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Blog: The Business of Management - Legal Issues
 

May 15th, 2009

Here’s How to Discourage Your Future Workforce

Regular readers of this blog know that I spend a lot of time writing about bad workforce practices, so much so that I have instituted an annual Workforce Management Stupidus Maximus Award for the “most ignorant, shortsighted and dumb workforce management practice of the year.” This year’s winner, Sam Zell of the Tribune Co., set an incredibly high standard for bad management practices that will be very hard for anyone to top.

Sometimes however, you see some spur-of-the-moment action take place in the workplace that is so over-the-top wrong that it makes you wonder—what the hell were they possibly thinking?

Don’t know what I’m talking about? Well, in the sunny Sunshine State of Florida, “Take Your Sons and Daughters to Work Day” events in the local prisons turned into a form of show-and-tell that ended up going terribly wrong.

“A total of 43 children were directly and indirectly shocked by electric stun guns during simultaneous ‘Take Your Sons and Daughters to Work Day’ events gone wrong at three state prisons,” according to new information provided by the Florida Department of Corrections to The Miami Herald. “Also, a group of kids was exposed to tear gas during a demonstration at another lockup.”

According to the newspaper account, “Three prison guards have been fired, two have resigned and 16 more employees—from corrections officers to a warden—will be disciplined due to the incidents that unfolded April 23, said Florida Department of Corrections Secretary Walt McNeil. An investigation is ongoing. None of the children in any of the incidents required medical attention or was notably harmed, McNeil said. He said the children, who ranged in age from 5 to 17, were all children of prison officials.”

And in what must easily qualify as the Management Understatement of the Year (and I’m open to your nominations for a better one), DOC secretary McNeil said, “I can’t imagine what these officers were thinking to administer this device to children, nor can I imagine why any parent would allow them to do so. This must not happen again.”

If  you look at the goals for “Take Our Sons and Daughters to Work Day,” it talks about things like “helping (children) discover the power and possibilities associated with a balanced work and family life, and providing them an opportunity to share how they envision the future and begin steps toward their end goals in a hands-on and interactive environment … each year, we develop new interactive activities and partnerships that will assist us in taking girls and boys to the future they dream of.”

Somehow, I don’t think that the organizers of this event anticipated that the “hands-on and interactive environment” would include getting some up-close-and-personal contact from the business end of a stun gun, but the thing that surprised me the most is that this isn’t just some random incident. It happened at three different correctional facilities to 43 children!

I can’t imagine a worse way to expose children to the workforce, even if you account for the fact that a prison, jail or correctional facility isn’t your typical, run-of-the-mill workplace environment.

“(Corrections secretary) McNeil repeatedly stressed that the stun-gunning only happened at three of the 55 institutions and that it wasn’t part of a widespread practice,” the Herald story said. “Still, he acknowledged that it was ‘logical’ to assume other children had been shocked on other take-your-kids-to-work days.”

And if that’s not bad enough, the newspaper story added this kicker: “So far this year (in Florida), none of the devices have been used on the 100,000 prison inmates—only the children of DOC workers.”

I’m all for helping get children excited about jobss and careers, and I’m sure that “Take Our Sons and Daughters to Work Day” is a wonderful success 99 percent of the time, but really, did any of the numbskulls wielding the stun guns stop and think about this for more than 10 seconds? If they had they would have known that this is hardly the way to handle children, keep your job, or most importantly, to encourage those delicate young minds that will become your future workforce.
  
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February 17th, 2009

What Does It Cost to Get Smokers to Quit?

Motivating workers to get healthy is a tricky business.

Anyone who manages people these days knows that there is a tremendous effort by a lot of organizations to get employees to take better care of themselves and ultimately save the company money through lowered health care costs.

No one has quite figured out the perfect approach to this, so businesses bounce from encouraging healthier practices by essentially bribing workers with a cash incentive, to taking a punitive approach by threatening to charge those who smoke, or even resorting to not hiring people who say they smoke.

This all raises a reasonable question: Just what does it cost to get workers to quit smoking and stay healthy, anyway?

And, here’s the answer, according to the New England Journal of Medicine and reported by the Associated Press—it costs $ 750, if you believe a study of workers conducted by General Electric since 2005.

“Among those paid up to $750 to quit and stay off cigarettes, 15 percent were still tobacco-free about a year later,” according to the AP story published in the Fort Worth Star Telegram. “That may not sound like much, but it’s three times the success rate of a comparison group that got no such bonuses. GE was so impressed that it plans to offer an incentive program nationwide next year, aiming to save some of the company’s estimated $50 million annually in extra health and other costs for employees who smoke.”

This all sounds good, but I wonder: Will financial incentives to help workers stop smoking or work harder to stay healthy be a line item that avoids getting whacked out of the budget during these tough times? Yes, you can point to a pretty nice ROI in the GE study, but how many organizations will really look at it that way and not just focus on the upfront dollars it takes to encourage the cost-saving behavior?

Our friends over at the Benefits Buzz blog made this very point recently when they penciled out the costs for corporate gym or health club memberships for employees based on a 2005 study that found most people who pay for gym memberships only work out there four—yes, four—times per month.

“Each attendee’s four trips per month to make a trip to the sauna and catch up on sitcoms as they gingerly touch the pedals of a recumbent bike is never, never, ever going to make a dent in your health care or absenteeism costs,” the blog post noted. “I don’t care what anyone else tells you.”

In my book, it’s worthwhile to pay smokers to quit because it ultimately will help the organization make a big dent in health care costs, as GE has found. My guess, however, is financial incentives like this one will face the budget knife in most companies this year.

It’s not that organizations don’t see the benefit in helping employees to get healthy. I think they do. But the issue for many will be a lack of focus on the long-term ROI when the more pressing issue is just keeping things going through this terribly difficult year.

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February 12th, 2009

Why I HATE Valentine’s Day

I hate Valentine’s Day. Not only is it one of those fake, orchestrated annual “holidays” that are based on relentless marketing pressure designed to make you feel that you just have to spend money, but it is also fodder for PR people to tout mindless news “trends” that seem to be fabricated out of thin air.

All of us here at the Workforce Management world headquarters get inundated with press releases hyping faux problems surrounding love and relationships in the workplace, and they magically seem to become a big deal around February 14.

What I hate most about all of this, as I have noted here in the past, is that if you were to just focus on the Valentine’s Day hype, you would think this is a new, huge workplace problem.

It’s not, of course. 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, and dating your co-workers is still a bad idea, but really, has any of that changed appreciably this year?

You know the answer to that question. And this is the crux of why I hate Valentine’s Day—it’s all made up, from the holiday itself, to the marketing, to the over-the-top PR hype over fake workplace problems.

This is a year in which workers are losing their jobs in record numbers, the economy is in the toilet and furloughs and salary freezes are the order of the day. If there was ever a year that cried out for toning down the Valentine’s Day hype, this is it.

Will it happen? Of course not. Just like the Grinch eventually figured out that Christmas was going to come along despite his best efforts to stop it, I know that the silliness over fake Valentine’s Day workforce issues will continue to flow despite my Scrooge-like bitching about it.

So just as there is the annual Valentine’s Day hype, here is my annual Valentine’s Day rant. It may be a time for hearts and chocolates, but not for any special workforce-related romance problems. Never has been and never will.
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December 24th, 2008

Wal-Mart’s $640 Million Christmas Gift

I’ve never been a big fan of Wal-Mart—despite the aggressively low prices, I have always found the stores to be crowded and cheap, with marginal customer service—but that doesn’t mean I don’t admire it as a smart business.

Setting aside my personal feelings about shopping there, I have always marveled at Wal-Mart’s ability to manage itself profitably with ruthless efficiency.

And that’s why this holiday announcement from the world’s largest retailer shouldn’t come as any great surprise: Wal-Mart announced this week that it has agreed “to pay up to $640 million to settle 63 suits alleging it routinely underpaid employees around the country, ending years of embarrassing legal battles over its treatment of workers,” according to The Wall Street Journal.   

“The workers and their lawyers will receive at least $352 million, and the payments could reach $640 million, depending on how many claims affected workers submit,” according to The New York Times.

“Union critics of Wal-Mart, the world’s largest retailer, saw the settlement as proof of their view that the company achieves its low prices in part by cheating workers,” the Times added. “But the company rejected that characterization, saying it had already corrected wage practices that it has long attributed to local managers acting without authority.”

As I’ve noted before, Wal-Mart management has an uncanny ability to know when to fold its tent and get in front of a negative issue, as the company did last year when it came to criticism over not providing adequate health care to its workers.  Still, the company’s actions on health care, I noted at the time, were disingenuous and little more than PR spin given that Wal-Mart touted that “92.7 percent” of employees were covered by a health plan—any health plan—when in fact only 50 percent were being covered by an actual Wal-Mart health plan.

In other words, there is ALWAYS something else behind the scenes that Wal-Mart is trying to accomplish when it offers up a settlement like this. The company doesn’t do it because it feels it is the right and honest thing to do for workers; no, Wal-Mart only gives in when there is some bigger issue at stake.

And, here’s what is behind this settlement, according to The Wall Street Journal’s law blog: “Wal-Mart wanted to settle the lawsuits not just to avoid potentially more costly defeats in the courtroom, but to resolve issues that might be used to argue for passage of the Employee Free Choice Act. The legislation, expected to be considered by Congress next year, is fiercely opposed by Wal-Mart because the company worries it will make it easier for workers to unionize,” according to Paul Secunda, an associate professor at the Marquette University Law School.

Secunda told the Journal’s law blog: “This is part of their overall strategy to get their labor house in order, and compared to what unionization might cost them, I think they probably realized it was a small price to pay.” In other words, this settlement by Wal-Mart is less about doing the right thing by workers and more about posturing for a long-term strategy to fight the Employee Free Choice Act.

I’ve said here before that I think the deceptively named Employee Free Choice Act pushes the frighteningly wrongheaded notion that the secret ballot, a pillar of our democracy, is somehow good for electing presidents but flawed when it comes to union organizing. It’s a bad idea that is going to make for even more divisive labor-management relations, in my view.

But, a disingenuous Wal-Mart “settlement” as a hedge against the Employee Free Choice Act, if that’s what the company is doing, doesn’t help matters either. It’s just the beginning of the PR spin and posturing we’ll undoubtedly be bombarded with from both sides as the battle over this terrible piece of legislation heats up in the new year.

So, Merry Christmas and happy holidays from Wal-Mart. Ho, ho, ho indeed.


October 10th, 2008

More Benefits You Probably Don’t Get (Unless You’re a Certain Public Sector Worker)

I get a lot of reader feedback when I write about some of the cutting-edge benefits that pop up at many forward-thinking companies across America, whether the perks are spiritual and faith-based services by businesses in Florida, or free food and a highly paid chef to prepare it by a certain well-known technology company in California’s Silicon Valley.

But here are some choice benefits that I’ll bet no one in the private sector gets: big bucks for certain California public sector workers who cash in unused vacation time when they depart their jobs.
“More than 400 state workers cashed out thousands of dollars for unused time off—a practice shunned in the private sector—when they left their state jobs in the 2007-08 fiscal year, according to a San Jose Mercury News computer analysis of payroll records from the state controller,” included in a story published this week.

Here’s where this story gets outrageous: “One doctor [working in the state’s prison system] racked up more than $815,000 in unused vacation and on-call pay—the equivalent of almost four years of pay at his final annual salary. When the Mercury News asked for specifics on that massive out-the-door paycheck, a state prison spokesman said ‘there is no way to tell’ when and how the doctor earned all that extra money during his 10-year career.”

And the newspaper also points out a fact that’s obvious to everyone living in the Golden State: “The massive payouts come at a time when California faces unprecedented budget shortfalls and is now grappling with a national financial meltdown and plummeting tax receipts. While labor groups say the workers are simply cashing in what they’ve been owed for years, there’s a huge benefit for waiting: the lump-sum payments are paid at the employees’ current—and, most often, highest—pay rate, no matter how long ago they accrued the time off.”
Worse yet, the state “has no way of predicting from year to year how many employees will retire with huge banks of unused time off on the books.”

The story has to be read to be believed, but here are a few more nuggets:

“The Mercury News analysis of the controller’s payroll figures, which do not include the University of California system or state legislative staffers, also found:

•  36,238, or nearly one in seven, of the state’s full-time workers earned $100,000 or more in salary and overtime in the 2007-08 fiscal year.
•  1,223 state employees earned more than $200,000 in salary and other pay; 19 employees took home $400,000 or more for the year.
•  More than 100 of the high earners made at least $100,000 in overtime for the year, including a prison nurse who racked up more than $200,000 in overtime.”

Is there any private sector worker in America who gets to cash out unused vacation like this? I would be shocked if there is a single one anywhere. You get this only in the public sector, where employee unions wield way too much clout and publicly elected officials show way too little backbone to stand up to the never-ending demands for more and more taxpayer-funded pay and benefits that are grossly out of proportion  to the actual work performed.

California has big financial problems for a variety of reasons, but the payouts are a big part of the problem. And at a time when our financial markets are melting down before our eyes, they point to a public sector pay system that is hard enough to fathom in good financial times, but now is wildly unsustainable at a time when everyone with a private sector IRA or 401(k) faces having to stay on the job a lot longer than they ever intended.



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