Category Archives: employee engagement

The High Cost of Warm Fuzzies

I admit the following with a recently delivered dash of remorse: I am an avowed Amazon Prime customer and I always get a “warm fuzzy” when a product I ordered in the morning arrives on my front porch before I even get home from work.

With that said, reading the New York Timesrecent in-depth look at Amazon’s corporate culture definitely left me with a “cold prickly,” or what the company calls the feeling customers get when they are informed their packages will not arrive as scheduled.

In case you haven’t read the piece yet — and I highly recommend you do — the Times “interviewed more than 100 current and former Amazon employees, including many who spoke on the record and some who requested anonymity because they had signed agreements saying they would not speak to the press.”

One of the few employees Amazon allowed to speak on the record (via email) for the piece was its vice president of HR, who defended the company’s attitude toward open confrontation in the workplace:

“We always want to arrive at the right answer,” said Tony Galbato, vice president for human resources, in an email statement. “It would certainly be much easier and socially cohesive to just compromise and not debate, but that may lead to the wrong decision.”

The story about the company that has just been valued at $250 billion has generated enough controversy that founder and CEO Jeff Bezos, who declined to be interviewed for the original story, nonetheless felt compelled to push back against some of the more damaging claims made in it, according to a follow-up piece by the Times:

In a letter to employees, Mr. Bezos said Amazon would not tolerate the “shockingly callous management practices” described in the article. He urged any employees who knew of “stories like those reported” to contact him directly.

“Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero,” Mr. Bezos said.

The NYT piece quotes Jason Merkoski, a 42-year-old engineer, who worked on the team developing the first Kindle e-reader and served as a technology evangelist for Amazon, who left the company in 2010 and then returned briefly in 2014.

Among the many disheartening stories of uncaring — or even malicious — co-workers, Merkoski’s quote perhaps best sums up the queasy essence of how work gets done there:

“The sheer number of innovations means things go wrong, you need to rectify, and then explain, and heaven help you if you got an email from Jeff,” he said. “It’s as if you’ve got the CEO of the company in bed with you at 3 a.m. breathing down your neck.”

Jason Averbook, CEO of The Marcus Buckingham Co., and one of the top thought leaders in the space of HR, workforce and enterprise technology — as well as being named as one of the 10 Most Powerful HR Technology experts by HRE — says the Amazon story offers a few powerful lessons for HR leaders everywhere.

“We need to be able to understand the pulse of employees much better than we do today,” he says. “It should never get to the point where employees see news media or social media as the only resort.

“And for a metrics-driven organization such as Amazon, it’s a shame and a shock that neither Bezos nor team leaders across the organization have quality people data that shows what’s at work in their teams. Because of this dearth of people data, we cannot truly know what their culture is like, and this situation emphasizes the need for reliable, real-time measures of team-level data for companies of all sizes.”

Averbook adds that companies need to “be doing a much better job of putting tools into the hands of team leaders themselves to empower them to take action.”

With the volume of millennials entering the workplace — even in managerial roles — “we need to provide both the training and tools to allow them to lead effectively,” he says. “It’s a reminder for companies to take a look at their current processes and identify how they need to improve now.

“This is the kick in the pants HR and companies need,” he adds. “If there was ever a question about the return on investment of HR tools and processes, the Amazon debacle should resolve those concerns as long as they are the right tools and processes.”

But, despite the public-relations black eye the story has caused Amazon, it certainly appears the company will continue to grow toward being the first trillion-dollar retailer in history, regardless of how we feel about the way our packages and products ultimately get to us.

Indeed, in Seattle alone, according to the piece, “more than 4,500 jobs are open, including one for an analyst specializing in ‘high-volume hiring.’ “

Twitter It!

A Cup of Reality for Starbucks?

In the world of coffee retailing, there’s little question Starbucks has been an innovator, experimenting (often successfully) with new product offerings and fine-tuning the customer experience on a regular basis. But it’s also no secret that Starbucks hasn’t limited its innovation to just these areas. It’s also been a pioneer where employee practices are concerned, launching cutting-edge initiatives in areas such as health benefits, tuition support and career development.

Starbucks_West_CoastBecause of these programs and others, Starbucks leaves many of its competitors in the dust when it comes to Glassdoor ratings, earning 3.8 stars out of 5 and supposedly beating the industry average by a wide margin. In comparison, Dunkin Donuts earned 2.8 and Peet’s Coffee earned 3.2 on Glassdoor.

But if we’re to believe a recent analysis conducted by San Francisco-based Monitor 360 that takes a closer look at the Starbucks narratives smattered throughout the Glassdoor reviews, the Seattle-headquartered employers isn’t without some noticeable blemishes.

Monitor 360, a former unit of Monitor Group that was spun off a few years back, recently applied its Narrative Analytics methodology to Starbucks’ Glassdoor reviews in order to identify sentiments and themes contained in the comments. (Earlier this week, Kevin Rockmael, chief marketing officer at Monitor 360, shared a report detailing the findings with me.) As you might expect, the report contained a lot of positive feelings. But it also revealed some definite “needs improvement” areas.

On the positive side, the report found that more than 60 percent of employee comments expressed confidence in Starbucks’ senior leadership and company vision. “The three narratives that comprised this coverage—’Starbucks the Star,’ ‘Grueling with a Shot of Great,’ and ‘ “Ground” by Middle Management’—focused more on employees’ pride in Starbucks’ vision and values than on benefits,” the report said, “suggesting that consistently delivering an inspiring narrative about the value of employees to the company can motivate as much as offering free lattes.”

Additionally, the first two narratives suggest that Starbucks can be an exciting place to build a career.

As for the negative, narratives such as “Part Time Pariah” and “Baristas are the Backbone” emerged that bemoan the difficulties of building a career at Starbucks — revealing one critical driver of employee turnover. The report points out that these were less prominent than the positive narratives about the company’s vision and values, but still comprised a disturbing 31 percent of total employee comments.

Meanwhile, the report continued, “The ‘Ground’ by Middle Management” narrative suggests that “many employees who have a positive view of Starbucks as a corporation simultaneously hold major concerns about middle management. Many view middle managers as out of touch — visiting stores infrequently and promoting those who are undeserving. This suggests that leadership’s efforts to brand Starbucks as a place for opportunity resonate deeply with employees on an emotional level, but that same vision is not regularly communicated by local company leadership, nor does the inspiring vision always match the day-to-day reality.”

A fourth narrative, something the report’s authors labeled “Glorified Fast Food,” suggests some internal and external brand-facing challenges. As far as the internal implications are concerned, the report contends that this narrative reflects employees’ beliefs that “Starbucks is losing its identity as a specialty brewer, suggesting that replacing the art of brewing with increased mechanization can damage retention.”

I asked Rockmael for his thoughts on the report’s biggest surprises. He said the narratives having to do with middle management and glorified fast food were at the top of his list. In the case of the latter, he added, the analysis suggests that employees and former employees are connecting Starbucks more to the likes of McDonald’s and Burger King than management would like.

Rockmael told me this is the first time Monitor 360 has used Glassdoor to uncover these types of narratives, but it may not be the last. (Glassdoor, he said, gave his firm permission to conduct this analysis.)

He also noted that Monitor 360 hasn’t shared the findings directly with Starbucks, at least not yet. But were it to do so, I’d have to think Starbucks might consider some of the more bitter ones worthy of further reflection.

 

Twitter It!

Companies Surveyed Flunk Employee Engagement

When it comes to employee engagement, what maturity level is your company?

Last week, the Temkin Group – a customer experience research, consulting and training firm in Waban, Mass. – released the results of its third Employee Engagement Competency & Maturity (EECM) study, which analyzed the employee engagement efforts of 206 companies that support at least 1,000 employees. Companies were placed into one of six stages of employee engagement maturity. Only 19 percent ended up in the top two stages of maturity while 56 percent fell into the bottom two stages.

The firm assessed each company’s maturity level across five competencies, referred to as the five I’s of employee engagement: inform, inspire, instruct, involve and incent.

The results are not exactly encouraging:

Maturity stage 1: Damaging (19 percent of companies fell into this category)

Maturity stage 2: Neglecting (37 percent)

Maturity stage 3: Maintaining (25 percent)

Maturity stage 4: Enhancing (16 percent)

Maturity stage 5: Maximizing (3 percent)

On the upside, the overall ratings have increased from previous years and the percentage of companies in the lower two stages declined from 67 percent last year to 56 percent this year. Still, not all stages reflected improvement, possibly suggesting that employee engagement at some organizations may be headed in the wrong direction.

Consider that the percentage at the top two stages remained idle over the last two years and competency levels dropped between 2014 and 2015. Likewise, while 69 percent of companies measured employee engagement at least once a year, executives at only 45 percent of the companies consider taking action on the results as a high priority.

Frankly, that last statistic is baffling. Over the years, numerous studies have repeatedly proven employee engagement’s huge impact on almost every facet of a business – productivity, customer service, attraction and retention . . . the list goes on and on.

These results are no different. Seventy-two percent of more mature companies reported above average customer experiences compared to 48 percent of other companies. Seventy-five percent also improved their financial performance over the previous year compared to 50 percent of those with weaker scores. Yet, only 35 percent of respondents classified employee engagement activities as well-coordinated across their company.

“HR should be leading the charge to raise the firm’s employee engagement maturity level,” says Bruce Temkin, customer experience transformist and managing partner at the Temkin Group. “Employee engagement is one of the most strategic opportunities for HR professionals.”

Meanwhile, survey participants point to three common obstacles that prevent them from turning this situation around: the lack of a clear employee engagement strategy, inconsistent buy-in from middle managers, and limited funding along with inconsistent buy-in across the leadership team.

Still, there’s plenty HR can do. According to Temkin, HR can benchmark their maturity against other companies to see where they stand, discuss the impact of their scores with colleagues across departments, identify weak spots and develop specific improvement plans.

The worst thing HR can do is stay stuck in neutral. But considering that employee engagement offers such a huge strategic opportunity for building company success, is that really an option?

Twitter It!

The Steep Price of Sleep Deprivation

The conversation around nap rooms in the workplace isn’t exactly a new one.

(For example, you can see just a few of HRE’s contributions to the long-running discussion here, here and, most recently, here.)

The consensus seems to be that nooks around the office where employees can retreat for some (probably much-needed) shuteye will likely remain a dream for many workers. But the effect that sleep deprivation has on the workforce—and on the countless employees who seem to perpetually run on too little rest—is very real.

The Washington Post’s Jena McGregor examined this impact in a recent piece.

For instance, McGregor cited Harvard data demonstrating that, for the average worker, insomnia results in the loss of more than 11 days of productivity each year, equaling $2,280. Add that up across the United States, and the figure comes to $63.2 billion.

Researchers have also found “clear links between poor sleep and reduced quality of life on the job,” wrote McGregor, noting studies that have revealed links between insomniac supervisors and abusive behavior as well as correlations between lack of sleep and medical conditions such as dementia and diabetes.

Employers are noticing these connections as well, and some have taken steps to aid employees in sleeping more and sleeping better, and in turn becoming physically healthier, mentally sharper, and, of course, more productive.

Vendors are helping as well. As McGregor points out, Ceridian has begun to include sleep coaches as part of the wellness packages it offers clients, while sleep diagnostic and treatment company SleepMed has introduced a nationwide health and wellness product that screens employees for sleep disorders and provides access to therapies.

Big Health’s Sleepio at Work program is the latest addition to this market space. Big Health launched the digital sleep improvement program last week, not quite one year after releasing its Sleepio app, which imports sleep data from fitness tracking devices to give users an overview of their sleep profiles, and provides a personalized program of cognitive behavioral therapy techniques. The digital provider of personalized behavioral medicine includes organizations such as LinkedIn and Henry Ford Health System on its client roster, and has helped lead employee workshops on sleep at Google, according to the Post.

Ultimately, however, it’s going to take more than technology and workshops to change the “sleep is for losers” mentality that remains prevalent in many organizations, according to Russell Sanna, a former executive director of the division of sleep medicine at Harvard Medical School.

This mind-set must go, and employers should be helping to see it out the door, he says.

“’Some companies don’t want to be known as sleep-friendly,” Sanna told the Post. “They want to be known as lean and mean.”

Thus far, the conversation about sleep deprivation has been “dominated by sleep scientists and self-help gurus,” he continued. “It needs desperately to have people in the organizational change, workplace advocacy and legal [fields] to help reframe the agenda.”

Twitter It!

‘Everyone, Everywhere, Everyday’

In case you missed this late last week, Forbes contributor Kevin Kruse had a great post detailing the all-encompassing employee-engagement efforts at Discover, the Riverwoods, Ill.-based financial-services company.

According to Kruse’s piece, employee engagement has long been a priority at Discover, which tied for highest in customer satisfaction with credit-card companies in 2014 by J.D. Power.  With approximately 9,000 employees working across multiple U.S. call and operational centers, and almost 14,000 total employees working globally, “the company knows that engagement is a critical driver of customer service, retention and hard business results.”

The backbone of any engagement process is the employee survey, and 88 percent of all Discover employees took the time to complete theirs, Kruse writes, and credits the impressive completion rate to a solid communication strategy and alignment with the business units.

He goes on to quote Erin Correa, a manager of executive development and talent management at Discover, who says it takes “a lot of communication” to get such a high rate of response to the company’s engagement survey:

It definitely begins with a lot of communication in advance of the survey. We work hard to identify leaders within our business units to help us communicate the importance of the survey. It’s one thing if HR is saying employee engagement  is important, it’s another if a business unit champion is explaining the linkage between engagement and business results.

And Kruse also quotes Andrea Nunez, a Discover manager of culture and employee engagement, who says that, despite their excellent scores, they aren’t resting on their laurels. In addition to engagement, Kruse writes, Discover has added a focus on understanding what environmental factors are enabling or disabling performance, and what is increasing or decreasing well-being.

To that end, Nunez says:

Our motto around engagement is, ‘Everyone, Everywhere, Everyday.’ Our leaders and individual contributors already have a solid understanding of traditional drivers of engagement, like the need to celebrate successes and the power of recognition. But we are now explaining that people might be happy but not enabled or truly energized.  We are using the survey results as one data point to understand the obstacles and barriers that are disabling people from performing at their best.

The most recent Discover survey, Kruse writes, found that “decision making and operational effectiveness” was an area of opportunity for improvement throughout the organization, and the HR team is now working closely with various leaders across the organization to focus on timely decisions, clear roles and responsibilities and more efficient operational approaches.

Nunez says, “It’s really a change management effort far beyond traditional engagement efforts. We’re in the position of driving change, understanding the dimensions of the issue, and providing resources on an ongoing basis to help our leaders with this challenge.”

Twitter It!

With Union Petitions Up, Get Your Message Out … NOW!

Since sharing this blog post the day before the National Labor Relations Board’s “quickie-election rules” went into effect on April Union14, I’ve been waiting to see if the predictions shared therein would come to pass.

More specifically, would there be — as predicted by various employment attorneys I talked to — a surge in the number of representation petitions filed with the NLRB by unions just waiting for those rules to help them hurry up their process?

Well, I just got confirmation from NLRB spokesperson Jessica Kahanek that there’s been a 32-percent spike in union petitions lodged with her agency in one month since the rule’s enactment. Broken down, that’s 212 petitions from March 13 to April 13 and 280 from April 14 to May 14. An impressive and additional 104 petitions were filed between May 14 and May 27, she tells me. Spike indeed!

Kahanek also notes that elections are now taking place — on average — 23 days from the date of the petition. This duration is a dramatic shift from the 38-day average that existed under the previous rule.

What’s also interesting to note is that the petitions didn’t come flooding in starting on April 14. On the contrary, says Steve Bernstein, a Tampa, Fla.-based labor attorney with Fisher & Phillips, “in the first two weeks after the rule, the numbers of petitions filed were flat, maybe even down some; only in the last two to three weeks have we been seeing them really climbing.”

So what does that mean? It means even the unions needed some time to figure out all the new procedures contained in the new rules. “It’s been a learning curve for everyone,” Bernstein says.

What it all really means — to employers — is now’s the time to talk up your company and make no bones about stressing with employees that it’s a better place to work communicating directly with management than through third-party representation.

Bernstein calls this “front-loading the message.”

Employers, he says, “have the opportunity to use this [albeit shorter] period of time to take the initiative away from the union.”

Some companies, in fact, are getting ready for the NLRB before the NLRB even comes knocking. They’re getting all the new data being asked for — employee emails, phone numbers, work histories, job classifications, etc. — collected and collated now “so they’re positioned to be standing on ‘Go’ when the petition arrives and can use all their time getting their message out,” says Bernstein. He recommends that you:

“start from the standpoint that, with the new rules, comes a new petition form giving unions the opportunity to request the earliest election dates possible, usually two weeks out. So you, the employer, can posit the question, ‘Why is this union trying to move so fast on something so important to your lives and the lives of your families as this?’ “

In terms of the new administrative and disclosure requirements contained in the rules, he says, rather than focusing only on scrambling around trying to meet them all, think about taking this approach:

“In many circles, the kind of employee data they’re now demanding from employers would look like an invasion of privacy. So you can put out the immediate message, ‘They’re not even here yet and look at the personal information they already want on you. Why do they want all this from us?’ “

In other words, the NLRB has changed the rules, so you can too. (FYI, my earlier post, linked above, contains the NLRB’s position and purpose in the rule changes.)

You don’t even have to wait for a petition to start the conversation. In addition to getting all your data ducks lined up, you can join with the many companies Bernstein is already seeing “embracing the notion that it’s OK to talk about this, now, with employees,” sooner than later, he says.

Nothing wrong with telling your employees, “Let’s have this union dialogue now,” he says, especially in businesses and industries where unions are dominant. Some companies are even fashioning tailored, customized videos along these lines to go with their orientation processes, i.e., why no union is better than representation.

“You’re really trying to establish this line of communication, getting them used to hearing about this, so it doesn’t just sound like a defensive move after the petition has arrived,” Bernstein says.

So, to recap, your message to them: “Hey, it’s OK to talk about this now, folks!”

And my message to you: Ditto.

Twitter It!

Doing Good Through Better HR

doing goodChristine Bader, a former corporate social responsibility executive at BP, has an interesting piece up today at The Atlantic on the importance of a good HR department for companies that want to be better corporate citizens.

Bader, author of the 2014 book The Evolution of a Corporate Idealist: When Girl Meets Oil (judging from the title, I assume it touches at least partly on her BP experience), cites companies such as auto-parts manufacturer Lear, Google and clothing company Eileen Fisher that take innovative approaches to HR to unleash their employees’ resourcefulness and creativity.

At Lear, Bader writes, CHRO Tom DiDonato did away with basing compensation on performance reviews, “realizing that the emphasis on pay created stress and stifled the candor that people need to improve and innovate.” Instead, the company now bases compensation on market conditions and awards equity and promotions for good performance.

Bader describes Google’s efforts to do away with unconscious bias through training that not only helps its employees recognize their own biases, but encourages them to step in and intervene when they see biased behavior toward others, Head of People Operations Laszlo Bock told her. The training isn’t being done entirely out of altruism, he said: People perform better when they feel more safe at work. However, Bader writes, if people are treating others more fairly at work, one hopes that will spill over into their lives outside the office.

At Eileen Fisher, the company’s long-term plan to improve the environmental and social sustainability of its supply chain depends on an intense spirit of collaboration within the organization — one that is carefully nurtured by HR, Bader writes. Eileen Fisher’s sustainability efforts are overseen by a team of leaders from different departments within the company who meet weekly by phone and monthly in person. “Traditionally, work evolves into buckets or silos; we help connect people so they can break down the silos,” Director of Leadership, Learning and Development Yvette Jarreau told Bader.

HR still has a reputation among too many people as a bureaucratic rut — a dark hole of stifling paperwork and mindless processes, writes Bader. But for companies that are trying to change for the better, she writes, a smart and flexible HR department is crucial.

 

Twitter It!

Are Your Managers Just Muddling Through?

boredIf your managers are supposed to set an example for employees to follow, a new report finds the odds are pretty good they’re leading your workers down a road that’s been paved with apathy.

In its State of the American Manager: Analytics and Advice for Leaders report (available for download here), Gallup Inc. surveyed 2,564 U.S.-based managers, studying the relationship between managerial talent and engagement, and the level of engagement among managers. The Washington, D.C.-based performance management consulting company found that just 35 percent of managers are engaged in their jobs, with 51 percent of managers “not engaged,” and another 14 percent “actively disengaged.”

It stands to reason that this type of managerial discontent would have a trickle-down effect on the rest of the workforce, and this survey doesn’t offer any figures to suggest otherwise.

For example, Gallup’s analysis found that employees who are supervised by highly engaged managers are 59 percent more likely to be engaged than those overseen by actively disengaged managers.

That finding shouldn’t surprise anyone. No, it’s the sheer number of disengaged managers that should be alarming. And, just as disconcerting is the small percentage of supervisors the poll found to have the “innate talent to become a great manager,” according to Gallup.

Defining talent as “the natural capacity for excellence in a given endeavor,” Gallup found just one in 10 individuals has the “unique blend of innate characteristics” that are predictors of management excellence, including motivational skills, assertiveness, accountability and decision-making talents.

Another two in 10 have “functioning” talent, which means they possess some of the aforementioned traits but not all of them, and could become successful managers with the right coaching. Just 18 percent of current managers have “high” talent, according to Gallup.

Naturally, these managers are more likely to be engaged. Fifty-four percent of those classified as having high managerial talent described themselves as being engaged in their work, compared to 39 percent of those with functioning talent and 27 percent of managers in the “limited” talent group.

It can and has been argued that “employee engagement” is a somewhat nebulous concept. But few would dispute that—however you define the term—getting and keeping employees engaged at all levels throughout the organization is critical to success.

And, this Gallup data certainly suggests there’s a big problem with engagement among managers. Fixing it may be a tall order, but, as Gallup notes in its report, a failure to do so comes with a hefty price.

“Managers influence everything that gets done in organizations,” according to Gallup. “They translate energy into action and hold employee morale, turnover, productivity, safety and creativity in their hands. A great manager improves lives while improving performance. A poor manager makes workers’ lives miserable while destroying performance.”

Twitter It!

Will Those Millennial Enigmas Stay, or Not?

Forgive me, first off, for focusing yet again on millennials in the workplace. We’ve admittedly done more than our fair share of 84464529 -- millennial workersstories and blog posts on this demographic and what they need, and  apparently aren’t getting from many employers.

But it seems no matter how much we write, or how much we study them, we simply cannot get our heads around these younger workers, generally born between 1980 and the early 2000s. Do they come to work with far too many expectations and little regard for established protocol? Are they one of the sharpest generations, or not so? Do they communicate well on paper and face-to-face, or only through their mobile devices? Then there’s the million-dollar question: Are they loyal or are they going to leave their jobs as soon as something else looks more interesting?

We’ve all certainly heard and read about the latter, haven’t we? It appears to be a worry that’s been plaguing employers for some time now and hasn’t been letting up much either. Indeed, both our January-February cover story, “Millennials in Charge,” and our soon-to-be-published April cover story, “Engaging Gen Y,” mention this age group’s propensity for job-hopping. So does a recent Aon Hewitt study that finds nearly half of all working millennials intend to find new jobs this year.

But then come all the counter findings: the most recent from the U.S News & World Report’s Money site suggesting “the reality doesn’t back that up at all.” In fact, writes columnist Alison Green March on that site, “a report from Oxford Economics [written about on the Forbes site] found that millennials are no more likely than non-millennials to leave their jobs in the next six months.”

Just last month, HRE Editor Dave Shadovitz blogged about another study, this one from IBM, suggesting “millennials change jobs for the same reasons other generations do and are no more likely than older colleagues to leave a job to follow their passions.”

So who are these guys? And should we be worried or not? Better yet, are we simply overthinking all these demographics and putting way too much stock in the latest survey or study?

I put all this to my 30-year-old son who will have been working as a mechanical engineer at a firm in Philadelphia for eight years this April. Count ’em: eight. First job out of college and he’s still there. That’s way more loyal than most studies indicate.

He’s a good texter, but he also communicates extremely well face-to-face. In his words: “I don’t really waste time thinking about those studies, but I do hear that about my generation from time to time.” Yea, the way I figure it, he’s way too busy flying to site visits and drafting up building, systems and circuitry designs to spend much time reading about how likely he is to job-hop.

“The generational-studies thing, I don’t really get it,” he says. “Seems like they do that with every new generation, right?”

Well, yes, but his generation seems to have gotten the lion’s share of attention, I tell him.

Then again, haven’t millennials always gotten the lion’s share of our attention? I’ve read that about us baby boomer parents in a number of studies as well.

Twitter It!

GM Takes Care of its Hourlies

blue collarGeneral Motors is still digging out from the onslaught of legal bills, settlements and recall costs of its faulty ignition-switch debacle that’s been directly linked to at least 51 deaths so far. Costs for the nation’s largest automaker stand at nearly $3 billion and counting.

That has not, however, stopped GM from awarding its unionized hourly workers record bonuses of up to $9,000 apiece based on the company’s performance last year. Excluding settlements and other costs linked to the recalls, GM’s North American division would have seen a whopping $9 billion in pretax earnings last year, reports the New York Times. Recall costs whittled that down to $6.6 billion. GM’s strong financial position was partly enabled, of course, by its $49 billion bailout by the federal government.

“I thought the recalls were going to kill us,” GM worker George McGregor, president of the United Automobile Workers local at GM’s Detroit-Hamtramck plant, told the Times. “We had the big check coming. We shouldn’t have to pay for their defects.”

GM’s unionized hourly workers are to be given annual bonuses based on the company’s financial performance, as per its current contract with the UAW. A spokesman told the Times that CEO Mary T. Barra decided that the workers had done their part to help the company meet its performance goals and should not be penalized because of the failures and mistakes made by others in leadership positions.

GM may also have had its eye on upcoming contract negotiations with the UAW this summer. “General Motors’ announcement today leaves no doubt about the strong, stable environment the G.M.-UAW collective-bargaining agreement created,” UAW President Dennis Williams said in a statement yesterday.

And what about GM’s salaried, white-collar workers? They, too, will get bonuses that will be unaffected by the automaker’s recall costs, two sources told Bloomberg News. Those bonuses are based on a blend of regional and global results, they said.

Barra and her top team will, however, see the recall costs eat into their own compensation, the sources said.

“The optics of not reflecting the recall costs into executive bonuses would be really bad,” Maryann Keller, an independent consultant, told Bloomberg. “In this case, the recall was precipitated by past management, but that’s just the way it is.”

Twitter It!