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Let Us Give Thanks

What we’re thankful for this November:

  • The vision of our Gen-X employees may be bad from growing up in front ofcomputer screens, but laser eye surgery is getting cheaper.
  • Our stock in Amazon, Ask Jeeves and Buy.com (and all the rest) can’t getmuch lower.
  • Goodyear.
  • A member of the HR profession, Richard Hatch, was the sole”Survivor.”
  • The Olympics have gotten so good at drug testing, they’re taking goldmedals from people who’ve taken cold medicine.
  • Toll-free help lines to HRMS providers.
  • The United Nations has realized that helping cure world poverty will helpachieve world peace.
  • Telephones — still much better for talking than e-mail.
  • eBay.
  • We never hear the phrase “Total Quality Management” anymore.
  • We don’t always get a busy signal anymore when we dial into AOL.
  • At last, an answer to the labor shortage – cloning.
  • You all like our e-mail newsletter so much, you e-mail to tell us when it’s late.
  • United Airlines’ labor problems may be ending.
  • The 2004 presidential election is just beginning.
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Basics of the I-9 Form

In 1986, Congress passed the Immigration Reform and Control Act that soughtto stem the flow of illegal immigration by cutting off the attractive pull ofAmerican jobs. This law penalizes U.S. employers for knowingly hiring orcontinuing to employ foreign nationals who do not have authorization to work inthe U.S.


Since November 7, 1986, U.S. employers and their new hires have had tocomplete Form I-9, the Employment Eligibility Verification form. This one-page,double-sided form requires that U.S. employers review the work authorizationstatus of each new hire. While the I-9 appears quite simple, failure to complywith federal regulations can lead to costly fines.


The I-9 is split into three sections:

  1. To be completed by the new hire. It requests biographical information andrequests his or her immigration status.
  2. To be completed by the employer. Here the employer indicates whichdocuments the new hire presented to prove work eligibility.
  3. Section three is only completed when a new hire presents documents showingthat he or she has temporary work authorization. In this case, when theexpiration date approaches, the foreign national must come back into HR toproduce proof of extended work authorization. That proof is noted in thissection.

The following is a list of helpful tips to keep in mind when HR staff arecompleting these forms (The I-9 can be downloaded here):


Each new hire must fill out the form


Federal law requires that each new hire complete the I-9. Companies can helpensure this if completion of the I-9 is part of the new hire paperwork. Once anew hire has commenced working, it can be difficult to convince him or her tocome back into HR to take care of this.


Moreover, HR staff should be aware that all new employees must complete theI-9, regardless of their status as a U.S. citizen, permanent resident, ortemporary worker. And if your company has not been having its new hires completethese forms, it should start now.


Make sure the necessary sections are completely filled out


Given today’s emphasis on privacy, many individuals are reluctant to revealtheir social security number and birthdates. However, since this is an officialU.S. form, the new hire must fill the form out in its entirety. Failure toadequately complete the form can lead to fines of $100 per blank space. Thefines can add up quickly, and HR staff should review the section completed bythe employee.


HR staff must not ask for specific documents


To prove authorization to work, the new hire is entitled to present anydocument or combination of documents listed on the back of the I-9. It isabsolutely critical that HR staff not demand specific documents. Toooften, new hires are told to bring in a driver’s license and social securitycard to prove employment eligibility. This is not legal and can lead to anallegation of document abuse and subsequent fines.


Complete the I-9 in a timely manner


IRCA regulations indicate that the first section of the I-9 form be completedprior to or on the start date. The second section, which is completed by HRstaff, can be completed before or within three days after the new hire’s startdate. To simplify matters, employers may want to consider having both sectionscompleted at the same time, prior to the start date. However, new hires have alegal right to produce documents within three days of the start date and must bepermitted to do so if requested.


Track your I-9 forms


Employers should create an I-9 tickler system that tracks the expirationdates of employees who have temporary work authorization. U.S. citizens andpermanent residents (a.k.a., “green card” holders) do not have limitedwork authorization. However, employees who are on temporary visas like H-1Bspecialty occupation workers or F-1 university students on optionalpractical training have expiration dates. These expiration dates must be trackedto prevent the inadvertent employment of people who have lost workauthorization.


What’s the benefit to these painstaking efforts to comply with the law?Minimizing fines. The INS and Department of Labor conduct deliberate and randomaudits of U.S. employers to ensure the law is being followed. Failure tocomplete forms or improper completion of forms can lead to fines of up to $1,000per form. Thus, fines for large companies can quickly reach into thehundreds of thousands of dollars. In March 2000, a Maryland food processingplant was fined $230,000 for failing to satisfy I-9 requirements.


The I-9 system creates a significant paperwork burden for U.S. employers. Butuntil a better system is implemented, U.S. employers must be sure to comply withthese regulations and utilize systems to promote compliance with the law.


SOURCE: I9Check.com. They enable companies to complete and track I-9 employment eligibility forms online.

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IDear Workforce-I What Trends are Most Likely to Impact Personnel Administration in the Next Five Years

QDear Workforce:


What are some of the major trends which are most likely to impact personneladministration in the next five years?


–Kelvin


A Dear Kelvin:


Not to pick on your semantics, but I guess the first one would be the name.There are still some personnel departments, and still some personnel directors,but a lot of people are now using titles like HR Director, Chief WorkforceOfficer, Human Capital Director or Director of Talent.


Now, to trends:


1) The Baby Boomers getting older. The aging of the population.


2) Technology taking over. The increasing need to automate and to use technologyto change the HR function, save money, improve hiring, retention, and otherparts of workforce management.


3) Rules and regulations proliferating. The ongoing need to make heads or tails out of newlegislation which often competes and collides with each other, such as the FMLAand the ADA.


4) The world shrinking. The need to understand different cultures,languages, and global business.


5) Employees hopping. The movement from traditional employees to freeagents, and from traditional workforces to teams and projects.


 


SOURCE: Todd Raphael, Online Editor for Workforce.


E-mail your Dear Workforce questions to Online Editor Todd Raphael at raphaelt@workforceonline.com,along with your name, title, organization and location. Unless you stateotherwise, your identifying information may be used on Workforce.com andin Workforce magazine. We can’t guarantee we’ll be able to answerevery question.

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Taming the Information Glut

It’s ironic how each new wave of technology fixes the problems of theprevious generation of technology. Computers were supposed to make it easier tomanage information, and the Internet was supposed to make it easier to findinformation. But somewhere along the path to utopia, most of us have foundourselves completely overwhelmed by the glut of news, facts, data, and more.Trying to keep track of everything has become the horror story for the newmillennium.


Amid the jumble of e-mail messages, Word and Excel documents, graphics files,and Web pages lies an important truth. “Unless you have systems in place tomanage information, you’re at the mercy of it,” says Louise Wannier,chairman and CEO of EnfishTechnology, Inc., a company thatproduces desktop portal software to index hard drives and manage electronicinformation. “There’s a fundamental problem: the computer doesn’t workthe way people think.”


She aptly points out that today’s PCs are task-oriented devices that centeron specific activities like e-mail, word processing, or presentation graphics.Yet people’s minds focus on names, companies, and subjects that cross theboundary of applications and files. What’s more, the line between a PC andnetwork computing, including the Internet, continues to blur. “Essentially,information is information, and people don’t care where it resides, they justwant to find it when they need it,” Wannier adds.


The solution, of course, is to devise systems and strategies for navigatingthrough the Information Age. As hard drives and databases collect moreinformation, and as the size and scope of the Internet expand exponentially, theneed for more sophisticated solutions grows. Suffice it to say that no matterhow proficient you are at creating folders and directories, it’s impossible tofind scraps, tidbits, and pieces of relevant data using a file-cabinet approachto the virtual world.


What’s more, manually clicking through folders in search of a white paper,employee letter, or report that you wrote sometime in the past is time-consumingand extremely inefficient. As anyone who has ever used a PC knows, the built-insearch capabilities of the Windows operating system are woefully inadequate. It’slike using a slingshot to battle a nuclear superpower.


Over the last few years, a slew of new tools has emerged to slay theinformation dragon. Companies are increasingly turning to business intelligence,knowledge management, enterprise information portals, and other solutions tomake sense of things. Some of these tools create searchable indexes on astand-alone PC or across a network. An early entry in this space was AltaVistaDiscovery, which displays resultsusing the same methods as the popular Internet search engine. Another program, Zoot,offers a free-form way to manage and cross-index all the information thatresides on a computer. But perhaps the most powerful tool of all is Enfish’sOnespace, which finds, analyzes, and cross-references information in a dazzlingnumber of ways.


What makes Onespace so effective is that it spots relationships among variouspieces of data. For example, if you’re looking for information about aparticular person, you can select the individual’s name and then view all therelated documents, including


e-mail messages, Word and PowerPoint files, calendar items, notes, and more.The program can also mine data relating to the person’s company oraffiliations, and it automatically uncovers articles and other material on theInternet. Similarly, it’s possible to search by company or topic and view dataand information that’s squirreled away on your system or beyond.


All this can create order in an increasingly chaotic data universe. BarryDeutsch, a recruiter at PowerHiring.com, no longer has to manually hunt and peckfor e-mail and background information on candidates, companies, and more. Withupwards of 250


e-mails streaming in daily and thousands of résumés on file at any giventime — some in Word, others in text format — it’s “essential to sliceand dice data among a wide variety of formats,” he says. “Sometimes, Ineed to view the history of a transaction or a communication and I need thetools to make the process quick and seamless. In the past, too much data fellthrough the cracks.”


Now, Deutsch can pull up relevant information instantly. No callbacks. Noplaying phone-tag. No hour-long search through his 8-gigabyte hard drive orthrough hundreds of Zip disks containing archived e-mail, Act! and Goldminerecords, and Access database files. What’s more, he can search throughdownloaded Web pages about companies and topics to find the information heneeds, when he needs it. Built-in viewers allow him to read the files withoutopening the native programs. “It has made me more effective and automatedthe entire information management and retrieval process,” he notes.


Call this new model “information on demand.” Instead of readingevery résumé as it comes in, Deutsch is able to mine only the information that’srelevant to his immediate needs. Likewise, human resources professionals using aprogram like Onespace or Zoot can subscribe to online newsletters, capture Webpages, and store documents — accessing them only when they’re relevant. SaysWannier, “Suddenly, you have the freedom to forget. You don’t have toclutter your mind with information about where folders and files are; you justwork in an intuitive way.”


Of course, a personal desktop portal isn’t the only solution. While it’sa powerful tool for individuals, enterprise computing and informationrequirements are often far more substantial. That’s leading many companies andHR departments to turn to enterprise portals, business intelligence, andknowledge-management tools to aggregate, mine, and distribute information.”It’s necessary to look at data in a way that makes sense from a businessperspective,” says Keith Gile, a senior industry analyst at GigaInformation Group, Norwalk, Connecticut.


One firm that has embraced the concept is Quaker Chemical. The Conshohocken,Pennsylvania, manufacturer and marketer of custom-formulated chemical specialtyproducts has turned to business intelligence to leverage information that usedto fall between the cracks. So that it can fully understand costs, salespatterns, and changing


industry conditions — across regions, product classifications, marketsegments, and more — Quaker Chemical uses an SAS Institute system to examinethe actual cost of various products. The software helps managers examine localpricing and currency fluctuations, and what mix of chemicals and raw materialsis most efficient. “If you slice through the data, it’s possible to seeexactly what’s affecting costs,” explains Irving Tyler, director and CIO.


In one instance, Quaker Chemical found that it was using more expensivematerials than necessary. “We didn’t have to beat up suppliers in anattempt to lower the price. We simply asked the chemists to reformulate theproduct,” says Tyler. The company also has used business intelligence tomanage assets and identify employee retention issues in different regions. It isadding knowledge management capabilities to the mix and embracing a balancedscorecard system. As a result, the company now feeds virtually all field datainto a data warehouse. “Data is the lifeblood of the moderncorporation,” concludes Tyler.


But only if it’s relevant. Corporate networks can hold tens of millions ofdocuments and files, and the Web has exploded to more than 550 billiondocuments, according to BrightPlanet, a Sioux Falls, South Dakota, firm thatstudies the Internet. Madan Sheina, a senior analyst at the IT consulting firmAberdeen Group, believes that individuals and companies too often findthemselves sorting through so much useless information that “they can’tfind the diamonds amid all the coal.” It’s particularly vexing, he adds,when it comes to capturing information and knowledge that reside in people’sheads.


At Xerox, the emphasis is on creating a pipeline of information that feedstechnicians around the globe. Six years ago, the company began building aknowledge-management system that allows workers to share tips and information.After only a few months, Xerox witnessed a 5 percent increase in productivityand saw a 5 percent drop in the use of parts. It has since expanded the system,called Eureka, to encompass 25,000 technicians worldwide.


Today, employees submit more than 1,000 tips each month, and managersconstantly sort through the information to ensure that it’s relevant andup-to-date. Using a Web browser, other workers — from Brussels to Buenos Aires– are able to find shortcuts and best practices. The result? A savings of morethan $7 million per year. Technicians also are able to provide faster and betterservice. In one instance, a technician discovered that a 50-cent part could savea $10,000 color copier replacement, says Bob Cheslow, a system architect. Oncehe posted the information, others began to use it.


Ensuring that only the right information reaches the right people can taxeven the most tech-savvy company. Unless an organization is willing to devoteresources to sorting through a universe of information and managing iteffectively, it is likely to find itself controlled by it rather than using itas a competitive advantage. “In an information-oriented world, it iscrucial to use the right tools to maximum advantage,” says Deutsch.


Workforce, November2000, Vol. 79, No. 11, pp. 22-24 — Subscribenow!

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Dear Workforce Should We Provide Incentives for Efficiency

Q

Dear Workforce:


At our bank we are really examining staffing issues. We don’t want to layanybody off; we want to accomplish our minimal downsizing (maybe 10-15 of our300 positions) through attrition. After asking department heads to monitor theirstaffing issues and explaining how a recent new hire was able to accomplish in a1/2 day what a prior employee was dragging out a full day, I explained to themthat we need to let our employees know it’s ok to be efficient, you are notgoing to lose your job if you come forward.


The question was posed, how do we encourage them to come forward — do weoffer them a reward of some type? Have you ever heard of anyoneenticing their employees for doing their jobs more efficiently? If so,how? Where do you draw the line? Thanks.


— Kim Stuckhart, human resources manager


 


A Dear Kim:


Why should you have to give incentives to employees to do their jobsefficiently? Isn’t that what they are already paid to do?


Your company’s efficiency is being brought down because your managers are notmonitoring the performance of their employees.


My suggestion is to have managers set up performance goals and objectives foreach employee and monitor these on a quarterly basis. The employee’s futureincreases should be tied directly to their performance and non-performers shouldbe counseled quarterly. You should also give managers the authority to rewardtop performers with cash and/or non-cash bonuses and also accelerated meritincreases.


SOURCE: Mike Sweeny, T. WilliamsConsulting, Collegeville, PA.


E-mail your Dear Workforce questions to Online Editor Todd Raphael at raphaelt@workforceonline.com,along with your name, title, organization and location. Unless you stateotherwise, your identifying information may be used on Workforce.com andin Workforce magazine. We can’t guarantee we’ll be able to answerevery question.

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Vita Needle Finds Vital Employees Among the Elderly

As a group, the senior citizens at Vita Needle Co. are still working to takehome weekly paychecks for many of the same reasons that those half their age do.


Some need the wages to supplement pensions or their Social Security checks.Others are saving for vacations or “those little extras.” Still othersjust want to stay active in their “retirement.”


To their employer, though, the mostly older workers at the Needham,Massachusetts, company represent a loyal, dedicated, and flexible workforce thatmeets the modern-day needs of a small manufacturing concern in a competitivemarket.


Of the 35 employees at Vita Needle, most on the factory floor are over 65.Many who spend their days turning slender rods of hollow steel into syringeneedles are well into their 80s.


These days, the average age at Vita Needle hovers around 76, but given thecompany’s reputation for providing “work for life,” that numberedges up with each passing year, according to company president FrederickHartman.


“We haven’t had anyone hit 100 yet, but we’re hoping for that; itwould be just fine,” said Hartman, one of the handful of company youngstersat age 48. “It’s not that we won’t hire someone younger. But whenyounger people come up the stairs and take a look at who we have working here,they generally say it’s not for them.”


Hartman, however, didn’t adopt his gray-haired employee profile afterattending a business-management class or in response to an overactive sense ofcivic responsibility. Rather it happened by accident.


“We didn’t plan it this way, but we continue to hire senior citizensbecause it makes good business sense; we’re not a charity,” he saidemphatically. “Our older workers have helped us build a strong company.More managers, particularly those having trouble finding responsible workers,ought to consider recruiting at their local senior citizen’s center. It works.It really works.”


The average age of a Vita Needle worker began creeping upwards in the late1980s, Hartman recalled.


“When we first started hiring older workers, I was actually out lookingfor people willing to work part time,” he said. “It just so happenedthe first ones who applied were people who had had other careers. Partly it haddo to the economy in Massachusetts at the time. We were in a recession and manycompanies were laying off their more senior workers.”


Hartman is the fourth generation at the family-owned company, founded in 1932during the Great Depression through the Yankee ingenuity and foresight of hisgreat-grandfather and great-uncle. For the next 50 years, the businessflourished. The country’s fight against polio and smallpox in the 1950s and1960s spurred demand for hundreds of thousands of needle-tipped syringes todeliver precious immunizations.


But when the AIDS epidemic hit in the early 1980s, Vita Needle’s sales tooka sudden tumble.


“Our core business was reusable needles, and with AIDS, suddenly peopleweren’t so interested in our product any more,” Hartman said.


By 1988, the company had shrunk to a shadow of its former self. Once theemployer of 50, Vita Needle had 11 names on its weekly payroll.


“We were at the point of either closing down or finding other productlines,” Hartman said.


Hartman, who had graduated from Princeton in 1974 with a degree in civilengineering, struck a deal with his father and his uncle and came aboard aspresident.


“I was confident we could find other customers because we always had hadpeople knocking at our door looking for a needle for some interesting,non-medical applications,” he said. “Our strength is our ability toproduce a quality product quickly and efficiently. We just never had to thinkabout other applications for our needles, because up until the mid-eighties wewere too busy meeting the demand for conventional medical syringe needles.”


Today, Vita Needle’s customers range from sporting goods stores and golfpro shops, which use the needles to inflate basketballs and apply the adhesiveon golf club handgrips, to funeral homes, which order them for their embalmingsuites. The needles also are used in the manufacture of cars and in chemistrylabs. Sea World regularly orders a hefty 48-inch long needle for injectingkiller whales.


But 10 years ago, Hartman knew he was going to need some time to refocus thefamily business, and that meant finding employees who were willing to add andsubtract hours based on the workload.


Among the first to come aboard on a part-time basis was Bill Ferson. Then 68,Ferson had recently retired as a design engineer for measuring gauges. It washis wife’s idea that he get a job, he said.


“She was tired of having me hanging around the house all day,” hesaid. “It was either this or a divorce.”


Now 82, Ferson punches a time clock Monday through Friday because he enjoysthe work and the company of his co-workers. Because business is booming again atVita Needle, Ferson often puts in 40 hours a week.


“There is no pressure here,” he said. “I can work at my ownpace and take time off when I want.”


And because Hartman lets his employees set their own hours, Ferson is oftenin at work by 6:30 a.m. so he can spend the afternoons in his garden.


“What we’ve found works best both for us and our workers is if theyput in four to five hours at a pop,” said Hartman, who notes that those wholike to come in early or work late have keys to the shop. “The minimumcommitment we ask for is 15 hours a week. We work around doctors’appointments, babysitting the grandkids, and winter trips to Florida.”


Cross-training his workers on a number of the machines in the shop means thatHartman can meet a demanding production schedule even with his workers comingand going as they wish. He pointed out that most who now work at the drillpresses, cutting machines, and grinding wheels never worked with metal beforesetting foot in his factory.

Rose Finnegan, 88, whose specialty is grinding down one end of the hollowtubes to a fine point, waitressed for 30 years before her knees gave out.


At Vita Needle, Finnegan can do her work seated on a stool, and she can getup to walk around whenever she feels like it. And while the work is repetitive,said Marion Archibald, 89, it is tolerable. When she is bored with one process,she can switch to another machine.


Taking regular breaks and chatting with fellow workers are encouraged, saidproduction manager Michael DeRosa, another Vita Needle youngster at age 42. Anefficiency expert, he said, would never approve of the layout of the factoryfloor.


“If we were strictly interested in productivity, there are many betterways of organizing the work flow, but the fact is, if you have a mostly elderlyworkforce, you want to encourage people to get up and walk around. I like to seepeople chatting about their families and other interests in their lives, becausehappy employees are good workers. We have an established reputation forproducing a quality product, so in the end that’s what’s mostimportant.”


Nationally, the strong economy is focusing more attention on older workers aslabor-starved companies gravitate to a largely untapped supply of availableworkers, said Sally Dunaway, a senior attorney at the American Association ofRetired Persons. Currently, 12.3 percent of those over 65 are working, up from10.8 percent in 1985, according to figures compiled by AARP.


In March, Congress responded to a rising clamor from businesses as well assenior citizens’ groups to eliminate the earned income limit for people onSocial Security, so that those who want to work aren’t penalized, Dunawaysaid.


Dunaway’s expertise is age discrimination, and until recently, she had beenmost often involved in resolving cases in which older workers lost their jobs tosomeone younger. Today, she is spending more time with companies that areaggressively recruiting retirees in order to woo them back into the workforce.


“Generally speaking, we are very happy to see jobs opening up to olderworkers,” Dunaway said. “But we are concerned that some companies aretaking advantage of these workers because they know that elders have feweroptions. Hiring people part-time is one thing if that’s what the workers want,but we don’t like the idea that companies see seniors as a group that doesn’tneed benefits like health insurance or as a group that will put up with erraticwork schedules that younger workers would never tolerate. We don’t wantseniors working in sweatshop conditions.”


DeRosa is aware of that criticism and points out that his company pays itsnewest workers better than minimum wage. Currently, the wages at Vita Needlerange from $7.50 to $11 an hour, he said.


“We take into consideration people’s specific skills and give raisesto reward individual effort,” DeRosa said.


As far as benefits go, employees including Finnegan and Ferson make it clearthat older workers find their work rewards in different places than those whoare younger.


“Each morning I wake up and thank God I have a place to go,” saidFinnegan, the former waitress. “There are no quotas. We each do our work asbest we can and they appreciate us for that.”


That’s the kind of comment that makes Hartman proud of his company’scommitment to the employment of older workers. “It has been a terrificbusiness model for us,” he said. “We don’t need a quality-controldepartment because these workers really care about what they are doing and wantto do the job right the first time.”


Workforce, November2000, Vol. 79, No. 11, pp. 102-103 — Subscribenow!

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HR Lessons From a Strike

August 6, 2000 marked the beginning of a tough two-and-a-half weeks forVerizon, the company formed after the merging of Bell Atlantic and GTE telephonecompanies. More than 80,000 unionized technicians and customer-servicerepresentatives on the East Coast participated in an 18-day strike, and althoughit didn’t shut down Verizon, it gave management something to think about.


Nearly 30,000 managers left their comfortable offices to work as operatorsand technicians, some hastily cross-trained. In the end, workers walked awaywith an agreement that upped salaries and gave them stock options, increasedbenefits, lowered caps on forced overtime and made it easier for the unions toattempt to organize Verizon’s wireless division.


But the deal is deceiving. Although money was an issue, it wasn’t theissue. Margaretta Cullen, senior vice president of global human resources forTMP Worldwide, the parent company of Monster.com, says the pay increases weren’ta big score. “Yes, they got a 12.5 percent pay raise over three years, butthat’s just slightly more than 4 percent a year, what a merit-based increaseis anyway,” says Cullen.


What the settlement does show is a move away from collective bargaininglargely for pay hikes, and toward bargaining for quality-of-work/life issues.Unlike the physical working conditions that unions fought to change in the lastcentury, current workplace problems have more to do with stress. In the Verizoncase, that stress was caused by too much forced overtime and too little freedomin handling customer calls.


The agreement that ended the strike reduced weekly required overtime forcustomer service reps from 12 to 15 hours to about 8; technicians will have an8-hour-per-week cap on mandatory overtime starting next year. So what does allthis mean?


“I think we are starting to see all employees, not just management,being able to write their own check. The workforce is getting smaller, and theneed for technical skills, including call-center skills, is getting bigger. Yousee things happening in this New Economy — things like telecommuting, bringinga pet to work, sabbaticals — and everyone wants some of that,” saysCullen.


Given a labor market that’s essentially at full employment, call-centerstaffers, customer-service reps, and all those back-end workers know they aren’tas replaceable as they once were, and they want to be treated that way. Givethem the ability to balance work-and-life issues, pay them competitively, givethem a pleasant work environment, and they’ll stay, says Kate Bronfenbrenner,director of labor education research at Cornell University.


“The most important thing for human resource managers to learn from thisstrike is that average American workers feel they aren’t getting their shareof the economic boom, which has been created at their expense,” she says.At Verizon, call-center operators and technicians put in 12-hour days andwatched as the company’s stock went up, but stock options weren’t a part oftheir benefit package.


“They are frustrated because they sense they are working longer, harder,and faster at jobs they once considered good, with benefits and security. Thenthey see Verizon making millions of dollars and being successful, while they areworn to the bone,” says Bronfenbrenner. And that’s where union resurgencecomes in.


Recent surveys of workers in this country indicate a feeling that unions areneeded, says Bronfenbrenner, and her own research shows union support cuttingacross all sectors of the economy. “We see doctors and high-tech workersturning to unions, as well as those in service and maintenance industries.”


Tom Casey, a partner at Unifi Network, a division of Pricewaterhouse Coopers,says the Verizon strike and settlement — viewed as win for the unions –changed the New Economy view that unions were dead.


“In a good economy like ours, the media pretty much suggests that unionshave lost their influence but obviously, they are very much alive,” saysCasey.


In fact, unions are angling to be important players in high-tech sectors. Inthe Verizon settlement, the International Brotherhood of Electrical Workers andthe Communications Workers of America won the chance to try to unionize theInternet economy, through Verizon’s wireless division, where job growth willbe fastest. And as employees in high-tech industries take note of the success atVerizon, there’s bound to be a ripple effect.


“Management needs to be concerned that this type of win will emboldentheir unorganized employees to reach out to union representatives foradvice,” says Kirby Wilcox, a partner specializing in employment and laborlaw at Paul, Hastings, Janofsky & Walker in San Francisco. “It makesthe unions look effective in an industry where they have not traditionally beenwelcomed.”


Yet welcome, experts believe, they will be. That’s not necessarily badnews, either; in many cases, unions actually help companies retain a stable,long-term work force. Jeff Keefe, a professor of labor studies and employmentrelations at Rutgers University, conducted a survey in 1998 oftelecommunications companies throughout the country, looking primarily atmanagers, service reps, and technicians.


He found that large firms like Verizon, AT&T, and Bell South arecharacterized by stability among employees. “There are several advantagesto that unionized workforce,” says Keefe. “Because technicians aremore unionized than other groups in the industry, they receive higher thancomparable wages, by about 13 to 14 percent. Technicians are mainly high schoolgraduates with some college, trained on the job, who feel a long-term commitmentto the company.”


Wireless companies and Internet service providers tend to rely more oncollege graduates who are not unionized, but they pay 30 to 35 percent more insalaries.


“The survey showed wireless firms and ISPs especially had higherturnover. I think a lot of the things done to take advantage of slack labormarkets years ago, like variable compensation, performance-based pay systems,and downsizing, are coming back to haunt these companies. To their employees, itsays it’s a quid pro quo out there,” says Keefe.


But old-line companies loyal to their often-unionized workforces are seeingconsiderable savings because highly trained workers are staying put. This, ofcourse, is at the heart of all the issues associated with the Verizon strike.The problem for human resource managers isn’t necessarily the threat of unionorganizing but the fear of losing employees who are frustrated and unhappy. Justthe suggestion of a walkout by workers now is far more effective than it’sbeen in the past — where will companies find replacements?


Casey says that rather than wait for the unrest, human resource managersshould be proactive: recognize how important it is to treat all employees welland assess whether certain employee groups are being taken for granted.


“Our research shows to keep people content at their jobs they need,among other things, learning opportunities, competitive compensation, anunderstanding of advancement potential, and a mix of employee benefits,”says Casey.


Those benefits aren’t just medical and disability. Even hourly workers wantthe non-traditional perks of salaried employees.


What workers at Verizon wanted, says Wilcox, was to be appreciated. “It’simportant that employees feel their employer cares about them. One of thehallmarks in collective bargaining is that despite hard fighting, there is agood-faith belief that one side isn’t trying to take unfair advantage of theother.”


During the Verizon strike, forced overtime that affected not only workers’stress on the job but also stress at home was portrayed as representative of theemployer’s treatment of all employees. Wilcox says this bargaining tactic willprobably become more common in the future.


“The unions focus on the pressure of one job — call-center work in thiscase — and argue it is symptomatic of the pressures inherent in all jobs, whichisn’t true. That’s why companies should look at jobs where there isunderlying stress, such as forced overtime, anything that could be a potentialblistering point,” he says.


In many cases, it’s not the job itself that is stressful, but rather theway that the job is structured. Because of the tight labor market, employers areoften trying to squeeze a job meant for one and a half people out of one person.Chere Estrin, head of The Estrin Organization in Los Angeles, an internationalstaffing company, says it makes more sense to create a shared job.


“Instead of paying overtime, which is a tremendous cost to the company,you


hire someone to come in 20 hours a week and teach them how to seamlesslyjob-share with the full-timer. Then you avoid the stress of forced overtime andalso save money,” says Estrin.


Another lesson from Verizon, she says, is to avoid operating with a crisismentality. Whether it’s a technician, service rep, or a programmer, having tofrequently use last-minute, forced overtime means something is wrong with theway the work flow is managed.


“Most people need to be able to work with a schedule that they can counton,” says Estrin. “Employees usually don’t have access to the mastercalendar of a company, so they don’t know when projects are due, or even whenpart of a project is due. Without the whole picture, they can’t plan, and theperson who winds up with the work can’t see it coming down the pike.”


Ultimately, what we take from Verizon’s ordeal is the notion of a breakingpoint; Job-related pressure and stress are more than a work problem; they affectall aspects of an employee’s life.


“Employers need to make the decision that instead of pushing theirexisting people to work harder, they will structure jobs more humanely, hiremore people, and offer better benefits,” says Cornell’s Bronfenbrenner.”You can only push people so far. It’s an issue that resonates not justfor the workers but for the whole community.”


Workforce, November2000, Vol. 79, No. 11, pp. 36-42 — Subscribenow!

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Third-Party Sexual Harassment

Y

ou know what to do when one of your supervisors makes unwelcome advancestoward his employee. HR is well drilled in the policies, protections, andactions warranted by basic workplace sexual harassment. But third-party sexualharassment is almost as common — and is rarely taken as seriously or dealt withas swiftly. Yet it’s just as wrong, and just as laden with liability for yourcompany. Employment law attorney Bradley T. Adler of Atlanta-based FreemanMathis & Gary, LLP discusses the dos and don’ts of dealing withthird-party sexual harassment.


Is this an under-recognized area of liability?


The focus of employers really revolves around workplace harassment byemployees. That’s the traditional arena in which they try to preventharassment. But employers need to be aware that there is liability in harassmentby non-employees.


And what’s the legal basis for this?


Back in 1997, the EEOC filed regulations that said essentially that anemployer can be held responsible for the actions of non-employees with respectto the harassment of employees in the workplace. Liability begins if an employerknows or should have known of the conduct and failed to take immediate andappropriate corrective action. It’s pretty similar to the affirmative defense.Which is: If you have notice of it or should have notice of it, you need to takeaction and correct it.


So what are some examples of third-party sexual harassment that we may notthink of immediately?


Take a cybercafe, where you have coffee and log on to the Internet. What if acustomer comes in, and each time, he logs on to Porn.com, and each time thewaitress who serves him sees that he’s logged on to this site. If the managerat this cybercafe knew about this — either by virtue of seeing it or virtue ofher complaining — the manager would need to take action if the waitress felt itwas harassment.


What kind of action?


It may be they transfer a male to the customer’s section — although thatmay not relieve the cafe of liability; there’s nothing to say a male can’tbe harassed either. But the business can transfer over different employees whoaren’t bothered by the fact the customer is looking at the pictures while they’rewaiting on him. Or the manager could tell the customer he can’t have thescreen up on porn sites while being waited on. It comes down to correctiveactions — the remedy isn’t exclusive. The options are numerous.


Does the waitress need to officially state that the conduct bothers her?


If, for instance, the computer faces the window, and the employer wouldn’tknow, then if the employee wants something to be done, the employer should beput on notice. That can be simply saying to the manager, “This guy islooking at porn. I don’t like it. It makes me uncomfortable.”


So once an employee makes a statement of discomfort, the liability is there?


In Lockard v. Pizza Hut, a 10th Circuit case, a waitress was waiting on someindividuals. After one of the individuals at the table made some remarks shefelt were harassing and made her uncomfortable, she reported the behavior to oneof her managers. The manager essentially instructed Ms. Lockard to wait on them.She continued to be harassed. She was putting a beer down on the table, and oneof the customers pulled her to him by the hair, grabbed her breast and put hismouth on her breast. She resigned and brought suit against Pizza Hut.


The court found that an employer can be held responsible for thesexually-harassing actions of a non-employee, and in doing so they cited theEEOC regulations. Again, the waitress had told the manager she didn’t want towait on the people, she didn’t feel comfortable, and no appropriate reactionwas taken to remedy or relieve the situation.


What about a workplace in which an atmosphere or uniform may foster alikelihood of sexual harassment — like a bar in which waitresses wear skimpyclothes?


Sexual harassment still needs to have the purpose or effect of reasonablyinterfering with a person’s work performance, or it has to be creating anintimidating, hostile, or offensive environment. It needs to be objectively andsubjectively offensive. That means if the individual didn’t find it offensive,certainly that can’t be harassment. The perspective that’s taken by a courtmay change depending on the particular employer. But certainly a waitress at amore risqué restaurant is not in any way precluded from suing.


In fact there’s one case of a casino waitress who was employed as a mime –a type of living doll. She brought suit under Title VII alleging she was beingharassed by a casino patron who was touching her as she was performing. In thatcase the 9th Circuit found the employer liable for sexual harassment on behalfof a private individual — the casino patron — where the employer eitherratifies or acquiesces in the harassment by not taking immediate action when itknew or should have known of the conduct.


Can an employee refuse to wear something skimpy and file for harassment ifthe employer enforces the dress code?


There are situations where provocative dress codes are going to lead to areal likelihood of harassment. Like dress codes where an employee is required towear provocative uniforms, like a short skirt and low-cut blouse. Even if it isprovocative dress, and the employee knows this going in, if there’s harassmentand the employee complains to the employer, the employer still needs to takeaction.


And plaintiffs win these cases?


There’s a case in which the plaintiff was a lobby attendant, and she wasrequired to wear as a condition of her employment a poncho. It was prettyskimpy, open at both sides, and she wasn’t allowed to wear a blouse, skirt, orother garment under the poncho. The uniform revealed her buttocks. Shecomplained it was subjecting her to harassment — lewd comments and suggestions– frankly, what people may expect to happen wearing that kind of uniform. Whenshe notified her employer that she was being subjected to this harassment, shewas told no exceptions to the uniform would be granted. She refused to wear theuniform and was discharged.


The court found the employer discriminated against her based on violation ofTitle VII, because it required her to wear the uniform when it in fact knew itwas subjecting her to this harassment. So it comes back to this: Does theemployer know and does it do anything? Now, the employer could have gotten auniform that fit the plaintiff — apparently she was tall and it didn’t fit aswell as it could have — or it could have somebody posted by her to prevent herfrom receiving any sort of comment, or if she did receive comments, to escortthat person out. Again, there are a lot of options.


What are some other frequent examples?


Take an assisted living center, in which a particular resident likes to grabwomen as they come into help him bathe or to make the bed. If the employeecomplains about the resident and no action is taken, that can subject theemployer to liability. It kind of seems crazy; in many cases you’re dealingwith somebody who’s much older, whom you’re not going to take as seriously– Oh, that’s just Mr. Jones, come on! Yet those actions can still subjectemployers to liability if they know about it, or should have known about it, anddidn’t take corrective action.


And companies dependent on sales, and relationships with customers, areparticularly prone, correct?


Say there’s a rep from Switzerland touring my facility, and one of myassistants is a lady that the rep is attracted to. What happens if the rep comeson to the assistant? The assistant comes to me and says, “Look what thisrep is doing — I don’t like it a bit.” If I were to say, “Tough,this is our biggest revenue gainer. I want you to put up with it, and if hegrabs your butt, if he plays footsie with you under the table, fine.” That’sa liability. And if she doesn’t do it, and I fire her — that’s retaliationalso.


What if it takes place outside of the workplace?


Let’s say I own a computer consulting company and I send my reps all overthe country. I send one to my biggest customer, ABC Inc., and the president ofABC harasses the rep. What happens when the consultant comes back and reportsthe harassment? And ABC says, “You need to continue to send this consultantout every week.” Tough. The employer is under the duty to take some sort ofcorrective action to remedy the situation.


Does third-party harassment bring with it more or less liability?


Neither — it all falls under Title VII. You have an obligation to make sureyour employee isn’t subjected to an environment filled with or injected withconduct that’s improper and unlawful under Title VII.


What should employers do?


Don’t limit your policies or training to actions taken by employees againstother employees. Expand them to cover actions taken against employees byemployees and non-employees: Harassment of employees is not tolerated.Disseminate the policy and implement it by having some training sessions. Or ifyou’re sending an employee to a customer site, remind that employee to reportany behavior that makes him or her uncomfortable. Make sure your employeesunderstand there’s a sexual harassment policy that covers not only conduct byemployees but by non-employees,and give them ways of reporting harassment.


And then?


Correct any actions you do know about or should know about. The “shouldknow about” is taken care of by the fact that if you have a policy in placethat allows people to complain, you’re putting the burden on the employee tolet you know. You don’t need to check in all the time; the employer can’tknow all the actions that go on in or out of the workplace. But HR needs to knowif something is going on. And that will happen if the employees communicate tothem.


Workforce,November 2000, Vol. 79, No. 11, pp. 88-92 — Subscribenow!
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.

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Retention on the Brink

It wasn’t too long ago that MicroStrategy was a high-flying company.


TheVienna, Virginia-based outfit, a 10-year-old producer of information systemsthat enable businesses to fine-tune their decision-making, had healthy profitsand a market capitalization of $25 billion. But the company’s innovativesoftware products were only part of its success. MicroStrategy was famed forrecruiting the best and the brightest for its 2,000-plus workforce, and itspared no expense to lure top talent.


It spent $5 million each year to conductteam-building exercises on a cruise ship in the Caribbean, and threw anotherannual bash for which it flew its employees’ friends and family intoWashington, D.C., for a dinner and comedy concert by Dana Carvey.


“We had all these beautiful retention programs,” Vince Gabriele,MicroStrategy’s director of staffing, recalls wistfully. “Then we had tocut them.”


In March, MicroStrategy suddenly found itself in a crisis. The companydisclosed that because of accounting problems, it would have to restate earningsfor the previous several years. In a single day, the company lost 66 percent ofits market value, and over several months its stock plunged from the vicinity of$300 per share down to below $30. For the first time, the company was forced torescind job offers to new hires and to lay off 10 percent of its workforce.


The laid-off workers, for the most part, didn’t have that tough a time; thecompany gave them a generous severance package that included $10,000 worth ofMicroStrategy stock from founder and chief executive Michael Saylor’s ownholdings, and many were quickly snapped up by recruiters for other high-techcompanies.


As MicroStrategy scrambled to come up with interim financing and torebuild its credibility with investors, the company had to confront yet anotherproblem. How would it keep from losing its remaining employees, thehard-to-replace technical, sales, and managerial talent that the company wouldneed to reverse its fortunes?


A corporate crisis can serve to expose weaknesses in retention policies.


Unfortunately, MicroStrategy’s dilemma is one that troubled companiesincreasingly face. Businesses left staggering from a serious body blow –whether it’s a plunging stock price, a high-level corporate scandal, or theloss of major clients — now have to worry about a second blow that could finishthem off. Just when they’re at their most desperate, they often must contendwith the prospect of mass departures of employees, whose skills and energy areessential to the company’s survival.


A talent exodus can be crippling to a troubled company, and that doesn’tapply just to dot-coms. Retailers, for example, have been plagued by the problemfor years. When Federated Department Stores, the then-parent of Bloomingdale’sand other store chains, found itself in financial trouble in the early 1990s, itlost 25 percent of its workforce in the company’s Gold Circle division alone.


When that part of the company was put up for sale, the loss of human assetsreportedly reduced the division’s price by $100 million. After troubledretailer Montgomery Ward filed for Chapter 11 in 1997, for example, nearly 30percent of its managers and virtually its entire sales staff resigned.


“When a company’s financial fortunes suffer, management used to think,‘We’ll keep the best people, and lay everyone else off,’” explainsBruce Tulgan of Rainmaker Thinking, a Connecticut-based consulting firm.”But in today’s fluid, free-agent employment marketplace, they no longerget to do that. Instead, when things get rough, management has to worry aboutlosing the best people, who are likely to say, ‘Thanks, but I can sell myskills to someone else.’ When they start fleeing, what is a short-termfinancial crisis can evolve into a long-term downturn.”


When a company is on the brink of disaster, retention isn’t an easy problemto solve. A corporate crisis can serve to expose — and exacerbate — weaknessesin the retention policies that a company has followed during good times. Simplytrying to fix those problems in a hurry won’t do the trick. Beyond that, someretention tactics that work in good times — such as the liberal granting ofstock options — may not only fail but also actually put a company in even worseshape.


There is always hope. Companies can and do retain employees, even in theworst of times. But as top consultants explain, a company on the brink usuallyneeds a bold, aggressive new strategy for keeping its talent base intact.


Itmeans establishing new lines of communication with employees, and communicatingwith a directness and candor that some top managers may find a bituncomfortable. And it may mean trying new, unconventional compensation schemesthat not only cajole staffers to stay but also give them more responsibility –and a greater reward — for the company’s short-term performance.


Companies in trouble often resort to buying employees’ loyalty. In a 1998study, Right Management Consultants looked at 829 U.S. and Canadian companiesgoing through cutbacks, acquisitions, and other difficult situations. Rightfound that almost half of the companies enticed essential employees into stayingwith financial incentives. The bonuses typically ranged from 26 percent of basepay for supervisory and technical staff to 47 percent for executives. In betterthan 9 out of 10 instances, the bonuses were in cash. In return, 59 percent ofthe companies required employees to sign agreements to stay for a specific timeperiod.


Generous staying-on bonuses, to be sure, can be a powerful method forachieving retention, at least in the short term. Right Management found that thecompanies that used such payouts were able to retain 90 percent of theirsupervisory and technical employees, said senior vice president Terry Szwec.


But such a strategy can be costly. Federated responded to its retention woeswith a $26 million, two-year plan that paid 300 of its key managers andexecutives bonuses of 20 to 30 percent. Ultimately, the company survived andre-emerged from Chapter 11 as a viable concern. Similarly, America West Airlinesworkers and management shared $13 million in bonuses after the company’sthree-year Chapter 11 case ended in 1994.


Only when the survival strategy is clear should management take a hard look at the company’s workforce.


Unfortunately, many companies in a crisis may find themselves unable toafford that sort of plan. An even bigger shock may come to habituallycash-strapped dot-coms, which may be accustomed in good times to building theirretention strategies around potentially lucrative stock options that takeseveral years to vest. As long as a company’s fortunes are rising, equity is apotent lure to staffers.


But when a company suffers a jolt, the value of those options can drasticallydecrease, making them worthless as an inducement. Piling more options of dubiousvalue on top of the existing ones isn’t going to do the trick. And optionawards can be hazardous to an ailing company, because they tend to dilute thevalue of a company’s already depressed stock — a move that can make outsideinvestors unhappy.


Instead, Szwec advises adjusting the exercise price downward on employees’existing options, so that their value again becomes a lucrative incentive.”If the share value is sinking and $15-a-share options areunderwater,” he explains, “a progressive board of directors might say,‘We’re going to redo them at $5.’” That gives employees not just anincentive to stay, he explains, but also an even bigger stake in reviving thecompany’s fortunes.


While compensation almost invariably is a key part of crisis retentionstrategies, Tulgan, Szwec, and other consultants caution that a troubled companyhas to do more than just spread a lot of cash and options around. A companyneeds employees not only to stay but also to perform, and in far more dauntingcircumstances than they have in the past. That’s why the experts advise that acompany’s executives and the human resources manager develop a carefullyfocused plan.


The first thing a company’s leaders must do, according to Tulgan, is take along, hard look at themselves and the company. “They need to ask, ‘Are wegoing to stay and stick it out? Are we really committed?’” he explains.”Once they’ve decided the answer is ‘yes,’ they need to do a reallyhard analysis of what is wrong with the company, and develop a strategic planfor rebuilding its value.”


Only when the survival strategy is clear, consultants caution, shouldmanagement turn to the next step — taking a hard look at the company’sworkforce. But instead of the conventional approach — looking for staff cutsthat can be made — management first has to flip the equation around. Whichstaff members have talents or proven abilities that are critical to keeping thecompany alive and making a turnaround?


“They have to figure out who are the talent that they need, and focus onthat,” Tulgan says. “Rather than just hoping that those people willstay, they need to preemptively take control of who’s leaving and who’snot.”


To retain those critical employees in today’s fluid job market, the expertsadvise an aggressive campaign — essentially, re-recruiting company staffersalmost as if they were new hires. The retention interviews should be carefullyscripted, with management focusing on specific, tangible selling points thatwill induce the employee to stay.


Not all of those selling points should be economic. “Our research showsthere are six reasons why people commit to an organization in the firstplace,” explains Tom Casey, leader for the talent management group at UnifiNetwork, a unit of PricewaterhouseCoopers. “The first is the opportunity tolearn. Compensation is only number two. The third is career potential. Fourth iswho is managing a person; 60 percent of the people in our data set say they’dbe willing to leave a job to follow a good mentor. Fifth comes the reputation ofthe organization. Sixth are the benefits, such as health coverage.


“The priorities shift a bit when you’re in a period of disequilibrium,so you may need to zero in on a few things — career opportunity, compensation,and staying close to people. But if you try to retain talent with money andignore everything else, you may be able to keep them for the short term, but youwon’t be able to sustain things for any period of time.”


Instead, Casey advises, management should focus on offering valuableemployees an individually tailored package of inducements. “You can’tjust walk in and say, ‘This crisis is a great opportunity for you,’ “he says. “You need to deal in specific scenarios.” For example, inexchange for a promise to stay, an employee might be offered a financial bonus,plus the promise of a promotion to, say, vice president of marketing, if theemployee meets certain specific goals.


Tulgan goes a step further, and advocates doing away with across-the-boardcrisis retention bonuses, and instead offering richer rewards based onperformance goals. “It may be tidier from an administrative standpoint tojust pay everyone to stay, but it’s terribly inefficient in economic terms,because the deal isn’t related to the ultimate value of a person’s work. Ithink what you should do instead is buy performance, what I call ‘purchasingagent-style compensation.’ You give the staff member a project that you needto accomplish to keep the company going, and negotiate the reward for it.”


Such deals, he says, can be highly individualized. “Basically, what you’relooking for is, ‘We want you to be part of the plan — what do we need to doto convince you to stay?’ The answer may be, ‘I want X dollars,’ or it maybe, ‘I’ll do it if I can come to the office on Tuesdays and Thursdays, andwork the rest of the time from home.’ Or it may be, ‘When the stock pricehits X, I want a bonus, or the ability to come back and renegotiate a new deal.’”


That all may seem pretty radical, but Tulgan notes that corporate managersalready are quietly doing such individualized, performance-oriented deals on apiecemeal basis, using discretionary funds from big projects. Right Management’sTerry Szwec thinks it’s a concept that could benefit troubled companiesdesperately in need of results to show Wall Street.


But negotiating commitments from crucial employees and inducing them to staywith added compensation and other benefits are only part of the battle. Once atroubled company retains employees, it must make a concerted, ongoing effort tokeep them on the job and performing effectively. Management has to get crucialemployees to have faith in the company, and to keep that faith, even through thecontinued rough moments that almost inevitably will occur as the company fightsits way back into the black.


Accomplishing that, the experts say, may require a company to drasticallyoverhaul its internal communications strategy. As Tulgan notes, “Gone isthe day when you could have secret meetings on the top floor, and keep employeesin the dark about what’s going wrong. All they have to do is go to someirritating anti-company Web site, and they’ll find out everything you didn’twant them to know.”


Instead, troubled companies can achieve more control over the situation bypre-empting the gossip, and providing their employees with reliable sources ofinformation. “You really have to tell people what is going on,”advises Roger Herman of the Greensboro, North Carolina-based consulting firm TheHerman Group. “That means the bad as well as the good. You can’t playgames.” He advocates holding workshops in which employees are offeredadvice on how to read and understand the company’s public filings, so that badnumbers don’t take on a more ominous meaning than they deserve.


Vince Gabriele says that MicroStrategy, although it’s still in the processof developing a formal plan to provide retention incentives, has alreadyratcheted up its internal communication efforts to aid in theworkforce-preserving process.


The company’s human resources department helpedexecutives devise a plan that included monthly company-wide conference calls, inwhich CEO Michael Saylor and other corporate officers brief employees on thelatest developments in MicroStrategy’s struggle back into the black.Employees, in turn, can ask questions of Saylor and his team.


“We’ve found that open communication is very important,” Gabrieleexplains. “Our people are smart enough that they can accept some bad news,as long as they know what is going on. So our approach is, if we’ve got news,even if it’s not great news, fine. Let’s get it out.”


From a retentionstandpoint, MicroStrategy’s communication efforts seem to be paying off.Before its downturn, the company had an annual staff turnover rate of 10percent, about half of the software industry average, according to Gabriele.Since then, the company’s turnover rate has increased, but only to 19 percent,still a healthy number. “We’ve got people who still believe in ourcorporate vision,” he explains.


Workforce, November2000, Vol. 79, No. 11, pp. 58-65 — Subscribenow!

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Unionization at a Mid-size Retailer

When a union paid acall to a Midwest retailer, the company dismissed it entirely. It had great wages and benefits, asolid HR department, and a lot of nice extra goodies. What it didn’t know,however, is that it had a thoroughly disillusioned workforce. While the companyflourished, employees didn’t. Sure there was profit-sharing and day-caresubsidies, tuition reimbursement and lunchtime lectures.


But the problem was that employees didn’t really have the time to take thecompany up on any of these goodies. Rather than allowing employees flexiblehours, telecommuting, job sharing, or compressed workweeks, the firm maintaineda culture that valued face time, and lots of it. It wanted employees to put thecompany first, with no questions (and no involvement).


And when the union first approached its clerical department, the firm, whichwe’ll call Smug, Inc., considered playing hardball. But it opted forInTrouble.com’s approach. It convinced employees that they shouldn’t votefor unionization, that things would be different. It ticked off all it had donefor its workforce over the years, and how much more it would do now that it hada second chance. And the company probably believed itself at the time. Theemployees certainly did. They chose not to go down the road to unionization.


“In the first organization drive, employers make a lot of promises. ‘Giveus another chance. If you vote the union out, we’ll make things right.’ Thenthe employers don’t make things right,” Clark says. “Even if you winan election, that union can come back in a year, and the win rate on a secondorganization drive is much better than the first.”


Which is just what happened at Smug, Inc.


And this time, despite the company’s somewhat feeble protests, the unionwas voted in. The managers could at that point have made a decision to be asadversarial as possible; the union certainly wasn’t running out with a whiteflag after having been shut down once. But the HR leaders were smart. They heldout an olive branch by signing a neutrality clause. What this means is that whenit came to the two other branches of Smug Inc., which were until now union-free,the organization would remain neutral.


If the majority of employees in each location signed cards, the companyagreed it wouldaccept the union without going through the ugly election process. Crazy? No.The union was already in the largest company unit. The two others were doingfine; they showed no sign of interest in unionization. And if they did? Betterto dispense a little goodwill than to engage in a battle the company wouldlikely lose.


In short, once you’re unionized, the more positive and cooperative yourattitude, the better. The union’s not suddenly going to leave just becausethings get nasty. Unions in the past 30 years have gotten quite accustomed tonasty. Your employees will appreciate your cooperation, too. “If you getorganized, the sun will come up tomorrow,” Clark says. “Theorganization will continue to operate. Unionization can represent some realpositive opportunities by bringing employees collectively together.”


Medium-sized companies are probably the best candidates for quality unionrelations. They’re not small enough that a union simply takes over, but notbig enough so that the sides naturally square off against each other. Smug,Inc., looked to mid-size companies like Saturn for examples of strongunion-employer harmony. HR leaders created union-liaison positions, and set upregular meetings with union leaders. They found that the union’s grievanceprocedure was actually more effective than the company’s former one. It hadmore teeth to it, and truly seemed to resolve disputes that previously hadfestered.


The union also brought new job descriptions and some time restrictions thatforced the company to reconsider how work was divvied up. And it gave employeesa venue for making changes that made their jobs better. Suddenly there was a lotmore talking going on. Would the company have preferred to remain union-free? Ofcourse. But it took advantage of the advantages it could. Smug, Inc., became alot less smug. In the best way.


Workforce,November 2000, Vol. 79, No. 11, pp. 84-86 — Subscribenow!