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Posted on November 23, 2009August 3, 2023

Labor Department Reworking Investment Advice Rule


Despite having seemingly killed its proposed rule on providing investment advice to participants in defined-contribution plans, the Labor Department expects to introduce a revised proposal for comment in the next few months, according to industry observers.


“We know that a re-proposed regulation is already at the Office of Management and Budget under review,” said James M. Delaplane Jr., a partner at Davis & Harman. The new proposal is expected to be put out for comment by early next year, he said.


“There will be a short comment period, and then there will be a final rule,” Delaplane said.


The investment advice rule, originally proposed under the Bush administration, would have allowed representatives of mutual fund companies to offer direct advice on investments to participants in defined-contribution plans. But in January, the Obama administration put the rule on hold.


During the course of this year, the Labor Department has delayed the effective date three times—most recently this week, when it was extended to May 17.


But on Thursday, November 19, three days after announcing the delay in the effective date, the department said it was withdrawing the advice rule—sparking outrage from some members of Congress and observers who were concerned about yet another delay on this issue.


“It is outrageous that the Obama administration would deny workers their right to high-quality investment advice that could help them restore valuable savings that have been lost because of this economic recession,” House Republican leader John Boehner, R-Ohio, said in a statement issued Thursday, November 19.


But the delay was just an administrative issue, Delaplane said.


The Labor Department wanted to pull the rule, which had been scheduled to take effect on Wednesday, November 18, and re-propose it. However, in order to do that, it needed OMB approval, so it delayed the rule. Surprisingly, that approval came earlier than expected, enabling the department to scrap the rule, Delaplane said.


Gloria Della, a Labor Department spokeswomen, confirmed that the DOL had a draft of the proposed regulation with OMB.


Industry officials are relieved to hear that the Labor Department will put the new proposal out for comment rather than merely issue a final rule. They’re worried, however, about how the agency interprets the term “affiliate” with regard to the potential for conflict of interest in providing advice.


“The DOL got negative comments about whether an affiliate of an advisor can earn differential compensation and not have an effect on the advice given, so they will probably change the interpretation of ‘affiliate,’ ” Delaplane said. “But how far they go remains to be seen.”


“One could predict that investment advisors who are affiliated in some way with a fund company or a product will probably be prohibited from providing investment advice,” said Greg Ash, head of the ERISA litigation group at Spencer Fane Britt & Browne. “This will open the door for fee-for-service advisers to jump into that market and dominate it.”


How far removed the potential conflict of interest could be is a real question, said Jason C. Roberts, a partner at law firm Reish & Reicher.


“This issue of how far up the chain this conflict analysis will go is causing our clients hesitation,” Roberts said.


Industry groups are anxiously waiting to see what the Labor Department does on this issue.


“We look forward to seeing the new proposal and to working with the Department of Labor on a regulation that provides investors access to quality investment advice,” said Rachel McTague, a spokeswoman for the Investment Company Institute, which represents the mutual fund industry.


The Investment Adviser Association is closely watching the issue, said David Tittsworth, its executive director.


The group, which represents investment advisors registered with the Securities and Exchange Commission, most likely will submit a comment when the proposal comes out, he said.



Filed by Jessica Toonkel Marquez of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.


Posted on November 23, 2009June 27, 2018

OSHA Outlines H1N1 Flu Inspection Procedures


The Occupational Safety and Health Administration on Friday, November 20, issued a compliance directive to ensure uniform inspection procedures to identify and minimize or eliminate high- to very high-risk occupational exposures to H1N1 flu among frontline health care and emergency medical workers.


According to OSHA, the directive closely follows guidance issued by the Atlanta-based Centers for Disease Control and Prevention.


OSHA said its inspectors will ensure that employers in the health care industry implement a series of controls, encourage employees to receive vaccines and implement other work practices recommended by the CDC. In cases where respirators are required, OSHA’s respiratory protection standard must be followed.


“OSHA has a responsibility to ensure that the more than 9 million frontline health care workers in the United States are protected to the extent possible against exposure to the virus,” acting Assistant Secretary of Labor for OSHA Jordan Barab said in a statement. “OSHA will ensure health care employers use proper controls to protect all workers, particularly those who are at high or very high risk of exposure.”



Filed by Mark A. Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.


Posted on November 20, 2009June 27, 2018

Amid Flu, a Call for Days Off

With the H1N1 pandemic weighing on everybody’s mind, employee advocacy groups are renewing their push for federal and state legislation making paid sick days mandatory, hoping that flu fears will speed the measures forward.


On the federal level, the National Partnership for Women and Families, a nonprofit group that promotes workplace fairness and health care issues, is lobbying for the Healthy Families Act, which would guarantee workers up to seven paid sick days a year to recover from illnesses or to care for family members during theirs. The measure also provides sick time for medical tests and appointments.


Initially sponsored by the late Sen. Ted Kennedy, the legislation now counts Sen. Christopher Dodd, D-Connecticut, among its key sponsors. Hearings on the bill were held in the last Congress, but there has been no action on it since June. Supporters expect the bill to be reintroduced in the next several months, after the debates over health care reform have subsided, says Steffany Stern, policy coordinator for the National Partnership. “H1N1 has really brought this issue to life,” she says.


In Illinois, the Chicago-based advocacy group Women Employed is backing the Healthy Workplace Act. The bill, sponsored by Illinois state Rep. Elizabeth Hernandez, failed to come to a vote in the labor committee last session amid the state’s budget crisis and opposition from business leaders, but Hernandez plans to reintroduce it next year.


Backers say 2.5 million private-sector workers—or 43 percent of the state’s workforce—lack paid sick days, according to a March study by the Institute for Women’s Policy Research in Washington.


Similar to the proposed federal legislation, the Illinois measure would allow workers to earn up to seven paid sick days a year, accrued hourly for every 30 hours worked, and would provide leave for the illness of the employee and family members, and for medical appointments.


Although no state legislatures have yet passed paid-sick-leave bills, one in Connecticut just narrowly missed earlier this year and laws have been passed in several cities, including San Francisco, Washington and Milwaukee, Stern says. An aggressive campaign for mandatory paid sick days also is under way in New York, and several other states are debating bills, she says.


Many employee advocacy groups agree that the H1N1 pandemic highlights the problems faced by low-wage workers with limited, if any, health benefits.


“Folks in our industry tell us all the time that if they’re sick, they won’t stay at home because there’s no guarantee that they’ll have a job the next day,” says Jose Oliva, a Chicago-based policy coordinator for New York-based Restaurant Opportunities Centers United, an advocacy group for restaurant workers.


Many business groups oppose the legislation out of fears that it would cripple industries already suffering under the recession.


“Obviously, we’re all very concerned about [H1N1], but this is an expensive venture we’re looking at,” says Kim Clarke Maisch, Illinois state director of the National Federation of Independent Business, with 350,000 members nationally and 11,000 in Illinois. “If you don’t have workers show up for work, you’re not pushing a product and you’re not making any money.” She pointed to a June 2008 study by the federation of a similar proposal in California that estimated companies there would cut 370,000 jobs within five years of the bill’s passage because of the cost. The study estimated costs of the proposal at 1 percent of small firms’ sales annually.

Posted on November 20, 2009June 27, 2018

An Ounce of Prevention or a Pound of Cure

The H1N1 flu pandemic has many business leaders concerned, but the strain of the recession and other worries have them holding back on aggressive, and costly, responses. That could prove disastrous.

“There are a lot of companies who might have had generalized discussions about [a pandemic], but when it comes down to it, most don’t have big plans,” says John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based outplacement firm.

“It’s human behavior that until it hits you square between the eyes, you don’t really want to deal with it,” he says. “And there might be some skepticism that it’s just another bird flu or Y2K kind of thing, where nothing really happens.”

Yet Challenger and other human resources consultants say it’s too risky not to take swine flu seriously, especially when many staffs are operating at bare-bones levels. Companies can’t afford to brush off a threat that could leave much of their remaining workforce incapacitated, or “to create any more ill will,” he says.

1 million and counting
The federal Centers for Disease Control and Prevention in Atlanta estimates that the H1N1 virus has infected more than 22 million people in the U.S. since April, and more than 4,000 people nationwide have died of related complications. The proportion of deaths attributed to influenza already has exceeded what is normally expected at this time of year, with the young hit the hardest, the CDC says.

At the same time, a survey published in September by the Harvard School of Public Health found that the pandemic and resulting absences could have devastating effects on U.S. businesses. Only one-third reported that they could sustain their businesses without “severe operational problems” if the swine flu kept half their workforces out sick for two weeks, according to the survey.

Jennifer Benz, who runs Benz Communications, a San Francisco-based employee benefits communication firm, says many of her clients have begun health education campaigns but have stopped short of analyzing all the issues that could arise from a pandemic.

“It’s very easy to post communications throughout your company, such as washing your hands when you sneeze, but to really look at changing policies is a much different thing,” she says. “It’s a tough business environment right now.”

Many companies may do more if they see absenteeism soar, she says, but by then, it may be too late. “I think a lot of companies have a plan in their back pocket. If their work site gets hit really hard, then they’ll look at ‘How do we respond?’ “

The flu pandemic highlights the importance of providing robust health benefits, such as more than one or two sick days a year, she says. But ad hoc solutions, such as allowing employees to work from home, will fail if a company hasn’t thought them through by, for instance, providing enough access to laptops and ensuring that computer networks can support large numbers of workers dialing in.

Furthermore, just telling employees to stay home doesn’t help if the company has a weak sick-leave policy or doesn’t provide paid sick time for hourly or part-time workers. “For low-wage workers, missing some days off can mean the difference in paying your rent that month,” Benz says.

In many cases, businesses are opting against more aggressive efforts because of cost and privacy concerns, says Russell Robbins, a principal and senior clinical consultant in the Connecticut office of HR consulting firm Mercer. Unfortunately, it’s easy to dismiss warnings over H1N1 as paranoid or an overreaction, but the truth is that the flu is likely to spread, Robbins says.

“I just keep saying that the only way we’re going to weather through this is if we’re prepared for a crisis,” he says. “In other words, make plans now.”

Medical opinion
For some businesses, such as medical facilities, restaurants and food stores, there’s often a greater urgency to implementing a response plan. At Northwestern Memorial Hospital, a task force looked at preparations for everything from a minor outbreak to the worst-case scenario resulting in widespread absenteeism, says Dean Manheimer, senior vice president of human resources. In addition to its comprehensive employee communication plan, Northwestern ramped up an immunization program and reached out to temp agencies to ensure replacements are available. It also is encouraging sick employees to stay home.

“If you are sick, we will send you home,” Manheimer says. “And we have a very robust paid-time-off policy that supports that.”

For now, Northwestern has not considered increasing employee sick days, but the hospital will continue to monitor the spread of the virus and make decisions accordingly, Manheimer says.

Like many large corporations, Chicago-based Boeing Co. started looking at its disaster plans in 2005, after the Asian outbreak of the avian flu caused concern worldwide, says a disaster-planning spokeswoman for the company.

One of the most important considerations was ensuring that employees fully understood their health care benefits and options, including those for sick children and other dependents, the spokeswoman says. Boeing leaders mulled over more costly options too, such as installing infrared devices to detect fevers, but opted against them, at least for now, over concerns that the cost wasn’t justified.

Small-business toll
For small businesses, preparing for flu is a particularly difficult challenge. In an operation of a couple dozen or fewer employees, even a few illnesses can shut down operations.
Samuel Ko, president of Philos Technologies Inc., has roughly 75 employees scattered at plants nationwide, as well as at the company’s Wheeling headquarters. If even a few people are out sick, the metal-surfacing company could be strained. For now, though, Philos offers only one paid sick day a year. Beyond that, employees can try working out an arrangement or provide a doctor’s note, but there are no guarantees of extra time off at their regular pay.

Ko travels extensively in Europe and Asia for his business and takes the H1N1 threat seriously. To prepare for the flu season here, he is cross-training employees to fill in for those who are ill.

Still, he worries about what might happen if the flu spreads through an entire plant or office, and does not have ideas for how to prevent his hourly employees, who have no sick leave, from showing up for work ill. “We need to look at that,” Ko says.

Other small-business owners are trying to head off that exact scenario by assuring their employees that they will be taken care of.

Because his workers butcher and handle meat all day, Bill Begale, owner of Paulina Market, a 22-employee gourmet meat market in Chicago, is taking extra precautions to keep his store sanitary, with frequent hand washing and intensive sanitary procedures. He’s also offered to pay the $20 or $30 it would cost nonunion employees to get flu shots.

Many of Begale’s butchers are covered by union benefits, but he tries to assure the others that they can work things out on a case-by-case basis. Temporary workers are lined up to fill in for ill employees, and Begale says hourly employees who can’t afford to lose their pay to sickness can come in on a day off or use vacation days to get paid.

“If anyone has a fever, they just can’t come in. I’ll send them home. We’ve talked about it a lot here,” Begale says. “They just know what kind of person I am and that I’d work something out.”

Posted on November 20, 2009June 27, 2018

A Prescription for Avoiding H1N1s Worst

If there’s any doubt about the importance of a plan to handle widespread absenteeism this flu season, Dr. Mark Dworkin wants to put it to rest.


“I think this is going to be an extremely difficult influenza season. In fact, it already is,” says Dworkin, associate professor of epidemiology and biostatistics at the University of Illinois at Chicago. “We’re seeing mostly H1N1 now, but as the season continues, we expect there’ll probably be an increase in the regular flu as well.”


Employers, he says, “should expect substantial absenteeism.”


Dworkin advises business owners to consult government sources such as the Centers for Disease Control and Prevention, which has posted on its Web site, www.flu.gov, guidelines for preventing the spread of the flu at work.


Among the most important advice: limiting gatherings of staff in close quarters whenever possible by setting up phone conferences, and encouraging employees to work from home, Dworkin says.


Basic sanitary measures and a high-profile employee educational campaign also are vital.


Employees need reminders to wash their hands frequently, cover their mouths when they cough and stay home when they have a fever. Some additional, oft-ignored advice:


Workers should remain home for a full day after the fever has subsided.


“While there’s no hard science on how long someone is supposed to stay home after a fever, at least 24 hours is a good practice,” Dworkin says.


He is especially concerned about businesses that employ a large number of hourly workers with no paid sick time. He sees a strong incentive in those settings to report to work regardless of health. That can be especially dangerous for restaurants, where there’s the potential for viruses to spread and even cause food-borne illness.


For businesses with a few employees, keeping a staff healthy can be critical. The U.S. Small Business Administration advises owners to consult its Web site, www.sba.gov/flu, for a guide on dealing with the pandemic.


“The very best practice and the most important thing we’re emphasizing is to have a written plan,” says Marianne O’Brien Markowitz, the SBA’s regional administrator in Chicago. “Businesses also need to have contingency planning and to cross-train employees now” to cover for their sick colleagues.


“We can’t control everything that’s going to happen, but what we can control is our level of preparedness,” Markowitz says. “If I’m sitting in California and a wildfire is a few miles away, I’d better be preparing for that.”


She also advises businesses to assign a workplace coordinator to handle questions and concerns. The coordinator also can be in charge of advising an obviously sick employee to go home.


Forcing sick employees to stay home could be the toughest advice to execute if employers haven’t thought things through, says Jennifer Benz, owner of San Francisco-based Benz Communications, a consulting firm focusing on employee benefits communications.


But even healthy employees could face difficult situations if an outbreak closes their children’s schools or day care centers. Beyond that, there’s often a work culture of long hours and high expectations that might be tough to navigate in a pandemic.


“Many of my clients are high-tech companies, where the expectation is to work 24/7,” Benz says. “So you really need to understand the business culture. A lot of it comes down to how well the manager is trained, and are they really managing groups consistent with wellness practices.”

Posted on November 13, 2009June 27, 2018

Bah, Humbug! Goldman Sachs Says No to Christmas Party


In an attempt to keep a low profile, The Goldman Sachs Group Inc. has told its employees that it won’t be hosting a corporate Christmas party this year.


The investment bank is also prohibiting employees from funding their own parties, an insider at the firm told InvestmentNews, a sister publication of Workforce Management.


The Christmas party ban comes as Goldman has been under sharp public criticism for paying bigger bonuses this year while national unemployment hovers at 10.2 percent and many workers have taken pay cuts.


In the third quarter, the company announced a profit of $3.19 billion and said it has set aside nearly half its revenue to reward its employees. Last year, Goldman paid out $4.8 billion in bonuses, awarding 953 employees at least $1 million each and 78 employees at least $4 million.


The rewards this year are expected to be greater.


Melissa Daly, a spokeswoman, confirmed that Goldman will not host a Christmas party this year and that it didn’t hold one in 2008. She could not comment on whether the company is banning employees from holding their own parties.


Given the shaky economic climate, it makes sense that Goldman is putting the kibosh on holiday festivities, said Steven Hall, managing director of Steven Hall & Partners, an executive compensation shop.


“The last thing they want are pictures showing up of lavish parties while everyone is talking about their paying lavish bonuses,” Hall said. “This is just not the time to be flaunting it.”




Filed by Jessica Toonkel Marquez of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Posted on November 13, 2009June 27, 2018

Senate Bill Would Boost, Extend Federal COBRA Subsidy


With hundreds of thousands of laid-off employees soon to lose a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.


Under bill S. 2730, proposed by Sens. Sherrod Brown, D-Ohio, and Bob Casey, D-Pennsylvania, the nine-month subsidy would be extended by six months, to 15 months, and the 65 percent federal premium subsidy would be raised to 75 percent.


In addition, workers who lose their jobs through June 30, 2010, would be eligible for the subsidy. Under the current law, employees who lose their jobs after December 31 will not be eligible for the subsidy.


And because of the unusual way the current law is written, employees laid off before December 31 but whose COBRA eligibility doesn’t begin until next year also would not be eligible for the subsidy. That could happen, for example, if an employee is laid off in mid-December and the individual’s former employer voluntarily extends group coverage through the end of the month.


“This legislation will make health care coverage more affordable for laid-off workers and bring some security in troubling times,” Sen. Casey said in a statement.


A somewhat similar bill was introduced in the House last month by Rep. Joe Sestak, D-Pennsylvania. The Sestak bill, though, would keep the subsidy at 65 percent.


The proposals come as the subsidy soon will run out for laid-off employees who became eligible for the subsidy when it started, which generally was March 1.


A Hewitt Associates study found that the percentage of involuntarily terminated employees opting for COBRA doubled to 38 percent compared with the opt-in rate in the several months before the subsidy.





Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.


Posted on November 13, 2009June 27, 2018

Some Employers With Health Clinics Get Vaccine

A handful of large employers with work-site health clinics are beginning to get access to vaccine that would protect high-risk employees against swine flu, but the employers’ ability to offer inoculations depends largely on local vaccine supplies.


Public health officials are distributing the H1N1 vaccine to medical clinics, including those based at employer work sites. Employers that do not offer work-site medical care will not be able to get the shots for high-risk employees, health officials say.


In New York, Citigroup, Goldman Sachs and Time Inc. are among a small group of large employers that have received doses of the vaccine from the city’s health department, a New York City health department spokeswoman said. These employers either operate or contract for work-site health clinics. The clinics had registered with the health department to receive the vaccine.


Citigroup, which has about 23,000 employees in the city, received about 1,200 shots to give to high-risk employees such as pregnant women, women with children under 6 months old, and employees with chronic illnesses.


The shots were not available to employees’ dependents, a company spokeswoman said. Citigroup has “for many years partnered with the New York City Department of Health to act as a distribution site for flu vaccines through the company’s existing health clinics,” the company said in a statement.


The New York City Department of Health and Mental Hygiene said that as its supply of the H1N1 vaccine has grown in recent weeks, the department has given 5 percent of its vaccine supply to health providers serving adults.


Some of those clinics are employer-based. A spokeswoman said that unless the clinic carries the name of its employer, the department has no way of knowing whether they are providing vaccines to a private practice or a work-site clinic. The vaccines are being given on a first-come, first-served basis to facilities that serve adult clients, the spokeswoman said.


In Silver Spring, Maryland, media company Discovery Communications has received enough H1N1 vaccine to inoculate about 300 high-risk employees and their dependents, says Evelyne Steward, vice president of the employer-of-choice group at Discovery. The company was able to receive the vaccines through its work-site primary health clinic, which is managed by Take Care Health Systems, a division of Walgreens.


“We were extremely fortunate,” Steward says.


Take Care Health Systems provides on-site wellness and primary care to medium-size and large employers at about 375 sites around the country. Many of those sites registered to provide the vaccine, the distribution of which was determined by health officials in each locale, says a company spokesman, Gabriel Weissman.


Though federal officials control the distribution of the vaccine, health departments at the city, county and state levels are determining which facilities get the vaccine and how much they receive. Priority is given to hospitals, public health clinics, pediatricians and obstetricians/gynecologists. Medical providers who care for adults, including medical clinics within work sites, are lower priority, health officials say.


Caterpillar, based in Peoria, Illinois, operates a health clinic for employees and has told state and local health officials that it would like to make vaccinations at the clinic available to high-risk members of the public as well as its own high-risk employees. However, the company has not yet received any of the vaccine it asked for, according to a company source who asked not to be named. The source is not authorized to speak to the media.


The distribution has created something of a two-tiered system in which high-risk employees whose companies do not operate health clinics do not have immediate access to the vaccine. Such employees must ask their primary care doctors for the H1N1 shot, health officials say.

Posted on November 13, 2009June 27, 2018

TOOL IRS Information on Using Independent Contractors

The IRS provides employers with a resource page containing information on properly determining whether workers are independent contractors or employees. Within the page, you’ll find these resources and others:


Presentation on Proper Worker Classification
The IRS’ Rick Schampers presents information on what the law says in general about the factors and situations that indicate a worker should be treated as an employee and the situations that indicate workers should be treated as independent contractors. For the transcript, click here. For the audio, click here.


IRS Internal Training: Employee/Independent Contractor
This manual provides tools to make correct determinations of worker classifications. It discusses facts that may indicate the existence of an independent contractor or an employer-employee relationship. This training manual is a guide and is not legally binding.


Evidence of control: Examples and discussion
The IRS looks to three categories of evidence that show degree of control and independence:


1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?


2. Financial: Are the business aspects of the worker’s job controlled by the payer? (How is the worker is paid? Are expenses reimbursed? Who provides tools/supplies?)


3. Type of relationship: Are there written contracts or employee-type benefits (i.e. pension plan, insurance and vacation pay)? Will the relationship continue and is the work performed a key aspect of the business?


Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding


If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8 can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.


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

Posted on November 12, 2009June 27, 2018

The Last Word Dirty Work Required

If you’re a manager and still gainfully employed as 2009 winds down, please accept my sincere congratulations. You are on the verge of actually making it through one of the single worst years ever to be a manager.


Think that’s just a bit of hyperbole? I think it’s hard to imagine another year—at least in the last 60—where so many had to deal with so much that was so bad so often.


In case you’ve tried to block all this out, let me refresh your memory: salary freezes and pay cuts; layoffs, buyouts, cutbacks and furloughs; fewer workers but a bigger workload; more worries, more stress, more pressure.


Amid all the bad stuff this year, there’s one more thing: 2009 will surely be a year that many managers look back on as the one in which they really had to step up and lead. That’s because it’s in handling the hard, difficult things that managers really show what they’re made of.


I’ve made this point before, but it bears repeating: Managers who can’t do the tough stuff—like having to let people go—really aren’t managers at all. I once had a boss who always spoke in an over-the-top, prideful way about how he had never, ever had to fire a person. This guy was a terrible manager and an insufferable egomaniac to boot, but the fact of the matter was that he never had to fire a person because he simply dumped the task on someone else.


That’s a giant cop-out, of course. (This former manager of mine was all about cop-outs.) Every manager worth his or her salt eventually has to shoulder the unpleasant and unavoidable task of letting workers go. It’s just an essential and basic part of the job that you get, like it or not, when you become a manager.


And that’s why taking a close look at Graydon Carter, a well-known editor (and, one would think, manager), is so instructive.


Carter works for publishing giant Condé Nast as editor of Vanity Fair, and Condé Nast has been going though a terribly difficult round of layoffs and cutbacks. Vanity Fair wasn’t immune from these staff cuts, of course, but when they hit the magazine, editor/manager Carter was nowhere to be found. According to the New York Post, he was jetting off to Bermuda on vacation while his workers were getting their pink slips.


“I think it is extraordinary that he let this happen,” one Condé Nast insider said to the Post about Carter’s vacation. “It says he is not a leader. That he is not in the trenches, that he is profoundly out of touch.”


There is a debate over whether Carter approved of these cuts. “Graydon looks bad, but it’s not really his call,” one Vanity Fair staffer told the Post. “How the cuts are made is the work of the [human resources] department and they have been terribly inefficient throughout, and that’s why these things occur.”


Besides taking an opportunity to bash the HR staff, this anonymous Vanity Fair editorial staffer inadvertently hit on something that all too many clueless managers seem to believe—that they can pick and choose what they’re responsible for.


Real managers know that leadership isn’t like a cafeteria where you can simply pick out the things you like and pass on the ones you don’t. If you get paid the big bucks to be a manager, you’ve got to be able to handle both good and bad. And that means handling the stuff that you may not necessarily agree with, but that you must carry out for the greater good of the entire operation.


It was the late, great Peter Drucker who once said that “management is doing things right, [while] leadership is doing the right things.” Graydon Carter is a great example of how sometimes people in cushy, high-paying leadership positions do neither.


If you can’t handle the tough work of being a manager—like layoffs and staff cuts—you have no business being a manager at all. Yes, you may work in management or flatter yourself with a management title, but if you can’t look your co-workers in the eye and do the dirty deed when it needs to be done, you’re just a manager wannabe. And in these tough economic times, those are the very first people who should be shown the door.


If I were an executive at Condé Nast, that’s something I would be seriously considering when a certain “manager” returns from his vacation. Now more than ever, you need leaders who are willing to do the tough stuff to get you through tough times.


Workforce Management, November 16, 2009, p. 34 — Subscribe Now!

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