Category Archives: HR profession

What Is An Internship?

Heather Huhman won’t soon forget the abusive director at the nonprofit organization where she worked as a paid intern while in college.

“He’d come over and yell at you, slowly backing you against a wall, and then he’d pound his fists against the wall next to your head,” she says. Not only was she forced to deal with this jerk, but she also had to put up with abusive colleagues and a supervisor who never showed up. “It was a horrible experience,” she says.  

When she complained to the organization’s home office, rather than remedying the situation they simply offered her the remainder of the salary she would have earned for completing the internship in return for her leaving immediately.

Huhman, a veteran of five internships, writes about this and other experiences in  Lies, Damned Lies and Internships: The Truth About Getting from Classroom to Cubicle, a new e-book aimed at college students and HR leaders alike.

The book was inspired by what Huhman says is “lots of misinformation about internships being spread around the media,” particularly the recently published book Intern Nation by Ross Perlin. “He’s perpetuating myths about internships but he’s no expert—he’s only done one internship himself,” she says.

She was also spurred to write the book by the widespread misuse of interns that she says is taking place in corporate America every day.

“An internship needs to have two things: a mentorship and an educational component,” she says. “If those two things aren’t there, then it’s not an internship.”

Much of the attention on internships these days focuses on paid vs. unpaid positions, says Huhman. But the focus should really be on paid internships, she says, because too many organizations are relying on paid interns to do work that would ordinarily be done by entry-level employees.

“They’re seen as replacements for full-time employees, and that’s a bad thing,” she says. “An intern is there to learn from you, not provide cheap labor. In many cases, these companies are just looking to save a buck.”

Huhman encourages HR leaders to ensure supervisors understand what an internship is supposed to be about, and create mentorships throughout the organization, not just for interns. “It’s good for the employees and it’s good for interns, because they’ll be coming into an environment where mentorship is a commonly understood and practiced concept. The intern will come away with a much more valuable experience.”

GM’s Looming Culture War?

With the hiring of Cynthia Brinkley as General Motors’ new head of human resources, a curious streak continues, one that may have serious ramifications for the car company’s future.

On July 1, Brinkley — who currently serves as chief diversity officer and senior vice president of talent development for AT&T — will join GM’s ranks with fellow auto-industry outsider and current GM CEO and Chairman Dan Akerson, who previously served in the telecom industry as CEO of Nextel and CFO for MCI before that, among other professional stops.

But the telecom connection does not end there, according to the Detroit News article:

 … [GM’s] former chairman and CEO, Edward Whitacre Jr., was an AT&T CEO.

GM’s communications chief, Selim Bingol, as well as OnStar President Linda Marshall, also came to GM from the telecom industry.

With all these telecom executives coming over to the automotive industry, one wonders if they will approach the  problems and challenges of the automotive industry  in the same way they approached similar challenges in the telecom industry. Will reports of failing brakes be handled the same way as dropped calls were?

And with so many executives migrating from AT&T in particular, there is also an HR concern that these migrating executives will be operating as if they were still operating in AT&T’s company culture, and that could conflict with the GM culture in place before the recent telecom influx.

Could a culture war be looming at GM? Stay tuned…

Nurturers or Business Partners?

I must say I found this article, Nurturing Skills Help Women Dominate HR, from the Times of India to be a bit off-putting.

Maybe it wasn’t the intention, but I wouldn’t have said that it’s HR’s job to be the “mommy” of the office. Isn’t that just a bit outdated?

The article noted that women now account for more than 60 percent of the HR jobs across industry sectors.

“The reasons have to do with certain aptitudes that women have-that men have less of — and which are becoming increasingly relevant in an environment where people are becoming a company’s biggest asset. Women are seen to be more people-focused, with a special knack of recognizing performers and working on their career advancements. They are good at objectively collecting feedback and offering career counselling.

“The kind of competency HR demands includes understanding people requirements and ensuring employee recognition. Women are better equipped to gauge these as they are more team-oriented and people-oriented,” said Indira Bharadwaj, executive director at Ernst & Young.”

I know there are some cultural differences between the US and India, but patting employees on the back should not be the primary responsibility of HR leaders — here or there.

This is an issue that HRE has been writing about for a long time — the need for HR executives to become full business partners — and we always try to feature those special individuals who have served in that role to the bottom-line benefit of their organizations.

Naomi Bloom recently addressed the issue as well on her blog, InFullBloom, when she asked Is HR Really a Pink-Collared Ghetto?

“A lot has changed since [her first professional job in 1967], but not enough.  HR is still dominated as to numbers by women, admittedly with many to most having degrees and even advanced degrees.  Compensation is better, and there are a lot of important areas of specialization.

” But something that was true then is still true now, to the detriment of the profession and, if you believe that HRM matters, to the success of our organizations.  All too many HR pros still haven’t a clue what drives success in their businesses. 

One result of that lack of business acumen is the frequency with which organizations pull someone from another part of the business, from another discipline, to be the chief HR executive.  …  And why is that?  Perhaps because it’s believed — and may in fact be true — that HR pros really aren’t business people.”

Obviously, some HR professionals want to take that step up the ladder. They want to understand the business and have an impact on their organizations; they don’t want to just plan corporate outings or send around benefits notices.

For those along that road, here are some thoughts from Sue Meisinger in her most recent HREOnlineTM  HR Leadership column, “Thinking Strategically.”

Nap time, anyone?

The idea of napping at work is certainly not a new one — one quickly thinks of Seinfeld‘s George Costanza and the napping space he had built under his desk at Yankee Stadium, including a shelf for an alarm clock.

But Greg Kratz, a journalist with Deseret News, recently wrote a column advocating the legalization of napping at work, which included a nonscientific poll of 200 workers, with 84 percent advocating napping at work.

And now, in a follow-up column on the topic, Kratz shares some of the feedback he received from the piece. Below are excerpts from both sides of the argument.

Pro: “Why be embarrassed by napping at work? People who take time to smoke at work aren’t embarrassed. People who have non-work-related conversations at work aren’t embarrassed,” wrote one person in an online comment. “If napping isn’t allowed, the quality and speed of the work suffers because the person is tired.”

Con: “If you feel the need to nap at work, then consider this: What if you are depending on someone to help you and he decided that rather than really do his job, he’s tired, so he’s napping. Maybe he’s a flight controller. Yeah, napping at work — what a great idea. It could also be considered stealing from your employer if he’s paying you for that time that you nap.”

The Rats Have It

Know those disturbing-looking giant inflatable rats that union activists like to display in front of locations they’re picketing? Well, they’re not going away, because a recent ruling from the National Labor Relations Board says it’s OK for a union to display a 16-foot tall inflatable rat in front of a company location, even if the business in question is not directly involved in the confrontation between the union and an employer.

Unions representing carpenters and other tradespeople like to display the rats to protest a business that uses non-union contractors and/or contractors that don’t pay union-scale wages. Businesses had complained to the NLRB that the inflatable rats are too confrontational and coercive. Hopefully the giant rats won’t make an appearance on Bring Your Sons/Daughters to Work Day. Imagine the ensuing nightmares …

Analyzing Proxy Trends

There weren’t many surprises in the overview of executive pay trends offered by David Chun, CEO of Equilar, and Patrick McGurn, special counsel at Institutional Shareholder Services, during a session at WorldatWork’s 2011 Total Rewards Conference.

Based on their review of several hundred proxy statements of S&P 500 companies, Chun said the $9 million average compensation for CEOs was at a record level, and was 28 percent higher than 2009 when CEO pay dropped 10 percent from 2008.

In general, CEO compensation was composed of cash bonus (43.3 percent), stock (39.4 percent), stock options (16.4 percent), salary (5 percent) and other (13.1 percent), he said. One trend he has seen is a continued preference for complexity in equity grant design, with three-quarters of companies using two or more long-term-incentive vehicles (primarily options, time-vested stock and performance shares).

As for say-on-pay, McGurn said 23 companies failed to get shareholder support for their pay practices — and of them, 21 have had close to double-digit negative returns for three years.

 As for the other companies, three-quarters of them saw approval rates of 90 percent or higher in support of management pay packages.

There was some pushback from shareholders, he said, on frequency of say-on-pay votes. About half of the S&P 500 companies sought approval for triennial voting while two-thirds of shareholders voted instead in favor of annual approval processes.

Testing Employee Comp Preferences

Leave it to data-driven Google to survey its employees on their pay preferences as a prelude to the company’s dramatic announcement last November of a 10-percent across-the-board pay increase to all employees.

At WorldatWork’s 2011 Total Rewards Conference and Exposition in San Diego, four of Google’s compensation professionals spoke about the survey data that helped define the company’s comp strategy as well as offered background into the way the change was approved and rolled out.

“This was a fairly dramatic change in our compensation philosophy,” said Frank Wagner, director of compensation. “We need the best in their field to work in search, video, mobile.”

It was also intended to prevent attrition or “lock in Googlers,” as they like to call themselves, he said.

The conjoint survey — which asked participants to give their preferences for different tradeoffs in comp packages — offered various levels of choices among base pay, bonuses, stock options and restricted stock.  In their responses, Googlers said they valued base pay the highest, with bonuses as second, followed by restricted stock units and then stock options, said John Schirm, compensation manager.

With that knowledge in hand, said Eric Schaeffer, compensation program manager, the team went into “Launch & Iterate,” the company’s structure for getting project approvals — which involves offering information about the various program options (including offering some polarizing alternatives or “charged viewpoints); getting feedback one-on-one from the management team; using that feedback to get consensus in a full executive session; and then taking the program to the board and being prepared to answer these key questions:

* What are we solving for?

* Why this?

* Why now?

* Why should the board members say yes?

* What else are we not thinking of?

Knowledge of the program was kept to a very small group and, because of tight timing (it took about three to four months from creation to approval to announcement), communications vehicles were being prepared even before the across-the-board raise was approved by the board, said Monica Patel Davis, senior compensation manager. The emails and printed documents were designed to answer: why, why now and what’s the individual impact of the change.

Google also created an online tool (developed by a software engineer who wasn’t even aware of why he was developing the tool) that would allow individuals to see how the changes would affect them. In addition to the pay increase, employees also received a $1,000 bonus and merit increases.

Wagner said the group went with the 10-percent hike because “it’s a big, round number and it fit into the cost-modeling we were doing with the financial folks as well.”

Switching from a Defined-Benefit to Defined-Contribution Plan

Siemens Corp. swapped a future $5 billion pension liability for a $259 million one-time P&L impact when it froze its pension plan and offered employees increased company-matching contributions as well as a new service-based company contribution to the 401(k) plan — the combination of which equaled the company’s contribution under the pension plan.

It didn’t reduce the company’s current-day costs — in fact, it cost more money, said Steven Seltz, vice president of compensation and benefits for US/Americas for Siemens Corp. — but it did eliminate potential liability down the road.

And it was a long road to see the plan from conception to fruition — take two years to conceive and get approvals and another year to communicate and implement the change, Seltz said.

“There was no way we could overcommunicate” the changes, he said, noting that employees received at least six written brochures, notifications or requests for action during the transition. Siemens also offered in-person and web financial-planning seminars and offered financial counseling.

They “anticipated the worst” from workers and were surprised that there was “virtually no criticism whatsoever” from employees, both union and non-union — crediting not just the equitable plan but also the communications effort that was part of the transition.

Key takeaways from the process, said Seltz and Nicholas Vollrath, manager of retirement plans and M&A, were:

* Don’t underestimate the time required to craft an effective design or to get necessary stakeholder approval.

* Don’t underestimate the time needed to define the requirements and adjust recordkeeping systems.

* Consider timing the freeze with other benefit changes or other initiatives.

* Involve a broad team to address various topics (including legal, accounting, finance, etc.)

* Make sure participants know the difference between a pension freeze and a pension termination.

* Consider whether changes impact union workers, if any.

* In communications, make sure to include the rationale for the change and be straightforward about it. Also balance the need to provide advance notice of the change with sufficient details of the change.

* Don’t avoid addressing uncomfortable topics (such as benefit reductions).

* Include non-experts on the communications team so they can help frame the message to workers who are not as knowledgeable about financial issues.

Challenging Assumptions

You’ve probably heard Albert Einstein’s definition of insanity: doing the same thing over and over again but expecting different results.

Dan Pink, in his opening keynote address at WorldatWork’s Total Rewards 2011 Conference and Exposition in San Diego,  offered a possible reason people continue to do that — they fail to challenge their assumptions and conventional orthodoxies.

Pink didn’t mention Einstein, but he did talk about a study by four economists at the Federal Reserve Bank of Boston, which disputes the CW that higher pay results in better performance. Pay motivates, he said, only when workers are involved in rudimentary mechanical work, according to the study.

As long as an organization offers fair, competitive salaries, that takes money “off the table” as an issue, Pink said.

Instead, for workers doing cognitive, creative work, HR leaders would profit more — as would their organizations — from providing autonomy (offering control over time, tasks, team and technique), mastery (being able to make progress in your work) and purpose (knowing your work has meaning).

Some of the companies he cited as being progressive in that way are Netflix (which has no vacation policy for salaried employees — they can take as much as they want, whenever they want); Facebook (which lets new hires decide which team they want to work with); Atlassian (which has Fedex Days — all employees will take a Thursday to work on whatever they want; then they make presentations the following day, which has led to many new products and improvements); and of course, Google (which is famous for offering its employees 20 percent of their time to work on whatever they want — two results of that: Gmail and Google News).

He suggested HR leaders ask managers and supervisors to take an autonomy audit — and to have their teams take it as well (warning that the bosses always predict their teams will score higher than they actually do — and that they are always be surprised by that.)

Score 0 to 10 on the following four questions (0 for very little; 10 for huge).

* How much autonomy do you have over your time at work — to arrive, leave or allocate hours?

* How much autonomy do you have over your tasks — what you do everyday?

* How much autonomy do you have over your team — can you choose the people with whom you collaborate?

* How much automony do you have over your actual performance — the main responsibilities of your job?

A score of 27-28 and higher is “pretty healthy,” he said.

Study: 401(k) Loans at a ‘Record High’

 

According to a just-released report from Aon Hewitt, about 28 percent of active participants in defined-contribution retirement plans had an outstanding loan in 2010–a record high, according to the firm. The average balance of the outstanding amount was $7,860, which represented 21 percent of these participants’ total plan assets, according to the study, entitled Leakage of Participants’ DC Assets: How Loans, Withdrawals, and Cashouts Are Eroding Retirement Income.

The study, encompassing 1.8 million employees across approximately 110 large plans, found that middle-aged and middle income are most likely to have outstanding loans–participants in their 40s, and those earning between $40k and $60k per year had significantly higher loan prevalence.

Although most plans require employees who are terminated to immediately repay in full any outstanding 401k loans they have, the study found–not surprisingly–that nearly 70 percent of such workers subsequently default on the repayment, with the default percentage jumping to 80 percent among participants in their 20s. However, the study also found that on average, active employees default on their loans less than 3 percent of the time.

However, new legislation just introduced in Congress proposed by Senators Herb Kohl of Wisconsin and Mike Enzi of Wyoming would limit the number of 401k loans employees could take and allow them more time to pay back outstanding balances, penalty-free, should they lose their jobs.