Category: Archive

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Lessons Learned From the Kursk

I am sure each of you have watched in horror over the last few weeks as the disaster around the Russian submarine Kursk unfolded.


First, just hearing that a submarine had gone down made those of us who are claustrophobic shudder. Second, we then heard all the different assumptions as to what caused the catastrophe. Finally, we watched as egos and pride delayed any chance of a successful rescue for the trapped sailors.


One can only imagine the lack of morale in the Russian Navy. Who wants to go out on maneuvers?


As the story unfolded, I could not help but wonder how many times that this type of situation is played out in our U.S. workforce. How many times do companies have an important situation regarding their most critical asset — their people — which never gets resolution due to political infighting, inflated egos, pride, etc.? I know for a fact it happens daily.


For example:


  • A company is being bought, people are nervous as to their future, but no communication is forthcoming because different departments are arguing as to who the communication should come from.
  • A great candidate eagerly awaits an offer, but now it seems “everyone and their brother” wants to give you their two cents. By the time the dust has settled, the next Bill Gates is elsewhere having grown weary of waiting.
  • A great solution to an old problem resides in the winds of a new set of outside advisors that have just left your offices. However, once they are mentioned to the “powers that be,” they are quickly discarded for the old advisors due to their long-term relationship with “key people;” an advisory group that, by the way, has no solution to solve the problem.

Human death is a tragic situation and one not to be trivialized. Each one of those sailors had a family and loved ones that mourn for them now. Corporate death, on the other hand, although not so unforgiving, can take on a variety of forms — none the least of which are caused by political infighting and oversized egos.


Remember though, like the Kursk situation, every mistake we make with our workforce that we do not rectify is a mistake that usually affects those close to them as well. Add to that the fact it often is a mistake that lingers and festers indefinitely in the minds of these key assets and you clearly can affect workforce psyche.


The morale of a company can vanish as a result. And one can only imagine the lack of morale in the Russian Navy. Who wants to go out on maneuvers? Well, ask yourself the same question about your workforce. Do you have an environment that is conducive to rectifying mistakes quickly? Are you open to outside solutions? Do you want your business to survive?


While you ponder the above, let our prayers and thoughts be with the families of those who found the answers to the above to be “no.”

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Security Issues Take Center Stage When it Comes to ASPs

Imagine it: A cost-efficient information system that handles your payroll, benefits, accounting, and other HR functions while you only pay for the software you need. A system that doesn’t require the hiring of extra IT staff to manage key functions.


A system that lets your business focus on what it does best while someone else worries about upgrading to the latest software. You can stop wishing. Such systems are here, in the form of Web-based outsourcing companies known as application service providers (ASPs). International Data Corporation sees Web-based outsourcing through ASPs as a $2 billion market within the next three years.


Both Microsoft and Oracle are reconfiguring key software to make it possible for you to work with ASPs over the Internet.


But ASPs have a downside: a nagging worry that priceless information could be compromised by entrusting it to a third party. It’s a rough world out there.


The Love Bug and related viruses can play tricks on your operating system. Credit card numbers pop up on illicit Web sites and computer break-ins make headline news. Security experts agree that these fears are well founded, though not for the reasons most people think.


Twenty years ago, if you wanted to steal the design for a new truck, you’d have to roll up the blueprints, put them under your arm, and carry them out. Today, you can simply attach them to an e-mail message.


Despite public perceptions, sending your information over the Web is perfectly safe. “The Internet is not a party line,” says Peter S. Tippett, chief technologist at ICSA.net, a global provider of computer security assurance and certification services.


“The risk of being intercepted is not even in the top 1,000 concerns for companies today. Web sites make a point of using encryption to guard against a problem we do not have.”


Issues like these are ICSA.net’s bread and butter. The company once worked with MCI to collect data (at the behest of the FBI) from a particular address as it moved over the Net. The project involved building a so-called “sniffer” to capture such data on disk.


At then-current Net backbone speeds, it proved impossible to collect anything more than the message headers for all that traffic.


Since then, the speed of the Net’s backbone has increased by a factor of 64.


“Getting data where it’s going,” adds Tippett, “is an entirely secure proposition.” A case in point: ICSA.net has verified with all major credit card companies, security firms, numerous banks, and law-enforcement agencies the number of cases in which credit card information was intercepted over the Internet.


The answer: none. Ever. The real security issue when dealing with an ASP is much closer to home. It involves locking down security inside your own company and ensuring that your ASP does the same. When problems occur, it’s at either end of the data transmission, and it’s clear that on that score, both companies and the ASPs they use have a lot to think about.


When you use an ASP, they have become your partner.


We’re no longer living in a world where security means keeping a mainframe computer in a protected room. The advent of PC networks has changed everything. “We started moving our information onto PCs as an afterthought,” says Randall Bennett, president of Secure Enterprise Computing, a security consulting and implementation firm based in Cary, North Carolina.


“All of a sudden we network these together and they’re on the backbone with our mainframes and the Internet at large. The technology has moved too quickly ahead of the security model, and now companies have to play catch-up.”


In a world where technology changes by the month and sometimes by the day, constant vigilance is critical.


And as Frank Prince notes, the Net keeps changing the equation. A senior analyst in e-business infrastructure at Forrester Research, Prince says that extending company operations to an ASP should make management more security conscious than ever.


“The Internet has lowered the threshold for doing things people might have done anyway,” he says. “Twenty years ago, if you wanted to steal the design for a new truck, you’d have to roll up the blueprints, put them under your arm, and carry them out. Ten years ago, you’d copy them onto a floppy and stick them in your pocket. Today, you can simply attach them to an e-mail message.”


It’s here that we leave the realm of the theoretical and roll up our sleeves. When you choose to outsource, it’s up to you to evaluate security at your ASP’s site, Secure Enterprise’s Bennett says. That usually means a visit to the ASP home base and a thoroughgoing examination of its policies, physical security, and network procedures.


“When you use an ASP, they have become your partner,” says Bennett. “That’s what connectivity is all about. You’ve got to treat an ASP the same way, and with the same diligence, as you treat your own internal IT department.”


Start with physical security. You should ask questions about where the company keeps its servers. Are they in a properly secured area, or in a place accessible to anyone clever enough to crack a password and gain access to a machine? Disaster recovery is likewise critical. A firm isn’t secure if it loses its files because its ASP doesn’t have sufficient backups to survive a disaster.


The better ASPs know that security is critical and take active measures to protect their information. One such company is Spectrum Human Resource Systems Corporation, a Denver-based ASP with a set of Web-based tools developed in-house for the HR market.


The firm provides software for HR management, benefits administration and training and development, along with related services in data conversion, data transfer, system planning, and implementation and support services.


According to president and CEO Jim Spoor, the Spectrum facility is protected against power loss, tightly secured against intrusion, and located near a major Internet backbone network.


“We have an extremely secure facility,” Spoor says, “one that is secured with not just passwords but also biometric systems that can read your handprint. We also require photo ID onsite, and people dealing with your account must use ‘smart cards’ or key fobs — forms of authentication that guarantee you are who you say you are.”


Authentication is a system that recognizes and verifies the identity of a user. A smart card has an embedded computer chip that can verify a user’s identity. A “token,” often in the form of a key fob with displayable digits, provides a constantly updated set of numbers that the user enters to complete his log-on to the network. Because the numbers change so quickly, even a person with a password can’t gain access without the token itself.


But not all problems come from inside a company. In an Internet-connected world, ASPs can be vulnerable to attacks from the outside, as can the corporations they serve. A hacker breaking into a company database can uncover a rich harvest of passwords and other sensitive information. In fact, more than half of stolen credit card numbers are now being swiped by hackers attacking corporate databases, says ICSA.net’s Tippett. That puts a premium on securing all possible points of entry and making sure they stay shut.


One answer is to install firewalls — hardware or software that restricts internal traffic to the private network — but computer-savvy thieves sometimes get through anyway. “When you put in a firewall, everything is closed,” says Secure Enterprise’s Bennett. “You have to start opening ports to let things happen if you want to do e-mail or browse the Web. So I may have created a choke point at the firewall, but as I open more doors to the outside, I may be creating a channel for intruders to use.”


For that matter, external attacks can shut down a company’s mail servers, as was demonstrated by recent attacks on some of the Internet’s biggest sites — Yahoo!, eBay, CNN.com, and Amazon.com — using a technique called distributed denial of service, or DDoS.


In this scenario, hackers use software to bombard computers with requests for service, which can quickly bring big systems to a crawl. These attacks depend on vulnerabilities in the sites they’re attacking and the servers that unwitting owners have left insecure enough to participate in the assault.


EmployeeService.com is a San Francisco-based ASP that has worked with crack teams of intruders (“the same spooks who crack systems for the CIA,” says CEO Jay Whitehead) to locate holes in its system and plug them. And so far, so good. Even the Love Bug, the widespread virus that shut down mail servers at many companies and caused billions of dollars of lost productivity worldwide, only created a problem in one server. That problem was quickly fixed, according to Whitehead.


Companies also should check ASP internal policies to make sure that they’re not selling clients’ private data, Whitehead says.


When Internet advertising firm DoubleClick was discovered linking anonymous user information to actual names and addresses, the resulting controversy alarmed privacy-minded computer users and showed the potential for the abuse of information assumed to be private. Whitehead recommends asking ASPs about both data selling and the creation of “cookies” that track a user’s progress through Web sites.


In a world where technology changes by the month and sometimes by the day, constant vigilance is critical. Potential clients should check security audits at the ASP they’re evaluating, says Carl Bennett, director of e-business for Application Outfitters, a consulting and implementation firm based in Linthicum, Maryland.


“Visit the ASP site and examine how they do business. Make sure they are up to speed with all current patches for their software. Many companies have really been too trusting in their dealings with ASPs, and it will pay to demand thorough and conscientious security.”


Software patches can fix potential security holes, and because they’re issued regularly, companies need to have procedures in place for seeing that they’re used. Hardware changes must also be tracked. Every time an administrator adds a node to the network or an employee installs a modem to access an outside line to the Internet, a potential vulnerability has been created. Security specialists agree that companies need checklists to control how devices are configured and added across the network.


And make no assumptions about the time it takes to evaluate an ASP. As Cendant Corp. has found, even a simple transaction with an outside provider can raise more issues than anyone had expected.


When the company, a global provider of real estate, travel, and direct marketing- related consumer and business services, chose to work with an ASP to provide an employee-discount Web portal, the risk seemed low. After all, the only information required for entry to the site for Cendant employees was a user identification, a password, and the employee’s name.


But how to set up the passwords? Freddye Silverman, vice president of human-resource management systems for the company, says the rules used to create them quickly became an issue inside Cendant. Its information-protection team wanted completely random passwords, rather than passwords created by plugging in employee-specific identifiers like initials or the last digits of a social security number. The HR team, meanwhile, argued that setting such passwords for all 30,000 employees was unnecessary.


The ensuing debate about passwords for an ASP-based benefits and enrollment package finally ended in the vendor accepting the responsibility for generating the necessary passwords. But the point was made. Adapting internal processes to third-party providers takes a lot of planning. “We’re just writing policy and rules as we go along,” says Silverman, “and that’s where a lot of companies are as they begin to explore this ASP picture. This is happening everywhere.”


In the frantic world of Internet time, getting to market fast has proven to be a successful strategy, but it leaves ASP clients vulnerable as outsourcing companies rush to bring their security up to speed. In that environment, demanding and verifying tight security from potential ASPs is not just common sense — it’s a necessary survival tactic.

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IDear Workforce-I What to Do With a Hostile Employee

Q


Dear Workforce:


We have an employee that appears to be disgruntled. As a result, she is creating a hostile work environment for co-workers. For example, she won’t speak to anyone, she slings boxes across the floor, and when someone asks her a question she is purposefully vague.


This doesn’t seem to really violate any policy, but it is really affecting morale of co-workers. How should I proceed?


–Jennifer S., H.R. Manager, major hobby and collectable company


A Dear Jennifer:


Jennifer, we had Mark Gorkin (who has done safety consulting for the postal service and others), the “Stress Doc” out of Washington, D.C., write a response as follows:


 


There are two serious dysfunctions in this scenario.


First, this kind of passive-aggressive and overtly aggressive pattern is not just anxiety-provoking for others, but may have an intimidating intent or effect.


Will this individual ratchet up the hostility and become globally explosive or, perhaps, start focusing on a specific target? Are problems with alcohol or drugs, an underlying or unrecognized depression or a burnout state fueling the hostility fires? A person displaying problematic behavior and emotional conflicts or a personality disorder fairly quickly becomes a morale and productivity tumor in an avoidance-based operational system.


Second, when employees believe management or company policy will not or cannot address, set limits or discipline such provocative and dysfunctional behavior, the tumor turns malignant. (Alas, management has been known to overlook or deny the interpersonal actions and consequences of a high producer.)


Various organ systems are invariably compromised and damaged. Employees, at minimum, are distracted; colleagues’ fear and anger levels rise. The possibility of retaliation and/or mutual escalation increases.


Gossip and group cliques feed, if not scavenge, on this ambient tension. Employees steadily lose confidence in and respect for a “know nothing/do nothing” management structure. And morale, a belief in capable leadership and productivity are highly interdependent.


Prescription


What about some strategies for disarming the hostile employee? As you didn’t specifically indicate your role or relationship with regard to this problematic individual, I will take a multifaceted approach. Consider these five strategic interventions:


1. Peer Confrontation. Because of the somewhat unpredictable nature of the problem employee, encourage the work team to confront the supervisor not the troubled and/or troublesome colleague. The supervisor must hear how people are being adversely affected by this person’s behavior. If the supervisor does not expeditiously address this problem, the group should approach the next level of authority or schedule an appointment with Human Resources.


There’s a guerrilla tactic if management is unresponsive: People from the work team or department schedule individual appointments with the Employee Assistance Program (EAP) Counselor. Not only can the EAP professional be a work team advocate in this stressful scenario, but eventually someone high up will notice all the “lost company time.” (More on the EAP option in 5.)


2. Clear and Firm Policy. Management and Human Relations need to design a practices and procedures policy on what constitutes a hostile work environment, including intervention and prevention steps. For example, continuously slinging boxes across a floor can readily be assessed as an unsafe work practice.


3. Team Performance Evaluation. In performance evaluations, more and more organizations are including the category of team player, that is, does the employee demonstrate a capacity for collaboration, cooperation and coordination with direct colleagues, personnel in other task-related departments, matrix team members, etc.?


So being purposefully vague or not speaking to anyone, especially if one is withholding or manipulating information that others need for doing their job effectively and safely needs to be a vital component of a formal job evaluation. This performance component should be formally included in a job description as well.


4. Supervisor-Hostile Employee Relationship. Clearly, a supervisor needs to have a face-to-face meeting with the hostile employee. The supervisor must have documentation which specifically enumerates the professional disruptive behavior.


In addition, the supervisor needs to inquire how the employee perceives her general and specific work floor/work team behavior. And the disgruntled employee needs to be confronted with the specific concerns identified by colleagues. (Of course, confidentiality for all employees needs to be respected.) At some point, a team meeting with all parties present is advisable. This meeting may require a professional facilitator.


Returning to the one-on-one, the supervisor might usefully inquire whether there is something in the work environment, including work relationships, that is troubling or frustrating this employee. With a person not overly defensive, one capable of hearing the supervisor’s feedback, this meeting might become a wake up call. Sometimes, a disciplinary letter in an employee’s file or losing a couple of days’ pay, especially if the problem persists after a first discussion of the problem, can be a reality check.


(Remember, unless the level of behavior is significantly destructive, maximum disciplinary action should not be imposed if the supervisor and employee have not had a previous formal discussion of the problem behavior.)


The supervisor and problematic employee may now be able to establish a performance improvement plan. Goals, action items and timelines will need to be monitored on a regular, perhaps weekly, basis at first. If really fortunate, this person may even accept a referral for EAP counseling.


However, if the problem has been fairly chronic and defenses are well-fortified or if the problem has a definite biochemical component (e.g.,


clinical depression) then rational discussion and, even, traditional supervisory discipline may not be sufficient. And, of course, if alcohol or drug abuse is part of the diagnostic picture then medical treatment along with cognitive-behavioral intervention becomes critical.


5. Critical Intervention and Support. Especially with an employee demonstrating a pattern of hostile behavior, a supervisor may need outside assistance in dealing with such a problematic individual. For example, one recent intervention that helped turn around a hostile employee was my facilitating a confrontation between this employee and his supervisor.


Larger reorganization and dysfunctional leadership issues at higher levels had set the stage for a hazardous work climate. The supervisor initially felt he was not getting any upper management support in his attempts to set limits on and discipline the hostile employee.


Angry and dejected, the supervisor eventually gave up confronting this employee’s disruptive behavior. This only exacerbated the employee’s acting out patterns. A new division leader committed to tackling workplace morale plus an intensive individual and team intervention process put the brakes on a vicious work environment/behavior cycle.


Another vital conflict resolution step was holding a group meeting with the hostile employee, the supervisor, the new division head and the other team members. At first, I encouraged the team members to discuss the impact of the supervisor’s detaching from his supervisory role. (I knew confronting the supervisor would be less threatening than tackling the hostile employee.)


Still feeling mostly safe, these peers next spoke of their upset or discomfort with the hostile employee’s angry outbursts and bullying behavior. (The angry employee often is in denial about how aversive his behavior is to others. And, of course, the problem employee frequently sees his or her acting out as justified or provoked by others.)


The moral: A supervisor should strongly consider asking for support from a Critical Intervention Specialist or an EAP Counselor. While supervisors are usually aware of the EAP referral option for a problematic employee, the supervisor frequently overlooks the EAP option as a coaching resource for him-or herself.


Whether an intervention consultant or an EAP specialist, collaboration with a professional trained in dealing with hostile personnel and work scenarios will help the supervisor feel less isolated and vulnerable. Nothing like having good backup when tackling a hostile situation.


Of course, depending on the nature of the hostile behavior, internal security may need to be placed on alert (or brought in for consultation) if the employee becomes increasingly agitated during an intervention/discipline meeting or, for example, if he or she refuses to leave or keep off the work premises if instructed to do so.


Summary


Five strategic interventions have been highlighted: 1) Peer Confrontation, 2) Policy Clarification, 3) Team Performance Evaluation, 4) Supervisor-Employee Relationship, and 5) Critical Intervention and Support.


By building these steps into the company’s operational philosophy, policies and practices, upper management will definitely strengthen organizational leadership, individual and team productivity and workplace safety and morale.


You can also get more information on EAP vendors and articles.


 


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 state otherwise, your identifying info may be used on Workforce.com and in Workforce magazine. We can’t guarantee we’ll be able to answer every question.

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Verizon Strike The Dark Side of the Good Economy

The Verizon television commercial opens with two men in dark suits standing far apart. Each represents a company. One GTE. The other, Bell Atlantic. The commercial continues as the two men move closer and blend into one, symbolizing the union of GTE and Bell into an instant leader in the telecommunications industry.


The ad campaign, which was designed during Verizon’s summer merger, did not contemplate that the company would become embroiled in a strike of its 87,000 telecommunication workers, affecting 50,000 residential and business customers.


In spite of putting 30,000 managers and retirees into operations, a backlog of nearly 100,000 repair orders left many customers no choice but to switch high speed Internet services in order to keep their businesses up and running.


The exodus of corporate employees to “Free Agency” is very often motivated by a desire for more flexibility.


A partial settlement has been negotiated between Verizon and the unions — The Communication Workers of America (CWA) and the International Brotherhood of Electrical Workers.


Details will be released once the remaining contracts are agreed to by the negotiating teams in Washington D.C.


Meanwhile, the Verizon merger ad continues to get national airtime, but its symbolism seems to have taken on new meaning. It underscores the difficulties presented when there is a merger of cultures and new business agendas. The two individuals also make a statement of oversimplification, underscoring the fact that Verizon underestimated the strength of its union base and the conviction workers would have for many of the deal-points on the bargaining table.


Although one of the provisions addresses the process of unionizing employees (voting ballots vs. cards), the remaining issues have broader appeal, affecting many businesses, industries and workers across the country:


  • A shortage of labor — or lack of technically trained labor — has resulted in work speed-ups and mandatory overtime in order to keep up with customer demand. Stress has increased for workers, under the pressure of longer hours and less flexibility to manage family and personal obligations. The unions want to eliminate mandatory overtime.
  • Merger restructuring has shifted work to geographical areas where labor is cheaper. This is both a wage and job security issue.
  • Unions point to an increase of 10.6% in productivity and have sought pay increases and improved benefits commensurate to this higher level. Negotiators indicate that wage increases of approximately 12% have been agreed to.
  • Following the trend to outsource, Verizon now subcontracts many areas of work. The unions are opposed to this practice.
  • Workers want higher job standards and the ability to advance within their company structure.

Verizon will likely conclude negotiations with the unions shortly, but the dialogue is bound to reoccur in businesses across the country.


This is the dark side to the good economy: Companies struggle to recruit high-skilled workers. They shift products, work hours, and locations in order to meet competitive demands. The boost in labor hours and productivity has taken its toll on workers and their families. Full-time employees talk about the need for more work-life balance and benefits. The exodus of corporate employees to “Free Agency” is very often motivated by a desire for more flexibility as to when and where work is performed.


While unemployment is at 4% in many areas, there are specific communities where unemployment is still 8% or more. Outsourcing to remote locations and recruiting high-tech workers from all over the world — while leaving those nearby untrained — simply defers a problem for both business and labor in the long-run.


The disparity of cost-of-living in different areas and affordability of our most productive city centers makes standardizing wages nearly impossible. These problems, rooted in general demographic and economic conditions, are not likely to disappear anytime soon. Union and non-union shops will be interested in the outcome of the Verizon strike, as the topics mirror the employer/employee exchange of bargaining issues in the broader business sector.


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Moving Employee Orientations Online–Duke’s Site

Workforce members have asked if we have any examples of companies that have moved parts of their orientation programs to the Internet. One example to take a look at is Duke University. Here’s a quick look at what they’ve done:


Goals:


Duke’s orientation site is just one component of its HR Web site, which includes policies, benefits information, job listings, a resume builder, and more.


The orientation section took about four months, and was completed this spring.


“Our goal is to offer an orientation tool to new staff coming to Duke University, as well as to help managers orient their new staff to Duke,” says Nancy Denenberg, special projects manager, Duke Learning & Organization Development. “We want to highlight the tangible and intangible benefits for working at Duke, as well as introduce them to the Duke culture.


“This is just one tool in the entire Duke Orientation process. All new campus employees hired by Duke (and their managers) are encouraged to use this Web site” says Denenberg.


About the site:


Some of what new employees find on the Duke site:


  • Benefits info. Duke offers a wide variety of downloadable documents for employees to make plan decisions, and see how life events will effect their coverage. There are additional links to forms, calculators and other information.


  • An employee orientation checklist. This lists everything employees will learn during their orientation, and includes a space for them to mark “completed.”


  • Safety policies and procedures. Includes a training checklist, as well as additional links to injury-reporting information and more.


Some of what managers find on the Duke site:


  • Sample letters and checklists. These letters include sample templates for supervisors to write to their employees, for ‘buddies’ to write to their employees, manager’s checklists and more. “Most of our templates and letters originated from various operational manager’s practical experience in orienting new employees,” says Denenberg.

http://www.hr.duke.edu/orientation




Results:


It’s a bit early to tell how many people are using the site, but the anecdotal evidence is positive.


“We have received positive feedback on the Web site so far from new hires, managers, and senior leaders at Duke,” says Denenberg.


Denenberg says they’re in the process of revamping their orientation process for managers, and the Web site will be a key component.


“We are constantly updating and improving the information within the site to fit the changing needs of this organization.”


Denenberg says, “We are still in the process of working out the kinks. Again, as Duke changes we are continuously trying to adapt the site. Short term we need to make the site searchable. Another of our goals is to launch a similar site for Duke Health System.


“Long term, we would love to make it more interactive with quizzes, etc. Make it more fun. Multimedia such as video, and employee interviews, etc, can be incorporated as we progress.”


The Duke team has high hopes for the rest of their HR site, too. “We’d eventually like to put everything online,” says Nancy Sutter, Duke’s director of HRIS. “You’ll be able to apply for jobs, do career development, training, manager’s toolkits…It will all be linked together on one site.”


 
Duke’s department letter, new-employee announcement, as well as the buddy letter, “buddy requirements” and “buddy selection criteria” that are in the buddy program suggestions and manager/supervisor checklist are all adapted from and used with permission from Jean Barbazette, Successful New Employee Orientation published by Pfeiffer & Associates, Copyright Jean Barbazette, 1994, thetrainingclinic.com

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How Your Overseas Operations May Expose You to Liability in the U.S

American business increasingly is becoming international business.


All you have to do is pick up the latest version of any business magazine and the message staring you in the face is: “If your business is not global, you are missing a golden opportunity, and, by the way, you’re way behind your competition.”


Without a doubt, international expansion has become the new standard for a growing and successful business—the world is your market now.


However, in the unrelenting push to perfect and enact their global strategic business model, launch their promising global operations and capture overseas market share, U.S. businesses are overlooking at least one critical piece of the puzzle–the possibility that the long arm of U.S. laws will reach out to the foreign country where they are doing business and hammer (and I mean hammer) the unwitting U.S. parent company.


Whether your business is a brick and mortar operation or B to B, old economy or e-commerce, there is a lurking danger in globalization that could hurt your business: the long arm of U.S. laws.


A state district court in Texas recently held that a U.S. company may be subject to jurisdiction in the U.S. court system and face liability for actions arising in a foreign country, involving foreign residents, and stemming from the actions of the company’s foreign subsidiary. Late last year, the defendant in Rodriquez-Olvera vs. Salant Corporation revealed that the case had settled for a whopping US$30 million after the trial court made the unprecedented decision to allow the plaintiffs’ case to proceed against the U.S. company.


The court’s decision and the ultimate settlement of this case, as well as other similar cases, demonstrates the dramatic increase in the exposure of U.S. companies to liability in the United States for actions arising in their foreign operations.


The Salant Case


In Salant, the plaintiffs brought a wrongful death and personal injury lawsuit in Texas state court against the Salant Corporation, a New York-based clothing manufacturer with subsidiaries in both Texas and Mexico. The lawsuit arose from an accident that had occurred in Mexico.


Twenty-six young Mexican workers at Salant’s Mexican subsidiary were killed or injured when the company’s bus, which was taking the workers to the clothing company’s maquiladora, overturned and burned in a sewage ditch. All the plaintiffs in the action were citizens and residents of Mexico, estates in Mexico, or heirs of residents of Mexico.


The Salant case is not the first time a U.S. court has permitted a claim to be brought against a U.S. company for the death or injury of employees in foreign countries.


Salant filed a motion to dismiss the case, contending that the plaintiffs’ claims were actually against the maquiladora, not Salant, and that the action should be litigated in Mexico. Although Salant and Mexican trade officials protested having the case heard in Texas, the trial court would not dismiss the case because Salant’s subsidiary in Texas made certain operating decisions for the company’s Mexican operations.


Litigating Foreign-Based Employment Claims In the United States


Although unusual, the Salant case is not the first time a U.S. court has permitted a claim to be brought against a U.S. company for the death or injury of employees in foreign countries. In Rodriguez vs. Sierra Western, a sewing-machine mechanic at a Mexican subcontracting factory sued a Texas corporation based on allegations that the company was negligent in not providing him with safe transportation to work at the company’s operations in Mexico.


The plaintiff suffered injuries in a 1996 car accident in which an employee of the U.S. corporation was driving the plaintiff from a plant in Chihuahua, Mexico to his hometown of Juarez, Mexico. Late last year, the Texas jury awarded US$632,000 in favor of the injured Mexican worker.


Moreover, U.S. companies are thought to have “deep pockets,” a big consideration for plaintiffs’ lawyers who want your money.


In another Texas case, Mendoza vs. Contico International, a U.S. corporation had a subsidiary in Mexico. Two payroll workers, who were employed by the Mexican subsidiary, were ambushed and murdered while transporting the company’s cash payroll. The parents of the payroll workers filed suit in Texas against the U.S. corporation, alleging that the U.S. corporation was negligent in allowing the employees to carry such large sums of cash without armed security along a lonely stretch of Mexican highway.


Although the murders took place in Mexico, the lawsuit was filed in Texas. In 1994, a Texas district court judge ruled that Texas law applied because decisions about payroll came from the U.S. company’s headquarters. The U.S. corporation agreed to settle the case for an undisclosed amount, which has been estimated at approximately US$1.5 million.


In 1994, the Aguirre v. American United Global action was filed in California. In Aguirre, a Mexican subsidiary, which was wholly-owned by a Los Angeles-based corporation, was participating in “blatant and disgusting sexual harassment” against the Mexican employees. A company executive allegedly demanded that female employees perform a bikini show for him to videotape at a company picnic.


The 118 female plaintiff employees (all Mexican residents) originally filed the action in Mexico, but the officers of the U.S. corporation apparently refused to show up for trial in Mexico. Alternatively, the plaintiffs refiled the action in Los Angeles Superior Court and alleged violations under both American and Mexican law.


After the corporation’s motion for summary judgment was defeated, the case settled for an undisclosed amount and the corporation reportedly closed down its Mexican operations.


Sue, Sue, Sue


These recent court decisions, jury awards, and settlements will undoubtedly encourage more foreign workers to sue U.S. companies with operations outside the United States. And don’t think for a minute that these claims are restricted to incidents in Mexico.


Indeed, the plaintiffs’ bar is on the lookout for Salant-style litigants wherever U.S. companies are doing business. Attorneys for potential foreign plaintiffs are often interested in pursuing their claims in U.S. courts because many foreign jurisdiction have laws which provide a damage cap for injuries and wrongful death, whereas a jury in the United States has virtually unbridled discretion in awarding such damages.


Moreover, U.S. companies are thought to have “deep pockets,” a big consideration for plaintiffs’ lawyers who want your money.


Tactics and Strategy


The recent rulings and settlements provide huge incentives for U.S. companies to initiate efforts to reduce exposure to liability for actions arising from operations outside the United States. To reduce such exposure, you should review your management and operational relationships with your counterparts outside the U.S.


The most basic and important recommendation for reducing exposure is to ensure that decisions regarding non-U.S. operations are made from within the non-U.S. operation, not in the United States. Another method of decreasing exposure is to reduce and monitor practices or activities of the non-U.S. operations that may result in liability.


For example, U.S. companies may attempt to limit potential liability by improving its employees’ working conditions, improving worker safety, increasing awareness of safety precautions, imposing more stringent safety and health policies, and by taking other steps to improve the work environment for the employees working outside of the U.S.


No Silver Lining for U.S. Business


These recent Texas state court decisions demonstrate a trend toward allowing U.S. courts to hear cases brought by non-U.S. residents that are based on actions occurring in or arising outside the U.S. With the new trend, U.S. companies will face increased exposure to liability in the United States for actions stemming from their overseas operations.


Given these new realities, U.S. companies must make serious and concerted efforts to reduce potential legal exposure in the United States.


The bottom line: Look before you leap in the global marketplace.


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Managers’ Love-Hate Relationship With Their Employees

I am a brand new Mom and have little time for the luxury of newspaper reading — let alone brushing my teeth! But recently, my husband mentioned a new state bill under consideration by legislators that would, in essence, force employers to be a responsible Big Brother.


Corporate managers would be obliged to inform employees each time an e-mail or telephone call check was made.


When I heard about this pending bill, I felt extremely confused. On one hand, I constantly hear about extreme measures firms take to attract and maintain employees. On the other, I hear about managers planning to monitor their employees’ each and every move.


Do managers trust their own people or not?


Why go to all the trouble of offering staff members two year leases on BMW Z3s, cruises and free soft drinks — then turn around and peer at these same folks with surveillance equipment as if they were potential criminals? Do managers trust their own people or not?


There needs to be more consistency in the workplace — a consistency of trust. And trust can only stem from good one-on-one communication. There is a severe lack of communication between managers and employees today.


When I was a corporate warrior, I was rarely taken out to lunch by my boss. Office social events were typically large events and involved a lot of teasing, taunting and uncomfortable silences. These parties were clearly not forums for trust-building between bosses and employees.


Managers need to get brave, and simply put — get to KNOW their staff members. Countless employee satisfaction surveys show that pay ranks behind exciting work, good people and career enhancement opportunities.


Worker bees, such as my former self, seek a place to hang their hat every morning, do some meaningful work and be with friendly people. They seek a “home away from home.” It is a manager’s responsibility to ensure that employees obtain these things — and hopefully reward their people generously along the way.


The more employees are listened to, respected and given opportunities to learn and grow, the more trust they will have for their bosses. Managers must encourage their subordinates to speak up without fear of reprisal. At the same time, company leaders must put aside their egos and truly act in their staffpersons’ interests.


When all these things happen, real trust is built. The traditional corporate structure of employee-employee, and employee-boss competition makes this type of openness difficult to achieve.


I hope there are at least a few pioneers out there who are more concerned with getting to know the people that work for them and less concerned about providing pastries on Friday or snooping into their staff’s e-mails. It is these brave souls that truly know the meaning of employee retention.


Other columns by Amy Berger:


Tales from an Outsider: My 30 Days as an HR Industry Analyst

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Texas Instruments Q&A on Staffing

Charles (Chuck) F. Nielson joined Texas Instruments in 1965. During his climb up the HR ladder, Nielsen has directed employment, training and industrial relations functions, both domestically and internationally. He is currently Vice President of Texas Instruments, Director of Worldwide Human Resources and sits on TI’s Strategy Leadership Team alongside the CEO and the COO.


Nielson’s leadership in many industry-advocacy groups earned him a 1997 Society for Human Resource Management Award for Professional Excellence. Recognized as true innovators and leaders in the workplace, the community and the HR profession, the Award for Professional Excellence recipients are role models who set standards for others and apply their expertise in professional as well as personal endeavors.


Q: Does Texas Instruments provide incentives for employee referrals? What type of employee referral program does the company have?
A: If an employee refers an individual, and we hire the person, we pay the individual who referred him or her $1,500. We use and promote this program when we’re having a staffing challenge, or looking for specialized jobs. The time this program was hot was when we were having a heavy hiring spree. We’re not doing it right now.


Q: Is the program successful?
A: It helps.


Q: Please comment on TI’s strategy as it relates to temporary staffing.
A: Previously, we used to have more contingent workers [than we do currently]. We used to have contract or temp people working in a lot of disciplines. Now we don’t have as many and we use them in more specialized areas where we can’t find that expertise other places, particularly in the software area. It has gone from a broad strategy of having many, which we’ve backed off from. Now, it’s more that we look at what we need. We’ve also found that many times, using people who work in the software area for example, that’s what the people want-to do temporary work. They want the flexibility. So, our contingent staffing strategy has become more focused and driven by discipline.


Q: Does TI take a national/international approach or local market approach in the selection of staffing providers?
A: TI takes a mostly local market approach although, again, it depends on needs. It depends on the supply and demand of people with the specialties we need. And, it depends on local legal systems. This is true for staffing in general. If there’s a discipline we’re having difficulty filling, we will recruit worldwide. We’ve done that before for chip designers and software folks.


Q: TI has a definite emphasis on “fit,” ensuring that employees fit with the TI culture. Does this philosophy apply with temporary workers as well?
A: Not as much at that level, no. Again, with temporary folks, we’re looking for special skills. It’s really a skill fit rather than a culture fit.


Q: As part of determining the “fit” of a regular employee, how many interviews does a job candidate go through?
A: It varies by job and level of job. However, the basic pattern would be that the person would be interviewed by someone from HR and probably at least two people in the business where he or she would be.


Q: What steps can be taken to be identified as the preferred employer in your industry or your community?
A: The first reaction I have to that question is you never get through-that’s a constantly moving target. You’re constantly striving to be there. When you think you’re there, you lose. The second crucial thing is to remember it’s not us who gets to decide that. It’s talking to people we’ve recently hired and to people we’ve made offers to but who have turned us down. It’s based on real input from real people.


And then, [to be identified as the preferred employer] we’ve done the things you typically do. We’re careful with compensation surveys to ensure we’re competitive in what we pay and how we deliver that pay. The same with benefits. We make sure we’re as good as anybody else or better, both in terms of value and also in the way the benefits are delivered. We’ve had profit sharing, for example, and in past years we gave the shares in total stock. Based on feedback, we recently changed this offering to part stock and part cash. That’s what I mean by ensuring they’re delivered in a way that’s appreciated, so people view them as valuable.


Also, the work/life issues are of growing importance-flexibility in terms of hours, workspace and all of that. For a long time, we didn’t allow kids under 15 in our operations, for example. We discovered that, although we need to always be safe and not endanger people, people sometimes have a need to bring a child with them to the workplace for a limited time. So even though the old rule made sense from a safety standpoint, it didn’t make much sense in today’s competitive environment. Flexibility of this sort is of growing importance.


Q: What steps can a company take to retain top performers in turbulent times?
A: To answer the second part of your question on retaining top performers, there are certain givens, such as compensation and benefits have got to be competitive. But then what becomes crucial for high performers is whether they’re doing things they view as exciting. Are they doing cutting-edge stuff? Do they feel they’re making a contribution to something meaningful? Do they have the tools they need to do their jobs? Are the people they work for and with considered by them to be leaders? In a nutshell, they want exciting and meaningful work.


Q: Where do you think HR as a profession will be in 10 years?
A: I hope it will be at a point in which, if a person comes to someone at TI and says, “Lets see your HR strategy,” we would say, “We don’t have one, but let me show you our business strategy. You’ll see that it’s dependent on crucial people stuff.” The people stuff will be integrated, not separated. The business strategy will have people elements that are essential to success.


The other thing that I hope is that we will have HR people who are really proud of being responsible for the people component of business strategy, and who are aware they’re significantly contributing to their companies’ successes. I frequently encounter HR people who ring their hands, have their heads down and grumble like Rodney Dangerfield that they don’t get any respect. These people will miss a fabulous opportunity. For forever we in HR have wanted business to recognize that people are the most important resource. We’re there, so let’s take advantage of that. I worry that some folks are in a negative mode and the world will pass them by.


Q: Given where you think HR needs to be, what competencies do you think are most important for HR people going forward?
A: The things we’ve identified at TI are, we think probably foremost is the ability to lead change. That’s real important. That’s not adapt to change but lead change, create change, cause change. Another competency is to have a good understanding of business process. HR really needs to understand what it takes to run a business. The third is to be experts of the HR function, of compensation, training, benefits and so on. Those are the three areas we focus our attention on.


Q: What does being a leader in the organization mean to you?
A: For an HR person, being a leader in the organization means you have the same opportunity, responsibility, accountability and influence as any other member of the leadership team. Being a strategic leader means you can show evidence that you have actually influenced the direction of the business.


Q: What’s the greatest contribution HR professionals can make in the years ahead?
A: To lead organizations in their action to hire, train and motivate individuals while, at the same time, being the initiator of actions that result in organizational success.


Q: You’ve been recognized on numerous occasions as being a leader in your field. To what do you attribute this?
A: First, TI as an organization has demonstrated business success. Secondly, the HR team has initiated activity in a broad range of areas which have been successful, such as diversity initiatives, work/life initiatives, major redesign of benefits programs, innovative reward and recognition activities and succession planning. It should be noted that these activities are evident globally.


Q: I know from having met you at trade shows that you are legally blind. If you don’t mind commenting on this, I’d like to know if there are any lessons you’ve learned as a result of having this additional challenge that you could share.
A: The thing this has taught me most is: My blindness is hereditary, I couldn’t do anything about the fact that I’m blind. I didn’t have influence over whether I’d be blind or not. However, I have everything to do with how I handle it. No one controls attitude but me. I make decisions on my attitude. Another thing is recognizing the fact that different is an asset, not a liability.


Q: What type of accommodations has TI put in place for you in regards to your blindness?
A: I have an electronic reader on my desk, I use a dictaphone and tape recorder and have had the same assistant for many years. Those types of things I guess would be considered accommodations and make my life easier. I’m sure they’re at least enablers. The biggest thing in my own personal view is I’ve been lucky to work for a company comfortable to accept me for what I am and base me on my results, nothing else.

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Maintaining and Updating Your HRIS

If you’ve just put in a new HR information system, it’s hard to think about what you will need to do to update your system. But like any computer software program, your HRIS is out-of-date as soon as you put it in. So what updating is important and when? How much should be budgeted for maintenance of a system and what factors impact these costs?


First of all, don’t ask your HRIS vendor for customized programming until you’ve determined that what you’re asking for isn’t going to be on the next release of the software. Check with the users group to see if there are other companies looking for similar programming; this is where the vendors get 90% of their ideas for software enhancements and if other companies need it, you’ll probably see it on your next update.


Updates to the software generally fall into two categories: minor and major. Minor updates generally are included as part of your original purchase agreement and come within a short period after implementation. Major upgrades will involve some cost on your part, and can be as much as 20% of the cost of your original system software, depending on the types of updates available.


Don’t automatically jump to the next update unless necessary, but keep in mind that for most vendors, you can’t skip more than two or three updates without doing another full implementation.


You should also budget annually for equipment upgrades such as workstations (especially if it was too much to bite off in the original implementation), data storage, interactive media (e.g., voice response, web-based data entry) and third-party vendor networking.


Link to listings of HRMS articles and vendors.