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Blog: The Business of Management March 2008 Archive
 

March 12th, 2008

Paying Workers to Get Healthy

Getting workers to take better care of their health is getting to be a national obsession. The thinking goes something like this: If we can get employees to stop smoking (or lose weight, exercise more, or get regular health checkups), they will be healthier and happier and use less health care. And, the less health care they use, the more we (the employer) can save on our overall health care costs.

Smoking was the early focus of most “get healthy” workforce campaigns, but now the bull’s-eye is on a more widespread problem—employee obesity. It’s a problem that is seen as the root of a lot of other health care issues, and a story in today’s Houston Chronicle speculated on the possibility of companies charging a “fat surcharge” for overweight workers.

The newspaper talked to Pattie Dale Tye, president of Humana, Houston, who said that “this touchy topic has come up recently during conversations with local employers. “Oh boy, nobody is anxious to go down that path,” she said. Tye said the U.S. hit the tipping point with smoking about five years ago—‘all of a sudden, it was just not accepted’—but she doesn’t believe the country is ready to penalize obesity in the same way. At least not yet.”

Instead, as the Chronicle story points out, companies are more likely to pay workers to lose weight. One Texas employer—Memorial Hermann Healthcare System—has a program called “Leaner Weigh” that “pays $10 for every pound that enrolled employees take off and keep off. Some 3,000 employees sign up each year for the program, and the hospital has paid out $408,000 since the program began five year ago.” Hospital officials say that “records show a 20 percent reduction in medical claims by Leaner Weigh participants.”

And as we have written about here at Workforce Management, some companies use a “calculator” to estimate the cost of employee health care problems. The “Blueprint for Health” “helps us see the cost of medical care and realize why employees’ health is a lot more affordable when you take care of them before they get sick,” says Dr. Steve Goldman, medical director for Peoria, Illinois-based Caterpillar.

Helping employees better manage their health has become an imperative for businesses. Most companies use incentives to do so, but a growing number are taking a more punitive approach. We’ll be exploring these two approaches on April 9 in Chicago at the 2008 Health Care Forum, presented by Crain’s Chicago Business and Workforce Management. The topic is “The Carrot or the Stick: How Employers are Managing Employee Health Care to Reduce Costs.”

If you manage a workforce and are worried about rising health care costs, this is a topic you should be thinking about. With $2 trillion being spent each year by Americans on health care, according to the Centers for Disease Control and Prevention, and half of that being spent to address preventable diseases, it’s a subject you just can’t afford to ignore.


March 7th, 2008

Verbal Abuse as a Workforce Strategy

I’ve worked few a few screamers in my career—and for some over-the-top, intimidating bullies, too. The worst one was this short, stocky guy who used to love to stand and glare, clenched fists at his side as if he was ready to punch you. He didn’t scream much, but when he did, it was a full-on string of your typical obscenities delivered in a full-throated roar.

As a bad manager, he was the complete and total package.

All of this came back to mind as I was reading a story in the Rocky Mountain News about a former assistant for Dish Network who was dismissed from the company after six years of work and is suing “because of alleged gender discrimination and retaliation. Her claims of a hostile work environment and breach of contract were dismissed this week.” The jury trial is continuing on the remaining causes of action before a U.S. District Court in Denver.

According to the newspaper account, a “Dish Network executive screamed at his assistant Sharon Baker numerous times and in one instance called her a ‘f—— stupid b—-,’ jurors were told in the closing arguments of a federal discrimination case.

The satellite TV company failed to act on Baker’s complaints and ignored its own policies prohibiting crude behavior among managers, Thomas Arckey, one of Baker’s attorneys, told jurors. Instead, top executives routinely engaged in screaming, swearing and sexual jokes, he said. Arckey described the company’s ‘trademark’ policy as ‘hear no evil, see no evil, investigate no evil, correct no evil.’ ”

As stunning as all of that is, what’s even more amazing is the response from Dish Network. It essentially comes down to this: Yes, we were verbally abusive to her, but we didn’t discriminate because we’re verbally abusive to everyone.

 “In the company’s closing arguments, Dish Network attorney Meghan Martinez attacked Baker’s credibility, maintained there was no evidence of gender discrimination and told the jury that the case simply ‘doesn’t belong here, and you know that,’ ” according to the Rocky Mountain News story. “Martinez acknowledged that Dish Network executives, including Baker’s boss, Executive Vice President Michael Kelly, yelled and swore at times. But she said the screaming equally was ‘male to male, executive on executive,’ and that Kelly denied ever using the word ‘b—-.’ Martinez also said witness testimony showed Baker ‘uses profanity and is comfortable with it.’ ”

There you have it: verbal abuse as an accepted part of a company’s workforce management strategy. In other words, Dish Network embraces a corporate culture where it is OK to swear and verbally abuse people in the workplace, and it’s not discriminatory to do it since everyone there does it all the time.

I’ve written a lot about boorish behavior from the top boss and a workplace where sexual harassment was tolerated and ignored, but I’ve never seen one where out-and-out verbal abuse was condoned and defended at the highest levels.

I’m going to go out on a limb here, but I predict that Dish Network won’t have much legal success in defending verbal abuse as an acceptable workforce practice. It will be interesting to see how the nearly all-female Denver jury will see it.


March 5th, 2008

HR on Trial, Revisited

Last November, I wrote about one of the pitfalls of HR finally getting that long sought-after seat at the table—high-level jobs carry a number of high-level risks.

Here’s proof positive: One of the two HR leaders I wrote back about then has agreed to settle the case brought against her by the SEC.

Nancy Tullos, the former vice president for human resources at Irvine, California-based Broadcom Corp., has “agreed to pay $1.3 million to settle charges by the Securities and Exchange Commission that she personally benefited by changing the value of employee stock options, the first settlement of a civil case into stock option backdating involving the Irvine chipmaker,” according to a report in The Orange County Register.

As a result of the stock option scheme that Tullos took part in, “Broadcom restated its financial results in January 2007 and reported an additional $2.22 billion in compensation expenses — the largest restatement to date arising from stock option backdating,” according to the SEC. The SEC said that Tullos agreed to the settlement without admitting or denying the allegations of the complaint. The settlement still must be approved by a judge.

This is serious business and a serious penalty for any corporate executive, much less the company’s HR chief. “Tullos pleaded guilty to a federal criminal count of obstruction of justice in November,” the Register noted. “In that case, Tullos admitted that she altered evidence of a new employee’s hire date at the request of members of the company’s compensation committee. … She agreed to pay $100,000 in fines and to pay the SEC $1.2 million in personal benefits she allegedly received for manipulating the stock options, although she never actually cashed in those options.”

I’ll repeat here what I said in November: The power that comes with having a seat at the table carries with it some heavyweight ethical and legal responsibilities. And since the HR chief is frequently the person in a company who is called upon to weigh the ethical and legal implications of people practices, a company’s top HR leader must be like Caesar’s wife—above suspicion and beyond reproach.

I don’t know Nancy Tullos, but I’ll bet she deeply regrets what she got drawn into. She got hit with a stiff penalty, and it is a sobering lesson that all HR executives would do well to learn from.


March 3rd, 2008

What Do You Do When the Big Boss Has a Big Mouth?

What is it about rich, successful guys that make them think they can say or do anything without questions or repercussions? And on top of that, why, as I’ve rhetorically asked in the past, do people who have great success in one aspect of business (or life) believe that they automatically will have success in another?

I’ve been thinking about these questions a lot while watching the actions of Sam Zell, the real estate billionaire who recently became a media magnate when he bought the Tribune Co. Tribune has been a troubled company, and Zell bought it at a fire-sale price. He seemed confident he could fix it, but as anyone who follows the struggles that print-oriented media companies have been having, fixing what is wrong with newspapers is much easier said than done.

Zell didn’t become successful and rich by being a shrinking violet or keeping his mouth shut, but still, people have recently been surprised, amused and amazed by what comes out of his mouth.

Some might call it refreshing, frank and forthright. Others, however, might say it’s sexist, boorish and inappropriate. More important, it has caused great grief for the people in authority who work for Sam Zell who have to clean up after the verbal mess he makes.

All of this raises an interesting question for managers and executives: Just what do you tell your workers when you have an owner or top boss like Sam Zell who frequently says things that would get most other employees reprimanded or fired? At the Los Angeles Times, a Tribune paper, senior managers went so far as to send out a memo saying that despite what Sam Zell says (or how he says it) “the fundamental rules of decorum and decency apply.” The memo went on to add, “Sam is a force of a nature; the rest of us are bound by the normal conventions of society.”

I understand forces of nature. What I don’t get are guys who get to the top who think that rules are something for everyone except them. And if you work for a guy like this? Well, you only have two options: grin and bear it as you put up with the rantings, or find another job where the top boss has a more reasonable way with words.



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