safe in the workplace.


    In contrast, employees older than 55 did not place work/life balance in their top five job satisfaction aspects at all and instead cited job security and communication as more important. The study cites cultural factors such as more women in the workforce and increased levels of stress in society as probable reasons for this shift.


    Yet data shows that just when most employees are seeking avenues to achieve more balance in their lives, the American vacation is shrinking. It’s no secret that Americans traditionally get less time off than their counterparts in other industrialized countries. Employees in European Union countries get four weeks of paid leave by law, for example, while many employees in the United States must work a job for more than a year before earning the conventional two weeks of paid leave–a benefit that is not required by law.


    And even with such a relatively small number of days off, studies show that short vacations are becoming even shorter as Americans take fewer days off than ever before. According to a 2004 survey conducted by Harris Interactive for online travel service Expedia.com, at least 30 percent of employed adults give up vacation time they have earned, a situation that resulted this year in a total of 415 million unused vacation days.


    In fact, the average employed American sacrificed three days of vacation this year–up 50 percent from the two days they gave up in 2003, the survey found.


Flexibility counts
    With vacations shrinking, flexible time-off plans are increasingly being regarded by both workers and employers as the best way to ensure that employees actually take days off when they need them. Sixty-three percent of U.S. companies now use some form of flexible paid-leave bank, compared with 21 percent in 2000, according to the CCH 2004 Unscheduled Absence Survey.


    CCH analyst Lori Rosen says the trend away from traditional vacation and sick leave packages is fueled by the fact that flexible plans are advantageous for both sides, and survey data reveals a positive correlation between these programs and employee morale.


    Everyone benefits, Rosen says, because employees get to take time off for any reason, and managers have fewer unscheduled absences to deal with. “When a manager has more notice, he can make decisions so that work continues to run smoothly instead of having to scramble at the last minutes to make sure than workflow is not interrupted,” Rosen says. “It’s a positive for both sides of the equation.



“Even though we may be giving our employees more time off, we’re getting that back in spades.”



    “The employees feel good because their employer understands there are times they need to be away without it being a reflection on their dedication. The employer is getting rid of the situation where employees are calling in at the last minute pretending to be sick when in fact they could have called in ahead of time.”


    Executives at HSBC say that the reduction of unscheduled absences and the recruitment and retention of top employees are exactly the goals of the company’s paid-time-off program. Rolled out in 1996 at Household International, the “TOP” (Time Off Program) is now available to all 45,000 HSBC employees in the United States, and it will be applied to Canadian employees next month.


The plan also grants approximately five more days off each year than the average paid-time-off program, according to recent Society for Human Resource Management surveys. That makes HSBC attractive to potential hires concerned with work/life balance. HSBC estimates the price tag on its paid-time-off program for U.S. employees to be $23 million a year, but executives say the benefits are worth the cost.


    “Even though we may be giving our employees more time off, we’re getting that back in spades,” says Sylvia Alston, director of employee communications for HSBC–North America. “It’s never been a question of costs and benefits because it absolutely washes for us because of the top performances we’re getting from them.”


    Instead of a set number of vacation days and a separate bank of sick time, HSBC–North America employees each get one block of “TOP time,” which are days off to be used for any purpose. They also get six paid company holidays. The number of TOP days granted is based primarily on tenure, says Bridget Schulz, manager of benefit strategy and policy for U.S. populations at HSBC.


    In general, a first-year employee at HSBC is eligible for 18 days of TOP time, while those in their third year get 23 days off. The time off increases every couple of years up to a cap of 33 days for employees with 25 years at the company.


    The plan also allows employees to buy or sell up to four additional days each year, an opportunity that 17 percent of employees utilize for 3.5 of their available days, according to Schulz. “Buying” a day off simply means taking it unpaid. Employees can also roll over up to 10 of their days off each year into the following year, and they may store 15 rollover days at any time.


Not without limitations
    Of course, there are limits to this flexibility. At HSBC, all time off must be approved by a manager, and as a rule, only two employees out of each group of 10 may be out on a given day. This makes the situation a lot less flexible than it sounds, especially for employees without seniority. Half of all time off has to be scheduled by the previous December.


    Managers say that having this control allows them to balance employees’ time off so that it does not adversely affect productivity in their departments. And while Schulz admits that the program does have its abusers–employees who still call in at the last minute instead of planning ahead–the program does create an environment where managers get more notice than under traditional plans.


    But even with the prevalence of flexible time-off plans, American workers are still living up to their workaholic reputation. HSBC does not track what percentage of its employees take all of their vacation, and managers say anecdotally that they encourage their employees to take the time they need. But the odds are that the company’s North American employees are taking significantly less time off than their co-workers in the United Kingdom.


    In London, a new HSBC employee starts out with 26 vacation days plus eight public holidays each year. A U.S. employee would have to be on the job for 10 years at HSBC before getting that kind of time off. Experts say that cultural attitudes about vacations drive the discrepancy.


    At many U.S. companies, a heavy workload and pressures from peers and supervisors keep employees at their desks. A 2003 survey of 730 U.S. executives by Management Recruiters International found that 47 percent wouldn’t use all their vacation time, and 58 percent said that the reason was job pressures. The study also found that 17 percent of U.S. employees said their boss was not supportive of employees taking all of their vacation days, and 35 percent said they had too much work to take a vacation.


Workforce Management, December 2004, pp. 66-67 — Subscribe Now!

Posted on December 3, 2004July 10, 2018

A Simple Philosophy

I’m the type of manager who struggles every year with buying Christmas presents for my staff. It’s always the same problem: Do I get the same thing for everyone, making it easier on me, or do I try to find something special for each person, complicating my task but making the gift more meaningful?



    This has been on my mind because I just read something by Bob Nelson, president of Nelson Motivation Inc. and co-author of Managing for Dummies, on the age-old tradition of companies giving employees turkeys at the holidays. When you give every employee a turkey, Nelson says, “you are rewarding presence, not performance. To many employees, the practice thus becomes a mere rite of survival: they made it through another year with the company.”


    Sometimes, just surviving another year is something to celebrate. That’s probably true for American Airlines and CEO Gerard Arpey, whom we feature in “Back From the Brink” in this issue. Not only is American, the world’s largest air carrier, struggling with record-high fuel prices and the terrible economics of the airline industry, but Arpey is still fighting to re-establish trust with the company’s large, unionized workforce–a trust that was nearly broken by shortsighted management decisions in the past.


    To his credit, Arpey seems to understand how important his workforce is. He talks about tapping into the “unique perspectives and insights” of his workers to better serve customers and rebuild the airline. Although American has many jaded employees who have heard a lot of this talk before, Arpey seems to be making it work. Not only is American slowly rebuilding itself, but the air carrier has managed to stay out of bankruptcy–no mean feat in this day and age.


    When I read what Arpey has to say, I’m struck by the feeling that it didn’t have to come to this. No matter what product or service a company may offer, its most important asset is its people. They are the one sustainable competitive difference that can give a company an advantage over another. Why did it take so long for American Airlines–and so many other businesses–to figure this out?


    Howard Schultz is one guy who figured it out a long time ago. In this book, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, Starbucks’ chairman says, “I know, in my heart, if we treat people as a line item under expenses, we’re not living up to our goals and our values. Their passion is our number-one competitive advantage. Lose it, and we’ve lost the game.”


    Enlightened corporate leaders who embrace this philosophy have seen how the benefits of building on people as a competitive advantage pays huge dividends. It’s why Southwest Airlines continues to thrive while rivals like American struggle just to stay out of bankruptcy. And it’s why Schultz has been able to build Starbucks into a powerhouse by doing something that people would have laughed at 20 years ago–charging $3 to $5 for a cup of coffee.


    As I struggle with my own challenge of what to give the staff this year, I keep coming back to the words of Bob Nelson, who says, “If we know one thing from years of research about human behavior, it is this: You get what you reward. …Ironically, the best motivators have little if any cost, requiring only some time, thoughtfulness and commitment on the part of the employee’s manager.”


    You get what you give. It’s a simple philosophy and a good lesson for managers to remember this month, and all year long.


Workforce Management, December 2004, p. 12 — Subscribe Now!

Posted on December 3, 2004July 10, 2018

Dear Workforce What Are the Pros and Cons of Switching to Lump-Sum Payments as Compensation

Dear Bird in the Hand:



Why are you considering replacing your current pay-increase program with lump sums? Employers that implement this type of program usually do so for very specific reasons. Some companies want to control the growth of salaries that have climbed out of the appropriate market range. Other companies implement it because of financial distress. Still others try to make their pay-for-performance plans more effective by directing scarce dollars to top performers.

There are several advantages to lump-sum increases, but they apply to these very specific situations:

  • They allow companies to control wage growth and growth in the cost of goods or services by turning fixed salary costs into variable costs.
  • They permit companies to redirect increased dollars to specific areas or performance levels to motivate top performers more effectively.
  • They enable financially troubled companies to survive by reducing wage increases (and thus potentially eliminating the need for layoffs).
  • Used selectively, they can help bring salaries back into a competitive range (generally applied only to those employees above market).
  • However, the disadvantages of lump-sum programs include the following:
  • They can be hard to justify to employees; communication is difficult.
  • Unless other compensation elements are added or enhanced, top performers can lose motivation.
  • Your company’s competitive salary position will slowly deteriorate.

Probably the best reason to consider implementing a lump sum is if your company is experiencing significant financial distress. It can be an effective counter to layoffs—the lesser of two evils. The other reasons are harder to explain to employees, and require a very careful crafting of messages.

Employees need to understand why the company desires this change, what you are going to do to keep salaries competitive, and how you will satisfy top performers. In any event, use lump sums only temporarily.

SOURCE:Bob Fulton, The Chatfield Group, January 12, 2004.

LEARN MORE:Is There a Precedent for Compensating Different Employees with Different Incentives?

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

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