Eyres v Atkinsons Kitchens & Bedrooms Ltd
Michael Eyres was an employee of Atkinsons Kitchens and Bedrooms. Late one evening, he crashed his van while returning to Bradford on the M1, having worked a 19-hour day and driven hundreds of miles. Eyres, who was not wearing a seatbelt, suffered a serious spinal injury in the accident, which left him tetraplegic.
Prior to the accident, while his managing director Craig Atkinson was asleep as a passenger, Eyres read and sent a number of text messages on his mobile phone while driving at high speed. The accident was caused by Eyres having to brake suddenly and losing control of the vehicle.
Eyres had claimed that his employer was liable in negligence and/or breach of statutory duty because it had caused or permitted him to drive when he was too tired having worked excessively long hours without a proper break.
Decision
The High Court found that it was Eyres' not paying attention through using his mobile phone that caused the accident, rather than his tiredness, and entered judgment in the defendant's favour. Eyres appealed.
The Court of Appeal overturned the High Court ruling, concluding that on a balance of probabilities the accident was caused by Eyres falling asleep, rather than using his mobile phone.
The Court of Appeal found that his employer, which encouraged a long-hours culture, had been negligent by requiring him to drive in such circumstances and doing nothing to guard against the risk of injury.
It was also directed that Eyres' damages should be reduced by 33% due to his contributory negligence in not wearing a seat belt and in driving while tired and liable to fall asleep.
Key implications
All employers should be alert to health and safety and working time requirements. However, employers of staff who engage in higher-risk activities (such as long-distance driving, working at height, or operating heavy or dangerous machinery) must take care to ensure they comply at all times with their duty of care to their employees. Casually asking an employee who has worked long hours, and is clearly suffering from fatigue, if they are "OK to carry on" with the relevant activity will not usually be sufficient.
The Eyres case is also a reminder that while risks taken by the employee may reduce damages through contributory negligence, they may not be enough to ensure that the employer escapes liability. Having exemptions or obtaining employee opt-outs from working time legislation will not prevent liability for health and safety or negligence claims.
The Corporate Manslaughter and Homicide Bill will bring such risks into even sharper focus.
Employers should ensure their health and safety policies adequately address risks that are relevant to their workforce, and that they:
Comply with all relevant health and safety and working time legislation for the industry in question.
Make it clear that a long working hours culture that puts employees' health and safety at risk is positively discouraged.
Ensure that working schedules and, where relevant, journey times are realistic and safe, with provision for rest breaks.
Put checks in place to ensure these schedules are adhered to.
Provide practical measures to ensure that employee health and safety is not placed at risk - for example, ensuring an overnight stay rather than requiring completion of a long road journey at the end of a working day.
By Adam Fuge, partner, Matthew Arnold & Baldwin
HR : http://www.personneltoday.com
Saturday, July 28, 2007
What is the 'same job' following maternity leave?
Blundell v St Andrews Catholic Primary School
When is a job not the same job? That was the question considered in Blundell v St Andrews Catholic Primary School, where for the first time the Employment Appeal Tribunal (EAT) considered the criteria to be used when assessing what exactly amounts to the 'same job' under the Maternity and Parental Leave Regulations 1999.
In the regulations, a woman returning from ordinary maternity leave has the right to "return to the same job, in which she was employed before her absence".
Background
Mrs Blundell was a primary school teacher. The practice in her school was for teachers to teach a particular class every two years and then rotate - to give them a breadth of experience.
At the time of commencing maternity leave in January 2004, she was in her second year of teaching the class 'reception yellow'. On her return to work, at the start of the following academic year, she was offered the choice of a floating role or teaching year two. She chose the latter. However, she claimed that this was a more stressful role, and not the same job that she had left prior to her maternity leave.
Decision
The EAT disagreed, and found her role to be that of a primary school teacher, and not specifically defined as a teacher of the reception yellow class.
An employer has to consider three things when deciding upon the 'same job': the 'nature' of the job, as provided by the contract of employment the 'capacity' in which the employee is employed, which is a factual label to describe the employee's function more than merely their status and the 'place' at which the employee works.
The issues of capacity and place are not dictated solely by the contract, but are to be decided by a tribunal on the particular facts. For example, where a mobility clause allowing for an alternative location exists in the contract of employment, this would not necessarily entitle an employer to move an employee on her return from maternity leave.
The EAT ruled that where there is variation to the role in practice, the employer is not obliged to "freeze time at the precise moment that maternity leave is taken, but may have regard to the normal range within which variation has previously occurred". It concluded that teaching year two was not outside the normal range of variability that she could reasonably have expected, and was therefore the 'same job'.
As her role was regularly rotated, the EAT found that the nature of her job was to teach at a primary school, her capacity was as a class teacher rather than a reception yellow teacher, and her place of work was at the school.
Key implications
Although of little comfort to Blundell, the EAT was keen to stress the purpose of the regulations, which is to ensure that women who return from maternity leave experience as little disruption as reasonably possible at an already stressful time for them.
While the EAT was sympathetic to the intentions of the regulations, the positive message for employers is that in practice, as in this case, it is likely that a generic job description and less rigid working practices will go a long way in affording them the flexibility that they may require.
The guidelines set out by the EAT are useful. However, nothing can be taken for granted and, where there is uncertainty, each case will still rest on its own facts.
Stefan Green is a lawyer in the employment and benefits team at Allen & Overy
HR LINK : http://www.personneltoday.com/
When is a job not the same job? That was the question considered in Blundell v St Andrews Catholic Primary School, where for the first time the Employment Appeal Tribunal (EAT) considered the criteria to be used when assessing what exactly amounts to the 'same job' under the Maternity and Parental Leave Regulations 1999.
In the regulations, a woman returning from ordinary maternity leave has the right to "return to the same job, in which she was employed before her absence".
Background
Mrs Blundell was a primary school teacher. The practice in her school was for teachers to teach a particular class every two years and then rotate - to give them a breadth of experience.
At the time of commencing maternity leave in January 2004, she was in her second year of teaching the class 'reception yellow'. On her return to work, at the start of the following academic year, she was offered the choice of a floating role or teaching year two. She chose the latter. However, she claimed that this was a more stressful role, and not the same job that she had left prior to her maternity leave.
Decision
The EAT disagreed, and found her role to be that of a primary school teacher, and not specifically defined as a teacher of the reception yellow class.
An employer has to consider three things when deciding upon the 'same job': the 'nature' of the job, as provided by the contract of employment the 'capacity' in which the employee is employed, which is a factual label to describe the employee's function more than merely their status and the 'place' at which the employee works.
The issues of capacity and place are not dictated solely by the contract, but are to be decided by a tribunal on the particular facts. For example, where a mobility clause allowing for an alternative location exists in the contract of employment, this would not necessarily entitle an employer to move an employee on her return from maternity leave.
The EAT ruled that where there is variation to the role in practice, the employer is not obliged to "freeze time at the precise moment that maternity leave is taken, but may have regard to the normal range within which variation has previously occurred". It concluded that teaching year two was not outside the normal range of variability that she could reasonably have expected, and was therefore the 'same job'.
As her role was regularly rotated, the EAT found that the nature of her job was to teach at a primary school, her capacity was as a class teacher rather than a reception yellow teacher, and her place of work was at the school.
Key implications
Although of little comfort to Blundell, the EAT was keen to stress the purpose of the regulations, which is to ensure that women who return from maternity leave experience as little disruption as reasonably possible at an already stressful time for them.
While the EAT was sympathetic to the intentions of the regulations, the positive message for employers is that in practice, as in this case, it is likely that a generic job description and less rigid working practices will go a long way in affording them the flexibility that they may require.
The guidelines set out by the EAT are useful. However, nothing can be taken for granted and, where there is uncertainty, each case will still rest on its own facts.
Stefan Green is a lawyer in the employment and benefits team at Allen & Overy
HR LINK : http://www.personneltoday.com/
Case of the week: When can the 'without prejudice' rule be set aside?
In Brunel University & Schwartz v Webster & Vaseghi, the Court of Appeal analysed the 'without prejudice' rule and circumstances in which the rule can be set aside.
The without prejudice privilege attaches to evidence of settlement negotiations aimed at resolving disputes, and prevents such evidence being referred to in proceedings. However, privilege will fall away where both parties waive it, and can also be withdrawn where it would otherwise conceal unlawful behaviour.
Facts
Vaseghi and Webster brought claims of race discrimination against Brunel University. The without prejudice discussions to settle the disputes were unsuccessful and tribunal hearings went ahead. Subsequently, in a university newsletter, the vice-chancellor complained about the cost of defending the claims, and alluded to the fact that the claims had been accompanied by "unwarranted demands for money". Vaseghi and Webster brought victimisation grievances and tribunal claims on the basis of these comments. An independent panel set up by the university heard the grievances, including evidence about the without prejudice discussions.
The tribunal pleadings and bundle also contained various references to the settlement discussions. However, when Vaseghi and Webster disclosed a statement by a solicitor about these discussions, the university's lawyers objected on the basis that the evidence was without prejudice.
Decision
The Court of Appeal said that privilege had been waived on the basis that both parties:
Gave or called evidence of the without prejudice discussions at the independent panel review (an unusual forum as it was adversarial in nature and a formal trial)
Referred to the without prejudice discussions in their respective pleadings.
However, the court said that, in normal cases where without prejudice discussions are mentioned at internal grievance meetings, privilege would not be waived.
While the court declined to comment on whether there was an exception to the without prejudice rule in cases of discrimination to prevent the rule from concealing the "evil" of discrimination, it did say that it could understand that it may be difficult to prove discrimination if the general without prejudice rule applies fully in every case.
Key implications
Be aware that without prejudice protection will not apply in all cases and is not absolute. To protect the without prejudice status of communications:
Consider whether there is a dispute before speaking on a without prejudice basis. The rule only applies where there is a dispute between the parties and the discussions are a genuine attempt to end the dispute.
Label settlement documents 'without prejudice', although remember that a document will not become privileged merely because of its label.
Only refer to without prejudice communications during internal grievance proceedings where absolutely necessary, and make it clear that privilege is not being waived. Where independent panels are set up to determine grievances, beware that adducing evidence of without prejudice communications is likely to waive privilege.
Do not refer to without prejudice documents or discussions in pleadings, witness statements or any other tribunal documents.
The privilege may not cover communications that disclose evidence of discrimination. There remains a risk that the without prejudice rule will be set aside to allow a claimant to prove discrimination.
By Judith Harris, professional support lawyer, Addleshaw Goddard
HR LINK : http://www.personneltoday.com/
The without prejudice privilege attaches to evidence of settlement negotiations aimed at resolving disputes, and prevents such evidence being referred to in proceedings. However, privilege will fall away where both parties waive it, and can also be withdrawn where it would otherwise conceal unlawful behaviour.
Facts
Vaseghi and Webster brought claims of race discrimination against Brunel University. The without prejudice discussions to settle the disputes were unsuccessful and tribunal hearings went ahead. Subsequently, in a university newsletter, the vice-chancellor complained about the cost of defending the claims, and alluded to the fact that the claims had been accompanied by "unwarranted demands for money". Vaseghi and Webster brought victimisation grievances and tribunal claims on the basis of these comments. An independent panel set up by the university heard the grievances, including evidence about the without prejudice discussions.
The tribunal pleadings and bundle also contained various references to the settlement discussions. However, when Vaseghi and Webster disclosed a statement by a solicitor about these discussions, the university's lawyers objected on the basis that the evidence was without prejudice.
Decision
The Court of Appeal said that privilege had been waived on the basis that both parties:
Gave or called evidence of the without prejudice discussions at the independent panel review (an unusual forum as it was adversarial in nature and a formal trial)
Referred to the without prejudice discussions in their respective pleadings.
However, the court said that, in normal cases where without prejudice discussions are mentioned at internal grievance meetings, privilege would not be waived.
While the court declined to comment on whether there was an exception to the without prejudice rule in cases of discrimination to prevent the rule from concealing the "evil" of discrimination, it did say that it could understand that it may be difficult to prove discrimination if the general without prejudice rule applies fully in every case.
Key implications
Be aware that without prejudice protection will not apply in all cases and is not absolute. To protect the without prejudice status of communications:
Consider whether there is a dispute before speaking on a without prejudice basis. The rule only applies where there is a dispute between the parties and the discussions are a genuine attempt to end the dispute.
Label settlement documents 'without prejudice', although remember that a document will not become privileged merely because of its label.
Only refer to without prejudice communications during internal grievance proceedings where absolutely necessary, and make it clear that privilege is not being waived. Where independent panels are set up to determine grievances, beware that adducing evidence of without prejudice communications is likely to waive privilege.
Do not refer to without prejudice documents or discussions in pleadings, witness statements or any other tribunal documents.
The privilege may not cover communications that disclose evidence of discrimination. There remains a risk that the without prejudice rule will be set aside to allow a claimant to prove discrimination.
By Judith Harris, professional support lawyer, Addleshaw Goddard
HR LINK : http://www.personneltoday.com/
Case of the week: 'Without prejudice' discussions
Framlington Group Ltd and Axa Framlington Group Ltd v Barnetson (Court of Appeal)
Hot on the heels of Brunel University & Schwartz v Webster & Vaseghi (see case of the week, Personnel Today, 12 June), which dealt with the circumstances in which the 'without prejudice' rule can be set aside, comes a second Court of Appeal case - Framlington Group Ltd and Axa Framlington Group Ltd v Barnetson.
Written or oral communications made in a genuine attempt to resolve a dispute will generally be protected by the without prejudice rule. This means that those communications cannot be used as evidence in court proceedings in relation to that dispute.
It is well established that where settlement negotiations occur in the context of litigation, or threatened litigation, those negotiations will be covered by the without prejudice rule. However, in the 2004 case of BNP Paribas v Ms A Mezzotero the EAT restricted the operation of the rule and said that it would only apply where litigation was likely and not before that point.
Framlington follows on from Mezzotero, and considers, for the first time, whether discussions that took place months before litigation started, or was even likely, will be covered by the rule.
Facts
In early 2005, Mr Barnetson started employment as chief operating officer at Framlington Group Ltd. He was told that his orally agreed terms and conditions would be confirmed in writing at a later date. However, when Barnetson pursued this written confirmation, a difference of opinion arose as to the terms that had been agreed. Discussions around his terms took place until the end of October 2005, at which point Framlington told Barnetson it intended to dismiss him at the end of the year.
Further negotiations ensued, during which a compromise agreement was produced and Barnetson set out the terms on which he would be prepared to settle. These discussions broke down and on 20 December 2005, Barnetson was given notice that his employment would terminate.
Barnetson brought proceedings for damages for wrongful dismissal in April 2006. Framlington alleged that certain parts of Barnetson's witness statement in support of his claim should not be allowed because they related to without prejudice discussions that had taken place between the end of October and 20 December 2005. The High Court judge rejected this argument. Framlington appealed.
Decision
The Court of Appeal held that, once Framlington had told Barnetson it intended to dismiss him, the discussions that followed were without prejudice and could not, therefore, be used as evidence in the court proceedings.
There was a public policy consideration underlying the without prejudice rule namely, to encourage people to settle their disputes without resorting to litigation. In light of this aim, it was not appropriate to set a time limit prior to litigation before which any discussions would not be protected. Rather, courts should determine the point at which, during the course of negotiations, the parties contemplated, or might reasonably have contemplated, litigation if they could not reach agreement.
Key implications
This case clarifies the circumstances in which discussions with staff will be covered by the without prejudice rule:
There is no need for litigation to be threatened or underway for negotiations to be protected. If it is clear that the parties understood that litigation might result if the negotiations failed, then such discussions are likely to be protected.
The discussions in this case were only protected from the point at which Barnetson was told of his employer's intention to dismiss him. Discussions during internal grievances are unlikely to be protected.
By Laura Green, assistant solicitor, Lovells' Employment Group
HR Link : http://www.personneltoday.com
Hot on the heels of Brunel University & Schwartz v Webster & Vaseghi (see case of the week, Personnel Today, 12 June), which dealt with the circumstances in which the 'without prejudice' rule can be set aside, comes a second Court of Appeal case - Framlington Group Ltd and Axa Framlington Group Ltd v Barnetson.
Written or oral communications made in a genuine attempt to resolve a dispute will generally be protected by the without prejudice rule. This means that those communications cannot be used as evidence in court proceedings in relation to that dispute.
It is well established that where settlement negotiations occur in the context of litigation, or threatened litigation, those negotiations will be covered by the without prejudice rule. However, in the 2004 case of BNP Paribas v Ms A Mezzotero the EAT restricted the operation of the rule and said that it would only apply where litigation was likely and not before that point.
Framlington follows on from Mezzotero, and considers, for the first time, whether discussions that took place months before litigation started, or was even likely, will be covered by the rule.
Facts
In early 2005, Mr Barnetson started employment as chief operating officer at Framlington Group Ltd. He was told that his orally agreed terms and conditions would be confirmed in writing at a later date. However, when Barnetson pursued this written confirmation, a difference of opinion arose as to the terms that had been agreed. Discussions around his terms took place until the end of October 2005, at which point Framlington told Barnetson it intended to dismiss him at the end of the year.
Further negotiations ensued, during which a compromise agreement was produced and Barnetson set out the terms on which he would be prepared to settle. These discussions broke down and on 20 December 2005, Barnetson was given notice that his employment would terminate.
Barnetson brought proceedings for damages for wrongful dismissal in April 2006. Framlington alleged that certain parts of Barnetson's witness statement in support of his claim should not be allowed because they related to without prejudice discussions that had taken place between the end of October and 20 December 2005. The High Court judge rejected this argument. Framlington appealed.
Decision
The Court of Appeal held that, once Framlington had told Barnetson it intended to dismiss him, the discussions that followed were without prejudice and could not, therefore, be used as evidence in the court proceedings.
There was a public policy consideration underlying the without prejudice rule namely, to encourage people to settle their disputes without resorting to litigation. In light of this aim, it was not appropriate to set a time limit prior to litigation before which any discussions would not be protected. Rather, courts should determine the point at which, during the course of negotiations, the parties contemplated, or might reasonably have contemplated, litigation if they could not reach agreement.
Key implications
This case clarifies the circumstances in which discussions with staff will be covered by the without prejudice rule:
There is no need for litigation to be threatened or underway for negotiations to be protected. If it is clear that the parties understood that litigation might result if the negotiations failed, then such discussions are likely to be protected.
The discussions in this case were only protected from the point at which Barnetson was told of his employer's intention to dismiss him. Discussions during internal grievances are unlikely to be protected.
By Laura Green, assistant solicitor, Lovells' Employment Group
HR Link : http://www.personneltoday.com
Case of the week: Banking on the bonus doesn't pay
Ridgway v JP Morgan Chase Bank National Association, High Court
What is the extent of an employer's discretion when making bonus decisions? We already know that discretion is not completely unfettered, and that employers must not act in a way that is irrational or perverse when making bonus decisions. But does that authorise an employer to award no bonus whatsoever?
Background
In Ridgway v JP Morgan, the High Court decided that the bank was entitled to award a 'nil' bonus to a trader who had spent most of the bonus year on sabbatical.
Mr Ridgway, who headed up the bank's options desk, took an unpaid sabbatical starting in April 2003. One of the terms of the sabbatical agreement was that Ridgway would continue to be eligible for a discretionary bonus for the year ending December 2003. At the end of the bonus year, the bank awarded Ridgway a nil bonus.
On his return from sabbatical, Ridgway's previous job was unavailable, and he and the bank failed to agree on an alternative role for him. Ridgway resigned and claimed constructive dismissal. He claimed compensation for his bonus on the basis that the bonus decision was irrational and perverse, as well as compensation for stock awards that he lost as a result of resigning.
Decision
The High Court dismissed all of Ridgway's claims. In relation to the bonus claim, it followed the guidelines for the award of discretionary bonuses set out in the recent Court of Appeal decision of Commerzbank v Keen. In Commerzbank, the Court of Appeal said the hurdle is set very high for an employee to show that a bonus decision is irrational or perverse. However, the Court of Appeal also said an employer must identify the reason for a bonus award and the decision maker.
The High Court said the bank had been entitled to award Ridgway a nil bonus after taking into account the fact that he had been on sabbatical for most of the bonus year. The bank had also taken into account the fact that Ridgway had been making a loss when he went on sabbatical, that his 'add-on' contribution was very limited, and that there were no other factors to justify awarding a bonus.
The court endorsed Commerzbank and said the task of proving irrationality or perversity in the exercise of the bank's discretion to award a bonus is a "daunting one".
Key implications
Following the Commerzbank and JP Morgan decisions, courts will be reluctant to intervene in bonus decisions except in exceptional cases. However, bonus decisions are subject to challenge where the decision appears irrational and/or where the decision-making process is not transparent. Employers should be mindful of the following when making discretionary bonus decisions:
Properly and fully consider whether to award a discretionary bonus and, if so, the amount of the award.
Ensure the decision-making process is transparent and provide reasons why the bonus was assessed at the level it was so that the employee has an understanding as to how the figure was reached.
Tell the employee who made the bonus decision.
Review bonus wording to ensure it provides the level of discretion required (subject, of course, to the legal limitations set out above).
By Judith Harris, professional support lawyer, Addleshaw Goddard
Employers' Law
Each month, Employers' Law magazine outlines the latest legal rulings and what these mean for you. Click here to subscribe, or call 01444 445566.
Article by : http://www.personneltoday.com
What is the extent of an employer's discretion when making bonus decisions? We already know that discretion is not completely unfettered, and that employers must not act in a way that is irrational or perverse when making bonus decisions. But does that authorise an employer to award no bonus whatsoever?
Background
In Ridgway v JP Morgan, the High Court decided that the bank was entitled to award a 'nil' bonus to a trader who had spent most of the bonus year on sabbatical.
Mr Ridgway, who headed up the bank's options desk, took an unpaid sabbatical starting in April 2003. One of the terms of the sabbatical agreement was that Ridgway would continue to be eligible for a discretionary bonus for the year ending December 2003. At the end of the bonus year, the bank awarded Ridgway a nil bonus.
On his return from sabbatical, Ridgway's previous job was unavailable, and he and the bank failed to agree on an alternative role for him. Ridgway resigned and claimed constructive dismissal. He claimed compensation for his bonus on the basis that the bonus decision was irrational and perverse, as well as compensation for stock awards that he lost as a result of resigning.
Decision
The High Court dismissed all of Ridgway's claims. In relation to the bonus claim, it followed the guidelines for the award of discretionary bonuses set out in the recent Court of Appeal decision of Commerzbank v Keen. In Commerzbank, the Court of Appeal said the hurdle is set very high for an employee to show that a bonus decision is irrational or perverse. However, the Court of Appeal also said an employer must identify the reason for a bonus award and the decision maker.
The High Court said the bank had been entitled to award Ridgway a nil bonus after taking into account the fact that he had been on sabbatical for most of the bonus year. The bank had also taken into account the fact that Ridgway had been making a loss when he went on sabbatical, that his 'add-on' contribution was very limited, and that there were no other factors to justify awarding a bonus.
The court endorsed Commerzbank and said the task of proving irrationality or perversity in the exercise of the bank's discretion to award a bonus is a "daunting one".
Key implications
Following the Commerzbank and JP Morgan decisions, courts will be reluctant to intervene in bonus decisions except in exceptional cases. However, bonus decisions are subject to challenge where the decision appears irrational and/or where the decision-making process is not transparent. Employers should be mindful of the following when making discretionary bonus decisions:
Properly and fully consider whether to award a discretionary bonus and, if so, the amount of the award.
Ensure the decision-making process is transparent and provide reasons why the bonus was assessed at the level it was so that the employee has an understanding as to how the figure was reached.
Tell the employee who made the bonus decision.
Review bonus wording to ensure it provides the level of discretion required (subject, of course, to the legal limitations set out above).
By Judith Harris, professional support lawyer, Addleshaw Goddard
Employers' Law
Each month, Employers' Law magazine outlines the latest legal rulings and what these mean for you. Click here to subscribe, or call 01444 445566.
Article by : http://www.personneltoday.com
Ownership of contacts lists after employment has ended
PennWell Publishing (UK) Limited v Isles
Who owns a contacts list maintained by an employee in Outlook on the employer's computer system? In PennWell Publishing (UK) Limited v Isles, the High Court decided that the list belonged to the employer, despite the fact that it contained personal contacts and contacts that the employee had made before his employment had started.
Background
Mr Isles, a journalist, was employed as a publisher and conference chairman for PennWell. During his employment, he created and maintained a contacts list on PennWell's Outlook system, which included personal contacts, journalistic contacts and contacts that he had made before his employment started, as well as business contacts that he developed in his role with PennWell.
After Isles left PennWell to set up a competing business, it discovered that he had downloaded the entire Outlook contacts list from his work laptop.
Isles's contract stated that all documents used during employment belonged to the company and had to be returned before he left.
PennWell applied for an injunction for the return of the contacts list. Isles argued that most of the contacts on the list were personal to him.
Decision
The High Court had to decide whether the contacts list belonged exclusively to either PennWell or Isles or whether it was jointly owned by both.
The High Court said that where an address list is contained in Outlook or a similar software that is part of the employer's e-mail system and backed-up by the employer, the database or list belongs to the employer and may not be copied or removed in its entirety by employees for use outside or after employment. The High Court said that it would be "highly desirable" for employers to publish e-mail policies to communicate this to employees. While PennWell had an appropriate e-mail policy, the policy had not been effectively communicated to Isles and, therefore, PennWell was not entitled to rely on it.
Had Isles maintained his list of contacts as a separate, private address book, he would most likely have been entitled to that list. The court distinguished between contacts developed for the purposes of employment, where removal of contact information would be detrimental to the employer, and other contacts that an employee might keep for career purposes.
The court concluded that the list belonged to PennWell, but that Isles could copy from it his journalistic contacts and those made before his employment started.
Key implications
The confusion over ownership of the contacts lists that led to this case coming to court highlights the need for clear policies on ownership of contacts information. Employers should as a minimum:
Review e-mail policies to ensure they clearly identify what information is considered to belong to the employer, and confirm that it may not be removed or copied.
Communicate e-mail policies to all existing staff and bring these to the attention of new employees.
Ensure that confidentiality and return of property provisions in contracts cover contacts information and state what information will be protected/must be returned after employment.
Consider giving employees the option of a personal contacts folder to maintain contacts that are personal and/or those that pre-date employment.
Judith Harris, professional support lawyer, Addleshaw Goddard
HR : http://www.personneltoday.com
Who owns a contacts list maintained by an employee in Outlook on the employer's computer system? In PennWell Publishing (UK) Limited v Isles, the High Court decided that the list belonged to the employer, despite the fact that it contained personal contacts and contacts that the employee had made before his employment had started.
Background
Mr Isles, a journalist, was employed as a publisher and conference chairman for PennWell. During his employment, he created and maintained a contacts list on PennWell's Outlook system, which included personal contacts, journalistic contacts and contacts that he had made before his employment started, as well as business contacts that he developed in his role with PennWell.
After Isles left PennWell to set up a competing business, it discovered that he had downloaded the entire Outlook contacts list from his work laptop.
Isles's contract stated that all documents used during employment belonged to the company and had to be returned before he left.
PennWell applied for an injunction for the return of the contacts list. Isles argued that most of the contacts on the list were personal to him.
Decision
The High Court had to decide whether the contacts list belonged exclusively to either PennWell or Isles or whether it was jointly owned by both.
The High Court said that where an address list is contained in Outlook or a similar software that is part of the employer's e-mail system and backed-up by the employer, the database or list belongs to the employer and may not be copied or removed in its entirety by employees for use outside or after employment. The High Court said that it would be "highly desirable" for employers to publish e-mail policies to communicate this to employees. While PennWell had an appropriate e-mail policy, the policy had not been effectively communicated to Isles and, therefore, PennWell was not entitled to rely on it.
Had Isles maintained his list of contacts as a separate, private address book, he would most likely have been entitled to that list. The court distinguished between contacts developed for the purposes of employment, where removal of contact information would be detrimental to the employer, and other contacts that an employee might keep for career purposes.
The court concluded that the list belonged to PennWell, but that Isles could copy from it his journalistic contacts and those made before his employment started.
Key implications
The confusion over ownership of the contacts lists that led to this case coming to court highlights the need for clear policies on ownership of contacts information. Employers should as a minimum:
Review e-mail policies to ensure they clearly identify what information is considered to belong to the employer, and confirm that it may not be removed or copied.
Communicate e-mail policies to all existing staff and bring these to the attention of new employees.
Ensure that confidentiality and return of property provisions in contracts cover contacts information and state what information will be protected/must be returned after employment.
Consider giving employees the option of a personal contacts folder to maintain contacts that are personal and/or those that pre-date employment.
Judith Harris, professional support lawyer, Addleshaw Goddard
HR : http://www.personneltoday.com
Thursday, July 26, 2007
10 Tips For Planning A Corporate Incentive Travel Program
Corporate incentive travel is a great way to motivate and reward your valuable employees. Incentive travel can be group or individual, and the destination can be local or international. But every successful incentive travel program begins with careful planning.
The following are tips to help you plan a corporate travel program that fits your company’s culture, size and available budget:
Determine your corporate incentive program goals. In specific terms, establish what the incentive program should accomplish. This could be an increase in sales, increase in production output or profits, or a reduction in defective products, sales returns or lost contracts. Be sure to assign a value to the improvement or reduction - a percentage, absolute number of units or contracts, or a dollar figure.
Select the target group for the program. This could be management, employees, salespeople, or even customers.
Discover what the target’s values, interests and preferences through paper surveys or interviews. Then browse our corporate incentives guide to match up preferences with available packages in your budget range.
Considering past performance and employee behavior, establish reasonable tasks for your target group.
Make sure you have a performance tracking system in place with a clear way to measure incentive program results.
Brainstorm what obstacles may exist to the success of the incentive program. This could be current employee morale, organizational structure or market conditions.
Determine whether the program will be managed internally or outsourced to an agency.
Understand applicable tax implications. Travel can be taxable to recipients under certain conditions, and special tax forms may be required.
When selecting a corporate incentive travel company, make sure it agrees to fulfill what is promised for your budgeted cost, and that you understand its cancellation policies.
At the end of your program, survey winners and non-winners to determine whether the program was successful in meeting the objective.
Corporate Travel on a Smaller Budget
Even if you can’t afford to whisk your top performers away to Europe on a private jet, you can still reward your employees with incentive travel that they can enjoy.
If you can afford to send your team away on a teambuilding retreat, it doesn’t have to be far away. Campsites and resorts, even a day on a chartered boat can create a memorable experience. For individuals, it’s a better idea to send your recipient somewhere exotic enough to be memorable. If possible, allowing a spouse or children to accompany your employee is also a good idea.
An employee incentive getaway generally lasts from three nights to a full week, but weekend getaways can also work for smaller budgets. Accommodation could be in a bed and breakfast. Check travel and hotel websites often to catch their “travel best bets.”
Conclusion
For any corporate incentive travel program to accomplish its goal, you must determine how much you can spend, what options are available and what people want. And you must anticipate potential problems both within and without your organization. A clear system for measuring results will help you with future planning. Even on a smaller budget, corporate incentive travel can benefit your organization.
Linda Bustos is the Director of Marketing for Image X Media, a full service web design firm in Vancouver.
Back to HR Article Directory
The following are tips to help you plan a corporate travel program that fits your company’s culture, size and available budget:
Determine your corporate incentive program goals. In specific terms, establish what the incentive program should accomplish. This could be an increase in sales, increase in production output or profits, or a reduction in defective products, sales returns or lost contracts. Be sure to assign a value to the improvement or reduction - a percentage, absolute number of units or contracts, or a dollar figure.
Select the target group for the program. This could be management, employees, salespeople, or even customers.
Discover what the target’s values, interests and preferences through paper surveys or interviews. Then browse our corporate incentives guide to match up preferences with available packages in your budget range.
Considering past performance and employee behavior, establish reasonable tasks for your target group.
Make sure you have a performance tracking system in place with a clear way to measure incentive program results.
Brainstorm what obstacles may exist to the success of the incentive program. This could be current employee morale, organizational structure or market conditions.
Determine whether the program will be managed internally or outsourced to an agency.
Understand applicable tax implications. Travel can be taxable to recipients under certain conditions, and special tax forms may be required.
When selecting a corporate incentive travel company, make sure it agrees to fulfill what is promised for your budgeted cost, and that you understand its cancellation policies.
At the end of your program, survey winners and non-winners to determine whether the program was successful in meeting the objective.
Corporate Travel on a Smaller Budget
Even if you can’t afford to whisk your top performers away to Europe on a private jet, you can still reward your employees with incentive travel that they can enjoy.
If you can afford to send your team away on a teambuilding retreat, it doesn’t have to be far away. Campsites and resorts, even a day on a chartered boat can create a memorable experience. For individuals, it’s a better idea to send your recipient somewhere exotic enough to be memorable. If possible, allowing a spouse or children to accompany your employee is also a good idea.
An employee incentive getaway generally lasts from three nights to a full week, but weekend getaways can also work for smaller budgets. Accommodation could be in a bed and breakfast. Check travel and hotel websites often to catch their “travel best bets.”
Conclusion
For any corporate incentive travel program to accomplish its goal, you must determine how much you can spend, what options are available and what people want. And you must anticipate potential problems both within and without your organization. A clear system for measuring results will help you with future planning. Even on a smaller budget, corporate incentive travel can benefit your organization.
Linda Bustos is the Director of Marketing for Image X Media, a full service web design firm in Vancouver.
Back to HR Article Directory
How To Create Lasting Change & Achieve Greater Success At Work
“This year, I’m going to get that raise.”
“I will get my desk organized once and for all.”
“I’ll have better work/life balance.”
“I’ll start that business I’ve always dreamed about.”
At some point we’ve all vowed to make some big change – similar to the resolutions above. But by the time the rosy blush of good intentions wears off, the resolution gets pushed aside. Not because we don’t still long to have what we want, but because we just don’t know how to change.
Changing your behavior takes work.
Our brains have enormous “plasticity,” meaning they can create new cells and pathways. But our brains create strong tendencies to do the same thing over and over.
Here’s why:
The brain cells that fire together wire together. Meaning, they have a strong tendency to run the same program the next time. That’s why lasting change takes lots of practice; you’ve got to create a pathway to the new options.
According to many brain scientists it can take six to nine months to change your behavior. Yet people continue to waste so much money on those seven-day miracle programs and then wonder why they have not experienced lasting change and greater success at work.
Here’s The Top 3 Reasons Why Many Business Entrepreneurs and Executives Fail To Change Their Behavior & Achieve Greater Business Success:
1. They’ve not yet realized that the change process is not about getting rid of bad habits. The pathway to your current behavior is there for life. Instead you want to focus on creating new, more positive habits that will positively affect your business. Even stopping doing something, like procrastinating, is really about creating a good new habit, starting sooner.
2. They fail to put external reminders in place, at least in the beginning. Unless you have a trigger from the outside like an email reminder, or a buddy it’s very likely you’ll keep defaulting to the old behavior because it’s automatic. That’s also why it’s so important to be willing to start over no matter how often you blow it or get discouraged.
3. They’re not concrete enough about what they want and are unrealistic about what they can reasonably ask themselves to change. Here’s what an executive client of mine said he wanted to change in three months: “to be more positive with co-workers, staff and colleagues, to be more creative and productive and to take better care of myself.” “How about create world peace while you’re at it?” I replied. “And what does `more’ mean anyway? As this client demonstrated, we expect too much of ourselves and we expect to change overnight. When that doesn’t happen, we resign ourselves to staying the same, convinced that we are hopeless, weak, or unmotivated. Which makes us even more stuck in a rut.
To truly change your behavior and achiever greater business success requires three things: desire, intent, and persistence. You have to identify what you desire enough to be willing to stick to. You have to make SMART goals (Specific, Measurable, Achievable, Relevant and Time-bound) like “leave the computer at the office and don’t look at the Blackberry after 9” rather than “having more balance”. You need determination and persistence to try again no matter how many times you blow it. Most importantly you need to avoid my top 10 common resolution pitfalls.
My Top 10 List of Resolution Pitfalls
1. Being vague about what you want
2. Not making a serious commitment
3. Excuse-making—no time, wrong time, dog ate homework 4. Unwilling to go through the awkward phase 5. Not setting up a tracking and reminder system 6. Expecting perfection and falling into guilt, shame, and regret 7. Trying to change by yourself 8. Telling yourself self-limiting rut stories 9. Not having backup plans 10. Turning slip-ups to give-ups
Armed with a new attitude and behavior, you can create lasting change and achieve greater success at work. When you have this invaluable tool in your arsenal, you’ll be empowered to bring anything you want into reality. You’ll become the master of your fate rather than the victim of old choices.
bio: M.J. Ryan is an executive coach and the author of THIS YEAR I WILL…How to Finally Change a Habit, Keep a Resolution or Make a Dream Come True. To receive a ton of free resources including free daily “I Will Power” emails that will help you make and actually keep your promises and achieve greater business success this year, go to http://www.mj-ryan.com
bio: M.J. Ryan is an executive coach and the author of THIS YEAR I WILL…How to Finally Change a Habit, Keep a Resolution or Make a Dream Come True. To receive a ton of free resources including free daily “I Will Power” emails that will help you make and actually keep your promises and achieve greater business success this year, go to http://www.mj-ryan.com
Back to HR Article Directory
“I will get my desk organized once and for all.”
“I’ll have better work/life balance.”
“I’ll start that business I’ve always dreamed about.”
At some point we’ve all vowed to make some big change – similar to the resolutions above. But by the time the rosy blush of good intentions wears off, the resolution gets pushed aside. Not because we don’t still long to have what we want, but because we just don’t know how to change.
Changing your behavior takes work.
Our brains have enormous “plasticity,” meaning they can create new cells and pathways. But our brains create strong tendencies to do the same thing over and over.
Here’s why:
The brain cells that fire together wire together. Meaning, they have a strong tendency to run the same program the next time. That’s why lasting change takes lots of practice; you’ve got to create a pathway to the new options.
According to many brain scientists it can take six to nine months to change your behavior. Yet people continue to waste so much money on those seven-day miracle programs and then wonder why they have not experienced lasting change and greater success at work.
Here’s The Top 3 Reasons Why Many Business Entrepreneurs and Executives Fail To Change Their Behavior & Achieve Greater Business Success:
1. They’ve not yet realized that the change process is not about getting rid of bad habits. The pathway to your current behavior is there for life. Instead you want to focus on creating new, more positive habits that will positively affect your business. Even stopping doing something, like procrastinating, is really about creating a good new habit, starting sooner.
2. They fail to put external reminders in place, at least in the beginning. Unless you have a trigger from the outside like an email reminder, or a buddy it’s very likely you’ll keep defaulting to the old behavior because it’s automatic. That’s also why it’s so important to be willing to start over no matter how often you blow it or get discouraged.
3. They’re not concrete enough about what they want and are unrealistic about what they can reasonably ask themselves to change. Here’s what an executive client of mine said he wanted to change in three months: “to be more positive with co-workers, staff and colleagues, to be more creative and productive and to take better care of myself.” “How about create world peace while you’re at it?” I replied. “And what does `more’ mean anyway? As this client demonstrated, we expect too much of ourselves and we expect to change overnight. When that doesn’t happen, we resign ourselves to staying the same, convinced that we are hopeless, weak, or unmotivated. Which makes us even more stuck in a rut.
To truly change your behavior and achiever greater business success requires three things: desire, intent, and persistence. You have to identify what you desire enough to be willing to stick to. You have to make SMART goals (Specific, Measurable, Achievable, Relevant and Time-bound) like “leave the computer at the office and don’t look at the Blackberry after 9” rather than “having more balance”. You need determination and persistence to try again no matter how many times you blow it. Most importantly you need to avoid my top 10 common resolution pitfalls.
My Top 10 List of Resolution Pitfalls
1. Being vague about what you want
2. Not making a serious commitment
3. Excuse-making—no time, wrong time, dog ate homework 4. Unwilling to go through the awkward phase 5. Not setting up a tracking and reminder system 6. Expecting perfection and falling into guilt, shame, and regret 7. Trying to change by yourself 8. Telling yourself self-limiting rut stories 9. Not having backup plans 10. Turning slip-ups to give-ups
Armed with a new attitude and behavior, you can create lasting change and achieve greater success at work. When you have this invaluable tool in your arsenal, you’ll be empowered to bring anything you want into reality. You’ll become the master of your fate rather than the victim of old choices.
bio: M.J. Ryan is an executive coach and the author of THIS YEAR I WILL…How to Finally Change a Habit, Keep a Resolution or Make a Dream Come True. To receive a ton of free resources including free daily “I Will Power” emails that will help you make and actually keep your promises and achieve greater business success this year, go to http://www.mj-ryan.com
bio: M.J. Ryan is an executive coach and the author of THIS YEAR I WILL…How to Finally Change a Habit, Keep a Resolution or Make a Dream Come True. To receive a ton of free resources including free daily “I Will Power” emails that will help you make and actually keep your promises and achieve greater business success this year, go to http://www.mj-ryan.com
Back to HR Article Directory
Employee Performance Appraisal — An Ideal System
Creating a Link Between Company Success and Employee Accountability
In America’s best-run and most-admired organizations, employee performance appraisal is a vital and vigorous management tool. No other management process has as much influence on individuals’ careers and work lives. Used well, employee performance appraisal is the most powerful instrument that organizations have to mobilize the energy of every employee in the enterprise toward the achievement of strategic goals. Employee performance appraisal can focus each person’s attention on the company’s mission, vision and values. And ideally, the process can answer the two fundamental questions that every single person in the organization wants the answers to: What do you expect of me? And How am I doing?
But most folks scoff at the idea that there might be a perfect system for doing employee performance appraisal. They think that since their organization is “unique,” then their system for analyzing employee performance must be unique, too. How foolish.
Don’t scoff — there is an ideal method for the assessment process. In organizations that take employee performance appraisal seriously and use the process well, the system functions as an on-going process – not merely an annual event – by following a four-phase model.
Phase 1 — Employee Performance Planning
At the beginning of the year, the manager meets with each person for discussion on the planning piece of the employee performance appraisal process. In this hour-long session they discuss the “how” and the “what” of the job:
How the person will do the job (the behaviors and competencies expected of the company’s members), and
What results the person will achieve over the next twelve months (the key responsibilities of the person’s job and the goals and projects the person will work on).
They also discuss the individual’s development plans. This discussion immediately generates improved employee performance because people know exactly what’s expected of them. And as the manager, you have just earned the right to hold people accountable at the end of the year by making your expectations of them clear from the start.
Phase 2 — Employee Performance Execution
Over the course of the year, employee performance should be focused on achieving the goals, objectives and key responsibilities of the job. The manager provides coaching and feedback to the individual to increase the probability of success and creates the conditions that motivate and resolve any performance problems that arise.
Midway through the year — perhaps even more frequently — they meet to review the individual’s progress toward the plans and goals discussed in the employee performance planning meeting. And the employee is responsible for certain elements of that progress – seeking out coaching and asking for feedback are two key examples.
Phase 3 — Employee Performance Assessment
As the time for the formal employee performance appraisal approaches, the manager reflects on how well the subordinate has performed over the course of the year, assembles the various forms and paperwork that the organization provides to make this assessment, and fills them out. The manager may also recommend a change in the individual’s compensation based on the quality of the individual’s work.
Best practice calls for the appraiser’s boss to review the completed assessment form before discussing it with the assessed employee. One key here is not falling victim to the “myth of quantifiability” — the erroneous belief that in order to be objective you’ve got to have numerical data to prove your assessments. Nonsense! An employee performance appraisal is a record of a manager’s opinion of an employee’s quality of work, so don’t shirk from candidly providing that opinion.
Phase 4 — Employee Performance Review
The manager and the subordinate meet, usually for about an hour. The employee performance appraisal form is reviewed with the self-appraisal that the individual created assessing her own performance. The manager and employee talk honestly about how well she performed over the past twelve months: Strengths, weaknesses, successes and areas needing improvement. At the end of the review meeting they set a date to meet again to hold an employee performance planning discussion for the upcoming twelve months, starting the process anew.
This four-phase performance appraisal process not only transforms employee performance management from an annual event to an on-going cycle, it tightly links the performance of each organization member with the mission and values of the company as a whole. And that’s the real purpose of employee performance appraisal in the organization. The real value is focusing everyone’s attention on what is genuinely important — the achievement of the organization’s strategic goals through demonstration of the company’s vision and values in each employee’s day-to-day behavior.
About Dick Grote (HTML)
Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and management. As a consultant, he has created employee performance management systems for several hundred of the world’s best known and most respected companies, including Texas Instruments, JCPenney, Miller Brewing Company, American Airlines, Macy’s, Raytheon, Burlington Northern Santa Fe Railroad, and Herman Miller. His company, Grote Consulting, specializes in employee performance appraisal, employee improvement and talent management.
For more information about Dick Grote and Grote Consulting, visit: http://www.groteconsulting.com/
Back to HR Article Directory
In America’s best-run and most-admired organizations, employee performance appraisal is a vital and vigorous management tool. No other management process has as much influence on individuals’ careers and work lives. Used well, employee performance appraisal is the most powerful instrument that organizations have to mobilize the energy of every employee in the enterprise toward the achievement of strategic goals. Employee performance appraisal can focus each person’s attention on the company’s mission, vision and values. And ideally, the process can answer the two fundamental questions that every single person in the organization wants the answers to: What do you expect of me? And How am I doing?
But most folks scoff at the idea that there might be a perfect system for doing employee performance appraisal. They think that since their organization is “unique,” then their system for analyzing employee performance must be unique, too. How foolish.
Don’t scoff — there is an ideal method for the assessment process. In organizations that take employee performance appraisal seriously and use the process well, the system functions as an on-going process – not merely an annual event – by following a four-phase model.
Phase 1 — Employee Performance Planning
At the beginning of the year, the manager meets with each person for discussion on the planning piece of the employee performance appraisal process. In this hour-long session they discuss the “how” and the “what” of the job:
How the person will do the job (the behaviors and competencies expected of the company’s members), and
What results the person will achieve over the next twelve months (the key responsibilities of the person’s job and the goals and projects the person will work on).
They also discuss the individual’s development plans. This discussion immediately generates improved employee performance because people know exactly what’s expected of them. And as the manager, you have just earned the right to hold people accountable at the end of the year by making your expectations of them clear from the start.
Phase 2 — Employee Performance Execution
Over the course of the year, employee performance should be focused on achieving the goals, objectives and key responsibilities of the job. The manager provides coaching and feedback to the individual to increase the probability of success and creates the conditions that motivate and resolve any performance problems that arise.
Midway through the year — perhaps even more frequently — they meet to review the individual’s progress toward the plans and goals discussed in the employee performance planning meeting. And the employee is responsible for certain elements of that progress – seeking out coaching and asking for feedback are two key examples.
Phase 3 — Employee Performance Assessment
As the time for the formal employee performance appraisal approaches, the manager reflects on how well the subordinate has performed over the course of the year, assembles the various forms and paperwork that the organization provides to make this assessment, and fills them out. The manager may also recommend a change in the individual’s compensation based on the quality of the individual’s work.
Best practice calls for the appraiser’s boss to review the completed assessment form before discussing it with the assessed employee. One key here is not falling victim to the “myth of quantifiability” — the erroneous belief that in order to be objective you’ve got to have numerical data to prove your assessments. Nonsense! An employee performance appraisal is a record of a manager’s opinion of an employee’s quality of work, so don’t shirk from candidly providing that opinion.
Phase 4 — Employee Performance Review
The manager and the subordinate meet, usually for about an hour. The employee performance appraisal form is reviewed with the self-appraisal that the individual created assessing her own performance. The manager and employee talk honestly about how well she performed over the past twelve months: Strengths, weaknesses, successes and areas needing improvement. At the end of the review meeting they set a date to meet again to hold an employee performance planning discussion for the upcoming twelve months, starting the process anew.
This four-phase performance appraisal process not only transforms employee performance management from an annual event to an on-going cycle, it tightly links the performance of each organization member with the mission and values of the company as a whole. And that’s the real purpose of employee performance appraisal in the organization. The real value is focusing everyone’s attention on what is genuinely important — the achievement of the organization’s strategic goals through demonstration of the company’s vision and values in each employee’s day-to-day behavior.
About Dick Grote (HTML)
Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and management. As a consultant, he has created employee performance management systems for several hundred of the world’s best known and most respected companies, including Texas Instruments, JCPenney, Miller Brewing Company, American Airlines, Macy’s, Raytheon, Burlington Northern Santa Fe Railroad, and Herman Miller. His company, Grote Consulting, specializes in employee performance appraisal, employee improvement and talent management.
For more information about Dick Grote and Grote Consulting, visit: http://www.groteconsulting.com/
Back to HR Article Directory
New Goal for Human Resources:Establishing a Work Force of One
By Susan Cantrell
From The Wall Street Journal Online
When it comes to human resources, one size no longer fits all.
For years, companies used standardized human-resources plans for recruiting and managing workers. One set of rules dictated everything from the kinds of benefits and rewards the company offered to how employees were trained and evaluated. That approach made things easier for the human-resources department and ensured a degree of efficiency, equality and fairness.
Now some executives are finding that this model isn't adequate for getting the most out of existing talent or attracting and keeping new people. To be competitive in the marketplace and in the race for talent, companies must understand and address the diverse needs of their work force. In fact, they must treat each employee as a "work force of one."
Why is a new approach necessary? Competition for talent is tougher, and the work force is growing more mobile and diverse, in terms of culture, education and individual aspirations. Workers today, increasingly accustomed to more-tailored offerings as consumers, are more likely to be attracted to and remain at a company that provides more-tailored offerings to them as employees -- flexible schedules, for instance, or a customized career path.
In addition, the growing recognition that business results are largely attributable to employee performance is leading many executives to seek creative ways of significantly improving that performance.
Surveys and interviews with managers and human-resources executives at 51 companies showed four techniques that organizations are using to achieve high performance by better addressing employees' needs. Some companies group together employees with common needs and preferences and provide solutions that are tailored to each set, such as different schedules or compensation plans. Others give all their workers a range of options and let them choose what suits them best -- everything from their benefits to their work environment.
In some cases, these new plans involve replacing specific human-resources mandates with simple, broad policies that can be applied in a variety of ways to suit individual needs, such as flexible budgets that let line managers use their own discretion to set salaries. Other arrangements focus on general management practices that recognize the individual, such as coaching or mentoring.
What follows is a look at the four methods and how they can help companies -- along with a discussion of some of the hurdles companies may encounter as they put these plans in place. Some of the practices described here are now commonplace, and some are unique. But they are all examples of a growing trend toward a more individualized approach to people management. By applying one or more of the techniques, companies can create new and innovative practices that will keep employees satisfied and productive.
Segment the Work Force
Just as marketing departments organize customers into groups, human-resources departments can segment employees in different ways to boost worker productivity and satisfaction -- and make the organization more effective.
Segmenting takes a variety of forms. Procter & Gamble Co. uses segmenting when recruiting, crafting targeted messages for certain types of potential employees. Many companies, such as those in the consulting and advertising industries, provide customized offerings for employees -- consultants are often equipped to work remotely, for example, and writers and artists sometimes receive unique incentive schemes and work environments designed to elicit creativity.
In recent years, a number of employers have begun to segment based on the employee's value to the organization. Labeling certain employees "high potentials" or "A players" based on past or predicted performance has given way to segmenting employees based on their relative contribution to the company's performance. International Business Machines Corp., for example, offers specialized development opportunities to employees in critical job roles.
A number of employers are designing more unusual segmentation strategies designed to play to individuals' varied needs. One research-and-development group at a technology company created several distinct roles for its engineers based on their personality and interests. The standard role is designed for engineers who prefer to concentrate on one project at a time. But those who don't like that work style have a chance to become "parachutists," dropping in on projects and solving problems for short periods of time. Meanwhile, those who are good at representing the company's work to outsiders can become "ambassadors."
Although it is relatively easy to segment employees based on job characteristics, such as where they're located or how much they travel, companies must be careful when segmenting employees based on traits such as age or personality. Employment law protects many classes of people based on such traits. When segmenting people based on personal traits -- for example, giving special consideration to older workers who need flexible schedules -- companies should only suggest such considerations and offer employees options, never force them to make certain choices.
Offer Choices
An alternative way of creating customized employee experiences is to allow employees to choose from a standard set of choices defined by the human-resources department. In recent years, for example, a growing number of employers have provided full-time employees with "cafeteria" benefit plans, which allow people to pick the options they value most.
Now companies are becoming creative about offering choices in other areas. Sun Microsystems Inc. asks employees to identify the type of physical setting that suits them best -- a private office, team room, satellite center or their home office. Microsoft Corp. goes so far as to ask certain types of employees to design their own career paths. The company offers software engineers both a management-focused and technical-specialist career track and allows them to move back and forth between the two.
Be Flexible
Many companies are saddled with human-resources policies that are so specific that they are no longer relevant. They then become bureaucratic barriers to effective management and undermine performance. Increasingly, companies are creating more general human-resources policies that give workers greater discretion, within clearly defined limits, to apply the policies in ways that suit their unique needs.
"Broad-band compensation," used by Merrill Lynch & Co. and Nike Inc., among others, is a common example of such an approach. In this plan, companies use fewer, wider salary ranges rather than many specific job classifications and pay grades. This gives managers more latitude to compensate top performers, for instance, or to offer more money to land a star. Similarly, car-rental company Avis Budget Group Inc. allows department managers to control their budgets within pre-set limits. If managers want to reward one employee with a big chunk of that money, they are free to do so.
Some companies, meanwhile, are setting up loose, "cascading" performance goals for their workers. Clothing chain Men's Wearhouse Inc. establishes sales targets for its stores, but doesn't dictate how employees should reach those targets, as other chains may do. "There are a variety of ways that stores meet these goals," says Charlie Bresler, president of Men's Wearhouse. Some stores have a few "wardrobe consultants" who excel at selling, for instance, while other stores have their consultants sell in teams.
"Stores hit their goals in different ways, and that is not only tolerated but encouraged," Mr. Bresler says.
Some organizations are even redefining the norms around work. At Best Buy Co. headquarters in Richfield, Minn., about a third of the 4,000 or so employees are allowed to set their own work hours and to decide whether they work from the office or home -- provided they can get the job done on time. As a result, Best Buy says, it has seen job satisfaction and productivity rise.
Get Personal
The preceding options are all primarily driven by human resources. But employee performance can be improved just as much if not more by general management practices that recognize the individual. Managers might offer one-on-one coaching or mentoring, or redefine a job's focus to line up with an employee's strengths.
Men's Wearhouse has largely replaced traditional training methods with an apprenticeship model, which the company has found to be far more effective. Store managers are encouraged to demonstrate effective sales approaches and to coach employees to develop a personal style of their own.
Likewise, some companies are reconsidering how they approach performance reviews. In traditional settings, human resources controls how and when the performance appraisal takes place, and managers are directed to evaluate how well employees have mastered the fundamental requirements of the job. But as work becomes more team- and project-based, it is becoming more difficult to have a standard set of requirements.
So, many companies supplement traditional performance reviews with continuing discussions with employees about goals and progress. This has a number of advantages. Problems can be caught earlier on, and feedback can be much more specific than with a traditional annual review. And employees are more likely to learn from feedback if they receive it soon after a noteworthy event and in the context of their regular workday.
Microsoft, which has a similar program in place, supports it with an information system that lets managers and employees record informal feedback confidentially. The information isn't reported to human resources and doesn't follow the employee from job to job. Instead, employees and managers use the information for their own reference. This system makes it more likely that managers will say what they really think -- and thus provide helpful guidance to employees.
* * *
Of course, these approaches come with a number of caveats.
For one thing, implementing any of these practices will mean big changes for companies with traditional human-resources departments. In some cases, human resources' primary role will be to support the line managers and employees who have the responsibility for carrying out the new plans, encouraging and facilitating good management practices and building a culture and work environment that support them. Software company SAP Americas, a division of SAP AG, makes sure that human-resources professionals focus on coaching managers on how to provide informal feedback to their employees through coaching or mentoring. Corning Inc. seeds some of its best people-managers throughout the organization to model and teach effective practices.
These practices can also require a difficult balancing act. In environments where managers treat individual employees differently, maintaining a sense of fundamental fairness is crucial. Managers need to take workers' concerns seriously, recognizing that negative feelings can be extremely harmful to the business.
The best way managers can respond to employee concerns is to be as open as possible about how they make decisions, and to have a clear rationale for decisions and policies. It's also important to be consistent about how decisions are made and to respond to questions in a sensitive, respectful way. And management should take steps to ensure employees that the company is strongly committed to equal opportunity and that legal protections against discrimination remain in place.
Finally, these practices work better in some contexts than in others. Government regulation is one critical factor. Many countries, such as Belgium and France, have strict labor rules that may make more customized practices difficult or impossible to introduce. Even in the U.S., some customized practices may bump up against rules about equal opportunity or retirement-plan security. Therefore, many companies use flexible policies to supplement, rather than replace, established programs.
In addition, some industries are more open to customization strategies than others. Advertising, consulting, financial services and entertainment, for instance, need highly independent and driven people to be successful. In return, these industries have been more than willing to offer work arrangements tailored to individuals to attract and retain top talent. Indeed, even particular departments inside companies are better suited for work-force-of-one policies than others. Positions that are knowledge-intensive, such as copy writing, tend to be a better fit for these policies than those that are more routine, or location-based, such as call centers.
The culture and history of the company itself also matter. Small, younger companies often operate without formal human-resources structures as a matter of course. The four techniques are thus more appropriate for larger companies seeking a way to introduce customization and flexibility without abandoning control and structure.
It's difficult to make the change from a one-size-fits-all approach to a more customized one. Doing so requires senior managers to discard familiar policies and practices and adopt a new, more responsive system from the ground up. However, companies that do it right will have unprecedented opportunities to develop the talent they need to become more competitive, high-performance organizations.
From The Wall Street Journal Online
When it comes to human resources, one size no longer fits all.
For years, companies used standardized human-resources plans for recruiting and managing workers. One set of rules dictated everything from the kinds of benefits and rewards the company offered to how employees were trained and evaluated. That approach made things easier for the human-resources department and ensured a degree of efficiency, equality and fairness.
Now some executives are finding that this model isn't adequate for getting the most out of existing talent or attracting and keeping new people. To be competitive in the marketplace and in the race for talent, companies must understand and address the diverse needs of their work force. In fact, they must treat each employee as a "work force of one."
Why is a new approach necessary? Competition for talent is tougher, and the work force is growing more mobile and diverse, in terms of culture, education and individual aspirations. Workers today, increasingly accustomed to more-tailored offerings as consumers, are more likely to be attracted to and remain at a company that provides more-tailored offerings to them as employees -- flexible schedules, for instance, or a customized career path.
In addition, the growing recognition that business results are largely attributable to employee performance is leading many executives to seek creative ways of significantly improving that performance.
Surveys and interviews with managers and human-resources executives at 51 companies showed four techniques that organizations are using to achieve high performance by better addressing employees' needs. Some companies group together employees with common needs and preferences and provide solutions that are tailored to each set, such as different schedules or compensation plans. Others give all their workers a range of options and let them choose what suits them best -- everything from their benefits to their work environment.
In some cases, these new plans involve replacing specific human-resources mandates with simple, broad policies that can be applied in a variety of ways to suit individual needs, such as flexible budgets that let line managers use their own discretion to set salaries. Other arrangements focus on general management practices that recognize the individual, such as coaching or mentoring.
What follows is a look at the four methods and how they can help companies -- along with a discussion of some of the hurdles companies may encounter as they put these plans in place. Some of the practices described here are now commonplace, and some are unique. But they are all examples of a growing trend toward a more individualized approach to people management. By applying one or more of the techniques, companies can create new and innovative practices that will keep employees satisfied and productive.
Segment the Work Force
Just as marketing departments organize customers into groups, human-resources departments can segment employees in different ways to boost worker productivity and satisfaction -- and make the organization more effective.
Segmenting takes a variety of forms. Procter & Gamble Co. uses segmenting when recruiting, crafting targeted messages for certain types of potential employees. Many companies, such as those in the consulting and advertising industries, provide customized offerings for employees -- consultants are often equipped to work remotely, for example, and writers and artists sometimes receive unique incentive schemes and work environments designed to elicit creativity.
In recent years, a number of employers have begun to segment based on the employee's value to the organization. Labeling certain employees "high potentials" or "A players" based on past or predicted performance has given way to segmenting employees based on their relative contribution to the company's performance. International Business Machines Corp., for example, offers specialized development opportunities to employees in critical job roles.
A number of employers are designing more unusual segmentation strategies designed to play to individuals' varied needs. One research-and-development group at a technology company created several distinct roles for its engineers based on their personality and interests. The standard role is designed for engineers who prefer to concentrate on one project at a time. But those who don't like that work style have a chance to become "parachutists," dropping in on projects and solving problems for short periods of time. Meanwhile, those who are good at representing the company's work to outsiders can become "ambassadors."
Although it is relatively easy to segment employees based on job characteristics, such as where they're located or how much they travel, companies must be careful when segmenting employees based on traits such as age or personality. Employment law protects many classes of people based on such traits. When segmenting people based on personal traits -- for example, giving special consideration to older workers who need flexible schedules -- companies should only suggest such considerations and offer employees options, never force them to make certain choices.
Offer Choices
An alternative way of creating customized employee experiences is to allow employees to choose from a standard set of choices defined by the human-resources department. In recent years, for example, a growing number of employers have provided full-time employees with "cafeteria" benefit plans, which allow people to pick the options they value most.
Now companies are becoming creative about offering choices in other areas. Sun Microsystems Inc. asks employees to identify the type of physical setting that suits them best -- a private office, team room, satellite center or their home office. Microsoft Corp. goes so far as to ask certain types of employees to design their own career paths. The company offers software engineers both a management-focused and technical-specialist career track and allows them to move back and forth between the two.
Be Flexible
Many companies are saddled with human-resources policies that are so specific that they are no longer relevant. They then become bureaucratic barriers to effective management and undermine performance. Increasingly, companies are creating more general human-resources policies that give workers greater discretion, within clearly defined limits, to apply the policies in ways that suit their unique needs.
"Broad-band compensation," used by Merrill Lynch & Co. and Nike Inc., among others, is a common example of such an approach. In this plan, companies use fewer, wider salary ranges rather than many specific job classifications and pay grades. This gives managers more latitude to compensate top performers, for instance, or to offer more money to land a star. Similarly, car-rental company Avis Budget Group Inc. allows department managers to control their budgets within pre-set limits. If managers want to reward one employee with a big chunk of that money, they are free to do so.
Some companies, meanwhile, are setting up loose, "cascading" performance goals for their workers. Clothing chain Men's Wearhouse Inc. establishes sales targets for its stores, but doesn't dictate how employees should reach those targets, as other chains may do. "There are a variety of ways that stores meet these goals," says Charlie Bresler, president of Men's Wearhouse. Some stores have a few "wardrobe consultants" who excel at selling, for instance, while other stores have their consultants sell in teams.
"Stores hit their goals in different ways, and that is not only tolerated but encouraged," Mr. Bresler says.
Some organizations are even redefining the norms around work. At Best Buy Co. headquarters in Richfield, Minn., about a third of the 4,000 or so employees are allowed to set their own work hours and to decide whether they work from the office or home -- provided they can get the job done on time. As a result, Best Buy says, it has seen job satisfaction and productivity rise.
Get Personal
The preceding options are all primarily driven by human resources. But employee performance can be improved just as much if not more by general management practices that recognize the individual. Managers might offer one-on-one coaching or mentoring, or redefine a job's focus to line up with an employee's strengths.
Men's Wearhouse has largely replaced traditional training methods with an apprenticeship model, which the company has found to be far more effective. Store managers are encouraged to demonstrate effective sales approaches and to coach employees to develop a personal style of their own.
Likewise, some companies are reconsidering how they approach performance reviews. In traditional settings, human resources controls how and when the performance appraisal takes place, and managers are directed to evaluate how well employees have mastered the fundamental requirements of the job. But as work becomes more team- and project-based, it is becoming more difficult to have a standard set of requirements.
So, many companies supplement traditional performance reviews with continuing discussions with employees about goals and progress. This has a number of advantages. Problems can be caught earlier on, and feedback can be much more specific than with a traditional annual review. And employees are more likely to learn from feedback if they receive it soon after a noteworthy event and in the context of their regular workday.
Microsoft, which has a similar program in place, supports it with an information system that lets managers and employees record informal feedback confidentially. The information isn't reported to human resources and doesn't follow the employee from job to job. Instead, employees and managers use the information for their own reference. This system makes it more likely that managers will say what they really think -- and thus provide helpful guidance to employees.
* * *
Of course, these approaches come with a number of caveats.
For one thing, implementing any of these practices will mean big changes for companies with traditional human-resources departments. In some cases, human resources' primary role will be to support the line managers and employees who have the responsibility for carrying out the new plans, encouraging and facilitating good management practices and building a culture and work environment that support them. Software company SAP Americas, a division of SAP AG, makes sure that human-resources professionals focus on coaching managers on how to provide informal feedback to their employees through coaching or mentoring. Corning Inc. seeds some of its best people-managers throughout the organization to model and teach effective practices.
These practices can also require a difficult balancing act. In environments where managers treat individual employees differently, maintaining a sense of fundamental fairness is crucial. Managers need to take workers' concerns seriously, recognizing that negative feelings can be extremely harmful to the business.
The best way managers can respond to employee concerns is to be as open as possible about how they make decisions, and to have a clear rationale for decisions and policies. It's also important to be consistent about how decisions are made and to respond to questions in a sensitive, respectful way. And management should take steps to ensure employees that the company is strongly committed to equal opportunity and that legal protections against discrimination remain in place.
Finally, these practices work better in some contexts than in others. Government regulation is one critical factor. Many countries, such as Belgium and France, have strict labor rules that may make more customized practices difficult or impossible to introduce. Even in the U.S., some customized practices may bump up against rules about equal opportunity or retirement-plan security. Therefore, many companies use flexible policies to supplement, rather than replace, established programs.
In addition, some industries are more open to customization strategies than others. Advertising, consulting, financial services and entertainment, for instance, need highly independent and driven people to be successful. In return, these industries have been more than willing to offer work arrangements tailored to individuals to attract and retain top talent. Indeed, even particular departments inside companies are better suited for work-force-of-one policies than others. Positions that are knowledge-intensive, such as copy writing, tend to be a better fit for these policies than those that are more routine, or location-based, such as call centers.
The culture and history of the company itself also matter. Small, younger companies often operate without formal human-resources structures as a matter of course. The four techniques are thus more appropriate for larger companies seeking a way to introduce customization and flexibility without abandoning control and structure.
It's difficult to make the change from a one-size-fits-all approach to a more customized one. Doing so requires senior managers to discard familiar policies and practices and adopt a new, more responsive system from the ground up. However, companies that do it right will have unprecedented opportunities to develop the talent they need to become more competitive, high-performance organizations.
Companies Beef Up Tech Security
By Katherine Wegert From The Wall Street Journal Online
Jane Terry has done more than her fair share of email policing.
As president of California manufacturer Ajax Boiler Inc., Terry has on two occasions caught employees breaching network security. While testing a new company software system, she stumbled upon a staff member bringing a rival's proprietary information into Ajax's system. Terry spent $6,000 fixing that problem, and hundreds more when a senior manager at the 100-employee company hacked into the network of a former employer, with whom he was involved in a lawsuit.
"We found him reading the HR manager's email," said Ms. Terry. "He was involved in a lawsuit and was probably looking for information on it. It was unbelievable."
Both staff members would have escaped notice if it weren't for a recent upgrade to Ajax's security software. The product, made by SpectorSoft Corp., a Florida company, essentially records everything employees do on their computers: what Web sites they have visited, how long they looked at a site, what emails they have sent, and more.
Nowadays, the greatest risk to company security comes from within, security analysts say. In the past, the threat had been mostly from spammers and hackers. These new threats are prompting companies to take their security measures up a notch. Employers are increasingly relying on advanced software to protect their systems.
Indeed, experts see the market for such security systems growing to $2.8 billion by 2010 from $919 million in 2005.
Even well-meaning employees can cause data-security problems. According to the Privacy Rights Clearinghouse, earlier this year the personal information of 302 households -- including names, addresses, birthdays and family-income ranges -- were posted on a public Internet site several times over a five-month period when employees at the U.S. Census Bureau tested new software while working from home. Employees breaching another company's network -- as in Ms. Terry's case -- also put businesses on the defensive.
A 2005 survey by the ePolicy Institute and the American Management Association polled 526 companies about their monitoring practices: 76% said they monitor Web connections, up from 62% in 2001, and 55% said they also look at email, compared with 47% in 2001.
"Monitoring is becoming more prevalent now than it has been," said Gartner analyst Peter Firstbrook, adding that both the insider threat and compliance issues are driving the growth. "People sending things to themselves or stealing intellectual property is a real concern."
There will always be people who try to beat the system. That is why analysts say that it is important for businesses to keep up with what is new and pick technology that can monitor, filter, block access to inappropriate Web sites and purge emails and instant messaging systems.
"You want to monitor your existing technology, but you need to stay up on what's new, especially if you have a young work force," said Nancy Flynn, executive director of the ePolicy Institute.
Software supplier Clearswift, with about $50 million in revenue a year, sells products that monitor email and Internet connections. Some applications can detect credit-card and Social Security numbers in an email message, a spreadsheet or an attached Word document; others limit accessibility of certain documents to a specific number or group of people.
"We can help stop the outbound threat," said Alyn Hockey, director of product management at Clearswift. "The real key thing about our product is that we can actually create policy rules that let people do their job without making security an inhibitor. We can encrypt mail according to policy and have different roles and responsibilities for managing the system, such as [by limiting access to] business managers and compliance officers."
Websense Inc., with $179 million in annual revenue, has a leak-prevention suite of software that discovers, monitors and prevents sensitive data from leaking out of the organization, either accidentally or maliciously, through common platforms, including email, instant messages, Web mail and network printers.
As monitoring technology becomes increasingly sophisticated and widespread, some argue that employers should respect their workers' privacy.
"Businesses have their concerns, and they're legitimate," said Jeremy Gruber, legal director at the National Workrights Institute. "But what we need is regulation. We need to see companies balance their concerns with their employees' privacy."
Email your comments to cjeditor@dowjones.com.
Wednesday, July 25, 2007
Human Resource Planning a Part of Early Growth Challenges
By Jeff Cornwall
Two young entrepreneurs came into our classes this week and talked about growth challenges they are currently facing in their businesses. Both focused quite a bit on the human resource challenges that come with growth.
Matthew Wilson and his father own Gateway Construction in Brentwood, TN. Gateway is a commercial real estate development company. They have seen significant growth in their business since they recovered from the huge hit that commercial real estate took after 9/11.
As they continue to grow, Matthew is finding the need to step back from the day-to-day aspects of construction management. That is, like many entrepreneurs he can no longer spend time "working in his business", but needs to shift to "working on his business." At the same time, his father is beginning to step away from the business—not retire, but clearly backing off from his role in the day-to-day operations of the business. So Matthew has to take on more of a strategic leadership role in Gateway, while hiring people who can handle managing the operational level.
"People say real estate is location, location, location. At this point in our business growth, I would say that the key has become people, people, people," Matthew told our class.
They have tried to keep their overhead low—a lesson learned over the years from riding out the ups and downs in their industry. And while their current growth creates the need for more people, they are trying to develop strategies that will keep all of the people they are adding busy and productive even when real estate takes its next downturn.
They are firm believers that the key is not just finding the best people, but finding the right people for the right job.
Matthew also is thinking about the need to some day expand his team to include more expertise in IT and financial management. They are not large enough now to support this type of an addition to the team, but may well get there some day soon.
Nicholas Holland, is Founder and CEO of a web design business in Nashville called CentreSource. Nicholas has also faced human resource challenges in his growth.
CentreSource has a business model that is driven primarily by billable hours. One challenge from the very beginning has been to have staff who have the skills to meet the latest technology need in the market. Finding the right people for his business can sometimes be a daunting task.
Nicholas said that managing key staff for a business like his when it grows can be difficult if it results in a power/dependency relationship. He recommends that all entrepreneurs have the mindset that no employee is irreplaceable, especially if you plan properly.
A challenge they faced as they grew was the expense hit that each of his early hires created had on the income statement. Expenses never grew in a straight line, but in significant steps as each new programmer was added. This created a major cash flow challenge. He met this by being very conservative in cash management. He never hired until he had the money already coming in to pay for the new employee. Also, he always keeps 90 days of cash reserves to cushion any unexpected downturn. During growth keeping this reserve took careful planning. Both of these tactics restricted his growth to some degree, but they also helped him to grow at a pace that he could afford to pay for.
Jeffrey Cornwall is the Director of Belmont University.
Two young entrepreneurs came into our classes this week and talked about growth challenges they are currently facing in their businesses. Both focused quite a bit on the human resource challenges that come with growth.
Matthew Wilson and his father own Gateway Construction in Brentwood, TN. Gateway is a commercial real estate development company. They have seen significant growth in their business since they recovered from the huge hit that commercial real estate took after 9/11.
As they continue to grow, Matthew is finding the need to step back from the day-to-day aspects of construction management. That is, like many entrepreneurs he can no longer spend time "working in his business", but needs to shift to "working on his business." At the same time, his father is beginning to step away from the business—not retire, but clearly backing off from his role in the day-to-day operations of the business. So Matthew has to take on more of a strategic leadership role in Gateway, while hiring people who can handle managing the operational level.
"People say real estate is location, location, location. At this point in our business growth, I would say that the key has become people, people, people," Matthew told our class.
They have tried to keep their overhead low—a lesson learned over the years from riding out the ups and downs in their industry. And while their current growth creates the need for more people, they are trying to develop strategies that will keep all of the people they are adding busy and productive even when real estate takes its next downturn.
They are firm believers that the key is not just finding the best people, but finding the right people for the right job.
Matthew also is thinking about the need to some day expand his team to include more expertise in IT and financial management. They are not large enough now to support this type of an addition to the team, but may well get there some day soon.
Nicholas Holland, is Founder and CEO of a web design business in Nashville called CentreSource. Nicholas has also faced human resource challenges in his growth.
CentreSource has a business model that is driven primarily by billable hours. One challenge from the very beginning has been to have staff who have the skills to meet the latest technology need in the market. Finding the right people for his business can sometimes be a daunting task.
Nicholas said that managing key staff for a business like his when it grows can be difficult if it results in a power/dependency relationship. He recommends that all entrepreneurs have the mindset that no employee is irreplaceable, especially if you plan properly.
A challenge they faced as they grew was the expense hit that each of his early hires created had on the income statement. Expenses never grew in a straight line, but in significant steps as each new programmer was added. This created a major cash flow challenge. He met this by being very conservative in cash management. He never hired until he had the money already coming in to pay for the new employee. Also, he always keeps 90 days of cash reserves to cushion any unexpected downturn. During growth keeping this reserve took careful planning. Both of these tactics restricted his growth to some degree, but they also helped him to grow at a pace that he could afford to pay for.
Jeffrey Cornwall is the Director of Belmont University.
Life With Blogs
By Perry Binder
Today, about 70,000 new Web logs—or blogs—are created every day, according to blog search-engine and measurement firm Technorati. In addition, a 2005 Pew Internet and American Life Project report indicated there are more than 32 million blog readers.
HR leaders may be stunned to read what some former employees, current employees, and even potential hires are saying on blogs about various companies. And depending on the size of their companies, such leaders may also be surprised at how many competitors and customers are blogging about their products or services.
The question then becomes what to do when unflattering or damaging comments are discovered, such as when:
• A health-care worker blogged about being able to surf the Web for three hours since the company's server went down; or
• An employee criticized his boss for not permitting the employee to go home sick one day.
In those cases, the employers opted to fire the workers.
Negative comments can affect competitive advantage, reputation, retention and recruitment. This is an evolving area that requires HR to step up and protect their companies. HR leaders need to assess the situation in their companies and create a business plan to respond to this complex, emerging arena in risk management.
Companies need to decide whether they want to take advantage of the buzz corporate-sanctioned bloggers can create as well as how to handle employees who blog without authorization. HR leaders need to assess the situation in their companies and create a business plan to respond to this complex, emerging arena.
Perry Binder is an Assistant Professor of Legal studies at The Robinson College of Business of Georgia State University.
Today, about 70,000 new Web logs—or blogs—are created every day, according to blog search-engine and measurement firm Technorati. In addition, a 2005 Pew Internet and American Life Project report indicated there are more than 32 million blog readers.
HR leaders may be stunned to read what some former employees, current employees, and even potential hires are saying on blogs about various companies. And depending on the size of their companies, such leaders may also be surprised at how many competitors and customers are blogging about their products or services.
The question then becomes what to do when unflattering or damaging comments are discovered, such as when:
• A health-care worker blogged about being able to surf the Web for three hours since the company's server went down; or
• An employee criticized his boss for not permitting the employee to go home sick one day.
In those cases, the employers opted to fire the workers.
Negative comments can affect competitive advantage, reputation, retention and recruitment. This is an evolving area that requires HR to step up and protect their companies. HR leaders need to assess the situation in their companies and create a business plan to respond to this complex, emerging arena in risk management.
Companies need to decide whether they want to take advantage of the buzz corporate-sanctioned bloggers can create as well as how to handle employees who blog without authorization. HR leaders need to assess the situation in their companies and create a business plan to respond to this complex, emerging arena.
Perry Binder is an Assistant Professor of Legal studies at The Robinson College of Business of Georgia State University.
Check the Web Before Hiring
By Perry Binder
As a college professor, a lot of my time is spent with students in the age range of 18-22 - individuals who grew up with e-mail, spell check, IM's, and blogs. The recent graduates entering your company are just as smart as those who graduated in the "old days." However, their modes of communication are vastly different.
If you've never been on MySpace or Facebook, the leading social networking sites and you have an HR function to your job, you need to become familar with these sites. My message to HR is that you can discover scary pictures or postings from the person you just interviewed in a suit and tie yesterday! Here are two actual examples, which I've watered down for the PG-13 crowd:
"What up pimpin?! Looks like somebody skipped school today...where were u huh? What did I tell u...stop smokin that...u wanna finish the rest? It ain't gonna get u no where!! LOL I love messin wit u!"
"F#@* yeah! Guitar hero + half ounce + water bong = good times."
Whether you outsource this search function or do it yourself, anyone can access information on MySpace. Facebook is supposed to be more private than MySpace because one has to be a part of a specific network for access. For example, a student at a university can join the college's network. But that also means that alums can join - if you interview at your alma mater, think of the information you may obtain on new hires.
I stress to my students that there are consequence to their web activity. HR is starting to wake up to this reality.
Perry Binder is an Assistant Professor of Legal studies at The Robinson College of Business of Georgia State University.
As a college professor, a lot of my time is spent with students in the age range of 18-22 - individuals who grew up with e-mail, spell check, IM's, and blogs. The recent graduates entering your company are just as smart as those who graduated in the "old days." However, their modes of communication are vastly different.
If you've never been on MySpace or Facebook, the leading social networking sites and you have an HR function to your job, you need to become familar with these sites. My message to HR is that you can discover scary pictures or postings from the person you just interviewed in a suit and tie yesterday! Here are two actual examples, which I've watered down for the PG-13 crowd:
"What up pimpin?! Looks like somebody skipped school today...where were u huh? What did I tell u...stop smokin that...u wanna finish the rest? It ain't gonna get u no where!! LOL I love messin wit u!"
"F#@* yeah! Guitar hero + half ounce + water bong = good times."
Whether you outsource this search function or do it yourself, anyone can access information on MySpace. Facebook is supposed to be more private than MySpace because one has to be a part of a specific network for access. For example, a student at a university can join the college's network. But that also means that alums can join - if you interview at your alma mater, think of the information you may obtain on new hires.
I stress to my students that there are consequence to their web activity. HR is starting to wake up to this reality.
Perry Binder is an Assistant Professor of Legal studies at The Robinson College of Business of Georgia State University.
Retaining Employees
By Jeff Cornwall
Several recent surveys of small business owners have found that finding qualified workers is one of the top challenges facing entrepreneurs. In times of growth, employee recruitment becomes even more of a concern. We are not just trying to fill new positions, but also replace openings created by employee turnover. Although it is usually easier and almost always less expensive to retain an existing employee rather than find a replacement, we often fail to take necessary steps to reduce employee turnover.
There are several steps that can be taken to do a better job of meeting employee needs and reducing employee turnover:
Opportunity to advance as company grows. Growing companies can offer ample opportunities to promote existing employees. Make sure to not just offer the opportunity, but the training and development to make such advancement possible.
Positive work environment. The positive culture of a small business is what draws many employees to work for you in the beginning. The stresses of growth can often change this part of the culture of a business. Take steps to maintain the culture you intended to create in the early days of the business.
Achievement and personal satisfaction. Although these are intrinsic factors, they are related to how we design jobs. Keep these things in mind as jobs evolve as your business grows.
Rewards. Although money is important, it is not the only reward we have to offer. Recognition, status, respect, inclusion, and so forth, are all important rewards to most employees.
Community. Many small businesses have a sense of "family" about them. Don't underestimate the power of these bonds to retain employees.
Clear vision that is openly shared. Keep employees informed of where you are headed, and remind them often. The chaos of growth can become overwhelming. Vision can help calm these feelings and help get everyone focused on the tasks at hand. I spent much of my time during our rapid growth traveling throughout our various locations communicating to our staff about our vision and why we needed to grow.
Security of place in firm as it grows. Many employees leave because they are worried they will not fit in as the business expands. Provide career plans for each employee to help them understand their place in the firm.
Opportunity for balance in their lives. Although growth may create the need for long hours from every employee from time to time, be sensitive to the strains this can create in employees home lives. Don't take advantage of employees' willingness to pitch in during busy times by making it a standard expectation of their jobs all the time.
Jeffrey Cornwall is the Director of Belmont University
Several recent surveys of small business owners have found that finding qualified workers is one of the top challenges facing entrepreneurs. In times of growth, employee recruitment becomes even more of a concern. We are not just trying to fill new positions, but also replace openings created by employee turnover. Although it is usually easier and almost always less expensive to retain an existing employee rather than find a replacement, we often fail to take necessary steps to reduce employee turnover.
There are several steps that can be taken to do a better job of meeting employee needs and reducing employee turnover:
Opportunity to advance as company grows. Growing companies can offer ample opportunities to promote existing employees. Make sure to not just offer the opportunity, but the training and development to make such advancement possible.
Positive work environment. The positive culture of a small business is what draws many employees to work for you in the beginning. The stresses of growth can often change this part of the culture of a business. Take steps to maintain the culture you intended to create in the early days of the business.
Achievement and personal satisfaction. Although these are intrinsic factors, they are related to how we design jobs. Keep these things in mind as jobs evolve as your business grows.
Rewards. Although money is important, it is not the only reward we have to offer. Recognition, status, respect, inclusion, and so forth, are all important rewards to most employees.
Community. Many small businesses have a sense of "family" about them. Don't underestimate the power of these bonds to retain employees.
Clear vision that is openly shared. Keep employees informed of where you are headed, and remind them often. The chaos of growth can become overwhelming. Vision can help calm these feelings and help get everyone focused on the tasks at hand. I spent much of my time during our rapid growth traveling throughout our various locations communicating to our staff about our vision and why we needed to grow.
Security of place in firm as it grows. Many employees leave because they are worried they will not fit in as the business expands. Provide career plans for each employee to help them understand their place in the firm.
Opportunity for balance in their lives. Although growth may create the need for long hours from every employee from time to time, be sensitive to the strains this can create in employees home lives. Don't take advantage of employees' willingness to pitch in during busy times by making it a standard expectation of their jobs all the time.
Jeffrey Cornwall is the Director of Belmont University
Hiring in the Internet Age
By Darryl Ohrt
We just completed a new hire at our firm, and we haven't even met the new employee yet.
There's a lot of press out there about the dangers of the internet as it relates to employees. "What if your employer finds your MySpace page?" But what about the employer side? As it turns out, using new internet tools for hiring employees can be amazingly productive. We just completed a new hire at our firm - and we haven't even met the candidate in person. We'll shake hands for the first time on his first day. Here's how the internet helped us find the perfect fit in a new employee:
The potential employee pool is now international. As a small business owner, it's a great feeling to get a resume from Iran. We're instantly international. By placing an ad online, you'll increased your potential market a thousand fold. In the old days, the local classifieds were your only tool. Maybe you'd spring for a more expensive ad in a bigger paper, like the New York Times. With ads online, you're reaching a worldwide audience in one fell swoop.
Results are immediate. In the old days, resumes (on paper) would begin to roll into the mailbox about five days after the first ad hit. Today, resumes begin hitting the inbox seconds after the ad is published. This has cut the timeline for screening potential candidates dramatically. For a recent position at our firm, we received hundreds of resumes from across the globe. And only two of them came in the mail.
Interviews. Not just for the boardroom anymore. Our first interview with Rob, our newest hire, didn't take place in my office. Or our boardroom. Or even our building. He was sitting at home in front of his computer, and I in front of my laptop. We used the popular iChat feature now standard on the new Mac products. Our first interview was done through a video chat window. When he became a finalist for the position, we interviewed Rob again, this time with a larger group of people on our side. But again with an iChat camera. Rob interviewed twice at our firm, and never left his house. I've even heard of firms using Second Life in the same way - but you lose the non-verbal part of the interview, which of course, is extremely important to the process.
Learn more. We hear of the horror stories of an employer finding pictures from a drunken frat party, on sensational news reports everyday. But photo collections can also be a fantastic way to learn more about a potential employee, or for the employee to learn about the company. It turns out that both Rob and our firm have Flickr photo sets. So before Rob ever sent his resume, he had a pretty good idea of what life was like as a member of our team. Because he's shared some of the high moments, through our photo collection. He's even seen our offices. At the same time, when we wanted to get to know Rob better, he shared his Flickr photo set. You learn a lot about a person (or a company) when looking through their photos.
Certainly, this isn't something that every employee would be comfortable with - but in our business, we work closely together. We know our co-workers better than some of our family members. Rob picked up on this, and was eager to share his photos. This was probably a key factor in his hiring decision - as it took away potential doubts about the unknown. "What if he's an axe murderer, that eats little children?" We're pretty sure that's not the case, after getting a picture of Rob's personal life. (Pretty sure, anyway.)
Save the details for email. When it was time to make an offer, we laid out all of the details in an email. No potential mis-understandings. Everything in black and white. Both parties knew exactly what was on the table. Email is awesome for detailing the nitty gritty specifications of money, benefits, and company policies. We made our offer to Rob via email. We didn't play phone tag for two days, but instead laid everything on the table, so that he could respond on his own schedule. (Turns out, he accepted the same day.)
So we're about to meet Rob for the first time in person. And yet, I feel like we already know him. Welcome to hiring in the internet age. Isn't it wonderful?
Darryl Ohrt is the founder of VIA and the chief contributor to
BrandFlakesForBreakfast.com.
We just completed a new hire at our firm, and we haven't even met the new employee yet.
There's a lot of press out there about the dangers of the internet as it relates to employees. "What if your employer finds your MySpace page?" But what about the employer side? As it turns out, using new internet tools for hiring employees can be amazingly productive. We just completed a new hire at our firm - and we haven't even met the candidate in person. We'll shake hands for the first time on his first day. Here's how the internet helped us find the perfect fit in a new employee:
The potential employee pool is now international. As a small business owner, it's a great feeling to get a resume from Iran. We're instantly international. By placing an ad online, you'll increased your potential market a thousand fold. In the old days, the local classifieds were your only tool. Maybe you'd spring for a more expensive ad in a bigger paper, like the New York Times. With ads online, you're reaching a worldwide audience in one fell swoop.
Results are immediate. In the old days, resumes (on paper) would begin to roll into the mailbox about five days after the first ad hit. Today, resumes begin hitting the inbox seconds after the ad is published. This has cut the timeline for screening potential candidates dramatically. For a recent position at our firm, we received hundreds of resumes from across the globe. And only two of them came in the mail.
Interviews. Not just for the boardroom anymore. Our first interview with Rob, our newest hire, didn't take place in my office. Or our boardroom. Or even our building. He was sitting at home in front of his computer, and I in front of my laptop. We used the popular iChat feature now standard on the new Mac products. Our first interview was done through a video chat window. When he became a finalist for the position, we interviewed Rob again, this time with a larger group of people on our side. But again with an iChat camera. Rob interviewed twice at our firm, and never left his house. I've even heard of firms using Second Life in the same way - but you lose the non-verbal part of the interview, which of course, is extremely important to the process.
Learn more. We hear of the horror stories of an employer finding pictures from a drunken frat party, on sensational news reports everyday. But photo collections can also be a fantastic way to learn more about a potential employee, or for the employee to learn about the company. It turns out that both Rob and our firm have Flickr photo sets. So before Rob ever sent his resume, he had a pretty good idea of what life was like as a member of our team. Because he's shared some of the high moments, through our photo collection. He's even seen our offices. At the same time, when we wanted to get to know Rob better, he shared his Flickr photo set. You learn a lot about a person (or a company) when looking through their photos.
Certainly, this isn't something that every employee would be comfortable with - but in our business, we work closely together. We know our co-workers better than some of our family members. Rob picked up on this, and was eager to share his photos. This was probably a key factor in his hiring decision - as it took away potential doubts about the unknown. "What if he's an axe murderer, that eats little children?" We're pretty sure that's not the case, after getting a picture of Rob's personal life. (Pretty sure, anyway.)
Save the details for email. When it was time to make an offer, we laid out all of the details in an email. No potential mis-understandings. Everything in black and white. Both parties knew exactly what was on the table. Email is awesome for detailing the nitty gritty specifications of money, benefits, and company policies. We made our offer to Rob via email. We didn't play phone tag for two days, but instead laid everything on the table, so that he could respond on his own schedule. (Turns out, he accepted the same day.)
So we're about to meet Rob for the first time in person. And yet, I feel like we already know him. Welcome to hiring in the internet age. Isn't it wonderful?
Darryl Ohrt is the founder of VIA and the chief contributor to
BrandFlakesForBreakfast.com.
Flexible Payroll Solutions Meet the Diverse Needs of Small Businesses
By Don McLoughlin
A friend of mine who owns a small business once comically lamented, “I have more hats than heads.” If you can relate to that sentiment, chances are great that you not only own a small business, you handle the back-end functions as well. You are not alone.
According to ADP research, 71 percent of small businesses still prepare payroll in-house, while 29 percent outsource (15 percent use a service bureau, and 13 percent use an accountant’s services).
Payroll and tax compliance can be time-consuming and burdensome for any business. However, a U.S. Small Business Administration (SBA) study, “The Impact of Regulatory Costs on Small Firms,” showed that America’s small businesses are the hardest hit financially. The study found businesses with fewer than 20 employees faced a 45 percent greater federal regulatory burden than their larger business counterparts. Small businesses annually spend $1,304 on tax compliance per employee, 67 percent more than larger companies with 500 employees or more.
Luckily, technology is transforming the day-to-day operations for small businesses. Today, there are a variety of tools available to help small business owners manage payroll in a cost-effective and simple way. Some seek a do-it-yourself software solution while others prefer to have an outside provider handle it all. In this article, we will review how companies select their payroll method, and the benefits of each type of payroll solution.
In-house Payroll
A 2006 national payroll survey by the National Federation of Independent Business (NFIB) Research Foundation found that the most common reason given for doing payroll in-house was that it is the cheapest way. Without dedicated administrative staff, many small business owners run the business during the day, and then spend evenings and weekends catching up on everything else, including bookkeeping, payroll and taxes.
However, many business owners don’t realize that there are “hidden costs” of payroll. Doing payroll in-house is both error-prone and time-consuming. According to ADP research4, companies with 20 employees or more spend upwards of half a day per pay period. On a weekly payroll schedule, that averages out to two full days a month dedicated to payroll.
Then there are risks. Given that local, state, federal tax laws are subject to change, remaining up-to-date and compliant is a formidable task. And the failure to deposit payroll-related taxes in a timely fashion is a frequent cause of tax penalties.
Lastly, when calculating payroll by hand, simple math errors are more common, which can cause employee dissatisfaction – endangering the success of your small business.
Do-it-Yourself Software
In increasing numbers, small businesses are turning to technology for help with their payroll to speed-up processing and improve accuracy.
Do-it-yourself payroll programs are ideally suited for small business owners who seek full control over their payroll processing and tax filing. Software solutions are typically cost-effective and give an “in-control feeling.” Once you input your payroll information, the software automatically calculates net pay for each employee. Product features are typically available 24/7, so you can process payroll whenever it is most convenient.
Outsourcing Payroll
Another option for small businesses is to outsource payroll. By outsourcing, small business owners pass on the responsibility of payroll to either an accountant, bookkeeper or third-party service provider, so that their time can be redirected to other strategic initiatives.
Once you are set up with your payroll provider, the owner simply submits hours worked by each employee. The provider calculates your payroll, including the deductions and withholdings for all relevant tax jurisdictions. Then professionally printed checks, pay vouchers and reports are delivered to your door on payday. Many service providers also manage W-2 creation at the end of the year, allowing seamless integration with accounting.
By working with a national payroll service provider, you can feel confident that payroll will be accurate, on-time and fully compliant with federal, state and local tax regulations. Based on ADP research5, the reasons companies decide to either change payroll processing method or the vendor used for the service delivery are to: save time (33 percent), effort (25 percent) or reduce costs (20 percent). Other reasons cited were tied to customer service, internal issues and familiarity.
Choosing the Right Solution
Ultimately, payroll is a task that every business needs to get done, but each business owner must decide the best approach. With the technology available today, many are choosing to evolve from manual pen and paper to either software or outsourcing – depending on how involved the owner wants to be in the payroll process.
Before moving forward, it is important to evaluate goals. Are you willing to dedicate time to payroll, but want to increase accuracy and compliance? Or do you want to lessen the burden of payroll administration completely?
No matter which payroll method you choose, it’s important to select a software package or outsourcing provider that best meets your needs. Evaluate your options, determine what is most important to your organization, and ask for references from your peers. This is especially important when selecting an outsourcing provider. Your success is based on the expertise and reliability of your partner – it’s essential that your goals and values are aligned.
A friend of mine who owns a small business once comically lamented, “I have more hats than heads.” If you can relate to that sentiment, chances are great that you not only own a small business, you handle the back-end functions as well. You are not alone.
According to ADP research, 71 percent of small businesses still prepare payroll in-house, while 29 percent outsource (15 percent use a service bureau, and 13 percent use an accountant’s services).
Payroll and tax compliance can be time-consuming and burdensome for any business. However, a U.S. Small Business Administration (SBA) study, “The Impact of Regulatory Costs on Small Firms,” showed that America’s small businesses are the hardest hit financially. The study found businesses with fewer than 20 employees faced a 45 percent greater federal regulatory burden than their larger business counterparts. Small businesses annually spend $1,304 on tax compliance per employee, 67 percent more than larger companies with 500 employees or more.
Luckily, technology is transforming the day-to-day operations for small businesses. Today, there are a variety of tools available to help small business owners manage payroll in a cost-effective and simple way. Some seek a do-it-yourself software solution while others prefer to have an outside provider handle it all. In this article, we will review how companies select their payroll method, and the benefits of each type of payroll solution.
In-house Payroll
A 2006 national payroll survey by the National Federation of Independent Business (NFIB) Research Foundation found that the most common reason given for doing payroll in-house was that it is the cheapest way. Without dedicated administrative staff, many small business owners run the business during the day, and then spend evenings and weekends catching up on everything else, including bookkeeping, payroll and taxes.
However, many business owners don’t realize that there are “hidden costs” of payroll. Doing payroll in-house is both error-prone and time-consuming. According to ADP research4, companies with 20 employees or more spend upwards of half a day per pay period. On a weekly payroll schedule, that averages out to two full days a month dedicated to payroll.
Then there are risks. Given that local, state, federal tax laws are subject to change, remaining up-to-date and compliant is a formidable task. And the failure to deposit payroll-related taxes in a timely fashion is a frequent cause of tax penalties.
Lastly, when calculating payroll by hand, simple math errors are more common, which can cause employee dissatisfaction – endangering the success of your small business.
Do-it-Yourself Software
In increasing numbers, small businesses are turning to technology for help with their payroll to speed-up processing and improve accuracy.
Do-it-yourself payroll programs are ideally suited for small business owners who seek full control over their payroll processing and tax filing. Software solutions are typically cost-effective and give an “in-control feeling.” Once you input your payroll information, the software automatically calculates net pay for each employee. Product features are typically available 24/7, so you can process payroll whenever it is most convenient.
Outsourcing Payroll
Another option for small businesses is to outsource payroll. By outsourcing, small business owners pass on the responsibility of payroll to either an accountant, bookkeeper or third-party service provider, so that their time can be redirected to other strategic initiatives.
Once you are set up with your payroll provider, the owner simply submits hours worked by each employee. The provider calculates your payroll, including the deductions and withholdings for all relevant tax jurisdictions. Then professionally printed checks, pay vouchers and reports are delivered to your door on payday. Many service providers also manage W-2 creation at the end of the year, allowing seamless integration with accounting.
By working with a national payroll service provider, you can feel confident that payroll will be accurate, on-time and fully compliant with federal, state and local tax regulations. Based on ADP research5, the reasons companies decide to either change payroll processing method or the vendor used for the service delivery are to: save time (33 percent), effort (25 percent) or reduce costs (20 percent). Other reasons cited were tied to customer service, internal issues and familiarity.
Choosing the Right Solution
Ultimately, payroll is a task that every business needs to get done, but each business owner must decide the best approach. With the technology available today, many are choosing to evolve from manual pen and paper to either software or outsourcing – depending on how involved the owner wants to be in the payroll process.
Before moving forward, it is important to evaluate goals. Are you willing to dedicate time to payroll, but want to increase accuracy and compliance? Or do you want to lessen the burden of payroll administration completely?
No matter which payroll method you choose, it’s important to select a software package or outsourcing provider that best meets your needs. Evaluate your options, determine what is most important to your organization, and ask for references from your peers. This is especially important when selecting an outsourcing provider. Your success is based on the expertise and reliability of your partner – it’s essential that your goals and values are aligned.
Charleston Partners In The News
Jill Krumholz Joins Charleston Partners as Principal
Press Release
By Richard F. StolzHuman Resource Executive
by John RossheimMonster.com
Cover story written by Richard F. StoltzHuman Resource Executiveฎ Magazine
Published by the Workforce.com
What Employers Are Seeking In Human-Resources Executives
By Suzanne McGee
HR Career Tips From Recruiters
Top Story byHuman Resource Executiveฎ Magazine
You Can Spot and Hire Stars - But Why Can't You Keep Them?
Published by HR-21
U.S. Companies Send Fewer Workers Overseas
By Kathy Chu Dow Jones Newswires
“Tremendous Optimism” for Human Resources Jobs
Published by the Workforce.com
How To Stay On Top Of Your Profession
MedZilla: Recruiters
Employers Seek to Trim Pay for U.S. Expatriates
By Perri Capell
Insurance Executives Face Churn Amid Industry Turmoil
By Suzanne McGee
The Overlooked Highest Performers: Workforce
Ironically, the most important workers sometimes don’t receive adequate training. Herman Miller is looking to change that.
By Joe Mullich
The people who are most important to running a company today--and would most immediately be missed--often receive the least amount of leadership training, says Linda Milanowski, director of learning and development for Herman Miller, the 82-year-old-furniture maker.
Complete article at :Workforce
By Joe Mullich
The people who are most important to running a company today--and would most immediately be missed--often receive the least amount of leadership training, says Linda Milanowski, director of learning and development for Herman Miller, the 82-year-old-furniture maker.
Complete article at :Workforce
Executive Comp: Pay Without Performance
Out-of-control executive compensation schemes are “widespread, persistent, and systemic,” and new reforms won’t clean up the mess, argue law professors Lucian Bebchuk and Jesse Fried. Q&A and book excerpt.
by Mallory Stark
In the new book Pay Without Performance: The Unfulfilled Promise of Executive Compensation, Lucian Bebchuk and Jesse Fried make the case that the executive compensation system in the U.S. is fundamentally broken. We like to think that executive pay is the product of arm's-length negotiation, that the executive bargains in his or her own best interest, while the board of directors bargains for the best interests of the shareholders. Bebchuk and Fried argue that, in fact, soaring executive pay is the result of management power.
Complete article at HBR
For latest on KM click here
by Mallory Stark
In the new book Pay Without Performance: The Unfulfilled Promise of Executive Compensation, Lucian Bebchuk and Jesse Fried make the case that the executive compensation system in the U.S. is fundamentally broken. We like to think that executive pay is the product of arm's-length negotiation, that the executive bargains in his or her own best interest, while the board of directors bargains for the best interests of the shareholders. Bebchuk and Fried argue that, in fact, soaring executive pay is the result of management power.
Complete article at HBR
For latest on KM click here
Why do organizations want "previous work experience"?
This post is triggered by Heather's post here.I also think there's a comfort level taking risks on new grads because they are less opinionated about what *works* in the business world (oh come on, I know I have an opinion on "how things work"...otherwise this blog would be b-o-r-i-n-g). But on the flip side, career changers bring so much maturity and different perspective to the table. Are hiring authorities worried that their next desired role is just an experiment? That they are trying something new because they failed at what they did before? Or do we embrace the risk taker?My response (not that I necessarily that I agree with it) tries to reason out why an organization might not look at somebody with "non-relevant" work experience for an experienced level opening.It is easier to get a transition with your current employer than to ask for a change with a new employer.Look at it this way, every hiring decision is a risk that the organization takes, and asking for previous experience is a way to mitigate that risk...that is because there are lots of factors that can be behind a successful talented person...like great organizational processes, a great team, top management support...you don't know if in your organization he/she will be as successful...but you still take a chance as the person has done this thing before...On the other hand hiring someone new without any previous experience in that kind of role actually means taking the most risk...sure it might pay off handsomely , but typically management is about reducing risks in most organizations.This post is triggered by Heather's post here.I also think there's a comfort level taking risks on new grads because they are less opinionated about what *works* in the business world (oh come on, I know I have an opinion on "how things work"...otherwise this blog would be b-o-r-i-n-g). But on the flip side, career changers bring so much maturity and different perspective to the table. Are hiring authorities worried that their next desired role is just an experiment? That they are trying something new because they failed at what they did before? Or do we embrace the risk taker?My response (not that I necessarily that I agree with it) tries to reason out why an organization might not look at somebody with "non-relevant" work experience for an experienced level opening.It is easier to get a transition with your current employer than to ask for a change with a new employer.Look at it this way, every hiring decision is a risk that the organization takes, and asking for previous experience is a way to mitigate that risk...that is because there are lots of factors that can be behind a successful talented person...like great organizational processes, a great team, top management support...you don't know if in your organization he/she will be as successful...but you still take a chance as the person has done this thing before...On the other hand hiring someone new without any previous experience in that kind of role actually means taking the most risk...sure it might pay off handsomely , but typically management is about reducing risks in most organizations. This post is triggered by Heather's post here.I also think there's a comfort level taking risks on new grads because they are less opinionated about what *works* in the business world (oh come on, I know I have an opinion on "how things work"...otherwise this blog would be b-o-r-i-n-g). But on the flip side, career changers bring so much maturity and different perspective to the table. Are hiring authorities worried that their next desired role is just an experiment? That they are trying something new because they failed at what they did before? Or do we embrace the risk taker?My response (not that I necessarily that I agree with it) tries to reason out why an organization might not look at somebody with "non-relevant" work experience for an experienced level opening.It is easier to get a transition with your current employer than to ask for a change with a new employer.Look at it this way, every hiring decision is a risk that the organization takes, and asking for previous experience is a way to mitigate that risk...that is because there are lots of factors that can be behind a successful talented person...like great organizational processes, a great team, top management support...you don't know if in your organization he/she will be as successful...but you still take a chance as the person has done this thing before...On the other hand hiring someone new without any previous experience in that kind of role actually means taking the most risk...sure it might pay off handsomely , but typically management is about reducing risks in most organizations.This post is triggered by Heather's post here.I also think there's a comfort level taking risks on new grads because they are less opinionated about what *works* in the business world (oh come on, I know I have an opinion on "how things work"...otherwise this blog would be b-o-r-i-n-g). But on the flip side, career changers bring so much maturity and different perspective to the table. Are hiring authorities worried that their next desired role is just an experiment? That they are trying something new because they failed at what they did before? Or do we embrace the risk taker?My response (not that I necessarily that I agree with it) tries to reason out why an organization might not look at somebody with "non-relevant" work experience for an experienced level opening.It is easier to get a transition with your current employer than to ask for a change with a new employer.Look at it this way, every hiring decision is a risk that the organization takes, and asking for previous experience is a way to mitigate that risk...that is because there are lots of factors that can be behind a successful talented person...like great organizational processes, a great team, top management support...you don't know if in your organization he/she will be as successful...but you still take a chance as the person has done this thing before...On the other hand hiring someone new without any previous experience in that kind of role actually means taking the most risk...sure it might pay off handsomely , but typically management is about reducing risks in most organizations.
Written by Gautam Ghosh on his blog
KM reads click here
posted by Siddharth Nagpal
Written by Gautam Ghosh on his blog
KM reads click here
posted by Siddharth Nagpal
A dearth of HR talent
All is not well with human resources. Many European companies don't have enough HR professionals who understand business issues—a necessity for recruiting and retaining talent. At the same time, companies complain that HR fails to provide basic services efficiently. The gulf between the goals of this critical corporate function and the organization's needs has implications for recruitment, training, and development.
The take-away
The HR function is at a crossroads. Companies may need to adopt a two-tiered approach that distinguishes between generalists with broad business experience and specialists with a deep knowledge of HR issues.
Complete article at :McKinsey Quarterly
The take-away
The HR function is at a crossroads. Companies may need to adopt a two-tiered approach that distinguishes between generalists with broad business experience and specialists with a deep knowledge of HR issues.
Complete article at :McKinsey Quarterly
Designing Better Employee Benefits
Health care costs are rising so quickly that they threaten to eclipse profits in many Fortune 500 companies.
Given the impact of benefits costs, you might think that senior executives would be doing everything possible to control them and make the most of this investment in the workforce.
But in fact, most companies have failed to approach benefits with the same rigor they bring to other major investments, such as research and development.
Benefits plan managers should view employees as internal consumers and conduct research to learn how to deliver the most value at an affordable price.
Complete article at McKinsey Quarterly
Given the impact of benefits costs, you might think that senior executives would be doing everything possible to control them and make the most of this investment in the workforce.
But in fact, most companies have failed to approach benefits with the same rigor they bring to other major investments, such as research and development.
Benefits plan managers should view employees as internal consumers and conduct research to learn how to deliver the most value at an affordable price.
Complete article at McKinsey Quarterly
Creating a Positive Professional Image
n today’s diverse workplace, your actions and motives are constantly under scrutiny. Time to manage your own professional image before others do it for you. An interview with professor Laura Morgan Roberts.
by Mallory Stark
As HBS professor Laura Morgan Roberts sees it, if you aren't managing your own professional image, others are.
"People are constantly observing your behavior and forming theories about your competence, character, and commitment, which are rapidly disseminated throughout your workplace," she says. "It is only wise to add your voice in framing others' theories about who you are and what you can accomplish."
There are plenty of books telling you how to "dress for success" and control your body language. But keeping on top of your personal traits is only part of the story of managing your professional image, says Roberts. You also belong to a social identity group—African American male, working mother—that brings its own stereotyping from the people you work with, especially in today's diverse workplaces. You can put on a suit and cut your hair to improve your appearance, but how do you manage something like skin color?
Roberts will present her research, called "Changing Faces: Professional Image Construction in Diverse Organizational Settings," in the October issue of the Academy of Management Review.
Read the interview at : HBS
by Mallory Stark
As HBS professor Laura Morgan Roberts sees it, if you aren't managing your own professional image, others are.
"People are constantly observing your behavior and forming theories about your competence, character, and commitment, which are rapidly disseminated throughout your workplace," she says. "It is only wise to add your voice in framing others' theories about who you are and what you can accomplish."
There are plenty of books telling you how to "dress for success" and control your body language. But keeping on top of your personal traits is only part of the story of managing your professional image, says Roberts. You also belong to a social identity group—African American male, working mother—that brings its own stereotyping from the people you work with, especially in today's diverse workplaces. You can put on a suit and cut your hair to improve your appearance, but how do you manage something like skin color?
Roberts will present her research, called "Changing Faces: Professional Image Construction in Diverse Organizational Settings," in the October issue of the Academy of Management Review.
Read the interview at : HBS
Sizing the emerging global labor market
The topic of offshoring generates extreme differences of opinion among policy makers, business executives, and thought leaders. Some have argued that nearly all service jobs will eventually move from developed economies to low-wage ones. Others say that rising wages in cities such as Bangalore and Prague indicate that the supply of offshore talent is already running thin.
To a large extent, these disagreements reflect the confusion surrounding the newly integrating and still inefficient global labor market. Much as technology change is making it possible to integrate global capital markets into a single market for savings and investment, so digital communications are giving rise to what is, in effect, a single global market for those jobs that can now, thanks to IT, be performed remotely from customers and colleagues.
Complete article at : McKinseyQuarterly
To a large extent, these disagreements reflect the confusion surrounding the newly integrating and still inefficient global labor market. Much as technology change is making it possible to integrate global capital markets into a single market for savings and investment, so digital communications are giving rise to what is, in effect, a single global market for those jobs that can now, thanks to IT, be performed remotely from customers and colleagues.
Complete article at : McKinseyQuarterly
Who's Responsible for Getting Bob Hired?
One of the Accountemps commercials just got through airing. I love the farcical nature of the ads and the creativity of the writers. The other thing is, those commercials make me think about a lot of things. They've been food for several proposed blogs that were started and lost or started and saved until I could finish later. Incidentally, Later is coming. But she still needs to finish putting on her make-up.
Back to Accountemps. There was the ad where Nerlman was looking for work for the intern. That one was ripe. There was the first one where Nerlman was calling in sick and learned about Bob. I also remember the one where the manager was taking credit for the excellent reports that were being produced. The VP was looking forward to talking with him about that. And today's gem is about Nerlman's wanting to do something important -- more than he's usually allowed to do. So Mr. [what'shisname?] tells him instead of the finance report, Nerlman can do Payroll while Bob (the temp) does the report. "What's Payroll?" Nerlman asks after celebrating the task with some significance.
But today's commercial comes on the coattail of some real life interactions where a person with excellent credentials is passed over while the recruiter continues their search for the needle in the haystack. So it's time to ask two questions (if not more): (1) How the heck did Nerlman get hired? (2) Why has Bob from Accountemps not been hired?
Nerlman is the consummate slacker. But he's been with the company for as many years as Carter has pills (or peanuts; it depends on which Carter we're talking about). He's good at supervising the intern but the intern is a whinny, sniveling teenager whose worth is stapling papers.
On the other hand, Bob knows how to do every financial function. It must be that Bob has not yet earned his certification. Or maybe he wants the independence (independence?) that temping allows. He's a commitment phobe. There was one commercial where Nerlman was moving his things into the last person's office and Mr. [what'shisname?] said Bob would be moving in there while the replacement was found and speculated that Bob may be the replacement.
So why haven't they hired Bob? Maybe Bob's agency is asking too much in the temp to perm fee percentage. But if this company that keeps calling Bob back in has such challenges and appreciates Bob's proliferate talents and skills so much, why have they not made the first step toward turning around their ROI dive by extending an offer or at least learning how to do a better job of recruiting, screening, and onboarding? Why is it that a recruiter hasn't latched onto Bob like tar on a stick and placed him in one of the Big Four?
Or maybe Bob sees the mess that exists at the company and has mentally said to himself, "Never, in a million years. That's the job from Hell," because there's so much waste and disorganization that it would take too much energy to get things sorted out and kept that way in the long run. Short-term, specific projects help him keep his sanity while driving up his worth.
That brings up another issue. Is Accountemps paying Bob a premium for all of the skills he has? Have they increased his hourly rate to reflect the amount of his demand, especially with Nerlman's company?
Here we have the consummate and elusive desirable candidate -- a qualified candidate. Yet the right recruiter has yet to pick him up and place him in the right situation. Do we really recognize qualified when we see it? Do we really understand what constitutes and what has led to being qualified?
And by the way, just exactly who is responsible for getting Bob hired?
Back to Accountemps. There was the ad where Nerlman was looking for work for the intern. That one was ripe. There was the first one where Nerlman was calling in sick and learned about Bob. I also remember the one where the manager was taking credit for the excellent reports that were being produced. The VP was looking forward to talking with him about that. And today's gem is about Nerlman's wanting to do something important -- more than he's usually allowed to do. So Mr. [what'shisname?] tells him instead of the finance report, Nerlman can do Payroll while Bob (the temp) does the report. "What's Payroll?" Nerlman asks after celebrating the task with some significance.
But today's commercial comes on the coattail of some real life interactions where a person with excellent credentials is passed over while the recruiter continues their search for the needle in the haystack. So it's time to ask two questions (if not more): (1) How the heck did Nerlman get hired? (2) Why has Bob from Accountemps not been hired?
Nerlman is the consummate slacker. But he's been with the company for as many years as Carter has pills (or peanuts; it depends on which Carter we're talking about). He's good at supervising the intern but the intern is a whinny, sniveling teenager whose worth is stapling papers.
On the other hand, Bob knows how to do every financial function. It must be that Bob has not yet earned his certification. Or maybe he wants the independence (independence?) that temping allows. He's a commitment phobe. There was one commercial where Nerlman was moving his things into the last person's office and Mr. [what'shisname?] said Bob would be moving in there while the replacement was found and speculated that Bob may be the replacement.
So why haven't they hired Bob? Maybe Bob's agency is asking too much in the temp to perm fee percentage. But if this company that keeps calling Bob back in has such challenges and appreciates Bob's proliferate talents and skills so much, why have they not made the first step toward turning around their ROI dive by extending an offer or at least learning how to do a better job of recruiting, screening, and onboarding? Why is it that a recruiter hasn't latched onto Bob like tar on a stick and placed him in one of the Big Four?
Or maybe Bob sees the mess that exists at the company and has mentally said to himself, "Never, in a million years. That's the job from Hell," because there's so much waste and disorganization that it would take too much energy to get things sorted out and kept that way in the long run. Short-term, specific projects help him keep his sanity while driving up his worth.
That brings up another issue. Is Accountemps paying Bob a premium for all of the skills he has? Have they increased his hourly rate to reflect the amount of his demand, especially with Nerlman's company?
Here we have the consummate and elusive desirable candidate -- a qualified candidate. Yet the right recruiter has yet to pick him up and place him in the right situation. Do we really recognize qualified when we see it? Do we really understand what constitutes and what has led to being qualified?
And by the way, just exactly who is responsible for getting Bob hired?
Reference Checking for Job Applications
You have found your dream employee. She has all the right qualifications and experience. She passed her interview with flying colors. She has even agreed to your payment terms without a hiccup. So what's the problem? You should hire her immediately, shouldn't you?
A smart manager would do a bit of homework before offering the job. My advice to managers would be: read the fine print. If you have a great catch in your clutches, chances are that you have not examined the catch well enough. Many managers overlook the importance of reference checking. It seems like a waste of time. These are the typical reasons given against reference checking:
No real data is ever found out about the employee through reference checking.
The referrer may have a vested interest in giving positive or negative feedback.
Reference checking makes analysis difficult.
I don't deny these reasons as irrelevant. However, one has to see the tradeoff between the two options. With reference checking, you can:
Discover new information, which is not revealed through interview
Establish the veracity of the employee's track record
Corroborate the opinions of the referrer with available facts
A systematic process of reference checking ensures that the information is not confusing. Here are some points to keep in mind:
Verify the relationship between the referrer and the applicant
This is probably the best place to start a full-scale examination. Check about the nature of relationship between the referrer and the applicant. An ex-professor is a good referrer, but there has to be substantial interaction between them to warrant a detailed reference. If the ex-professor hardly knew your candidate, then the reference would not be of much use. If possible, insist on references from people who have had substantial interaction with your candidate.
Sort out the accolades from the facts
Some reference letters are full of adjectives to describe an applicant. These fluffed up nonsense lend no credibility to the writer or the applicant. Look out for such references. Read the letters to accumulate information about the candidate. Then, verify the accuracy of the facts stated in the letter by interviewing the candidate. This will help you gauge the significance of the achievement.
Multiple References
In the case of reference checking, the more, the better is not a good thumb rule to follow. Rather stick to a limited number. However, it is good to get references from a cross section of people. So a good rule is to have one reference letter of each: (1) a professor or academician (2) a superior or ex-boss (3) a member of a social institution, if the applicant is an active social worker. You can cross verify information to check for any discrepancies. For example, if the reference letter from the professor claims that the applicant is hard working, check if there is a mention of the same trait in other reference letters too.
Phone based reference checking
References can also be verified over the phone. Before making the phone call, make sure to have a list of questions ready. Have a column where you can note down facts or interesting details. Pose specific questions like "Can you tell me how was X's relationship with her colleagues?", rather than asking, "Can you tell me more about X's working style?" If you ask specific questions, you will get specific answers. If a person is being vague about the answers, press for information without sounding too nosy.
Reference checking could be done intelligently if planned and executed well. It can be an important tool for recruiters who want to zero in on their final candidate.
A smart manager would do a bit of homework before offering the job. My advice to managers would be: read the fine print. If you have a great catch in your clutches, chances are that you have not examined the catch well enough. Many managers overlook the importance of reference checking. It seems like a waste of time. These are the typical reasons given against reference checking:
No real data is ever found out about the employee through reference checking.
The referrer may have a vested interest in giving positive or negative feedback.
Reference checking makes analysis difficult.
I don't deny these reasons as irrelevant. However, one has to see the tradeoff between the two options. With reference checking, you can:
Discover new information, which is not revealed through interview
Establish the veracity of the employee's track record
Corroborate the opinions of the referrer with available facts
A systematic process of reference checking ensures that the information is not confusing. Here are some points to keep in mind:
Verify the relationship between the referrer and the applicant
This is probably the best place to start a full-scale examination. Check about the nature of relationship between the referrer and the applicant. An ex-professor is a good referrer, but there has to be substantial interaction between them to warrant a detailed reference. If the ex-professor hardly knew your candidate, then the reference would not be of much use. If possible, insist on references from people who have had substantial interaction with your candidate.
Sort out the accolades from the facts
Some reference letters are full of adjectives to describe an applicant. These fluffed up nonsense lend no credibility to the writer or the applicant. Look out for such references. Read the letters to accumulate information about the candidate. Then, verify the accuracy of the facts stated in the letter by interviewing the candidate. This will help you gauge the significance of the achievement.
Multiple References
In the case of reference checking, the more, the better is not a good thumb rule to follow. Rather stick to a limited number. However, it is good to get references from a cross section of people. So a good rule is to have one reference letter of each: (1) a professor or academician (2) a superior or ex-boss (3) a member of a social institution, if the applicant is an active social worker. You can cross verify information to check for any discrepancies. For example, if the reference letter from the professor claims that the applicant is hard working, check if there is a mention of the same trait in other reference letters too.
Phone based reference checking
References can also be verified over the phone. Before making the phone call, make sure to have a list of questions ready. Have a column where you can note down facts or interesting details. Pose specific questions like "Can you tell me how was X's relationship with her colleagues?", rather than asking, "Can you tell me more about X's working style?" If you ask specific questions, you will get specific answers. If a person is being vague about the answers, press for information without sounding too nosy.
Reference checking could be done intelligently if planned and executed well. It can be an important tool for recruiters who want to zero in on their final candidate.
Does Personal Attribute Influence Recruitment Decisions?
Are we influenced by a person's attire, mannerisms, charisma? Or do such traits expose our own inadequacies and thereby affect rationale?
There is an old saying that goes: First impression is the last impression. Scores of job applicants are learning the benefits of personal grooming. People who otherwise dress sloppily wear their best for their interview. Why? Because they want to create a lasting impression on the minds of the interviewer.
The applicant adapts his taste to meet expectations of the interviewers. So, a person usually in jeans sticks to formal attire. The lady who loves to wear vibrant colors chooses to wear dull, sober colors. Out goes personal style, in come corporate etiquettes.
It is not just the clothes. Candidates bedazzle their recruiters with a host of other impressive things. The candidate has the best mannerisms on display. He flashes a benevolent smile now and then, which clouds judgment.
I am not against well-mannered candidates. In fact, I like professionals who behave like one. Their attitude tells me that they are serious about getting the job. The problem, however, is on the other side of the recruiting table. Sometimes, interviewers get so carried away by first impressions that they immediately form a bias for or against the individual. Objectivity gets overrun by prejudice.
To elucidate the point, let us take a typical example of a biased interview. A harried looking executive walks in for an interview. His disheveled appearance creates a negative bias. This bias reflects in the interview, which allows no room for comfort. In such a discomforting scenario, it is quite likely that the applicant would not perform well. From this point on, the interview goes downhill. Naturally, the applicant is rejected without a second thought. One can argue that the applicant lost out due to poor preparation. However, we cannot rule out the role of bias in this interview process. While most people would blame the poor performance of the applicant, it is also possible that the recruiters have to take a share of the blame.
Take the example given above with a modified outcome. A harried looking executive walks in for an interview. The recruiters ignore his looks and continue the interview as they would with any other applicant. There is an atmosphere of comfort. The applicant is encouraged to talk freely. In this situation, both the candidate and the recruiters are in a position to focus on 'real' issues. The recruiters can look beyond the external factors to evaluate the true potential of the candidate. The interview process can be termed fair and non-judgmental.
Psychologists say that bias is often a reflection of our own personality. Individuals have inherent preference or dislike for certain mannerisms. We see people as an extension of our own persona. We react positively when a person has a special skill that we don't have. For instance, a person with no driving skills admires others who drive well. Likewise, we tend to dislike people, who don't have the same set of values that we do. This explains why many people hate hypocrites or liars, because these qualities are against their values.
Very often, bias affects impartial evaluation of employees. A non judgmental interview can focus on applicant's real talents. Managers can avoid serious hiring mistakes if they keep objectivity in perspective while doing an interview. Employers must recognize that bias can have a significant impact on interviews. An in-depth analysis can reveal bias factors in decision making process. The first step in eliminating bias is to accept that bias can affect rationale. Once that is done, the road ahead becomes visible.
There is an old saying that goes: First impression is the last impression. Scores of job applicants are learning the benefits of personal grooming. People who otherwise dress sloppily wear their best for their interview. Why? Because they want to create a lasting impression on the minds of the interviewer.
The applicant adapts his taste to meet expectations of the interviewers. So, a person usually in jeans sticks to formal attire. The lady who loves to wear vibrant colors chooses to wear dull, sober colors. Out goes personal style, in come corporate etiquettes.
It is not just the clothes. Candidates bedazzle their recruiters with a host of other impressive things. The candidate has the best mannerisms on display. He flashes a benevolent smile now and then, which clouds judgment.
I am not against well-mannered candidates. In fact, I like professionals who behave like one. Their attitude tells me that they are serious about getting the job. The problem, however, is on the other side of the recruiting table. Sometimes, interviewers get so carried away by first impressions that they immediately form a bias for or against the individual. Objectivity gets overrun by prejudice.
To elucidate the point, let us take a typical example of a biased interview. A harried looking executive walks in for an interview. His disheveled appearance creates a negative bias. This bias reflects in the interview, which allows no room for comfort. In such a discomforting scenario, it is quite likely that the applicant would not perform well. From this point on, the interview goes downhill. Naturally, the applicant is rejected without a second thought. One can argue that the applicant lost out due to poor preparation. However, we cannot rule out the role of bias in this interview process. While most people would blame the poor performance of the applicant, it is also possible that the recruiters have to take a share of the blame.
Take the example given above with a modified outcome. A harried looking executive walks in for an interview. The recruiters ignore his looks and continue the interview as they would with any other applicant. There is an atmosphere of comfort. The applicant is encouraged to talk freely. In this situation, both the candidate and the recruiters are in a position to focus on 'real' issues. The recruiters can look beyond the external factors to evaluate the true potential of the candidate. The interview process can be termed fair and non-judgmental.
Psychologists say that bias is often a reflection of our own personality. Individuals have inherent preference or dislike for certain mannerisms. We see people as an extension of our own persona. We react positively when a person has a special skill that we don't have. For instance, a person with no driving skills admires others who drive well. Likewise, we tend to dislike people, who don't have the same set of values that we do. This explains why many people hate hypocrites or liars, because these qualities are against their values.
Very often, bias affects impartial evaluation of employees. A non judgmental interview can focus on applicant's real talents. Managers can avoid serious hiring mistakes if they keep objectivity in perspective while doing an interview. Employers must recognize that bias can have a significant impact on interviews. An in-depth analysis can reveal bias factors in decision making process. The first step in eliminating bias is to accept that bias can affect rationale. Once that is done, the road ahead becomes visible.
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