Summer 1998 Fauecast Report Newsletter

Recovering the Loyalty Lost in a Downsizing

Subsequent to corporate downsizing, many organizations have found diminished employee loyalty. Certainly, this was a recognizable consequence of the commonly referred to “new employment contract.” Other titles for this change in relationship between employee and employer give additional clues to the dynamic: free agency or non-lifetime contracts. One source suggests that major corporations replace half their workforce every four years. While this may be is a welcome shift from corporate paternalism of the 1950’s, employees are not disposable assets. With labor free to flow to the “best” circumstances, HR has to reconsider what loyalty to the firm means.

Employers need creative, resourceful employees. These employees are responsible for their own careers. Good employers provide comprehensive training and opportunities to enhance skills, and relationships. Rewards are tied to performance tied to reward, nonproductive employees assisted or dismissed, and employees surveyed to determine attitudes, sentiments, and new ideas. Employers with a long term perspective do not utilize layoffs to boost stock prices, or to correct for strategic miscues.

To compensate adequately for employee doubts about the intentions of the firm, HR needs to address the morale issues head on. Some part of this is communication; another part is the small rituals that make up so much of personal interaction. Some tactical suggestions:

	Humor, often considered the highest coping mechanism, has many uses. Invite employees to post what they consider funny material in a humor corner. Employ an aspiring photographer to capture employees in humorous candid pictures. Openness is a welcome sign to employees, it is also an early warning device for troubled employees. Sometimes humor has a cutting edge; some employees may be offended. This alerts the employer that diversity has gone awry. Take humor seriously; it's the cheapest management consulting available.
	To offer a better view of the workplace, change locations. Work sites are comfortable, familiar places; their very intimacy stifles creativity. Try meeting in a park. Use hotels, conference centers or restaurants as stimulants to discussions. Where a meeting takes place, may say more about its purpose than the agenda.
	Emphasize flexibility. Add a theme to casual Fridays: grotesque top, gauche tie, decrepit sweater or outlandish pants day. Award winners a prize: ugly duckling gift certificate. Another alternative demonstrating accommodation is late Mondays or early Fridays for top performers.

Loyalty is a bargain between the company and its human assets. HR can help the organization keep its part.

Why Are We Here?

Perhaps it’s the anticipation of summer, those lazy, hazy days of rest, reading and reflection, but it seems that in the midst of the myriad responsibilities that HR now has, it is important to analyze the reason we are so critical to the functioning of any business unit. Personally, I find a quotation from a 1954 book to speak directly to the issue:

The final function of management is to manage workers and work.... This implies organization of the work so as to make it most suitable for human beings, and organization of people so as to make them work most productively and effectively. It implies consideration of the human being as a resource -- that is as something having peculiar physiological properties, abilities, and limitations that require the same amount of engineering attention as the properties of any other resource, e.g., copper. It implies also consideration of the human resource as human beings having, unlike any other resource, personality, citizenship, control over whether they work, how much and how well, and thus requiring motivation, participation, satisfactions, incentives and rewards, leadership, status and function. And it is management, and management alone, that can satisfy these requirements.

Peter Drucker, The Practice of Management

Once there was a time when personnel was an administrative function: maintaining records, collating resumes, managing benefits, etc. These functions continue, but are enhanced in this business environment. Critical to business success are the attitudes, beliefs and feelings of employees. Recently, I heard a presentation on a national survey of Fortune 500 employees. Loud and clear they demanded: fairness, communication and development. HR is on the line to deliver.

Administration can be a safe harbor in the turmoil surrounding today’s HR department. It is routine to conduct employee hearings, attend arbitration, maintain records, purchase services and benefits. In contrast HR folks run risks when they propose new directions, expand employee ownership, appraise performance, and challenge traditional methods of operation. Strategic thinking and implementation are the true mission of HR. Performance management, strategic HR planning, employee and organizational development are the agenda. Drucker called for this almost thirty -- five years ago. Deliver it today.

What Do You Say...?

With school violence in the headlines, it raises the question of what you say to employees after a violent incident, a prolonged absence due to illness, or after a death.

	Communicate, where possible, openly, honestly and as objectively as possible. Ignoring this invites rumors and gossip. Specify a person to coordinate information and provide feedback.
	Relationships remain, even in after of dramatic events. If an employee is not "friends" with another, do not suddenly manifest deep concern. Returning to work is difficult enough without having to relate intimate details to casual acquaintances.
	Involve first line supervisors. Use a return to work conference to ease the employee’s re-entry. Allow the supervisor, who knows the employee, to make suggestions and guide the employee.

Are the Firm’s Ethics HR’s Responsibility?

According to a recent survey, most employees reported misconduct. The most common instances reported were: lying to supervisors, the abuse of alcohol and drugs, and falsifying records, or cheating on reports. However, approximately one in five (21%) did not report misconduct citing the reasons below:

	I feared I would be accused of not being a team player (96 percent).
	I didn’t believe corrective action would be taken (81 percent).
	I feared retribution or retaliation from my supervisor or management (68 percent).
	Nobody else cares about business ethics, so why should I? (58 percent).
	I didn’t trust the organization to keep my report confidential (55 percent).
	I feared retribution or retaliation from my co-workers (38 percent).
	It was none of my business (32 percent).
	I didn’t know whom to contact (25 percent).
	I didn’t want to be known as a whistle blower (20 percent).

Most of these organizations have written standards of business ethics.

Most organizations have written ethical standards, so why the confusion? Some of the elasticity of ethics comes from the culture; there are fewer agreed upon norms for our society. Some erosion follows the competitive market place. Some stems from emotional disorders.

Still, organizations need to decide what is acceptable and what is not. These statements are the Ethics Code. Employees need to know what is acceptable, and what is not. That is training. There are consequences for infractions. That is enforcement. Both are necessary if both the organization and the code of ethics are to be respected.

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