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Blog: The Business of Management - Talent Management
 

May 9th, 2008

Pay and Perks at Starbucks

Ever hear of a company having someone with the title “executive vice president of partner resources?”

That was a new one for me, but “partners” are what they call employees—aka, workers—at Starbucks. In English, that means the executive VP for partner resources is really the executive VP for human or employee resources. And, the new guy in that very HR-sounding position will “be paid a $400,000 salary plus $400,000 in stock options and eligibility for a bonus.”

This little bit of information comes from a story in the Seattle Post-Intelligencer about a filing the company made with the Securities and Exchange Commission on Thursday. It details what Starbucks is paying some executives as well as what the company is giving to former company president Jim Donald to keep his mouth shut—a $1.25 million severance package as long as he doesn’t “utter negatives to the press or any individual or entity about Starbucks, its business, its activities, its shareholders, employees, agents or relationships.”

I always find SEC filings to be a fascinating read because of all the inside information you can glean about a company and its management team. For example, the Post-Intelligencer found that “Donald also agreed not to work for McDonald’s or Dunkin’ Donuts, because they are ‘companies that directly compete with Starbucks’ field of business,’ ” the filing said. “However, it notes, he is allowed to work for grocery chains, such as Pathmark, Albertsons and Safeway, and he also is allowed to work for other fast-food chains, including Wendy’s, Arby’s and Burger King.”

McDonald’s as a competitor to Starbucks? Although Starbucks CEO Howard Schultz has been dismissive of the new McDonald’s coffee strategy, he is clearly concerned enough to want to bar former Starbucks executives from going to work there and has vowed to “fight to the death” against his competitors for coffee dominance.

And, although a severance package of $1.25 million to Donald sounds like a lot, it pales in comparison to what a lot of other CEOs or former executives are getting paid when they leave.

But it’s not all about the money. Launi Skinner, former president of Starbucks’ U.S. operations, not only got a nice severance package, but also “a lifetime of employee discounts on Starbucks products.” Given what they charge for a fancy coffee at Starbucks these days, Skinner’s discounts may turn out to be the best perk of all.


May 6th, 2008

Hoping for the Best, Preparing for the Worst

Losing a job is always traumatic, and that’s why stories like this one in the Chicago Tribune—titled “Are you prepared if you lose your job?”—can serve as a good jolt for anyone who thinks that they are immune from the incessant layoffs, buyouts and cutbacks that seem to be a fact of life in the modern American workplace.

What struck me about this article wasn’t the advice it offered, which was pretty straightforward and basic. What got me thinking were some of the statistics listed in the Tribune story, such as “Young workers face the prospect of changing jobs nearly nine times before they reach age 32, according to the Bureau of Labor Statistics, ” and that in March, “the average length of unemployment for all ages was nearly 17 weeks, [and] workers over 50 face longer job searches.”

I’ve written here before about how stressed out workers are and the very different and modern approach some are taking as they cope with layoffs. Fact is, for all the talk about a “talent shortage” or a “war for talent,” it still is very much a buyer’s market when it comes to getting and keeping a job—especially now as we head into a recession.

The Tribune story makes the point that today’s workers always need to be preparing for the worst and that “there’s little excuse these days for not being ready to kick a job search into high gear at a moment’s notice.” That’s great advice to keep in mind, because no matter whether it is called a layoff, buyout, cutback or “Productivity Transformation Program,” the stability of the job you’re in today is a tenuous illusion at best.

I’ve learned this the hard way, as I’m sure many of you have too. It’s always great to hope for the best, but you’ll be better off and sleep better at night if you also make sure to prepare for the worst, because it generally happens when you least expect it.


April 3rd, 2008

More Proof of the Talent-Shortage Myth

I have long argued that the notion of some huge, across-the-board shortage of workers and talents due to the retirement of the 76 million-strong baby-boom generation is wildly overblown and overhyped.

Not everyone agrees with me, of course, but I do think lot of people feel the way I do: Today’s workers are healthier, happier, more engaged and are going to stay on the job a lot longer than their parents and grandparents did.

But in case you need proof that the coming talent shortage is actually a myth, consider this new evidence (which, admittedly, is more about economic necessity than engagement, health or happiness): The current economic downturn is causing many workers who were thinking of taking early retirement to reassess their plans.

A recent story in The Wall Street Journal noted that “according to economists and demographers, a huge exodus from the workforce should be happening. … But it has run into a brick wall. Investment advisers and retirement planners at more than a dozen firms, including Charles Schwab Corp., Edward Jones and Merrill Lynch & Co., say they are seeing large numbers of older workers put off retirement as the housing and stock-market troubles have deepened.”

In fact, the Journal story points out that as boomers delay leaving the workforce, a very different problem may surface: more competition for jobs with younger workers.

 “However, there is a potential upside,” the Journal story noted. “People who earn more as they age may rely less on Social Security, easing the burden on these programs—including Medicare—and keeping them solvent for longer. The trend could also be good news for ‘knowledge-based industries,’ such as technology, science and health care, which are predicted to suffer from a drain of experienced workers.”

My point all along has been that the baby boomers have never been predictable or acted in ways that the “experts” expected. And as I have written, “Yes, we are facing some large demographic changes in the workforce, and businesses need to plan for them, but all the gloom-and-doom talk of a giant worker shortage may just end up being more myth than reality.”


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.


February 19th, 2008

The Modern Way to Cope With a Layoff

Layoffs used to be something workers had to handle on their own. But, as with most things in the modern workplace, even the old way of losing your job has a new twist.

“Like so many other personal experiences transformed by the Internet, getting canned need no longer be endured in quiet, isolating shame,” according to a story in today’s Los Angeles Times. “Technology is allowing people to turn a traditionally private trauma into a quasi-public event, drawing quick moral support and even job referrals,” the Times reports. “ ‘This is something that used to be shared over the dinner table. Now the whole world can watch and participate,’ technology forecaster Paul Saffo said.”

The gist of the story is this: Workers who get laid off these days are increasingly taking a very public approach to their plight, plugging friends and colleagues into what they are going through with online tools such as Twitter. This is an online service “that notifies your friends, by mobile phone, instant message, e-mail or on the Twitter Web site, what you are doing at any given moment. These messages of 140 characters or less, called tweets, are sent to anyone who subscribes to or follows your Twitter stream.”

The Times story follows Ryan Kuder, a senior marketing manager at Yahoo, who was one of 1,100 employees laid off last week. As the story puts it, “Self-broadcasting what is usually a private experience gave Kuder more than 15 minutes of Internet fame. It gave him solace, and, more important, job leads. The San Jose husband and father of two was flooded with ‘positive tweets’ offering support as well as connections via social networking services such as Facebook and LinkedIn.”

But if Ryan Kuder’s layoff from Yahoo seems to be an instance of bad news turning into good, there are still plenty of layoffs that end up the old-fashioned way—with depressed, demoralized workers left with no jobs and little hope. Workplace columnist and blogger Dianne Stafford of the Kansas City Star writes today about midcareer workers who find themselves suddenly out of work and without the network, or technology, to effectively find new work.

“At least three of my e-mails this morning contained admissions that the writers simply didn’t know how to network or that they didn’t think they knew anyone who could help them find a job,” Stafford writes. “In their worried job hunts lies a warning to others: It’s no longer enough to sit at your desk and do your job well. Someday, perhaps through no fault of your own, you may not have that desk anymore—and it’s vital that you know people outside that job.”

I would take this one step further: With layoffs seemingly on the rise everywhere, often with little rhyme, reason or logical business purpose, having a fallback plan just in case something does happen is essential. That’s true for employees at all levels, from worker bees to midlevel managers to senior supervisors. Hoping for the best is a good way to live, but planning for the worst is the best way to survive.



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