U.S. Supreme Court’s Ruling on Healthcare Reform

The HR ramifications of today’s historic decision by the U.S. Supreme Court — upholding the majority of the Patient Protection and Affordable Care Act — will be debated across the partisan aisle all the way to Election Day and possibly beyond.

So, in order to arm yourself with knowledge, here is the decision in its entirety. 

And, stay tuned to the news analysis section of HREOnline ™ for analysis of the Supreme Court’s decision later today…

Collins Shares Inspiring Definition of True Leadership

Well-recognized author and business strategist Jim Collins inspired a massive auditorium full of HR professionals to think deeply about what leadership means to them and to take the necessary steps toward their own real business-leadership success.

As Tuesday morning’s keynote speaker at SHRM’s 2012 Annual Conference in Atlanta, Collins shared stories from the past — including his own personal life — to punch home his message that true leadership success carries with it a very precious combination of ingredients, including humility, the ability to take advantage of circumstances of chance or luck, disciplined thought and action … the list went on.

Although some of what he shared came from his books — including well-known best-sellers Built to Last and Good to Great, as well as his latest, Great by Choice — Collins’ spoke more about what he called his “one big question: what makes great companies tick, what marks the people who lead them and what causes other companies to self-destruct.”

The answer, he said, begins and ends with people. Some companies out there have charged ahead to drive the bus full bore ahead. But in companies that succeed, leaders have decided “who sits on the bus and who sits in the key seats, and only then do they drive the bus.”

“The single-most important strategic executive decision is choosing those right people to sit in those seats and drive the bus,” Collins said.

Of crucial importance in great leaders, he said, are also their abilities to “channel ego,drive and commitment that is larger and more enduring than themselves — that is not about them — ever outward into an organization that’s bigger and more important than they are.”

Using the story of two Mt. Everest explorers, one of whom led a team that succeeded and the other who died with his entire team before making it back, Collins was also very specific about what the successful leader did that the other leader did not. He tied it to what organizational leaders must do as well, as “disciplined people with disciplined thought taking desciplined action.”

In the case of the climbers, the successful team was led by a man who preceded his climb with empirical research — setting up an emprically validated model. What did he do? “He spent time living with the Eskimos,” Collins said. “They told him, ‘Don’t go with ponies. They sweat [and freeze to death]. Dogs don’t.’ So he went with dogs, whereas the other leader went with ponies.”

The former leader’s approach, he said was disciplined. It was also creative. And while creativity is a natural human state and infinitely abundant, discipline is not.

Successful leadership, he said, involves a “rare combination of the two; it’s to marry discipline with your creativity so you can magnify the creativity and not destroy it.” The balance is very delicate.

In a powerful parting comment, Collins shared the story of his wife’s successful battle with cancer, a story that underscored the element of luck or chance in every story of success or failure, joy or grief. “The question is not whether you’ll get good or bad luck,” he said. “The question is, ‘What are you going to do with it?’ And how are you going to extract more good luck from the good luck you encounter?”

What his own personal challenge taught both him and his wife, he added, was that “true great luck events are the ones spent with people,” especially the people we love.

“Become an element of [that kind of] luck by connecting with a younger leader” and helping him or her learn how to embrace and repond to those events, he added. “The truly meaningful work in life is done with people … especially those you love.”

Heading for the Exits?

I was reminded more than a few times at this year’s SHRM that employers are clearly worried about losing their top talent.

Yesterday, I stumbled across further proof: an overflow area, where audio and PPT for a session titled “Succession Management and High Potentials: How to Connect Your Most Critical Leadership Programs” were “streamed” to attendees sitting outside the packed workshop room. Best for HR professionals to be prepared, no?

Then, later in the day, I sat down with executives from Aflac, who shared with me the findings of their most recent workforce study, the 2012 Aflac WorkForces Report.

In the survey of 6,100 employees, Aflac found that nearly half of the workers (49 percent) questioned said they were  somewhat likely to look for a new job in the next 12 months; 27 percent indicated they were very or extremely likely.

The findings raise the question, “What are employers doing to retain workers?” says Audrey Boone Tillman, executive vice president of corporate services for Aflac.

Not surprisingly—especially when you consider Aflac happens to be in the business of providing group benefits—the study also shows a clear correlation between satisfaction with benefits and satisfaction overall. Seventy-three percent of the respondents who indicated they were extremely or very satisfied with their benefits were very satisfied with their jobs.

When employees were asked what their employers could do to retain them, nearly half (49 percent) said “improve my benefits,” according to Tillman.

Despite this, employee benefits hasn’t really budged all that much since the economy went south late last decade. Proof of that could be found in SHRM’s 2012 Employee Benefits Survey, which was released yesterday. The study of 550 HR professionals revealed that employer spending remained pretty much stable this year. Organizations spent 19 percent of an employee’s annual salary on voluntary benefits, 18 percent on mandatory benefits and 10 percent on pay for time employees didn’t work.

Companies, however, are apparently making an investment when it comes to initiatives aimed at promoting healthier behaviors among its employees, the SHRM survey found. For example, the percent of employers offering health and lifestyle coaching jumped from 33 percent in 2008 to 45 percent in 2012. Rewards and bonuses for completing a health and wellness program, meanwhile, increased from 23 percent to 35 percent over that same period. No question these are pretty significant changes.

Of course, no one knows what might lie ahead. But it’s safe to assume we’ll begin to see more movement on other benefit fronts as employers start to see more of their talent head for the doors.

What Thinking Globally Might Really Mean

I liked some of the thoughts that came out of Gary Kushner’s SHRM Conference session on Monday, “The Changing Nature of Work: Five Global Trends Affecting Strategic Human Resources.” Doing global business going forward won’t mean spending more money than the next organization, or getting your people cheaper than the next one. In the global dictionary of Kushner, president and CEO of Portage, Mich.-based Kushner & Co., it will come down to which one can think more differently … dare I say … “out of the box.”

Some of the ideas he threw out for the roomful of HR practitioners to chew on:

  • Based on the research of Sylvia Ann Hewlett, baby boomers and Gen Yers are actually from the same mold. You heard right. They’re much more like one another in how they view the contract with their employers. It’s the Gen Xers and the boomers who are diametrically opposed. So globally, think about that, and how you’re doing your workforce planning and engagement strategies. It could be a game-changer.
  • Consider the creative approach of McDonalds Corp. Some brillilant person there decided it might be worth it to outsource drive-thru orders to a call center in the mid-United States that would then transmit those orders on the web to cooks and order-takers. So they tried it. Accuracy of orders picked up dramatically and 10 seconds were saved per order. “Think about this,” said Kushner. “They changed the way they thought about delivering 99-cent burgers.”
  • Or Sun Microsystems and its more well-known rethinking of how work gets done. By transmitting work along a chain of countries, all based on what their workday hours were, work and speed-to-market picked up exponentially.

“In HR,” Kushner said, “we need to be thinking like this. ‘How can I rethink HR practices to drive better workforce effectiveness?’ ”

Essentially, that means getting used to a complete transformation of how work gets done. Consider all the ramifications of telecommuting and make it work for your organization. In some cases, that won’t mean five-day telecommuting. Three-day telework arrangements might be better for some. Think about the future of video-conferencing. “Hey, all workers might even be equipped with Dick Tracy-like video wristband watches,” he said. “You don’t have to be in a doctor’s office to perform the work of a doctor.”

The greatest challenge to HR in the global world of business to come, he added, will be in deciding how new leadership approaches are communicated, and how the impact of what’s happening in the world (such as Spain and Greece today) is communicated to the workforce — how those events will impact them. “This will be crucial,” he said.

And social media? And what those policies should or even will be in the near future?

Forget about solcia-media policies. “In 10 years, are you going to have a social-media policy? No!” Kushner practically shouted. “In 10 years, that policy will be, ‘Go forth, communicate with the world and be fair.’ ” Now get outta here … .

Get used to it.

Gladwell on Civil Rights and Occupy

Years ago, I heard Malcolm Gladwell deliver a keynote at a Taleo user conference (believe it was in Boston). At the time, he was superb. The same could be said of the talk he delivered at this year’s SHRM. (Gladwell keynoted SHRM once before—in 2005—but I apparently missed his talk that year. He opened his remarks by asking SHRM what took it so long to invite him back?)

Gladwell focused his remarks on a topic we’ve repeatedly covered in HRE and on this blog: generational differences. As a regular reader of his New Yorker columns, I’ve come to expect Gladwell to offer a fresh and interesting spin on whatever subject he’s writing or, in the case of his speeches, talking about. I wasn’t disappointed.

In this morning’s keynote, Gladwell devoted a large portion of his presentation to comparing the civil rights movement of the ’50s and  ’60s to the Occupy movement of more recent times, looking specifically at their different approaches to leadership, organizational structure and ideology.

The civil rights movement, he said, had Martin Luther King as its leader, a well-developed organization and a clear ideology. At the end of the day, it was tremendously successful. Not long after Martin Luther King’s launch of Operation C (confrontation) in Birmingham, Ala., in 1963, the Civil Rights Act  was passed.

In comparison, he explained, the Occupy movement—which took place in 600 cities around the country—is dramatically different. “Did  they have a leader? No. Did they have a single ideology? No. Did they have an organization? Not really?” he said.

The Occupy movement, he explained, represents a paradigm shift that’s also taking place in the workplace—one HR professionals have to understand and get their hands around.

While the civil rights movement was in many ways closed, he said, the Occupy movement is open. While the civil rights movement of the ’50s and ’60s was hierarchical, with King at the center, the Occupy movement is about social connections and networks.

Gladwell pointed out that one approach isn’t necessarily better than the other, noting how one of America’s most successful companies built its success on combining the two different approaches.

Apple built its success on being one of the most networked environments around, he said; but the company under Steve Jobs was also one of the world’s most hierarchical companies.

No doubt all points worth considering as HR leaders deal with generational issues in the workplace.

Employee Health Takes on New Meaning

Two different studies came to my attention at SHRM’s 2012 Annual Conference and Exposition — both underscoring a growing awareness that keeping workers working, and healthy and productive, is probably the best way to cut healthcare costs.

In essence — though as important cost-cutting factors — focusing on plan design and doctors’ and drug costs may be taking a back seat to keeping workers healthy and happy, at work.

One, a just-released report from The Standard Insurance Co.’s Workplace Possibilities program, titled Health-Related Lost Productivity: Causes and Solutions, kind of turns on its ear the notion that medical care and drug costs should be employers’ biggest worries.

It cites recent studies (one in the Journal of Occupational Environmental Medicine, “Health and Productivity as a Business Strategy: A Multi-Employer Study,” and two others by Mercer and Kronos on the Total Financial Impact of Employee Absences) showing that medical and pharmaceutical costs make up only 30 percent of the total cost of poor employee health.

The other 70 percent can be attributed to what The Standard calls health-related lost productivity costs. Those accrue through presenteeism (workers showing up but not producing at full capacity due to illness) and absenteeism. And the latter costs accrue through all kinds of demons: overtime for the workers left to pick up the pieces, turnover should patients never return, temporary staffing, working slow, late deliveries (because, let’s face it, replacements just don’t know the ropes like the employees themselves), replacement training, customer and variable product quality.

Michael Klachefsky, national practice leader of The Standard’s Workplace Possibilities program and author of the report, calls it the “iceberg concept.”

“These are the hidden costs, like the part of the iceberg under the water’s surface,” he tells me. “Our findings show the people left to pick up the slack are, on average, 15 percent to 44 percent more expensive, and 21 percent to 29 percent less productive.”

His research shows that, for every $1 employers spend on worker medical or pharmacy costs, they absorb at least $2.30 of HRLP costs.

“It’s intuitive,” says Klachefsky, “but no one ever measured it before.”

His company actually bases its services on this concept through numerous proactive fixes, such as on-site wellness and return-to-work consultants, ergonomic advice, products and services, and a blog — workplacepossibilities.com — devoted solely to educating employers and employees about ways to avoid medical leave and keep short-term disability from becoming long-term disability.

“We’re doing the 70 percent,” Klachefsky says. “Most others are addressing the 30 percent.”

Also at the conference, SHRM released its 2012 Employee Benefits Survey, showing more employers are offering benefits now that encourage employees to improve their health. Of the 550 randomly selected HR professionals surveyed by SHRM, 45 percent are now offering health and lifestyle coaching, up from 33 percent in 2008, and 35 percent are rewarding — through lower premiums or bonuses — workers who complete health and wellness programs, up from 23 percent in 2008.

“Employers recognize that providing employees with the opportunity to improve their health can increase morale, confidence and productivity,” says Mark J. Schmit, vice president or research at SHRM.

“Organizations continue to look for ways to manage costs as the economy slowly improves,” he says, “[recognizing that] healthier employees … help decrease healthcare costs to employers and employees.”



Varied Perceptions of SHRM Conference’s Opening Day

Hank Jackson, president and CEO of the Society for Human Resource Management, took to the stage at the opening session of SHRM’s 2012 Annual Conference and Exposition in Atlanta Sunday with a positive message about HR moving as a profession into the driver’s seat of growth and change.

Against a backdrop of business successes such as Intel and Apple, and casualties such as Twinkies’ bankruptcy and Blockbuster’s inability to withstand what he called the “disruptive innovation” of Netflix, Jackson warned that “businesses that don’t see change coming will be gobbled up and taken over.”

The speed and growth of change in the business world, said Jackson, “has changed the way we live and work,” and HR, and SHRM, “will help drive that growth and new direction.”

After listing many of SHRM’s recently launched and ambitious initiatives — including its introduction of HR competencies and standards, established in partnership with the American National Standards Institute, and its even-more-recently announced commitment to immigration as a future-workforce promise — Jackson called on the thousands of HR professionals in the audience to join with his group and help lead the nation’s businesses to a new age.

“We as HR professionals now own our seat at the table,” he said. “Now we have to take that next step and take our place at the head of the table.”

Former U.S. Secretary of State Condoleezza Rice was also positive in her opening keynote. Despite the nation’s crisis in education threatening to become “our No. 1 national-security threat,” she said, “I’m still optimistic — like our country [which has endured powerful hardships in its past] and like me, a girl from a black neighborhood in Birmingham, Alabama, who goes on to become the country’s secretary of state.

“We will emerge,” said Rice, “this exceptional country called the United States of America.”

Earlier that day, however, in a press conference called by the SHRM Members for Transparency, a different kind of change was being called for — one intended to right a SHRM ship that the group’s members say has drifted far off course.

Some of the SMFT’s key concerns about the current SHRM leaders center around what it considers non-transparent decision-making, salaries adopted for SHRM board members that fly in the face of today’s still-sputtering economy (and SHRM traditions) and board members being appointed without being certified by the Human Resource Certification Institute (a practice that has been in place since the HRCI was established in 1976).

At the press briefing, the SMFT released results of two surveys it conducted in May — one of 3,607 SHRM volunteer state, regional and chapter leaders, and another of 350 grassroots members — showing definitive support for what the SMFT is trying to address.

Highlights of the survey results include a 98-percent agreement that the SHRM board should follow the Center for Association Leadership and BoardSource recommendation of establishing an independent compensation committee, which the current SHRM Board has chosen not to do. Additionally, 91 percent agree that the board’s compensation is too high; 94 percent agree that the current perks, such as domestic premium-class air travel, are not necessary to recruit and retain good board members; and 87 percent believe it is unacceptable that only 38 percent of SHRM board members possess HRCI certification.

The group also announced Sunday that it was launching a massive write-in campaign to elect four of its members to the SHRM board to correct these flaws.

This February 2011 HREOnline news analysis says that, “among other issues, the Transparency group is actively encouraging SHRM members to request outside reviews of board compensation and travel-reimbursement policies; to have the job specifications for the CEO revised to require HR experience and education [which Jackson does not have]; and to discontinue future use of the consumer-price index as a factor in dues increases.

“Reasonable people can disagree on how you attract the best board members,” Jackson said in that story, “and I think the group’s fundamental concerns are that we’re breaking SHRM traditions. But SHRM is growing in size and complexity and that means some of the more traditional things may go away because of that.”



HR’s Perception vs. Reality

Does HR really see what’s going on?

If that’s the question, then the answer — according to the results of a new Kenexa whitepaper entitled Employee Attitudes and Engagement — is a disconcerting “No.”

The whitepaper sought to find out just how tuned in — or tuned out — HR leaders are to what employees think and feel about their organization by asking the same questions around attitude and engagement of both employees and HR leaders.

The results show that HR and employees are worlds apart on some big issues:


81 percent of HR professionals think employees would recommend the organization to a friend. Only 38 percent actually would. If your employees aren’t fully engaged, they might consider leaving the organization. Bringing a friend into an organization that you aren’t fully engaged with might affect a personal relationship—a risk many aren’t willing to take.


83 percent of HR professionals think their employees plan to stay for the next year. 41 percent of employees agree with this statement. With engagement low and belief that compensation and benefits aren’t fair, it should come as no surprise that employees aren’t committed to their organization. Moreover, through the recession, many employees stayed with their organization out of a need for security. Now that organizations are hiring again, loyalty starts to waver.

Troubling figures, to be sure.

But, according to Kenexa, there is still hope for the function:

So how can we resolve these gaps in perception? Through communication and manager training. Even the best-intended HR programs fall flat without proper communication. Often times our employees aren’t fully aware of all the organization is doing for them or how much the organization is spending on programs. Moreover, all the communication in the world won’t offset a poorly informed manager. Managers need to be trained not only on understanding and evangelizing the company message, but also on bringing concerns back to HR so employee issues can be addressed.

So, there you have it.

Communication and manager training: HR’s route back to Earth  — and its employees.



Chiming In on the Supreme Court’s Overtime Decision

There’s some pretty prolific fallout out there around the Supreme Court’s decision Monday to strike down two SmithKline Beecham Corp. pharmaceutical sales representatives’ claim that they should have gotten overtime because they worked more than 40 hours a week.

Just as impressive as the decision is for those directly involved is the fact that it also strikes down an Obama Adminsitration interpretation of labor law.

Here’s part of the Wall Street Journal ‘s recap (subscription required) that sums it up pretty succinctly.

In the Christopher v. SmithKline Beecham Corrp. decision, a 5-4 majority clarified that white-collar sales reps for drug companies don’t qualify for overtime. Two employees for SmithKline Beecham made such a claim, and the Obama Labor Department jumped in with an amicus brief in this and similar cases. A favorable ruling would have freed the plaintiffs bar to bring class actions on behalf of 90,000 drug reps for billions in back pay.

The High Court ruled that the claim wasn’t required under the 1938 Fair Labor Standards Act, which was enacted to protect workers from “substandard wages and oppressive working hours” and explicitly exempted “outside salesmen.” The plaintiffs argued they aren’t in sales because they merely “promote” drugs to physicians. But the Court noted that federal laws bar drug companies from selling certain products directly to consumers; they must be prescribed by physicians.

The WSJ also pulled no punches in commending the majority “Supremes” for holding tough in their ruling. “The Supreme Court doesn’t get overtime pay, but maybe it ought to for striking down a novel Obama Administration interpretation of labor law on Monday,” the piece “An Overtime Victory,” starts out. It goes on to say that the majority was “not not amused by the Labor Department’s attempt at regulation-by-amicus brief.” It continues:

 Justice Alito wrote that Labor had not once—in 70 years of the drug-rep pay system—filed an enforcement action of this kind. Instead of going through a formal rule-making, the agency joined lawyers to force what Justice Alito called an “unfair surprise” on the industry.

The lawsuit was part of the Administration’s campaign to bring more workers under wage-and-hour laws, the better to unionize and provide trial-bar jackpots. Courts have mostly taken a dim view of these legal runarounds, and the Supremes deserve credit for upholding long-settled labor law.

The arguments on both sides focused on whether sales were actually made or not. The Department of Labor, Obama administration and dissenting judges held to the notion that the Fair Labor Standards Act’s “outside sales exemption” did not apply to the representatives because no actual sales transaction took place.

It’s complicated, and the fallout — legally and through discourse — is only beginning. In this post on the Wage & Hour Litigation Blog, attorneys Richard Alfred, Alex Passantino and Jessica Schauer write about its impact:

Obviously, the impact of the Court’s decision will be felt most immediately in the pharmaceutical industry.  Dozens of pending cases around the country will likely be dismissed based on this decision.  Dozens more nascent lawsuits likely will never be filed, and the tens of thousands of employees who are currently working as [pharmaceutical sales representatives] will continue to be treated as exempt, at least under federal law and in states that follow the FLSA’s outside sales exemption.

But the Court’s decision in the Christopher case potentially permits employers in all industries to classify a wider variety of employees as outside sales, even if the employee does not directly effect a transfer of title.  Moreover, due to the Court’s decision on deference [striking down the Obama brief’s argument that the DOL’s interpretation of its regulation should be given Auer deference], the Christopher case is likely to reverberate throughout many other industries.

Making the Sandusky/Screening Connection

With the Jerry Sandusky trial under way in Bellefonte, Pa., this week, it’s been impossible to avoid (even if you wanted to) news reports about testimony and other court proceedings — including yesterday’s airing for jurors of the videotape of Sandusky’s interview with Bob Costas in November.

Most pundits agree that the most horrific and damaging moment of that interview was Sandusky’s hesitant, repetitive response to Costas’ question, “Are you sexually attracted to young boys?”

Weighing in on that very issue today is the SingleSource Services Corp., in this release about an online assessment tool called the Diana Screen, a tool it claims can scientifically evaluate “those individuals at high risk to violate sexual boundaries with children and teens.”

As Donald J. Dymer, president and chief operating officer of the Jacksonville, Fla.-based background-screening company, puts it:

Child sexual abuse by those individuals entrusted with their care has once again taken center stage as the Sandusky trial unfolds. And yes, we are taking that opportunity to remind the public that a powerful prevention tool is available that would most likely have prevented Sandusky from being hired. An assessment that identifies those adults who do not recognize the appropriate sexual boundaries that should exist between adults and children.”

He cites studies from the Child Molestation Research and Prevention Institute showing 6 percent of adults are sexually attracted to children. “You won’t be able to recognize them without the Diana Screen,” says Dymer, “but they will recognize your children … .”

The release says the screen — consisting of 120 questions — is already being used by departments of juvenile justice, church diocese, Boys & Girls Clubs of America, mentoring agencies and residential homes for youths. Companies and organizations that put any adults into positions of trust with children and youths are encouraged to consider its use.

Dymer, a background-screening professional and longtime law enforcer, says it fills the void left by criminal background checks because it measures behavioral likelihood (such as a lack of sufficient social boundaries), as opposed to relying on past events.

We’ve been reporting for some time now on the changing face of the screening and assessment industry, whereby companies can now measure — through behavioral and psychological assessments — likelihoods that certain job candidates will succeed, learn quickly, be committed, be ethical and honest, present threats to a workforce, etc. etc.

Should a screen such as Diana join those ranks and become as widespread as Dymer hopes, my only concern would be that its accuracy is as failsafe as he says it is and that none of those 120 questions leaves room for doubt or interpretation.