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Smokers, Boozers, Sunbathers and Health Insurance

Railing against the evils of nicotine addiction is in vogue – and there’s little risk of being ostracized in public for doing so. After all, few quibble with the notion that smoking is an unglamorous vice, an outright public health calamity.

Business and government have joined the fray, eliminating smoking in the workplace, and sending most Hack Raspkoffs into the parking lots or smoking kiosks. Some firms discriminate against smokers in hiring; others charge extra for health insurance.

Smokers should pay more for insurance – but so should sunbathers, boozers and rotund men and women who spent more time working out at the training table than at the gym. Our society probably needs an equivalent of the fake cough for the buffet line.

More than half of Americans are overweight. Researchers say this obesity epidemic poses a major threat to public health due to the clear connection between obesity and type 2 diabetes, heart disease, and cancer. Obese or overweight people paid more in health care costs than those of normal weight. In 1998, overweight and obese individuals paid an average of 11.4% and 26.1% more on out-of-pocket medical costs.

More organizations need to turn up the dial in focusing on health in a more wholistic manner, and to widen their focus on encouraging employees to adopt a healthier lifestyle. Smoking is bad; but so are a host of other lifestyle habits that seem to go unnoticed or unchallenged.

Another View on Web Usage at Work

Surveillance and strict prohibition-like controls are the most common responses organizations use in the fight to keep cyber slacking in check. Most firms spell out the do’s and don’ts of internet usage at work through the omnipresent Acceptable Employee Internet Usage Policy. These policies are often buttressed by LAN software that monitors and tracks internet usage patterns.

Excessive surfing at work can be a productivity robber when the privilege is abused. However, in knowledge-based work environments where creativity and impulsive-like insight are required, web use should probably not be of paramount concern, unless there is clear, egregious misuse – e.g., porn, heavy levels of personal shopping and so forth. In those settings occasional web usage should be viewed as a healthy diversion, akin to the well-documented guitar strumming by Seattle IT workers in the 80’s. Innovative work environments are known for their informality, spontaneity and absence of KGB-like surveillance and tight controls.

Research conducted by the Center for e-Service at the University of Maryland’s Robert H. Smith School of Business and the research firm Rockbridge Associates, concluded that employees with Internet access at both home and work spend an average of 3.7 work hours per week surfing on personal business. That’s more than offset, however, by the 5.9 hours these same people spend online at home on work-related chores.

In operations-oriented environments where the business model is predicated on x number of widgets produced each day, or where attentiveness to the customer is critical, then use beyond break time is probably of greater concern, as it probably lowers overall efficiency and output.

What has been your experience in this regard?

Unintended Consequences of Age Discrimination Laws

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Hats off to Joanna Lahey, a research associate of the Center for Retirement Research and an assistant professor at Texas A&M.

Her research has established that while the Age Discrimination in Employment Act appears to have helped and protected older workers on the job, it has probably hurt the older job seeker. Presumably, the law has made some employers a little more “gun shy,”and fearful of unwittingly mishandling the older worker.

Employers will have no other alternative than to be less cautious in their dealings with older workers given the well-publicized aging of the workforce.

The Crankiness Factor

It’s easy to forget that one’s mood away from work influences one’s mood at work.Wharton professor Nancy Rothbard and Steffanie Wilk, a professor at the Fisher School of Business at Ohio State University, have reported research findings that an employee’s mood on arrival influences their mood throughout the work day.

They further report that “”Start-of-day mood may come from myriad sources including persistent life challenges and opportunities, positive or negative family experiences before leaving for work, or even the commute into work,” they write. “Non-work and work domains are permeable, and research suggests that mood often spills over from one to the other…. Specifically, start-of-day-mood might affect one’s appraisal of subsequent events.”

Does this lend credence to the importance of humor in the workplace?

A Confirmation of Reality

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The folks at Hudson Highland Group released survey findings indicating that younger workers crave feedback, access to managers and more social interaction.

Hudson surveyed 2,000 U.S. workers and categorized the respondents as either:

Traditionalists, workers born 1928- 1945;

Baby Boomers born 1946-1964;

Generation X born 1965-1979; and

Generation Y born after 1980.

According to the Hudson survey, “ beyond formal reviews, one-quarter (24 percent) of both Generation X and Y workers said they would like feedback from their boss at least once a week, if not every day. Comparatively, only one-fifth of Baby Boomers want feedback that frequently, and just 11 percent of Traditionalists would like that level of communication.”

What struck me about the findings is that they mirror my personal experience in corporate America; and secondly, that they are not all that surprising.  The constant segmenting of the workforce into these categories also bugs me, but this is a movement that is here to stay. 

Younger employees who are thirsty for upward mobility understand that being connected to your boss and knowing “where you stand” is pretty critical.  Many youthful employees engage in this type of temperature taking.  As one moves into the middle and later stages of their career they often know their strengths – and have developed a very uncanny ability to know what their boss thinks of their work sans formal feedback.

Super-Sized Slices Shrink the Pie

Today’s New York Times featured an article – “If All the Slices Are Equal, Will the Pie Shrink?” – that probably portends an escalating debate on the intended and unintended consequences of the ramp-up in executive pay since the early 90’s.  Some are already forecasting the topic as a key issue in the next general election.

Two of the researchers identified in the Times article, Xavier Gaibaix of MIT and Augustin Landier of the Leonard N. Stern School of Business at New York University, argue that the explosion of CEO pay to new stratospheric levels is simply due an accompanying increase in firm size over recent decades. Other academics dispute this hypothesis however, and strongly belief that the run-away pay is due to a host of factors, and not just organizational size.

Several statistics are quite sobering:

  1. The top 0.1 percent of American income earners receive nearly 7 percent of the total, the highest since the 1920’s;
  2. Fifty percent of the income increase in our economy due to productivity gains between 1966 and 2001 went to the top 10 percent of earners; and
  3. During the period 1993-2003, the aggregate compensation paid by public companies to their top-five compensated officials amounted to $290 billion – and during 2001-2003, the top-five reaped $92 billion, which represented 10.3% of the aggregrate corporate earnings of those firms.

Even the poster boy of American capitalism, Warren Buffet, lamented in Bershire Hathaway’s 2006 annual report that executive compensation is running amuck.

It’s only ironic that the last attempt to rein in executive pay, which occurred during the first Clinton administration, may have actually exacerbated the problem. President Clinton believed that the tax code could be amended to help bring greater sanity to rocketing levels of pay. Section 162(m) of the IRS Code was amended to allow for a deduction for executive compensation in excess of $1,000,000 only if certain performance targets were achieved. Shrewd compensation quickly realized that stock-based compensation was not prohibited and served as the perfect work-around.

Similar attempts to legislate or regulate the problem are probably doomed to failure.  Pay reform is unquestionably necessary, as the incidence of unconscionable pay packages are increasing, and “super-sized slices shrink the pie,” but we need to retain the philosophical tenants of pay for performance in our society and corporations.

Googling Job Candidates and Consultants

Googling prospective job candidates has become standard practice among at least the more technologically savvy recruiters.  According to CareerBuilder, twenty-six percent of hiring managers said they have used Internet search engines to research potential employees, and 12 percent said they have used social networking sites.  According to a 2005 survey of 102 executive recruiters by ExecuNet, an executive job-search and networking organization, 75% of recruiters use search engines to uncover information about candidates, and 26% of recruiters have eliminated candidates because of information found online. I too have Googled prospective job candidates and potential human resources consultants for several years now, and have found it to be helpful.

LinkedIn and Zoominfo are also useful sites for finding more about individuals pre- and post-job interview.  Some job candidates may have a presence at one of the social networking sites such as MySpace, Faceback, or Friendster which can also provide a glimpse of their pursuits outside of the workplace – and in some instances their level of character.

For me, consultants or experienced senior-level human resources professionals who are not cited by Google constitutes a major red flag, suggesting that they have not delivered presentations, written meaningful articles, participated in professional or civic associations, or at least created a basic website.

An Irrefutable Case for Leadership Development

The most dangerous leadership myth is that leaders are born-that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born. Failing organizations are usually over-managed and under-led.”

   Warren Bennis

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For years, researchers and thought leaders like Warren Bennis have explored the debate over whether leaders are born or made. While the debate will surely continue, some conclusions are generally accepted, with one of the most important being that effective leadership can not be predicted by level of intelligence or education, family wealth or stability, birth order, ethnicity, race or gender. There is a much stronger body of evidence, originating from the Center for Creative Leadership, that leaders are developed through significant challenges and hardships either on, or away from the job.

The case for devoting significant resources and energy to leadership development is hardly new. There are a host of arguments for a well designed and implemented leadership development process that enables individuals to grow through job assignments and work experiences, including these:

Leadership Does Make a Difference

Leadership is one of the most important elements in successfully executing business strategy. After all, it’s people, through effective leadership, who implement business strategies and new product introductions – not spreadsheets, equipment or creative financial strategies. No fact better illustrates that than the finding that fifty-seven percent of the U.S. gross domestic product (GDP) is spent of workforce related expenditures. The most successful organizations appreciate that simple fact, and have a well honed ability to engage and obtain very high levels of contribution from their workforce through effective leadership.

The long term business success enjoyed by such firms as Pepsico and General Electric is directly traceable to both firm’s obsession with leadership development. The Wall Street Journal recently reported that GE spends over $1B annually on management and employee development at Crotonville and elsewhere. GE and Pepisco, and certainly many others, recognize that the more change that lies ahead, the more important it will be to have an effective leadership team. They strongly believe that the quality of leadership can be improved through management development processes.

Buying Talent is Expensive

Organizations can’t always find available talent outside or buy the leadership that they need. If they do, it comes with a commensurately-sized price tag, and no money-back guarantee. Sometimes bringing in talent from the outside may be the only feasible choice, but it’s expensive.

Career Derailments are Expensive

The cost of hiring an replacement at a senior level can range from 25% to almost 200% of annual compensation. The higher the level, the greater the expense. As John Kotter once remarked, there are many false positives. Organizations can not afford to not develop people in a manner that heightens the likelihood that they will be successful when they assume a key leadership position.

Darwinistic Development does not Work

A laissez-faire leadership development process predicated on a “slug-it-out†survival of the fittest is not the same thing as survival of the best. Unlike natural selection, the most capable do not always win in pugilistic contests that are designed to determine who’s the most competent survivor. Relying on such an approach is simply reckless.

Cost of Development is Already being Incurred

The Center for Creative Leadership, through the pioneering work of Michael Lombardo and Morgan McCall, established that most leadership development occurs on the job through challenging and stretch work assignments. If that’s the case, which most enlightened practitioners don’t deny, then the cost of development is already being incurred. Not to reap a return on this investment is bad business judgement.

Leadership Development is Simply a Good Business Practice.

Findings from the Towers-Perrin study, “How Leading Organizations Manage Talent,†underscore that talented people prefer to work for organizations that invest in their development. Workers respect organizations that realize people are not depreciating assets. Equally important, creating a learning environment where development is a key feature is consistent with business strategies that involve having employees take on more responsibility, assume more risk, and solve problems.

Summary

Employee and leadership development are viewed not only as a cost of doing business in high flying organizations, but also as an investment that produces nice returns to the bottom line even though its very difficult to measure. They recognize, borrowing a well known advertising tagline used by Fram, that with leadership development, it’s “pay me now or pay me later.â€

Happy Employees ≠≠ Operating Performance?

Which Comes First: Employee Attitudes or Organizational Financial and Market Performance”  is a great read on the causality between employee satisfaction and firm performance. The article reports on research findings that overall job satisfaction and satisfaction with security are predicted by ROA (return on assets) and EPS (earnings per share) more strongly than the reverse.

The authors acknowledge that rock solid conclusions are still elusive, but it would appear that this particular piece of work has chipped away at some the assumptions and inaccuracies in earlier pieces of work.

Might a more interesting challenge for future researchers be to explore the connection between engagement and performance, versus satisfaction and performance? After all, without disparaging a particular type of worker, industry or practice, one can easily conclude, through personal experiences, that a happy employee is not always a productive employee.

A Challenge for the Fortune 100 Best Employers

Fortune’s annual 100 Best Employers issue always presents me with the same perennial set of questions:

Can we assume that employees in these firms are more happy – and more importantly, more engaged with their work than the average employee in the U.S economy; and

If so, are these employees’ happiness being fueled by the “deep pockets” of the typical firm in the listing?

Monolithic bureaucracies in oligopolistic or regulated industries seem to be prime examples of firms with the financial wherewithal and competitive means to fund a spiffy array of workplace pleasantries, such as on-site pet day care centers or free espresso, without having to fret much about the bottom line.

Wouldn’t it be great to see firms of all sizes in the annual parade, or better yet, to base inclusion on third-party survey data, say from JD Powers, that validates the level of employee engagement (and not just satisfaction)in their workplaces?