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Blog: The Business of Management February 2008 Archive
 

February 11th, 2008

A Valentine’s Day Tradition: Overhyping Office Romance

There are minor workplace issues and there are major workplace issues. And then there are blown-out-of-proportion workplace issues—like romance in the office, a topic that inevitably surfaces around Valentine’s Day.

What is it about this commercial candy-and-card holiday that makes publicists, consultants and PR people feel the need to tout the latest polls, surveys and books that purport to help managers deal with this terrible workplace problem? I understand the news hook of Valentine’s Day, but really, is this a hot, burning issue for any workplace in America?

Here’s what I’m talking about:

  • CareerBuilder’s annual Valentine survey (they need an annual survey?) found that 40 percent of workers have dated a co-worker “sometime during their career,” and that 29 percent went on to marry the person they dated at work.
  • Another poll, the SpherionWorkplace Snapshot, a survey conducted by Harris Interactive, found that “36 percent of U.S. workers would consider dating a co-worker if they were single, a number that has steadily declined from 42 percent in January 2005.” It also found that 30 percent of workers feel that openly dating a co-worker would jeopardize their job security or advancement opportunities. That’s down from 41 percent in 2007.
  • The publicist for self-described “business etiquette expert” Barbara Pachter touts her book New Rules@Work: 79 Etiquette Tips, Tools, and Techniques to Get Ahead and Stay Ahead as a guide to how to “share a copier by day and a bedroom by night with someone without hurting your professional image.” Some of Pachter’s “advice” includes insights such as “Continue to Keep the Relationship Private,” “Don’t Email X-Rated Valentine’s Day Cards” and “If the Relationship Fails, Be Professional and Adult About It.”
  • According to Vault.com’s 2008 Office Romance Survey, “48 percent of respondents have known a married colleague to have an affair with someone at the office. In addition, 40 percent know of a married or seriously involved co-worker who had a romantic liaison with someone other than their partner while on a business trip.”

This is just the tip of chocolate heart. I’ve gotten at least a dozen press releases on the latest Valentine’s Day survey, poll or expert advice that is supposed to show why office romances are good, bad or problematic. In fact, if you were to just focus on the Valentine’s Day hype, you would think this is a new, huge workplace problem.

Well, here’s a news flash: It’s not. Office romances have always been part of the equation in any workplace since the dawn of time, and there’s no evidence that the problem has gotten appreciably better or appreciably worse. Yes, sometimes office romances go bad, but as I pointed out last year, the current trend seems to be to not get too worried about co-workers dating.

My own opinion on office romance hasn’t changed, hype, trends and surveys notwithstanding: It’s a bad idea. As I pointed out in November, it’s because “all too often they go bad. Spoiled office romances leave the participants—and the co-workers around them, who have to live with the bitter, sometimes litigious aftermath—much worse off as a result.” This is true at any time of year, not just at Valentine’s Day.

So be forewarned: You’re going to get bombarded with “love in the office” warnings and surveys over the next few days, all being pushed by organizations with “news” or “expert advice” they’re trying to sell or hype. Don’t feel compelled to rewrite your employee handbook, though. This junk is extremely forgettable—or at least it will be until the cupid machine goes into overdrive again around this time next year.


February 7th, 2008

Why CEO Pay is Out of Control

Griping about CEO pay is sort of like the old joke about the weather: Everybody complains, but no one ever does anything about it.

Just about everyone (except CEOs) agrees that most CEOs get paid too much—in many a case hundreds of times what the average employee earns. Part of the problem is that there seems to be no real connection between what they get paid ($14.8 million, on average, at an S&P 500 company) and what they do. Successful CEOs make a ton of money, but even unsuccessful business leaders make out really well and seem to cash in even as they are getting pushed out the door.

Even Michael Jensen, a professor emeritus at Harvard’s Graduate School of Business who “was an early inventor of bigger-than-life compensation packages for corporate chief executives,” according to The New York Times, now feels that CEO pay is out of control. His new book (co-written by University of Southern California business professor Kevin Murphy) is called CEO Pay and What to Do About It.

I’m sure the book has some good ideas in it, but the problem with CEO pay appears to be pretty basic: Many company directors—who are, after all, the people who approve the gargantuan CEO pay packages—don’t believe they are responsible for the runaway pay.

A recent story in Financial Week  (a sister publication of Workforce Management) reports on a survey by recruiting firm Heidrick & Struggles and USC’s Marshall School of Business that shows that three out of 10 directors believe that CEO compensation is “too high in most cases.” In addition, nine out of 10 feel that CEO pay should be no more than two or three times more that of the next highest-paid executive.

So, why don’t these board members do anything about the CEO compensation problem? Well, they don’t think they are the cause. They blame the consultants. “As in the 2006 survey, board members see the actions of compensation consulting firms and the creation of new incentive compensation programs as the major reason for the continuing increase in CEO compensation,” according to a summary of the results.

I’m not a big fan of consultants, but really, do directors truly think that anyone will buy the notion that they aren’t to blame for runaway CEO pay? It’s really all about pay for performance, a concept that most companies seem to understand. But for whatever reason, it’s a notion that has gotten oddly twisted in the hands of those in the boardroom.


February 3rd, 2008

From the Editor: Why We’re Writing About SHRM

Last month, I wrote here about “SHRM’s Leadership Challenge” in the wake of the retirement announcement by SHRM’s CEO and president, Sue Meisinger. Although I felt I gave Meisinger her due for what she has accomplished during her tenure, I also said that “her departure gives SHRM a golden opportunity to address the ongoing malaise that permeates the HR profession and, perhaps, help more human resource professionals move up to that long sought-after “seat at the table.’”

It’s not the first time I’ve voiced my opinion about the Society for Human Resource Management, and it won’t be the last. But what always surprises me is the reaction I get when I do write about the organization. “Interesting editorial piece,” said one reader in reaction to that blog post. “It sure went off track somewhere along the line. Frankly, it sounds like you have an axe to grind against the organization.”

Although I’ve come to expect comments like that when I write about SHRM, it still makes me wonder. Why do so many people get their backs up when reporting, commentary and scrutiny are applied to the world’s largest HR organization?

I’d guess it is because nobody has ever publicly scrutinized SHRM before, looking at how well it fulfills its stated mission and asking whether it is truly using its ever-increasing size and war chest to better help the 200,000-plus human resource professionals who each pay $160 a year to be a member. SHRM does strategic reviews of itself, and you can find individual critics piping up now and then on SHRM’s member message boards. But that’s not independent reporting or inquiry.

And that’s why the cover story in the February 4, 2008, issue of Workforce Management magazine, “SHRM at a Crossroads,” is well worth reading. It’s probably the first in-depth look at SHRM that’s ever been written.

SHRM affects the human resources profession in ways both large and small. “SHRM is the voice of the profession,” says HR author, Workforce Management essayist and University Michigan professor Dave Ulrich. “It services all types of organizations–large and small, public and private–and all types of HR professionals: junior and senior, generalists and specialists.”

In addition, SHRM is a not-for profit 501 (c) (6) organization. Although some parts of the organization are for-profit enterprises (such as HR Magazine, which competes with Workforce Management), SHRM in general gets special tax breaks because of its not-for-profit tax status. That alone should make SHRM a newsworthy enterprise that demands regular coverage.

And that’s where Workforce Management comes in. I don’t know of any other broad-based business publications that regularly cover HR that have the ability to devote journalistic resources to reporting about SHRM as both a large HR organization and a business that generates nearly $100 million in annual revenue.

“SHRM at a Crossroads” represents many months of work by the staff of Workforce Management. Most of the reporting, writing and research has been done by Washington-based Mark Schoeff Jr., a reporter who has worked in Washington for a long time, knows SHRM and sees it in action on Capitol Hill. He worked hard to make sure the story told all sides, and when you read the package, I think you’ll see that’s the case. 

In the end, I’d say that Workforce Management is writing about SHRM because SHRM deserves to be covered like any other large, powerful and influential organization that has an effect on readers’ lives and work. I think you’ll find that “SHRM at a Crossroads” is a unique look at an important HR organization, and will offer insight and perspective about it that you won’t find anywhere else.

As always, I appreciate any comments you have about this story or about SHRM–either posted as comments at the end of this blog post, or sent to me directly at jhollon@workforce.com.


February 1st, 2008

Delusional Management

Here’s something that you probably understand completely: Success in one aspect of business (or life) does not automatically guarantee success in another. In other words, just because you are great at one thing doesn’t mean you’ll be great if you try something else.

Most regular people understand this intuitively, but for some reason, a lot of successful business executives seem to be delusional about this. Here’s this week’s example: Sears chairman Edward Lampert.

Lampert made a lot of money—billions, according to The Wall Street Journal—from managing hedge funds. Clearly, he’s very, very good at that, and the huge pile of money he made doing it is the ultimate measure of his success. But this makes me wonder: As successful as Lampert has clearly been as a hedge fund manager, how does this in any way qualify him to manage a large, complex business such as Sears?

It doesn’t, of course, and this week’s news proves that. As The New York Times so cheekily put it, “Edward S. Lampert has a new strategy for Sears: less Edward S. Lampert.”

Three years ago, Lampert put together a deal that merged Kmart and Sears into a new company called Sears Holdings Corp. that was controlled by Lampert. He installed himself as chairman and personally jumped in managing the company. Unfortunately, Lampert has no background (or discernible skills) in retailing or marketing, and he’s a micromanager to boot. The results have not been pretty, and the price of Sears’ stock has tumbled from around $200 a share in April 2007 to a little over $100 today.

So Lampert does what a lot of arrogant executives do when confronted with their own shortcomings—he fired someone else. Earlier this week, Lampert canned Sears’ CEO. He said he would find a new chief executive, although as one analyst told the Times, “Sears will have a very tough time filling this job.” That’s because “Sears Holdings has earned a reputation for starving its stores of money, anathema to experienced retailers. The company is in trouble. And Lampert has already clashed with—and tossed out—several executives.”

Now that Lampert has been hammered by Wall Street, he’s had a change of heart and tells the Journal that he’ll step back and allow managers running individual businesses to make their own decisions rather than relying on corporate bosses to make the big calls. “He compares Sears with Warren Buffett’s Berkshire Hathaway Inc., in which managers are given a long leash to run businesses, and Buffett doesn’t get involved in their day-to-day operations.”

Lampert may want to be like Warren Buffett, but does he really believe he can suddenly change his micromanaging ways and become more like Buffett, a great manager and one of the world’s greatest investors? I don’t think this is possible because Lampert probably doesn’t understand that what made him highly successful as a hedge fund manager just won’t work when trying to turn around a huge retail operation.

Great managers and leaders—like Warren Buffett—become great because they know in their hearts that they don’t know everything. They put great people who know what they are doing in charge and then they get out of the way.

Can Lampert subjugate his massive ego long enough to let someone else take charge of Sears Holdings and show him the way? Only if he can unlearn everything he thinks he knows. And that’s a tall order for anyone, let alone a billionaire.



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