Category Archives: downsizing

Forming a Different Kind of Alliance

Trust. Loyalty. Lifetime employment. I think most of you would agree these words don’t really apply to today’s workplace.

ThinkstockPhotos-181678934As Ben Casnocha pointed out during his keynote yesterday at the SHRM Talent Management Conference—conveniently taking place this week just a few city blocks from the ERE Recruiting Conference I also attended—companies such as General Electric used to treat employees like “family” and offer them lifetime employment. But as we all know, factors such as globalization and technology forced employers to abandon such approaches decades ago.

Casnocha, an entrepreneur who co-authored with LinkedIn Founder and Chairman Reid Hoffman and Wasabi Ventures Partner Chris Yeh a book titled The Alliance: Managing Talent in a Networked Age (published last July by the Harvard Business Review Press), noted that a General Electric executive once described job security as one of GE’s prime corporate objectives. The year: 1963.

It’s hard to imagine anyone saying that today, right?

More recently, Casnocha said, many companies have embraced the other extreme: the free-agent model. True, he explained, that model does provide both employers and employees with the upside of greater flexibility; but it doesn’t build the kind of relationships that are needed to innovate.

“Would you do your very best work knowing you might not have a job the next day?” he asked.

For those of you who haven’t read The Alliance, Reid, Casnocha and Yeh make a compelling case for a third model that treats employees as “allies.”

“Think about any great alliance between countries, companies and people,” Casnocha said. “In an alliance, both sides commit to adding value. It’s a relationship that’s characterized by mutual trust, mutual investment and mutual benefit.”

Both the employer and the employee need to be adaptable in order for such a model to work, he added.

Employers, Casnocha said, need to “look the employee in the eye and say, ‘We’ll help transform your career, even if that means your career takes you to a different company someday.’ ” As for the employee, he or she “needs to say, ‘If you can make my LinkedIn profile look more impressive by having worked here, I will do great work [for you] and make a meaningful contribution to the company … .”

In his talk, Casnocha also touched on tours of duty, in which employees embark on a specific “mission.” (Once one tour of duty is completed, a new one is then defined.)

Alliances are especially effective, Casnocha pointed out, when it comes to “super-talented employees” who can really move the needle in your company. “What fires [these] employees up more than anything,” he said, “is the opportunity to transform themselves, the company and the world.”

To be sure, it’s a collaborative effort.

Casnocha told the story of one manager who printed two copies of an employee’s LinkedIn profile (so both the manager and the employee would have copies). Together, the two went through the profile, circling those parts that mattered most to the employee and writing in how that person might like to see it read two or three years from then.

On the subject of millennials, Casnocha asked: Which is better for their careers: Giving them a new title? Or telling them that you’re going to help them have conversations with three of the most important people in the industry?” (Hint, it’s not the first. Because, as Casnocha explained, people can take their networks and relationships with them when they leave.)

Layoffs or No Layoffs, Employees Come First

Whatever side of the layoff story you find yourself on — now or in the 187065451 -- layoffsfuture, conducting them or avoiding them at all costs — don’t ever lose sight of your employees’ experiences.

That seems to be the collective message of two articles I came across recently, written on the same day, no less. One, from the Harvard Business Review site, written by the chief executive officer of Scripps Health, Chris Van Gorder, trumpets that company’s no-layoffs policy.

The other, from the Society for Human Resource Management site (registration required), details Target Canada’s recent “unprecedented” move to offer a $70 million severance package to the some 17,600 employees who are slated to be laid off by mid-year 2015 as the company exits the Canadian retail market.

A more recent HREOnline news analysis by Senior Editor Andrew R. McIlvaine, “Cushioning the Blow,” highlights the merits of giving severance to everyone. In that story, Sanjay Sathe, founder and CEO of San Jose, Calif.-based outplacement consultancy RiseSmart, is quoted saying that, “if the No. 1 goal of severance is to take care of employees, then the practice should be to offer it to all employees.”

Without a doubt, taking care of employees is at the heart of both the Target and Scripps Health examples mentioned above.

As Brian Cornell — CEO and chairman of Target’s U.S. parent company, Target Corp. — says in a statement:

“We do not take lightly the impact that our decision to discontinue operations in Canada will have on Target Canada’s team members who have worked tirelessly to make improvements to the guest experience. That is why we took the unique step of establishing the employee trust.”

More specifically, that’s why his company has set up a trust fund for employees to receive 16 weeks of pay, an amount that will be kept separate from Target’s restructuring process. Lisa Stam, a partner at Koldorf Stam in Toronto, calls the severance amount “unprecedented.”

Anil Verma, director of the Centre for Industrial Relations and a professor of human resource management at the University of Toronto’s Rotman School of Management, tells SHRM it’s “unusual” for a company to protect its employees with a trust fund. In his words:

“[Laid-off employees] will also accrue certain benefits, such as medical and life insurance. This act demonstrates that Target is a good employer.”

In defending his decision to establish a no-layoff policy, which “isn’t the norm in my [nonprofit] industry,” Van Gorder shares his belief that “a no-layoffs philosophy is good for employees’ physical and psychological health.” As he puts it:

“I’ve seen what it’s like to carry out mass layoffs — I had to do that in the 1990s at a hospital that was in bad financial shape. I vowed never to let myself get into that position again. Instead, nonprofits need to match institutional discipline with authentic good will toward employees, developing effective employee-assistance and wellness programs and eliminating anxiety about job security.

“Who knows? If enough nonprofits master this balancing act, then maybe we can teach the for-profit world something for a change. … In today’s economy, organizations are supposed to treat employees almost as free agents, with low expectations of loyalty on either side. … But paternalism works — even in the 21st century, and even in an industry undergoing disruption.”

Just some food for thought, I thought.

Are Drones Targeting Your Job?

This morning, I came across an interesting piece on the ABC News website titled “How Drones Will Replace Humans in the Workplace.”

462430535True, this probably isn’t the most burning issue facing HR leaders today, but the commercial use of drones is certainly a topic we’re starting to see a lot more of in the news lately. If there’s been a tipping point here, it probably was Amazon CEO Jeff Bezo’s revelation on 60 Minutes last December that the world’s largest online retailer was exploring the use of drones to deliver packages to its customers.

Since then, drones have left the war zone and have started to appear in our backyards. As a story appearing in The Des Moines Register pointed out last month, real-estate is a natural, with agents “increasingly taking their work to the skies, using remote-controlled aircraft to film bird’s-eye-view video tours of homes, land and commercial properties.”

Asking what jobs might be at risk if and when drones are given clearance by the Federal Aviation Administration to take off commercially, the author of the ABC News piece quotes Mary Cummings, a drone expert who teaches at MIT and Duke University. Cummings suggests delivery jobs, such as UPS and FedEx, are likely candidates, along with police jobs. “Crop dusters might also find their risky work outsourced,” she adds.

(As you might expect, there was no mention of HR jobs. No speculation that, one day, drones might be delivering pink slips to remote workers included in a reduction-in-force.)

A number of obstacles, of course, lie in the way of this becoming a reality, including the need for the FAA to ease up on regulations. But experts expect it’s just a matter of time for that to happen.

In the ABC News piece, Cummings also suggests workers, in general, don’t really need to sweat the commercial use of drones catching on.

‘Ultimately,’ she says, ‘drones will create more jobs than they replace, they will save lives and they will give us capabilities we only dream about—like everyone owning our own flying cars.’ ”


Layoffs and Litigation

Gavel and JudgeSome employees may breathe a sigh of relief after surviving not one but two reductions in force. Roger Maxwell filed a lawsuit.

Maxwell, a disabled veteran and former manager of customer service with the U.S. Postal Service in Bloomfield Hills, Mich., filed an internal EEO charge in 2004 (for reasons not specified in Roger L. Maxwell v. Postmaster General of the United States).

Sometime after the EEO proceedings concluded, Frances Chiodini—an HR manager representing the Postal Service during the proceedings—adopted “an undisguised attitude of hostility toward [Maxwell] and undertook, over time, consistent adverse actions against Plaintiff in his employment,” according to the suit.

Among the allegations:

• Chiodini took adverse actions against Maxwell because he is male, and wrongfully rejected him from consideration for a promotion, which was subsequently awarded to a less-qualified female applicant.

• Maxwell was not included in a 2009 reduction in force, depriving him of a promotion and pay raise.

• His position was not upgraded from EAS-20 to grade EAS-21, while a “similarly situated” female was upgraded.

• Maxwell was not included in a 2010 downsizing, which again deprived him of a promotion and pay raise.

That’s right. Maxwell claims that emerging with his job after two rounds of layoffs adversely impacted his employment with the Postal Service.

How so?

As a disabled vet, Maxwell maintains he would have had certain rights in the event his position was included in a reduction in force, in the form of either an automatic upgrade to a new role or the permission to vie for a new position at a higher level. Instead, he was involuntarily transferred to a different facility, according to the complaint.

Maxwell subsequently sued, claiming retaliation and gender bias. While the Postal Service argued the transfer didn’t qualify as an adverse employment action, a trial court recently found that the transfer—which occurred in lieu of a promotion—could potentially constitute an adverse action.

The ruling is “fairly fact-specific and at a very early stage of litigation,” but the Maxwell case still holds lessons for employers and HR, says Eric Stevens, a Nashville, Tenn.-based attorney with Littler Mendelson.

“The transfer, in and of itself, appeared to be a neutral event,” says Stevens. “There was no change in compensation, duties, title or working conditions. Typically, such a move would not be considered a materially adverse change.”

However, he notes, the appeals court considered the potential effect of the transfer—disqualifying the plaintiff from an alleged automatic upgrade and pay increase—and found that effect sufficiently material to allow Maxwell to continue with the portion of his lawsuit relating to the transfer.

“There are occasions in which an employee may have been subject to inappropriate, possibly even unlawful treatment in the past,” continues Stevens. “Some employers, when they become aware of such circumstances, feel bound to avoid managing the employee as others would be managed because of that past improper conduct.”

This opinion demonstrates that, in the absence of a “longstanding and demonstrable policy of discrimination, an employer will not necessarily be liable for past, discrete violations,” he says.

“While no such violations should be countenanced by the employer, if one does occur, the employer should deal with it appropriately, and then continue to treat the aggrieved employee the same as any other employee.”

A Push Toward the Exit

exitIf you can’t fire ’em … isolate them, assign them menial, mind-numbing tasks and hope they wind up so discouraged they voluntarily leave the company.

That seems to be the idea behind “banishment rooms,” where, according to The Asahi Shimbun, some large Japanese companies are sending handfuls of employees in hopes of nudging them toward the door.

The companies operating these rooms—including Panasonic, Hitachi, Sony, Toshiba and Seiko Instruments—have more palatable names for them, of course.

Certain employees at a Panasonic subsidiary, for example, are assigned to “career development teams,” similar to the company’s “Business and Human Resource Development Center,” typically reserved for employees from sections that are performing poorly.

Panasonic and the other companies specified in the article deny they are exerting pressure on workers to resign by relegating them to lesser duties.

At Panasonic, employees are relocated to “career development teams”  to “acquire new skills so they can work at different sections,” according to a public relations official with the company.

But don’t be fooled by such claims, one Panasonic worker told the paper.

Transferred to the “career development team” four years ago, the man—unnamed by The Asahi Shimbun—says he was told the move was only temporary. In the time since, his tasks have included staring at a monitor for 10 hours each day, looking out for irregularities in TV program footage, according to the paper.

The worker also claims that employees given these undesirable assignments “come under enormous pressure to quit,” and described his current work environment as “simply another banishment room.”

A male Hitachi employee in his mid-50s interviewed by the paper recalled feeling “betrayed” by the company, which he says urged him to “find a different career path” upon completing a two-week “career challenge program” last year.

The employee had worked in a computer-related capacity with Hitachi, according to the paper. Upon finishing the program, he says, he was reassigned to a windowless room with only a desk and computer—prepared by a staffing agency—to work on his resume and search the web for job opportunities.

Determining the prevalence of “banishment rooms” in corporate Japan is difficult, according to the article, which also notes Japanese businesses “have been clamoring for an overhaul of employment practices to make it easier for an employer to fire regular workers on grounds that companies need to move more swiftly to seize growth potential.”

Indeed, Japan’s long-standing lifetime employment system often deters organizations from abruptly terminating permanent employees. But here’s hoping the system ultimately evolves to allow employers and employees a cleaner way to make the break.

Think Twice Before Hitting Send …

That’s what the HR department should have done at Aviva Investors when it accidentally fired more than 1,300 employees. Yikes!

According to a story in the International Busines Times, someone at the London-based company ordered all of its employees to return company property and security passes, and leave the building — and wished them “all the best for the future.”

The email — which was supposed to be sent to one individual — went to workers in the United States, UK, France, Spain, Sweden, Canada, Italy, Ireland, Germany, Norway, Poland, Switzerland, Belgium, Austria, Finland and the Netherlands, according to IBT.

The error was discovered about 25 minutes after the email was sent. The HR department recalled it, and an apology was then sent to the entire staff — except to, I guess, that unfortunate worker who had been terminated.

Job Cuts Abate in Oct.

Good to wake up to some rare positive news on the jobs front this morning.

Challenger, Gray & Christmas reported that the number of planned job cuts announced by U.S.-based employers plunged in October to 42,759, the lowest monthly total since June. Planned hiring announcements, meanwhile, approached 160,000, as several employers revealed their seasonal employment strategies.

What sectors benefited the most?

“The biggest declines in October job cuts occurred in the financial and government sectors,” the Chicago-based outplacement firm reported. “After announcing 54,182 cuts to personnel levels in September, the government announced just 2,785 job cuts in October; a 95-percent drop to the sector’s lowest monthly job-cut total since January 2009 (2,298). Job cuts in the financial sector plunged 98 percent from 31,167 in September to 497 last month.”

Later in their press release, CG&C describes the recovery as “slow and uneven.” That’s putting it mildly.

To date, the firm said, employers have announced a total of 521,823 planned job cuts in 2011, which is 16 percent more than the 449,258 job cuts announced between January and October 2010.  The 2011 total, however, remains well below recession levels.  By this point in 2009, planned layoffs totaled 1,192,587.


Data Continues to Disappoint

The news leading into Labor Day weekend hasn’t been terribly uplifting.

This morning the Department of Labor reported that no new jobs were added to the economy in August. (The consensus among economists was an increase of 60,000 jobs.) The unemployment rate, meanwhile, remained stuck at 9.1.

These disappointing numbers follow the release a day earlier of an equally bleak report from the Center for Workforce Development at Rutgers University.

The study’s authors didn’t leave a lot of room for misinterpretation. They titled their report: “Out of Work and Losing Hope: The Misery and Bleak Expectations of American Workers.” Now how’s that for a less-than-cheery title?

Among the findings: Nearly half of unemployed workers have been unemployed for more than two years; only one out of four of the Great Recession’s unemployed found full-time work; and half of new jobs were at lower pay levels.

Of the unemployed and formerly unemployed studied, 45 percent describe their financial condition as flat out “poor.” Further, 60 percent of those out of work for two years or more are pessimistic about finding a new job anytime soon.

If time permits, you might want to check out some of the verbatim comments the survey respondents offered up when they were asked what they think government should be doing and what one thing would be most helpful in getting a new job. (Maybe you’ll want to hold off until after the holiday.)

When we started the year, most expected to see better jobs data heading into this Labor Day. But apparently that was just wishful thinking.  Should I dare say: Let’s hope better days lie on the other side?

Hold Your Fire

In a keynote speech entitled “Tackling Performance Issues in a Post-Recession Workforce” delivered earlier today, Wharton Professor Peter Cappelli shared new research that suggested a hole in the argument for forced rankings.

Cappelli referenced a recent study that examined the performance-appraisal scores at one large employer from year to year over a 10-year period to determine how well last year’s scores predicted this year’s scores. 

What percentage of the performance appraisals were the same? No, not 75 percent. No, not 50 percent. Rather, just 25 percent.

“It changes many of the fundamental ways companies think about performance,” Cappelli told attendees. “There may be some good people in your organization [you’ll want to keep] and some very bad people in your organization who you may want to get rid of,” he explained, but this research suggests companies might want to rethink the notion of forced rankings because there’s actually “a lot of variation in how people perform year after year.”

Dial L for Layoffs

Sanofi-Aventis appears to have joined the list of companies that have taken layoffs to a new level. (Think Radio Shack and its mass e-mail a few years back informing workers that they need to pack their bags.)

A colleague of mine recently shared a report (“Drugmaker Lays Off 1,700 Via Conference Call Ahead of Holidays”) posted Friday on The Huffington Post detailing an unarguably novel way to downsize your workforce.

“A.R., a Sanofi-Aventis sales representative in California who wished to remain anonymous, as her contract forbids publicly disparaging the company, said she and her coworkers each received one of the two mass e-mails the company sent out that Tuesday morning,” the story said. “Both e-mails contained a code, an 800-number and a call time, either 8:00 a.m. or 8:30 a.m. The employees who were instructed to call in at the earlier time were told they could keep their jobs, but the 1,700 employees who called in at 8:30 a.m. weren’t so lucky: They were laid off by a voice on the other line that told them to stop working immediately, and had no opportunity for question or comment.”

Unfortunately, A.R. found herself in the second group, the story said.

“We acknowledged in the call that delivering this news on a teleconference wasn’t ideal, but given the scope and scale of the reductions, there was no other way to share this news quickly and consistently,” a company spokesman told the website.

Not “ideal” seems to be an understatement.