Millerwood Communications

Timing Key for Rewards Programs

We've all heard of or have been part of one.

Rewards programs that offer prizes, gift certificates, cash or time off to employees who have met some set of criteria are popular.

But when is the right time to start a rewards program?

Common sense would say that the time to strike is when morale is low and needs a good boost. But that could be the worst time.

Introducing a rewards program into a toxic work environment can create jealousy among workers or foster a "too little too late" response. The same can be said for holding a company outing or holiday party when employees are overworked, underpaid and frustrated.

Rewards programs and company events are best when used to enhance a healthy business environment. If there is need to improve morale, the first questions to ask include:

1. Are business goals clearly defined and shared with employees?
2. Do employees feel they are contributing to business goals?
3. Is the compensation plan fair and well-communicated?
4. Are under-performing employees being managed through a performance plan to improve?
5. Do the current employees fit in the desired company culture?

So before you break out the CEO bobble-head dolls and gift cards to distribute to high performers at the next summer outing, take a look at the company's foundation.

If the answer is "no" to any of the above basic questions, hold off. Instead, put efforts toward getting to a healthy work environment.

Small Businesses in Benefits Crunch

In a recent insurance survey of small businesses, almost half of the respondents say they plan to cut back on employee benefits in the future.

That puts small businesses at a big hiring disadvantage from larger employers who can afford to offer more robust benefits.

Combined with other benefits larger employers are more likely to offer like job sharing, telecommuting and flextime, small businesses are going to be increasingly challenged to offer employees a plan that offers good benefits, but also keep costs in check.

When trying to adapt to our changing economy, employers need to remember what employees value.

In addition to health care, employees also appreciate a 401(k) plan, vision insurance and time off. Plans that offer personal financial security, such as life and disability insurance, go a long way in easing employees' concerns in the event of sickness or death.  

Small companies, as well as medium to large organizations, will need to continue to evaluate costs for the company and for employees. This may mean getting creative with the benefits that are offered and who pays for them.

Group benefits plans can offer employees reasonable rates, while the employer incurs no direct costs. Some analysis is required for time off policies, flex time and telecommuting. These policies have no direct costs, but there is an indirect cost that needs to be considered. 

Looking at a total benefits plan, employers can keep up with the changes by implementing plans that are attractive to employees, and don't break the bank for employers.   

Actions Now Can Hurt Later

More and more I am hearing disconcerting stories of how employers are handling the tough topics that need to be communicated these days.

One friend of mine opened a company email on a Friday afternoon to learn that overtime for his employees will be eliminated as of Monday (please let them know before Monday), the 401(k) match has been discontinued and there will be a salary cut effective immediately.

Another friend was blind-sighted by a 200-person layoff one week after the company communicated that they were financially in good shape.

I've also heard stories of benefit cuts going out in email with no other communications and health plan benefits changed retroactively with no prior messaging. 

Businesses are doing what they can to survive, but steps like this will not only create a disgruntled workforce; it will make it difficult to attract new candidates when the hiring starts again. 

Employers should always be thinking of the best way to alleviate stress and worry among employees when the news is bad.

Advance notice should be given to any type of change to wages or benefits so employees can plan. And, no matter how bad the news, it should be disseminated by a human voice, either in a group or individually.

This gives employees the opportunity to ask questions and it gives the messenger the opportunity to express their reason(s) for the changes and their general concern for the employees.

At some point, the tides will shift again and employees will be pick and choose their employers. Employers need to do their best to keep morale up now, so they don't get left in the cold later.    

It Pays to Have Fun at Work

Harman Management Corp., the largest franchise of Kentucky Fried Chicken (KFC), has a rule: Employees must have fun at work.

They recognize that hourly employees ages 16-22 don't necessarily care about the future of the business or their career at KFC. These employees just want to make some spending money. So they need to retain them by helping them enjoy their time while they are on the clock.

To make the program work, store managers are encouraged to create a fun atmosphere in their stores. As a result, those managers who have taken the program seriously have experienced lower turnover and higher morale and engagement, than the managers of stores who did not make as much effort.

Ross Environmental Services, a company which has daily concerns over the regulatory environment and penalties, has a history of creating a stressful, serious workplace for employees. To bring about change, management brought in a fun-driven human resources manager and added a controller with a sense of humor. As a result, employee morale has improved, the culture is more relaxed and the company is experiencing a seven to eight percent annual growth rate.

Happy employees bring energy to the workplace. A little fun and a sense of humor can bring employees together, reduce stress and improve the overall success of a business.   

A Lesson From Baseball

The 2007 baseball season is over and the Red Sox did it again.

To see how they did it, we can look at the players, the strategy and the competition, but one aspect probably doesn't get the attention it deserves: the managing of the team.

Terry Francona knows baseball, but more important, he knows how to manage people. His techniques are effective and can easily translate into any work environment. For example, Francona:

• Knows his team. He knows how players interact and he knows how to deal with each one. The baseball season is long, and it helps to have a good manager keeping morale up and peace between the players. He also knows their strengths and weaknesses, and uses each player accordingly.
• Supports his players. And, because of his support, his team wants to win for him.
• Communicates his vision. In September when the AL East lead was shrinking, Francona didn't panic. He communicated his long-range plan and stuck to it. He gained support for his plan and the team believed in him.
• Knows the job. He understands what needs to be done, and can think fast on his feet.
• Works toward the goal. The goal was to win the World Series, and that meant pulling Curt Schilling in Game 2 against the Rockies, maybe before he was ready to come out. It meant not succumbing to public pressure to use Josh Beckett over Tim Wakefield in Game 4 against the Indians. Feelings could not be considered when the stakes were so high. He had to focus on the results.
• Cares. It's obvious he is passionate about the game, the team and winning. He approached each game with a vengeance and it showed.

We could take a lesson from this style of management, and see how our players perform.

Engagement During Times of Change

When there are staff changes at the senior level, it's imperative not to disengage employees.

Shakeups at the top, which happen frequently, cause companies to go through a period of time when information cannot be disseminated as freely. And projects, programs and even promotions can be put on hold.   

Employees are given limited explanation as to why all of a sudden they are asked to change direction or stop what they are working on completely. As a result, good employees may question their performance or their job stability. Rumors start to fly frantically around the workplace, some based on fact, and some way off the mark.

If this situation goes on too long, employees may start to feel disconnected from the organization. Their performance may, in turn, start to wean, and lastly they start to look for another job.

To prevent the drop in employee morale during the time preceding major, confidential changes, do the following:

• Don't stop communicating with employees. Continue all newsletters, email announcements and meetings as scheduled. Stopping any regular communications will just add more worry.
• Prepare all managers with information on how to address employee questions. Managers who know about the changes, and those who don't, should be equipped with answers. Answers should assure employees that, although there are changes to how work is being done, the changes are temporary.
• Meet with troubled employees. If any employee shows signs that they are distraught, meet with them individually. Some employees always have some level of fear of losing their job. These employees need extra attention to prevent further distraction. 
• Communicate the change as soon as possible. Once the change is public, be sure to communicate to employees right away, either face-to-face or via a conference call with remote employees.
• Hold follow-up meetings with employees to explain the change, how it impacts the business and what it means for employees.

The key is to be honest and only communicate the truth. It is not wise to lie to employees, knowing that the truth will come out later.

Invest in Workers Before It's Too late

According to the U.S. Department of Labor, this country will face a shortage of 7 million workers by 2008. Along with increasing productivity and efficiency, this is just one more reason employers should focus on retaining their best workers.

Why do people leave their job? The Saratoga Institute surveys employers and discovered that 90% of companies do exit interviews to find out why. But only 30% of those companies share the information with their managers. Not using this information makes this a wasted exercise.

Regardless of why people say they are leaving, something prompted them to conduct a job search much earlier.

It could have been dissatisfaction with their manager, senior leaders or the overall direction of the organization. It could be the absence of a work/life balance, or that they did not feel respected or appreciated. It could also be a lack of training or support.

I believe that most people find fulfillment in doing a good job, but that requires being placed in a job that "fits," adequate tools and skilled managers. How many people do you know feel they are working to their fullest potential?

Employee retention requires analysis and participation from the entire organization.

I cringe when I hear managers describe the work/life balance program as the monthly employee birthday party or company picnic. To retain employees, the organization needs to look internally at compensation practices, job descriptions, manager effectiveness, performance planning, training programs, rewards and recognition, time-off policies and employee communications.

Then there's the external look. What do customers think of your organization? Is there a public relations program? Does the marketing plan accurately convey the image of the company and visa versa?

Yes, this is a huge undertaking. But what's the alternative? A lack of talent in the years to come?

An employee retention plan should be a top initiative in 2007.

Wal-Mart's New Communication Plan

Wal-Mart is working on integrating a multi-tiered communication plan into the business.

According to Sue Oliver, senior vice president of the Wal-Mart Stores Division, there were several reasons for the new program. The primary reason was to reduce turnover, and to stay ahead of customer demand and trends. Another reason was to react to the many criticisms that have been placed on Wal-Mart in recent years.

The new plan includes hiring more than 300 human resource managers to work in the field. Their goal is to ensure hiring, training and performance practices and policies are implemented correctly. In addition, they are responsible for increasing employee morale by communicating business objectives and opportunities for growth.

Also implemented is the development of a new human resource strategy that ties all human resource practices into the business strategies. The strategic integration will ensure that all employees are moving in the same company direction.

An ethics hot line is available for Wal-Mart employees to report issues. Each issue is investigated promptly.

To respond to critics, Wal-Mart updated its web site to include up-to-date issues and controversial topics, so that senior management could get the facts in public view. And, to address topics as they come up, senior leaders will speak out more and make certain that the public knows what they are doing.

The new program is designed to increase employee satisfaction and successful recruiting. Wal-Mart has realized that the key to continued success is experienced, happy employees.

Kudos to Wal-Mart. These moves should improve employee communications and integrate more transparency into the business.

Can Workplace Criticism Get Employees Fired?

Richard White, a union leader at Endicott Interconnect Technologies, was fired for comments he made about his employer on a web site.

Initially White had spoken to reporters about his employer following a layoff. His statements were negative, and Endicott counseled him to not make disparaging comments in the future. White's reaction to the request was to post comments on a public web site, including a statement that said "the business is being tanked by a group of people that have no good ability to manage it."

White was dismissed.

In a court of appeal, White claimed that Endicott violated the National Labor Relations Act protecting an employee's right to engage in concerted activity for the purpose of collective bargaining or other mutual aid or protection.

The court disagreed with White. Since his comments were deemed reckless and disloyal, it was determined that Endicott had good cause to terminate, based on insubordination, disobedience and disloyalty.   

This is an unusual ruling in our current world of technology. Federal laws usually afford employees the right to criticize matters involving the workplace without fear of retaliation by the employer. Though it isn't wise, it is becoming more common for employees to post negative comments about their employers on their personal web sites.

I would recommend a more constructive action like talking to a manager or human resources about the issue. If the issue isn't resolved to satisfaction, then it's time to seek a new job. One of the worst things to do is to burn a bridge with an ex-employer, especially in a public forum. Once it is on the Internet, it is there forever, and may impact future employment opportunities.

Illegal? Not usually.

Smart? Not at all.   

Finding the Right Company

Finding the right "job fit" is key to employee satisfaction.

In their book "The New American Workplace,"James O'Toole and Edward E. Lawler III categorize the three emerging organizations as:

1. Low-cost operators - Companies that provide low wages and little benefits to employees
2. Global competitors - Enormous companies that offer high wages with little stability
3. High-involvement - Companies that offer challenging work environments and defined career paths

When job searching, applicants need to consider financial needs, amount of desired responsibility, benefit requirements, work/life balance and tolerance for risk. For example, if the candidate has few skills and can work flexible hours, a job at Wal-Mart is the right fit for that time in his or her life.

Once the same candidate acquires additional skills and education, is seeking a job with higher pay and benefits, and can take a risk on a job that may not be long term, Microsoft may provide a good opportunity.

This same candidate may reach a new stage of life where they need more job security, more work/life balance and the desire to make a longer-term commitment to an employer. An organization like WL Gore can provide this.

The onus to get the right employees with the right organization lies with the candidate and the recruiter. Since many companies are hybrids of the three categories it requires some research to match the right employee with the right organization.

And the right fit is critical in getting a dedicated worker who will meet business needs.