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Wal-Mart Answers Its Critics

Wal-Mart is playing aggressive defense these days in an effort to polish its battered reputation, which has been taking increased fire from all sides in recent months. A rash of negative publicity, which stems from a class-action discrimination suit, a variety of wage disputes and vocal opposition in California to the retail giant’s ambitious expansion plans, has amplified familiar criticisms related primarily to the company’s treatment of its 1.5 million employees.



    The company has taken action on a couple of fronts. Last month, it hired Lawrence Jackson as executive vice president of its People Division. Jackson, 51, was most recently president and chief operating officer of Dollar General Corp., which has been described as a sort of pocket Wal-Mart, operating small stores in rural areas or in poorer neighborhoods of midsize cities.


    Jackson, who grew up in Washington, D.C., is a graduate of both Harvard University and the Harvard Business School. He comes to his new job with a widely praised background in operations and, according to one book, an up-front approach to confronting issues of bias in organizations. In 2002, Jackson was No. 29 on Fortune’s list of the most powerful black executives in America. And, interestingly, there’s no human resources title on his résumé. His hiring could signal potential changes in the employment practices that have served as a lightning rod for Wal-Mart’s critics.


   Meanwhile, in California, Wal-Mart has launched what it calls “an unprecedented effort to communicate the facts.” In an open-letter-style advertisement in 15 newspapers across the state, the company characterizes itself as a “target for negative comments from certain elected officials, competitors and special-interest groups” and calls criticisms of the company “half-truths and misinformation.” Wal-Mart’s California spokeswoman Cynthia Lin says the company decided it was time to strike back. “For years various special-interest groups have engaged in a campaign of misinformation against Wal-Mart, and we simply couldn’t let it go unanswered anymore.”


   Wal-Mart’s ad disputes widespread claims that it pays employees lower wages than comparable retailers and asserts that, contrary to some media reports, health benefits are available to both full- and part-time employees. It highlights the tax revenue that the stores generate for local communities, the business Wal-Mart brings to California suppliers and the corporate donations given to charities.


    Although Wal-Mart has not singled out any particular source, the chain was criticized in a study released in August by researchers at the University of California at Berkeley’s Labor Center. They estimated that California taxpayers provide $86 million a year in public assistance to Wal-Mart employees who cannot make ends meet on company wages.


    “Wal-Mart has had to take an uncharacteristically strong reactive stance recently because the criticisms have gotten that much more serious,” says Michael Belch, a marketing professor at San Diego State University. “They are really feeling the heat all over the place, and from a PR standpoint, you can only ignore things for so long.”


    It’s no coincidence that the company rolled out its new counteroffensive in California. The state has been home to some of Wal-Mart’s most high-profile public relations challenges. During a five-month strike last year, California supermarket chains blamed competition from Wal-Mart for their need to slash wages and health benefits to employees.


    In addition, Wal-Mart’s plans to open 40 Supercenters, which are combination discount stores and supermarkets, have been met with vocal opposition, particularly in Inglewood, a Los Angeles suburb. Residents there rejected a ballot initiative that would have cleared the way for one of the colossal stores, effectively canceling the project. Opponents argued that Wal-Mart stores destroy communities by bankrupting competitors and, in doing so, displacing good positions with low-wage, low-benefit jobs.


Workforce Management, November 2004, p. 22 — Subscribe Now!

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Delta Deal Would Change Benefits, Pay

A tentative agreement with its pilots union that Delta announced Thursday would freeze the pilots’ defined-benefit plan and add a new defined-contribution plan, according to TheStreet.


TheStreet reports that the deal also “provides a 32.5 percent wage reduction from May 2004 levels, effective Dec. 1, with no increases for five years. Pilots will also receive about 30 million shares of Delta common stock, representing a 15 percent equity stake in the company.” In a statement issued Thursday, Delta said that it is “committed to the principle that employees will have an opportunity to share in any success their sacrifice helps make possible.”


Delta has already announced the elimination of 6,000 to 7,000 non-pilot positions. Delta CEO Gerald Grinstein says he’s doing what he can not to declare bankruptcy, but that there’s no guarantee it will be avoided.


Meanwhile, Delta is updating its cabin interiors; adding more flights from certain cities and cutting back from others; and growing the low-cost airline called Song that Delta started operating last year.

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Dear Workforce How Do I Fix a Messed-Up Salary Structure

Dear Cleaning:



It depends on what you mean by “mess.” Are jobs out of whack with the market? Are there significant issues with perceived internal equity? Do your policies fail to provide managers with tools for managing pay? Is your salary structure woefully out-of-date?

Your answers to the above questions will influence how you’ll proceed. In general, though, you’ll first need to assess which is more important: internal equity or external competitiveness. Once you’ve done that, you can begin to assess and evaluate what must be changed immediately, what can wait and what does not have to be addressed. Keep the following in mind as you proceed:

Define a compensation philosophy for the organization. This not only helps guide your efforts, but also forms the core of the message you want to communicate to your employees.

Make sure job descriptions are up-to-date and accurate. If they aren’t, have the employees and managers revise them.

Use only high-quality published (or custom) salary survey sources. Internet sources are highly variable in quality and value.

Be up front with employees about the issues and what you’re doing to address them going forward. For many employees, pay is not a motivator. Still, if not properly managed, salary levels can create tremendous dissatisfaction within a company. A well-thought-out plan of action is your best line of attack.

SOURCE: Robert Fulton, managing director,The Pathfinder’s Group, Inc., an affiliate of The Chatfield Group, Chicago, November 25, 2003.

LEARN MORE:How to Conduct an Effective Pay Survey.

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

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Dear Workforce How Do I Create Tips for Change Management

Dear Promising:



Most change management requires significant up-front planning. The simplest way to prepare involves putting a foundation in place–prerequisites that precede any change journey. Companies risk failing to effect change if one or more of these are missing.

Before embarking on change management, be sure to:

  • Clearly align the change with the company’s strategy. Key players must understand the business benefits of the change effort and have a sense of intellectual ownership.
  • Understand what you’re likely to achieve. Too many change efforts fail simply because they don’t seem reasonable, don’t have clear goals or have no end in sight.
  • Make certain that senior executives are committed to achieving change. For companies lacking adequate senior-level commitment and sponsorship, successful change management often is elusive, or even impossible.
  • Verify that your organization has sufficient resources–financial, personnel, time, attention, etc.–to sustain the initiative until a positive return on investment is attained (in addition to maintaining acceptable business performance and delivering on other simultaneous change initiatives).
  • Assess the need for external help and find outside resources if they are appropriate.

Once the journey is under way, managing change effectively depends on four concerns, each of which helps you identify and act on problems.

1) Navigation, consisting of:

  • Integrating the program with management and employees
  • Coordinating initiatives
  • Managing costs
  • Prioritizing resources

2) Enablement, specifically:

  • Redesigning processes and the organization
  • Developing human resources policies
  • Offering appropriate training
  • Creating effective communication

3) Leadership, which involves:

  • Making sure there are effective role models among senior management
  • Making managers and supervisors accountable
  • Offering coaching and counseling

4) Ownership, namely:

  • Creating teams to plan and implement the program locally
  • Creating a change “network” across the company
  • Confirming that people affected by change are involved, are heard, understand the need for change, believe it is positive and receive effective communication

SOURCE: Patrick Mosher, associate partner, Accenture’s human performance service line, Minneapolis, November 26, 2003.

LEARN MORE:Incentives and the Art of Changing Behavior.

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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Why Investing in Health Care Enhances Employee Productivity

Yes, rising health-care costs continue to present a significant challenge to companies. Still, it’s important to resist the temptation to cut back on health-care spending. Doing so can cost you dearly in terms of productivity.



    Businesses should recognize that human capital is an asset. Investing in that asset requires more than the traditional approaches can offer.


Unintended losses
    Businesses should turn from the traditional view of health care as simply a cost center and apply the same principles they use to manage tangible assets, like equipment, buildings or other parts of the infrastructure. Management should evaluate the short- and long-term implications of benefit-design changes. This means using new methods for measuring productivity and integrating the total cost of health care. Achieving short-term health-care savings on one side of the ledger could result in unintended losses in productivity on the other.


    Current research is demonstrating to be true what I observed firsthand as assistant vice president, health services, at Union Pacific Railroad. Studies have shown that health status directly affects productivity, absenteeism, disability and safety. Moreover, health-benefit design influences employees’ health decisions and, in turn, their health status.


Drugs can pay off
    Consider pharmaceutical costs. The evidence shows that when employees have access to medication at a cost they can afford and use it as prescribed for certain chronic conditions such as asthma, allergies, depression and diabetes, they’re more likely to be healthy and on the job. The appropriate use of medication can reduce productivity losses for some of the most common and expensive health conditions, according to “Pharmaceuticals and Worker Productivity Loss: A Critical Review of Literature,” published in the June 2003Journal of Occupational and Environmental Medicine.


    Given the effect that drugs can have on chronic conditions such as high blood pressure and diabetes, it makes sense to promote their use. Benefit design that includes disease management and encourages employees to take the appropriate medication will save on long-term health-care costs and improve productivity. Both of these approaches may increase utilization, which can boost overall employee health and productivity to more than offset the increased expense.


    According to doctors Wayne Burton of Bank One and Alan Morrison and Albert Wertheimer of Temple University, for chronic conditions that affect work performance but are rarely disabling–migraine, diabetes and respiratory infections, for example–prescription medicines help keep employees healthy and on the job, which saves disability costs.


    Another study, published in the Journal of Occupational and Environmental Medicine in January 2003, showed that medical and disability costs have to be considered in tandem to help foster a return to work. The study, “The Health and Productivity Cost Burden of the ‘Top 10’ Physical and Mental Health Conditions Affecting Six Large U.S. Employers in 1999,” demonstrated that the medical costs associated with a heart attack are much higher than those associated with back pain. However, the costs of disability and absence associated with back pain make it a more expensive problem for employers. This suggests that employers might want to focus on prevention efforts like risk-factor reduction for heart attacks and place more emphasis on disability-management programs for employees suffering from back pain.


    The authors concluded that absence and disability losses constituted 29 percent of the total health and productivity expenditures for physical conditions and 47 percent for all mental-health conditions.


    Business & Health reports that Bank One experienced productivity improvements when it took a multi-pronged approach–including treatment and training–to help employees with allergies. When the pollen count was high, allergy sufferers were 7 percent less likely to reach their usual productivity level. Productivity greatly improved, however, for allergic employees who took medication. In fact, they had about the same productivity levels as those who did not suffer from allergies.


Look at the whole picture
    These studies prove how crucial it is to look at the whole picture when it comes to the impact of employee health on productivity. The traditional cost-cutting approach to save health-care dollars can result in unintended productivity losses that erode the potential for profit.



    Although health coverage may be an enticing target for expense control, benefit managers should design benefit plans that encourage employees to get the health care they need. Otherwise, the result could be greater absenteeism and a loss of productivity.


    As more employers heed this advice, they will see that careful investing in their employees’ health makes them more competitive.

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UPS Likely to Appeal Ruling on Deaf Truck Drivers

Reuters reports that United Parcel Service may appeal a court decision that told the package-carrier it can’t ban deaf employees from taking jobs as truck drivers.


Last week, a federal judge ruled that UPS could not bar deaf drivers from driving small trucks. UPS had argued that deaf drivers have higher accident rates compared to employees who aren’t hearing impaired.


The federal government sets rules for large trucks–more than five tons. But for smaller vehicles, it’s up to the private sector to set its own rules. According to Reuters, “the plaintiffs’ lawyers estimate that about 1,000 UPS employees are deaf.” UPS has a total of 317,000 employees.


Among the related stories online: several case studies on fatigue management in the transportation industry, as well as more information on discrimination.

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Dear Workforce What Factors Ought to Be Considered When Assembling a Relocation Package for Senior-Level Candidates

Dear Stumped:



The best place to start is to determine the objectives of the relocation program. For example:

  • Is the objective to enhance the recruiting process, or to minimize the chances of relocation getting in the way of hiring the preferred candidate?
  • Is the relocation philosophy designed to “keep the person whole” economically for the move, or to merely assist with personal cash-flow needs?
  • Should changes in the local cost of living affect the compensation or relocation package? If yes, for what period of time?

Consider how much the employee will have to spend on trips to the new location to research the local housing market. Also factor in moving expenses, temporary housing costs, differences in local tax rates, support for spousal career transition and other expenses.

Many relocation companies maintain comprehensive databases with benchmark spending levels for relocation packages. The larger relocation companies can cut their data by industry, company size, geographical area and employee level.

Cross-border relocations are significantly more complicated than domestic relocations and usually require outside expertise to plan and deliver the benefits. Special issues include tax equalization, immigration approvals and work permits, children’s education, retention of home-country residences and visits back home.

SOURCE: Carl Weinberg, principal, PricewaterhouseCoopers HR Services practice, New York City, October 20, 2003.

LEARN MORE: Moving Employees to Hot Housing Markets Is a Tough Sell.

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

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Dear Workforce Any Suggestions for Upgrading Our Web-Based Training

Dear Going Virtual:



To avoid being overwhelmed by the diversity in e-learning, start by looking at the big picture. What changes are you trying to make with training initiatives? Have you been successful? If not, is it because you haven’t defined objectives, or is the process flawed?

Once you’ve answered these questions, determine where e-learning fits into the broader equation of adult learning, beginning with this self-assessment:

Is everyone on board with your training initiatives? Without buy-in from the C-level on down, your initiative may produce culture shock rather than culture change.

How do you assess competencies? The best-designed program will fail if you target the wrong skills for development. Similarly, follow-up assessments ensure that the training has paid off and identify new areas needing improvement.

Are your asynchronous (self-paced) programs engaging and do they offer true interaction? Engaging, asynchronous training is a great way for learners to acquire the basic nuts and bolts of interpersonal skills.

What’s your plan for practice and application of newly acquired skills? These vital steps are best handled live. The medium, though, is flexible, encompassing telephone, virtual-classroom and face-to-face interactions.

What support-community tools do you offer? Are they used, or have they become online ghost towns? These can range from self-paced tutorials and online communities to expert-moderated forums, in both synchronous (real-time) and asynchronous environments.

Do learners have access to reinforcement? Good skill reinforcement is where the “just-in-time” concept earns its stripes, allowing learners to grab just enough review, just when they need it.

Does your content follow a sound instructional design process? High-quality content is research based rather than guru based, and is relevant to your curriculum’s skills and objectives.

After answering these questions, tackle the shortcomings in your e-learning programs. When we talk specifically about asynchronous Web-based training, look at these elements:

Interactivity. Strong, interpersonal e-learning has a high degree of interactivity, such as simulations or games. PowerPoint presentations no longer suffice. Where bandwidth and hardware allow, use audio, graphics and even streaming video to engage learners on multiple levels and heighten the reality of the experience.

Interoperability. Courses can’t exist in a vacuum. They should communicate with a learning-management system to track the learner’s progress, scores and other data. To ensure interoperability, build your courses to conform to recognized SCORM (Sharable Content Object Reference Model) and AICC (Aviation Industry Computer-Based Training Committee) industry standards.

Reusability. By embedding descriptive data, known as metadata, within the course’s code, you create reusable learning objects, or RLOs, which multiply the usefulness of those objects across many courses.

SOURCE: Jack McDaniel, media project manager, AchieveGlobal, Tampa, Florida, Sept. 22, 2003.

LEARN MORE: When Choosing Training, the Medium Depends on the Message.

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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Money Spent on Vioxx May Be Recoverable

Human resources consulting firm Findley Davies has notified its clients that self-funded employers may be able to recoup some of the money they spent on Vioxx shortly before Merck’s September 30 withdrawal of the popular arthritis medication.


Merck officials sent a letter to pharmacy-benefit managers in mid-October that described the reimbursement option, which uses a formula to compensate PBMs for the unused Vioxx distributed through retail pharmacies in September and mail-order pharmacies during the third quarter of 2004, according to Bruce Davis, a Findley Davies principal. Davis was briefed about the letter by a health-industry source.


In addition, Merck officials advise the pharmacy-benefit managers to pass along the reimbursement to its payers, including self-funded employers, if they select the formula approach, Davis says. The other option, he says, is “business as usual,’’ with the rebates continuing to go to the pharmacy-benefit managers. PBMs must contact Merck with their preference by November 8, Davis says. Self-funded employers should call their pharmacy-benefit managers, he says, to determine which reimbursement option they will pursue, and whether the refunds will be passed along.


Merck spokesman Tony Plohoros confirmed that a letter was sent to pharmacy-benefit managers on October 11, but wouldn’t provide any details, saying it was a private communication. Spokespeople at Express Scripts and Medco said they’d received the letter and were passing the information along to their clients, but wouldn’t comment further.


Merck officials voluntarily withdrew Vioxx, a pain reliever and arthritis medication, after a study found that patients taking the drug for more than 18 months faced a slightly increased risk of heart attack or stroke. The medication, introduced in 1999, ranked 20th in total U.S. sales in 2003, reaching $1.8 billion, according to the Connecticut-based research firm IMS Health.


The Vioxx withdrawal is one of the largest to date involving a prescription product, says Todd Brown, vice chair of the department of pharmacy practice at Northeastern University School of Pharmacy. Historically, pharmacy-benefit managers don’t have a good track record of passing along rebates, Brown says, pointing to a recent spate of lawsuits. Before companies ask for any refunds, Brown suggests they first verify that the money won’t limit their future legal options. “I wouldn’t want to be taking payment if it’s going to somehow affect my ability to file a legitimate legal claim down the road.”


–Charlotte Huff

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A Delicate Balance Business Needs and Employees’ Lives in Chaos

When Hurricane Frances slammed into Florida’s east coast on Labor Day weekend, the powerful storm ripped three-quarters of the roof off Ann Gates’ house. Water poured down the walls, ruining furniture in the den. Once the storm had passed, a team from her employer, Health First, was at the executive assistant’s door, helping her husband tack a tarp on the roof to prevent further water intrusion and hauling undamaged furniture to a company warehouse for storage until the Gateses’ battered home could be repaired.



    It was a response that Ann Gates hadn’t expected. She had been working through the storm, and when she heard the news that her home had been damaged, she burst into tears on the job. Word spread through Holmes Regional Medical Center in Melbourne, where Gates works, and the company’s vice president for human resources told her, “We’re here for you. We’re going to help you,” she recalls. “I knew he was a kind man, but I had no idea what he meant when he said that.”


Take your pick: job or family?
    Health First, which is based in nearby Rockledge and operates three hospitals on Florida’s east coast, went far and above the call of duty when it came to assisting employees walloped by Hurricane Frances, as well as Hurricane Jeanne, which tore through the area just three weeks later.


    With four hurricanes pounding the state in six weeks, critical services such as hospitals, utility companies and government offices had to perform quite a juggling act. These organizations had to remain up and running and keep employees focused on their jobs, while at the same time taking into account workers’ concerns about their families, pets and homes.


    “We never want to put associates in a situation where they feel like they have to choose between their job and their family,” says Dennis Vouglas, Health First’s director of employee relations.


    The company relies heavily on advance planning, and its 6,000 employees are divided into pre-storm, storm and post-storm teams, which determines whether they will work before, during or after the storm. All workers have the opportunity to secure their homes and evacuate before the hurricane is scheduled to hit. Single parents, those with children under age 2, and people caring for elderly parents can be granted exemptions so they don’t have to work during the storm, Vouglas says.


Still tallying cost
    Even the hurricanes’ conclusions didn’t return things to normal. Many school districts were closed for days on end because of storm damage or lost utilities, and parents were left struggling to figure out how to care for their children while they worked. Health First provided 24-hourchild care for those under the age of 21. “It really does a lot to increase peace of mind,” Vouglas says.


    To further assist employees, Health First put tarps on the roofs of more than 300 employees’ homes, provided temporary housing in its newly opened hospice building for several families who had lost their homes, handed out more than $100,000 in cash advances to those with financial needs, and provided transportation for people whose cars were damaged.


    Health First is still tallying the cost of these services, but had no contingency budget for these disasters, Vouglas says. “We felt that it was simply the right thing to do, to provide for our people in time of need.”


“We can’t compromise safety”
    Jacqueline Byers, an associate professor of nursing at the University of Central Florida in Orlando, says one of her graduate students conducted a survey of 30 nurses in four hospitals after Hurricane Floyd pounded the state in 1999. Respondents said they were concerned about their families, pets and elderly parents during the storm. They also complained that they weren’t paid for all the hours they spent on-site and that at some hospitals, beds and showers were provided for physicians and administrators, but not for the nurses. “It makes the nurses feel devalued,” Byers says. “Nurses can’t provide good care when they don’t feel good themselves.”


    She says the key is to communicate beforehand, so hospital administrators know their employees’ life situations. While hospitals may expect everyone to report for duty, “that’s not realistic. Not with the sandwich generation. People are being torn in so many different directions.”


    At two Florida Hospital facilities on the east coast, about two dozen employees were fired or suspended for not reporting for work during Hurricane Frances. “The nature of the business we’re in doesn’t allow us to be unresponsive,” spokeswoman Desiree Paradis-Warner told the Orlando Sentinel. “We can’t compromise patient safety.”


Communication: a two-way street
    In St. Lucie County, which was slammed by Frances and Jeanne, two county employees were fired for not showing up for work. One got in his motor home and drove to Ohio, and didn’t contact his supervisor for 17 days, says Carl Holeva, the county’s human resources director.


    Other employees said they had nowhere to stay as the storms neared, and requestedleave to travel out of state. The county approved it, telling workers to keep in touch. “If people just disappeared, never requested leave, never sought approval to leave, we’d look at that a little differently,” Holeva says.


    At St. Joseph’s Hospital in Tampa, employees from the three campuses can bring their families to the hospital if they have nowhere else to go, and pet care was put in place for the first time this year. “It was important to one of our team members,” says Pat Teeuwen, director of team resources. “We do these things so we can take the pressure off [employees].”


    Those not directly involved in patient care pitched in by tending to children or making sandwiches for employees and visitors. “The most important thing iscommunication,” Teeuwen says. “We make sure we communicate to our team members the types of services we have available for them.”


    The hospital also has an emergency assistance fund, which is financed by annual employee campaigns. Those who suffered losses during the hurricanes could apply for assistance with housing, utilities and food.


    At Florida Power & Light, which provides electricity to customers primarily on Florida’s east coast and southwestern region, meals were brought in for those working extended shifts to get the lights back on. “Food shopping was a big issue. There wasn’t a whole lot in grocery stores,” says spokeswoman Pat Davis. Some employees volunteered to do minor home repairs for fellow workers, while others brought ice and drinks to employees’ families. “We’re asking a lot during that time, so we really try to take care of our own.”


    In St. Lucie County, the county government has been liberal in granting leave for those whose homes sustained storm damage and who now must meet with insurance adjusters and building contractors. “It’s a trying time even now,” Holeva says. “People need to make a living. At the same time, they want to take care of their homes. We try to balance that as much as possible.”