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Blog: Global Work Watch - Economic security
 

September 28th, 2009

Cubicles for the Soul

There’s been talk of late of the withering effects of corporations on workers’ souls.

It’s true that many jobs in corporate America are draining and can challenge one’s ethical code—telemarketing posts come to mind. And during this recession it appears many firms acted in shortsighted, callous ways that have helped kill workers’ spirits.

But I don’t think large companies are beyond redemption. In fact, the seeds of renewal are at hand for a better place to work for employees and managers alike.

Among the chief critics of the corporate workplace is Matthew Crawford. Crawford owns a motorcycle repair shop and writes about the virtues of manual labor and the moral perils of “knowledge work.”

In an essay published earlier this year in The New York Times Magazine, Crawford makes some interesting points about the way working as a mechanic prompts attentiveness, receptivity and humility. His earlier work as a writer of article abstracts and as leader of a Washington think tank, by contrast, pressured him into misrepresenting others’ ideas and fitting facts into foregone conclusions.

“Mechanical work has required me to cultivate different intellectual habits,” he wrote. “Further, habits of mind have an ethical dimension that we don’t often think about. Good diagnosis requires attentiveness to the machine, almost a conversation with it, rather than assertiveness, as in the position papers produced on K Street.”

But many workers in modern corporations have to pay close attention to business operations or market trends to succeed. And they are keenly aware they can fail with a new software product or ad campaign or manufacturing process.

As Kelefa Sennah suggested recently in The New Yorker, a retail marketing specialist tweaking a display rack is interacting with the physical world not too differently from the way a motorcycle mechanic does. “Why shouldn’t a retail display rack count as a tool, in Crawford’s sense of the word?” Sennah writes. “It’s a physical device meant to perform a particular function, and the shop’s cash registers generate a fairly accurate record of how well it succeeds.”

The real question with work, Sennah argues, is whether it is dull and repetitive, not whether it is manual.

Crawford’s vision for work that is absorbing and meaningful, ultimately, is the same one companies have for their workers. Firms want engagement, given that passion and commitment lead to better business results.

Engagement appears to have slid during the recession. A recent report from consulting firm Watson Wyatt Worldwide found employee engagement levels for workers overall dropped 9 percent since last year. Engagement fell close to 25 percent for top performers.

It seems many companies over-reacted to the downturn with meat-cleaver-like cuts, at times adding insult to injury when axing employees. The willingness to whoosh workers out the door is the latest episode in a three-decades-long trend that has prioritized shareholders and treated employees as largely disposable.

But there is still hope for corporations and workers, it seems to me. Regulatory, demographic and cultural trends are pushing firms to become more careful about job cuts, more socially responsible, more transparent, more democratic and more sustainable. Companies out ahead of these forces include Indian technology services provider HCL and online retailer Zappos.com, whose egalitarian, high-performance culture helped persuade Amazon.com to buy it.

U.S. workers themselves haven’t given up hope on companies. A recent report from staffing Randstad finds that Americans’ ideal employer cares about its employees and delivers on its promise to customers. The report also shows Americans want leaders who hold people accountable.

Caring, integrity, accountability. What workers want in organizations are soul-nourishing characteristics. Will companies fulfill those wishes?


June 25th, 2009

Toward a Northern European Safety Net

The U.S. is taking small steps toward looking like Sweden and the Netherlands when it comes to the economic safety net. And those aren’t bad places to be, whether you’re an employer or an employee.

A recent report from the National Employment Law Project advocacy group shows many U.S. states are changing their laws on unemployment benefits to qualify for $7 billion in funding included in the stimulus package signed by President Obama earlier this year. Those state modifications amount to expanding the reach of unemployment insurance to cover more low-wage workers as well as other groups including part-time workers.

Over the past four months, 25 states have enacted unemployment insurance reforms that qualify for incentive funding, according to the National Employment Law Project.

In addition, according to the project, 21 states changed their laws to provide “extended benefits” when their unemployment rates reached 6.5 percent, helping about 1 million workers who are exhausting their state and federal benefits.

Apart from expanding the coverage and duration of jobless benefits, the stimulus package boosted weekly payments by $25. U.S. unemployment insurance checks have been paltry: The average weekly benefit in 2008 was $297, or just 35 percent of the average weekly wage.

Those payments have been part of a skimpy safety net overall in the United States. Other developed nations have had much more generous jobless benefits, with northern European countries such as Denmark, Sweden and the Netherlands among those providing the most assistance.

Such social welfare policies typically carry the price tag of higher taxes, either on corporations or individuals. Higher tax levels also have been accused of slowing economic growth. In the first quarter, both Sweden and the Netherlands saw their economies contract at a faster pace year-over-year than the U.S. economy did.

But those two nations outperformed the U.S. in another key measure of business strength earlier this year. Public relations firm Edelman’s annual trust survey found that while trust in business plunged in the U.S. and slipped worldwide last year, it rose in both the Netherlands and Sweden. (It also rose in fast-developing Brazil and China.) Just 38 percent of U.S. respondents to the survey said they trust business to do what is right, compared with 62 percent of respondents from the Netherlands and 51 percent of respondents from Sweden.

In addition, the survey found that the most trusted global companies are headquartered in Sweden. The Netherlands ranked fifth on that list, behind Germany, Canada and the U.K.

Given how important trust is among an organization’s employees and in the broader consumer population, those northern European countries and the businesses located there are well-positioned to climb out of the current global recession.

I would argue that part of the business trust in Sweden and the Netherlands has to do with the fact that citizens in those countries have a significant degree of economic security. If a firm goes out of business or someone loses a job, the ability to survive and provide for a family isn’t nearly as jeopardized as it is in the United States. In America, getting the ax hurts a lot more. And that pain likely translates into anger at companies.

If the U.S. is looking for guidance out of the current trouble, it could do worse than to follow Sweden and the Netherlands.


January 12th, 2009

A Window Into Dreary Workplaces

Employer-employee bonds are being tested just about everywhere these days, as companies lay off people, freeze wages and take other steps to cope with a collapsing economy.

But there are some places where the affection workers have for their workplace is particularly lacking.

Glassdoor.com, a Web site where employees can post information about their employer anonymously, recently compiled a list of least-loved companies based on employee ratings.

Anonymous ratings by employees always should be viewed with some skepticism. But Glassdoor.com’s list of the 50 employers with the lowest employee satisfaction ratings includes some names already known for questionable workplace cultures. Among them is Circuit City, which my editor, John Hollon, has blasted for axing experienced workers in a cost-cutting frenzy.

Far worse than Circuit City, according to the Glassdoor.com report, is United Airlines, which ranked as the company with the second-lowest level of employee satisfaction. This performance by United dovetails with the uneven customer service I just experienced on United over the holidays.

And it is in keeping with the way United finished 17th out of 19 airlines in terms of complaints per 100,000 enplanements during October.

Some of the winners (losers?) on the list were firms that had not come on my radar screen previously as either a good or bad employer. They include transportation services outfit DHL Express—ranked as lowest in customer satisfaction—and retailers RadioShack and Office Depot.

One particularly surprising name was eBay. After all, the online auction giant ranked 68th on Fortune’s 2008 Best Companies to Work For list. On the other hand, eBay in October announced plans to cut its global workforce by about 10 percent, affecting about 1,000 employees in addition to several hundred temporary workers.

One Glassdoor.com reviewer said of the firm, “eBay attracts a lot of great people, then the company culture beats them down and they leave within a couple of years.”

Firms on Glassdoor.com’s list would be wise to take the ranking seriously—even just to realize that it raises concerns about their reputations.

And for those of us at employers not on the list, the ranking of the least-liked places offers a kind of cheap schadenfreude. Even if things aren’t great at our companies in these dark days, we can take some solace that things seem to be worse somewhere else.


December 2nd, 2008

In Great Depression, Greater Unemployment Benefits

There’s lots of talk in these dark economic days about learning from the Great Depression. One lesson we seem to be missing centers on beefier unemployment payments to those out of work.

Consider what people losing a job got back in 1938 and 1939, the tail end of the Depression. The average weekly benefit of $10.94 in 1938 may not sound like much, but it amounted to 43 percent of the average weekly wage at the time, according to U.S. Department of Labor statistics. The ratio dropped slightly in 1939, to 41 percent.

The corresponding figure for 2007 was 34 percent—and it has been 35 percent or less since 2004. A difference of six or seven percentage points can mean a lot of money. If the 2007 ratio had been 41 percent instead of 34 percent, the average weekly benefit would have jumped from $288 to $347 in 2007. Over a 26-week period, that $59 difference adds up to $1,534.

It’s quite possible those relatively higher unemployment benefits in the 1930s helped lift the country out of the Depression—along with the economic engine of World War II.

The Labor Department lays out the logic of the unemployment insurance system on its Web site:

“It was created in 1935 in response to the Great Depression, when millions of people lost jobs. They couldn’t buy goods and services, which contributed to more layoffs,” the Labor Department states. “Now, as then, the program helps cushion the impact of economic downturns and brings economic stability to communities, states, and the nation by providing temporary income support for laid off workers.”

Of course, exceedingly generous unemployment payments without any strings attached or efforts to help people get back to work can backfire. People can get lazy on the dole.

But the U.S., whose unemployment benefits are among the most miserly in the developed world, seems far from that dilemma. In fact, America may be missing a chance to bolster its faltering economy by boosting those stingy jobless benefits, which are part of an overall shoddy safety net.

According to The New York Times, economist Mark Zandi estimated several years ago  that increases in unemployment benefits produced about $1.73 in additional demand for every dollar spent, while tax rebates to all citizens generated about $1.19 for every dollar spent. Reductions in tax rates produced just 59 cents per dollar.

President-elect Barack Obama appears poised to launch big public works projects akin to the New Deal spending that Franklin Delano Roosevelt used to propel the U.S. out of the Depression some 75 years ago. But as hundreds of thousands of Americans find themselves out of work these days, let’s not forget the power of generous unemployment payments.


November 21st, 2008

Say Anything (Nice)

They may have chosen an inelegant label.

But the folks at employee recognition specialist Globoforce are on to something with their concept of psychic income—a notion that could prove to be vital to workforce morale during these tough times.

At first blush, psychic income sounds like it might refer to the take-home pay of a palm reader. But in a press release earlier this week, Globoforce defined the term as “the need for social acceptance, increased self-esteem and enhanced self-realization.” In effect, they are talking about the strokes bosses can give workers. Those are easy to give, and appear to be surprisingly valuable.

Globoforce cited a number of reports that suggest the value of a “thank you” can meet or exceed cash as a motivator. Among them is a study from Japanese researchers finding that a compliment triggers a reaction in the brain similar to that caused by a monetary reward.

“A strategic recognition program that thanks and rewards employees can lift workers out of the ‘recessionary rut’ that many are falling into,” Derek Irvine, Globoforce vice president of global strategy, said in a statement. “This approach is essential now as companies seek cost-effective, creative ways to spread good will among their employees, show their appreciation for a job well done and boost productivity.”

Irvine’s call for more kudos comes on top of other evidence that talk can have important results while big bonuses may be overrated. In a new report from consulting firm Watson Wyatt Worldwide and professional group WorldatWork, 48 percent of employers surveyed cited improved communication as one of the three most effective options to reduce employee stress.

In a New York Times op-ed piece this week, Dan Ariely, a professor of behavioral economics at Duke University, wrote about some fascinating experiments that indicate large bonuses can backfire. In one case, people were offered a payment for performing a set of tasks exceptionally well. The subjects were divided into three groups, with some told they’d get a small bonus, others a medium bonus and some a high bonus. Those given the chance to earn the biggest payment did the worst.

Ariely argues that money motivates people but also can add stress, and at some point the stress overwhelms the motivating effect. “If our tests mimic the real world, then higher bonuses may not only cost employers more but also discourage executives from working to the best of their ability,” Ariely wrote.

For his part, Stanford University professor Jeffrey Pfeffer has challenged the wisdom of pay-for-performance schemes.

“The evidence is overwhelming that individual pay for performance does not improve organizational performance except in very limited cases,” he told Workforce Management recently.

A cynical company might take this all in and decide to revoke raises altogether. That would be wrongheaded, even in today’s belt-tightening climate.

But it’s clear people aren’t driven by money alone. There’s something to be said for saying nice things to your workers.



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