Gruntled Employees

The dumbest managerial tool: annual performance reviews

2011-12-29T16:37:24-05:00

A recent article in The Wall Street Journal discusses some of the problems with annual performance reviews and how a few companies are abandoning them. In the article, ("Performance Reviews Lose Steam," Dec. 19, 2011), Rachel Emma Silverman mentions that even HR professionals recognize the flaws in the system:

Performance reviews have long received poor grades, even from those who conduct them. Nearly 60% of human-resources executives graded their own performance-management systems a C or below, according to a 2010 survey by Sibson Consulting Inc. and WorldatWork, a professional association. And one academic review of more than 600 employee-feedback studies found that two-thirds of appraisals had zero or even negative effects on employee performance after the feedback was given.

Silverman writes that about one percent of companies are ending the practice, citing a report of the Corporate Executive Board. Well, it's a start, I guess.

In Chapter 8 of Firing at Will, I discuss annual performance reviews at length, calling them "the dumbest managerial tool." Here's why:

First of all, emphasizing that employees’ performance should be measured on an annual basis suggests that there’s less reason to measure it on a more-frequent basis. That’s insane. First of all, who can possibly remember how a particular employee was performing ten or eleven months ago? So what ends up happening is that the past month or two get undue weight in the “annual” evaluation.
Second, if the purpose is to correct poor performance or behavior, why would you wait till the end of a year to do that? Performance and behavior issues need to be dealt with when they arise, not saved up till the end of an arbitrary twelve-month period. Similarly, if the appraisal is intended to reward good behavior or performance, why in the world would you wait? “Hey, Alice. That thing you did back in March was terrific. Way to go.” Alice: “Huh?”

Third, if the purpose is to tie the evaluation to a decision about a possible pay increase, that’s also foolish. In a well-run and well-managed company, pay decisions should be made on the basis of the employees’ individual contributions on an ongoing basis, not based on the mere fact that they avoided attrition for another calendar year.

My fourth problem with the annual basis is that managers tend to blow it on the timing. I always did. An evaluation that was intended to go out in early January would just as likely get finished in late March. That’s normal, because managers usually have more-important managerial tasks to accomplish, like running the actual business.

The problem is, if you tell your employees that you’re going to do annual performance appraisals in January, they’re going to expect to receive them in January, along with some sort of a pay raise. When January slips into February and then March finally comes around, those employees are going to be unhappy with you, even if they know you’ve been busy doing real work.

Companies end up using performance reviews as a crutch in place of actually managing their employees real-time. In fact, the reviews do more harm than good. Don't be part of the 99%. Get rid of annual performance reviews, and instead teach your managers to manage.

A Lousy Christmas Present

2011-12-23T16:50:28-05:00

From Firing at Will, Chapter 6, "How to Fire an Employee":

One consideration that’s worth keeping in mind is the broader time frame. For example, it’s never a good idea to fire someone right before Christmas. That then becomes the story: “Those bastards fired me two days before Christmas.” That never sounds good, and it may actually increase the risk of a lawsuit.

Other days to avoid: The employee’s birthday. The day after her mother dies. The day after the Red Sox win the World Series. The basic rule here is this: be sensitive about the timing, but don’t worry about the “rules” about times and days.

Throughout the book, I talk about the need to fire a problem employee once you know that he or she is never going to work out. But there are exceptions, and Christmastime is one of them. Yes, I know it's the end of the year, and maybe there are tax or accounting implications. But don't do it. Either plan ahead and do it in November, or wait until a couple of weeks into the new year. Don't make the story "I got fired at the holidays."

Speaking of holidays, it's not too late to get a copy for your managerial loved ones' digital stockings. You can pick up the Kindle version here and the Nook version here. And if you want to go old school, the paperback version is available from Amazon here.

Managing face to face

2011-12-22T08:27:15-05:00

New Red Sox manager Bobby Valentine, speaking on WEEI's Mut and Merloni Show about why he prefers talking to his new players in person instead of over the phone:

'Talking on the phone is only one step up from communicating by a letter or Twitter or the Internet,' he said. 'There’s nothing like — you know what I mean by this, Lou — talking with your body and your heart and your eyes and your hands, as we Italians do. I think most of the communication has been a cordial one, one that says I’m really looking forward to really establishing a line of communication and really working and really enjoying and and trying to find what I could do to make these guys as good as they can possibly be.'

Frankly, it has nothing to do with being Italian. Almost everyone communicates more effectively face to face than over the phone (and even more so compared to email or letter). That's because human beings take in a ton of tacit information by seeing facial expressions and body language. Employees are less likely to misunderstand your words when delivered with the context of these nonverbal cues.

All managers should listen to Valentine here. Whenever possible, talk to your employees in person.

via fullcount.weei.com

Millennials don't want 9 to 5

2011-12-22T00:54:37-05:00

Dan Schwabel writes at TIME.com that millennials are forcing employers to think differently about how they structure the workforce:

Aside from the early adopters of workplace-flexibility programs, many other companies are hesitant because of the traditional “command and control” approach laid out for older generations. The challenge these companies face is letting go and trusting their young employees — even when they are telecommuting or using Facebook regularly at work.

Many companies fear that, without structure, employees will be distracted, not as engaged and less productive. In fact, the opposite is often true. A trusting work environment breeds more-loyal employees and increases efficiency.

via moneyland.time.com

Firing at Will listed as "Hot New Release"

2011-11-27T13:51:52-05:00

As many of you now know, my new book Firing at Will: A Manager's Guide was published by Apress last week. It's an unlawyerly guide to the riskiest thing you can do at work with your clothes on: firing employees.

So far, so good. Amazon is currently listing it as number 7 on its Kindle list of "Hot New Releases in Business Management & Leadership." (It's right behind the Steve Jobs biography. No, not that Steve Jobs biography. The other one.)

You can order the Kindle version here, the paperback version here (convenient for stocking stuffers), and the Nook version here. If you have any friends or family members who are managers, supervisors, or employers, Firing at Will can make their lives 37 percent easier (that number completely made up; your mileage may vary).

Checking on the spider

2011-10-23T18:29:00-04:00

One of the benefits of closing my law firm and working out of a home office is that I'm there when my daughters get home from school. And because of this, I discovered a ritual that's been going on for quite some time without my knowledge.

My youngest daughter, Samantha, who's eight, gets off the school bus every day near our house and races to our front patio. Before she goes to the door, though, she stops and checks the bushes next to the patio. For months now we've had this ginormous spider living in the bushes building this incredible web. It's big: one of these days I expect to see that it's caught a squirrel or maybe the neighbor's poddle for lunch. (Take a look at the photo. The spider is the huge brown blob on the left. Click the photo to biggify.)

Every day, Samantha stops, looks for the spider, makes sure it's still alive, checks out the progress of the web, and sees what other unfortunate critters it has caught. Then, satisfied, she comes into the house and tells me about her day.

Managers could learn a lot from this spider-checking process.

Too many managers rely on performance appraisals and timesheets to see how their employees are doing. They would be much better off getting out of their offices every day and checking in on their employees rather than waiting for the employees to come to them with their problems.

When I would tell other lawyers that I had gotten rid of timesheets in my firm, they would always ask me, in outraged or incredulous tones, "Then how do you know if your associates are working?" And I would smile calmly and say, "By managing them." I'd explain that I'd go around and check on my lawyers and see how they were coming with their various jobs and projects. This would give me much more information than looking at an entry that said, "4.3 hours — Attention to brief."

Managers: go out and check on your spiders every day.

Fist-bump fireworks and other employee metrics

2011-10-23T17:34:17-04:00

Managers often struggle with how to measure employee performance. It's natural to shy away from purely subjective ways of judging how well your employees are doing. It's much easier to have an objective metric that you can just look at to track your workers' results.

Ironically, employers generally base their hiring and firing decisions on primarily subjective opinions about the employees. But when it comes time to actually manage them, employers long for something they can look at in a spreadsheet. Law firms, accounting firms, and other professional-knowledge firms are the worst offenders, using the timeworn metric of billable hours to substitute for subjective evaluations of performance.

Many employers use annual performance appraisals to rate employees' performance. They figure that it's easier to check off a few boxes and plug in a few pat phrases than to actually (and subjectively) evaluate performance. In Firing at Will, I describe the annual performance appraisal as "The Dumbest Managerial Tool." To find out why, and to learn about better alternatives, check out the book. (It's in Chapter 8.)

Many employers have asked me how to measure performance if they don't use billable hours or annual performance appraisals. The answer I give them is to look around their business, figure out what really matters, and measure that. Professional-services visionary Ron Baker devotes an entire book on the subject called Measure What Matters to Customers: Using Key Predictive Indicators (affiliate link). In it, Ron talks about the sort of KPIs that professional firms could use, such as turnaround time (which is really the opposite of billable hours), innovation sales (selling new services), customer loyalty (retention rates), share of customer wallet, and others. (Ron prefers "key predictive indicators" to the more common "key performance indicators" because the former is forward looking.)

At Shepherd Law Group, we unintentionally developed a way of recognizing whenever one or more of our lawyers had a successful client outcome. It didn't matter what it was: winning a discovery motion, landing a new client, settling a case. We would note the successful event by exchanging "fist-bump fireworks." This was a goofy ritual of exchanging fist bumps followed by a slow descent of wiggling fingers to connote fireworks. This came from a silly but memorable McDonald's commercial. (I've looked all over the web to find it, but was unsuccessful.)

Although we never put this into practice, we could have tracked FBFs — either as a firm or by lawyer — and charted our performance. Naturally, a greater number of FBFs per month or per quarter would be a positive result. This might sounds like a silly performance metric to you. But as the saying goes, "You can manage what you can measure." Measuring FBFs or other key predictive indicators will help you manage toward having more occasions for them.

What KPIs could you institute in your company? Share them in the comments.

So I've been writing this book

2011-10-23T15:05:51-04:00

I'll be honest with you: I've never been a fan of people who abandon their blogs for a few months and then come back with a lame explanation of how busy they've been. So I'm reluctant to do that here, knowing how long it's been since I've posted. But I do feel the need to give you an update and explain how I'm taking Gruntled Employees to the next level.

First and foremost, I wrote a book for managers and employers that embodies the Gruntled Employees philosophy. It's called Firing at Will: A Manager's Guide, and its tagline is "An Unlawyerly Guide to Management's Riskiest HR Decision." It's being published by Apress and its official publication date is November 22, although it may come out a couple of weeks early. You can check out the book's website, its Facebook page (click "Like" if you're so inclined), and you can preorder it from Amazon.

I've described the book's topic — firing employees — as being the riskiest thing you can do at work with your clothes on. Even though it's a book for employers and managers written by a management-side employment litigator, it's actually very much a pro-employee book. Because as longtime Gruntled readers know, how well you treat your employees is the biggest factor in how well they'll perform — and in how likely they will be to sue you. As the book says, people don't sue people they like.

The book's style will be familiar to Gruntled readers. I had no interest in writing a book that sounds like the back of a rental-car agreement. There isn't a hereinafter or a pursuant to in the 300 pages. In fact, it was this blog that led the publisher to reach out to me and suggest the project.

Besides writing the book, another major change this year has been the decision to close Shepherd Law Group after 13 years and step away from practicing law. As much as I loved the practice — giving advice to employers and standing up for them in court — I felt it was time to bring my message to a larger audience. As a practicing lawyer, I was only helping one client at any given moment. By writing and speaking, I can help many more employers at the same time by teaching them how to improve their workplaces. And the best way for employers to do that is by freeing individuals to do their best work.

One area where I'm trying to help employers is in pricing professional services. Specifically, I want to teach law firms, accounting firms, ad agencies, consultancies, design firms, and other professional companies how to price their knowledge instead of billing for time. I've formed Prefix, LLC to focus on this, and I write about the topic over at The Client Revolution.

So now you're caught up. Please check out the book when you have a moment. And thanks for reading.

Cosmic Law and social media

2011-02-25T14:16:42-05:00

So I'm having a #LegalChat this morning on Twitter, and the subject of …

Pardon? Oh, what's a "#LegalChat"? It's an open conversation on Twitter where people can choose to participate and discuss a particular topic by tweeting something and adding the hashtag #LegalChat at the end of the tweet. Or you can just lurk, and read the different entries without adding your own. (Nothing wrong with that.) You don't need to be invited, and the group is obviously self-selected. But only people who are interested in the topic would bother.

Today's #LegalChat was about the legal implications of social media — a timely topic. (See "Vote 'Yes' on social-media law.") An incredibly bright bunch of social-media experts and lawyers joined in with questions, answers, and tips. One of the recurring themes was how to help companies and individuals protect themselves while using social media — short of abandoning it altogether.

Since I've written here about my antipathy toward draconian social-media policies, I thought I'd share my take on how social-media users should protect themselves. Here's what I tweeted on the #LegalChat discussion:

@VMaryAbraham: SM users can protect themselves by assuming that the wrong people will see what they write. It's cosmic law. #legalchatless than a minute ago via TweetDeckJay Shepherd
jayshep

[@VMaryAbraham is the well-respected blogger, lawyer, and knowledge manager who asked the question.]

Since I have more than 140 characters here, let me explain:

The advice I give people using social media — or anything that's written electronically — is to assume that the person you most want not to see it … will see it. (This is actually a corollary to our firm's First Rule of Litigation: The other side will always learn what you most want them not to learn.) Over 17 years of employment litigation, I've seen it happen too many times not to believe that it is actually Cosmic Law (or at least an offshoot of Murphy's Law).

All too often, people either (1) don't even think about the possibility that the wrong people will read what they've written, or (2) underestimate the likelihood that it will be seen. Either way, they end up with the embarrassment (or worse, the litigation) that comes from the wrong people reading the wrong things.

Never assume that people won't find what you've written. Lawyers can be pretty smart, and we can often find things that you think you've hidden. (See my recent Above the Law post, "Social Media and Breast Implants.")

If you follow Cosmic Law, then there's no need to avoid social media or be burdened by restrictive social-media policies.

What do you think? Is following Cosmic Law enough? Do you think it isn't Cosmic Law? And when exactly is the Cosmic Law bar exam?

Vote "Yes" on social-media law

2011-02-24T18:13:41-05:00

It's kind of exciting to witness the birth of a new area of law. (OK, maybe it's only exciting to lawyers. Look, we need the excitement, all right?) When new things arise in society at large, the law has to play catch-up. Thus the civil-rights advances in the 1960s led to discrimination law. The rise of the Internet in the 1990s led to a brand-new area of Interwebs law. Terrorism at the turn of the century led to a body of terrorist-related law (not to mention the whole PATRIOT Act). And so on. Since law is an industry that tends to favor precedent and authority over innovation, it can take us a while to get our act together.

Now it's social media's turn. Over the past five years, it has become clear to even the most Luddite of lawyers that social media is not a fad, that it's here to stay, and that it's rife with issues that will eventually involve lawyers. Which means we're going to need an area of law called social-media law. (Yes, with the hyphen. When you use it as a phrasal adjective before a noun, you hyphenate it. End of lesson.) And which also means we're going to need social-media lawyers.

[Important aside: I am not advocating that we need to hyperlegislate social media, and I am not saying that it's a good thing that we need lawyers in this area. It's just a fact. When humans interact, they get into disputes. You can choose to resolve disputes with lawyers, or you can resolve them with fisticuffs. Your call. Plus it's hard to punch people over the Internet.]

Right now, with a vacuum in the area of social-medial law and a dearth of social-media lawyers, employment lawyers are stepping up to fill the void. Unfortunately, most of them are taking what I call the "No" approach. These are the folks who are drafting blog policies like Harvard Law School's. (See "A two-word corporate blogging policy.") And LinkedIn policies that try to prevent departing employees from keeping their own contacts. (See "Who owns an employee's LinkedIn contacts?") And Twitter policies designed to, well, keep people off Twitter. (See "A twitterable Twitter policy.")

[By the way, Doug Cornelius (@dougcornelius) has accumulated an amazing database of well over 200 social-media policies on his Compliance Building blog. Most of them are exactly what I'm talking about — written in the "No" approach.]

As employment lawyers, they know all about drafting employee policies. But more often than not, they don't know much about social media. Which is a problem. When I see an announcement for a lawyer seminar on social media, I check out the bios of the lawyers presenting to see what their social-media creds are. I look to see what their blogs are called, how many Twitter followers they have, and how active they are on LinkedIn. What I usually find is nada. No blogs, no Twitter. No Klout score. Maybe a perfunctory listing on LinkedIn. In other words, they're not exactly social-media mavens.

[Quick note on Klout: By mentioning this new social-media "scoring" site, I'm not saying that it has any particular importance. It's just one company's way of measuring an individual's traffic on the Interwebs. For a decent introduction to Klout, read this article by The Boston Globe's Beth Teitell, "Ascent of the social-media climbers."]

And if they're not active in social media, they're much less likely to understand what makes social media the human phenomenon that it's become. Which means that they're more likely to tell their corporate clients that they should fear social media, and that they need prohibitive policies to minimize the chance of Very Bad Things happening.

I for one prefer the "Yes" approach. Yes, social media is here to stay. Yes, employees are going to tweet and Facebook and make connections with people on social-media sites. Yes, these employees can act as effective brand ambassadors for their companies, and they should be encouraged to do so. Yes, sometimes Bad Things relating to social media might happen, but we'll deal with them. We don't need draconian policies to prevent people from acting like idiots. People are going to do that from time to time anyway. Why throw out the good along with the bad?

If you have a company who wants restrictive social-media policies to prevent your employees from connecting with other people over social media, absolutely do not call me for help. (Or fax me. Or telex me, or whatever you guys are still using for communications.) You're not going to like what I'm going to tell you anyway.

But if you have a company and you understand that social media is a way for your company and your people to interact with the world, and you want guidance in this new area of social-media law, call me (617.439.4200). No, better yet: reach out to me on Twitter (@jayshep) or LinkedIn. I look forward to connecting with you.

• • •

Update Right after posting this, I noticed an article on Inc. magazine's site, "How to Avoid a Social Media Lawsuit." (Yeah, no hyphen; right off the bat, you know it's suspect.) It pretty much proves my point. All kinds of "No" approach here. Even worse is an older linked article called "How to Write a Social Media Policy." Besides advocating that companies consider eighteen different policies, it also recommends a $149 "social media policies toolkit" so that you can roll your own. Yeah, you should definitely do that. If you're an idiot. Unbelievable. [Hat tip to @kevinokeefe.]

Who owns an employee's LinkedIn contacts?

2011-02-13T19:48:42-05:00

Or Facebook friends? Or Twitter tweeps? If an employee is using these social-media sites in his or her professional capacity, does the employer have the right to take the contacts away once the employee leaves?

The correct answer is: shut up.

Seriously. If you're an employer or a manager and you're seriously asking these questions, you just don't get it when it comes to social media. You're missing the whole point of these social-networking sites.

Now pause for a minute before you go ballistic on me in the comments below. Remember: I'm a management lawyer. I'm on your side.

But the whole point of having your employees on these sites is to broaden the reach of the company's brand. Making connections with other people — customers, prospects, vendors, referral sources — by combining the employees' personalities with your company's brand identity is what it's all about.

And there's a trade-off here. Your company's brand reputation (ideally) helps your employees raise their own personal stature online. But if they leave your company, voluntarily or not, they have that stature to take with them. And there's nothing you can do about it. That's the implicit bargain you make with your employees when you use them as ambassadors for your brand.

That's why it drives me batspit crazy when I see other employment lawyers sounding alarms of doom and drafting small-minded policies about retaining social-media contacts for the company after the employee's departure. See, for example, "Who owns the salesperson's LinkedIn accounts?" Or a similar article here. There's even a discussion on this at LinkedIn itself.

Seriously, cut it out. If employees put themselves out there in cyberspace, even on the company's behalf, they can take their online connections with them when they leave. If you can't abide that, then maybe you do need a policy barring social media. Just don't come to me for that, because you're not my kind of employer.

On the other hand, if you're the kind of enlightened employer who sees the real value in having your employees connect with people who might lead to more business, and you understand that there's always a risk that those contacts will leave with your departing employees, then definitely give me a call. We're kindred spirits, and I can help you.

One more thing: Much of my legal work involves noncompetes and trade secrets. And one of my favorite tools for investigating whether a departed employee is violating agreements or stealing trade secrets is searching through social-media sites. Just because I sound all "Kumbaya" about social media doesn't mean that I won't use it like a hammer to win a lawsuit. (Just sayin'.)

What do you think? Does your company have LinkedIn policies about whose contacts are whose? Do you think you need them? Sound off in the comments.

500,000 reasons to worry about retaliation claims

2011-02-06T03:34:54-05:00

Good news, you're thinking. Your company's just been sued for sex discrimination, but your lawyer tells you that her discrimination claim stinks. You're almost certainly going to beat it. W00t! Squee!

Not so fast with your w00ts and your squees. As employment lawyers, we see this scenario play out far too often. Company gets hit with a weak discrimination claim. Turns out something bad happened to the plaintiff after he or she complained about the bogus discrimination. Wa-bamm! Now the company's stuck defending a much stronger retaliatory-discrimination claim.

This happened the other day here in Boston. The state's Probation Department faced a sex-discrimination claim (among other things) from an assistant chief probation officer. The case went all the way to a jury trial, which is unusual (less then one percent of these cases try). The Suffolk County jury found in the Department's favor on the sex-discrimination claims, but ruled for the plaintiff in her retaliation claim. It awarded her $6,000 in compensatory damages, and … wait for it … half a million dollars in punitive damages. Plus, now she's entitled to her attorneys' fees.

Now to be fair, the Probation Department has been having a bad year as the subject of daily newspaper stories about corruption and patronage. (For The Boston Globe's extensive coverage, click here.) But the lesson is still an apt one. In this case, after the employee complained of sex discrimination, she was stripped of supervisory duties and reassigned to cover the front desk. In its defense, the Department said that her performance had declined. Maybe it had. But that's a weak defense in a retaliation claim. (For more coverage of the case, see Marcella Bombadieri's piece in the Globe.)

Employers: When you're facing a potential discrimination lawsuit, you have to be extra careful to avoid doing something that could end up giving the employee a much stronger retaliation claim. It's a delicate situation to be in, but the wrong actions by the employer can be just the thing that the plaintiff needs to end up with a windfall.

For tips on how to treat a complaining employee, tweet or direct-message me at @jayshep, or send me an

Noncompete cases not slowed by economy, legislation

2010-12-09T22:21:49-05:00

A recent study by Shepherd Law Group shows that noncompete litigation nationwide has continued to trend upward, despite a slowing economy and legislative attempts to curb noncompetes. The latest study shows that noncompete litigation has more than doubled since 1995, and has increased by 61 percent from 2004 to 2009.

Tracking noncompete litigation across the United States is difficult. Unlike in discrimination cases, there are no government agencies to track noncompete litigation. What is more, the various state and federal courts have no mechanism for keeping track of noncompete cases. To get around these problems, the Shepherd Law Group study analyzes judicial opinions published by state and federal courts around the country. This data gives some indication of trends in noncompete litigation over time.

To be sure, the data has limitations. First, since it's based solely on published court opinions, it substantially underreports the number of noncompete lawsuits filed. Many if not most noncompete cases never result in a judge's written decision, and trial-court decisions in many states don't always get picked up by LexisNexis, where this data was collected. Moreover, the number of cases for a given year changes over time, for reasons known only to Lexis. (Compare the data in this post with 2009's "Eight ways to lose a noncompete case" and 2007's "Are noncompetes the new Sarbanes-Oxley?.") The likely explanation is that there is a lag between the filing and the publishing of court decisions.

So while the actual number of published decisions in a given year may not be that useful, the trends are. And if you're wondering about this year, the data suggests that the trend continues. If you prorate the first eleven months of 2010 over the course of a full year (that is, multiply by twelve elevenths), you get an estimate of 965 cases, which is a five percent drop from 2009. But that number will certainly go up over time. I expect that when the dust settles on 2010, we'll see a slight increase over last year's numbers.

Bottom line: noncompete cases have surged over the past decade and a half, and are showing no signs of slowing down. If you're a company looking to guard against unfair competition, a company looking to hire employees who have noncompetes, or one of those employees with a noncompete, make sure you have a noncompete specialist available to help you.

What do you think? Are you seeing an increase in noncompete activity in your industry or practice? Sound off in the comments below.

Uniting two airlines by focusing on culture

2010-10-11T12:27:09-04:00

Nice interview in today's Wall Street Journal with Jeff Smisek, the new CEO of United Continental Holdings. Smisek was previously the CEO of Continental Airlines, which is merging with United Airlines. The interview (sorry, it's behind Rupert's paywall) by the Journal's Susan Carey, focuses on the challenges he faces merging two huge companies in a moribund industry. Continental, which we've written approvingly about before (see "If you treat me with respect, I'll do more for you"), has a better reputation for employee satisfaction than United does, which is known for having disgruntled employees. United is much larger than Continental.

So what's Smisek's biggest challenge and solution for making this new behemoth work? Fixing the corporate culture:

I am going myself to focus very heavily on the culture. Culture is incredibly important in a service business. I can lecture about service and we can train about service, but the employee is not going to give good service unless the employee wants to. They want to give good service if they enjoy coming to work, trust their co-workers [and] are given the tools they need to do their jobs.

In discussing the turnaround at Continental, Smisek talks about paying attention to the so-called little things, like keeping the plane cabins clean. Not just because it was disrespectful to the customers, but because it was disrespectful to the flight crews, who spent much more time in them.

Over the next two weeks, I'll be flying more than 20,000 miles on United, so I'm hoping to see the early results.

What do you think? Have you seen examples in your workplace where focusing on employee gruntledness translates into improved customer service? Or is it just a lot of happy talk? Share your thoughts in the comments below.

Four more years!

2010-09-28T21:45:47-04:00

Gruntled Employees began four years ago today, on September 28, 2006. To paraphrase Ronald Reagan, from his famous 1980 debate with then-President Jimmy Carter: "Are you more gruntled than you were four years ago?"

I know I am, thanks to you. Four years ago, I took a made-up word and a philosophy about employment and human resources and started this blog. Since that day, there have been 165,892 pageviews, many of them by people not my mother. I'm honored to have had a small slice of your time, and I'm honored by the hundreds of comments and thousands of tweets that have continued the conversation.

The first post was called "Radio Shack Deletes 400 Workers, Common Sense," a story about how the electronics retailer fired 400 employees by email. At the time, Radio Shack defended this Stupid Employer Trick as being necessary "improve its long-term competitive position in the marketplace." Since that infamous email, Radio Shack's annual revenue has dropped about 16 percent (or nearly a billion dollars), and its annual income has dropped about 24 percent. Nice work, guys. I doubt that workers at The Shack are more gruntled than they were four years ago.

Thanks again to all of you who read these posts on the website, by email, and by RSS. Who knows? Maybe four years from now it will be "Morning in America."

Here's that clip from the Reagan–Carter debate:

Maybe we're becoming more gruntled

2010-09-19T23:25:30-04:00

Or maybe our bosses aren't as bad as they used to be. This according to a ~~scientific~~ completely unscientific internet poll conducted by Monster.com. The job-board website surveyed 2,150 visitors to its site and asked questions about their feelings toward their supervisors. According to a press release, 41 percent reported that they would never quit a job because of their boss. Monster took this as reflecting "an increasing tolerance among Americans for 'nightmare' bosses." It then concluded that this change in attitudes — lo and behold — was because of the economy:

In sum, according to Monster’s August poll findings, current economic conditions and an uncertain job market have changed Americans’ perceptions of their supervisors. The perceptions of American workers will be interesting to monitor going forward, as the economy begins to turn around – particularly if workers adopt a more critical view of their bosses and the decisions they make.

Whatever. I'm not going to put any stock in an internet poll, especially one where the self-selected respondents are people looking for jobs. And the too-obvious blame-the-economy-for-everything deal is getting kind of old now. More importantly, managers should not let internet polls make them think for a second that they need to work at keeping their employees gruntled.

What do you think? Are you happier with your boss than you were two years ago? Why? Or why not? Did the economy cause the Patriots to lose to the Jets? I'm thinking so. Sound off in the comments below.

Hat tip to The Boston Globe for the story.

Why employment law is like "Survivor"

2010-09-15T01:34:53-04:00

Tonight is the premiere of the 21st season of "Survivor," the CBS reality show that has been hugely successful. The show's been on for ten years (they do two seasons a year, unlike most shows), and even now draws 12 million viewers and ranks among the top 25 shows in ratings. To be sure, I'm the only person I actually know who still watches it (my wife gave up years ago). It's my TV guilty pleasure, and the only reality show I watch (I'm done with "Idol").

And for years, I've been telling people that it's very similar to practicing employment law.

Let me explain:

"Survivor" is incredibly formulaic. Every episode of every season (except the season finales) follow the same exact pattern: Two tribes of castaways in an exotic location bond and caper and plot and fight in their respective camps. Then the two tribes have a contest to try to win some minor comfort (the Reward Challenge). More bonding and capering and plotting and fighting, then another challenge (the Immunity Challenge) to figure out who is at risk for going home. The climax of each episode is the Tribal Council, which is even more ritualistic and formulaic. The losing tribe sits around a fire. The host, Emmy-winning Jeff Probst, goads the players into revealing their fears and suspicions and plans. Then the players cast ballots to vote someone off the island. Probst uses many of the same stock phrases every episode, like "The Tribe has spoken. It's time for you to go."

But despite the repetition over a complete decade and 273 episodes, there is still great drama. (OK, maybe not "great," but drama nevertheless.) It's never boring.

As in employment law.

I've been practicing employment law for 16 years this month. (Paging Molly Ringwald.) I work on the same kinds of cases day in and day out. Noncompetes, discrimination, wage claims, sexual harassment. The usual. Everything I do boils down to people not getting along at work. The lawsuits and agency claims are all basically the same. It's been many years since I've come across a case that was truly novel in any way. I use the same set phrases — "The Tribe has spoken. It's time for you to go. (OK, not really.) — in many of my conversations.

And yet there is still great drama. And it's never boring. To me, practicing employment law and helping companies have gruntled employees and easier workplaces is as interesting to me as it was 16 years ago.

And the reason for that is the same reason that "Survivor" is still interesting:

Because of the people. Every employment-law case or issue or problem, every "Survivor" episode or challenge or Tribal Council is different because of the human variable. It's the people who make it different every time. The different personalities of the players and employees. The different exotic locations, and their effects on the contestants. The different corporate cultures. The people always make it different, and thus interesting.

That's why I still love employment law. And that's why I still watch "Survivor." Wednesday nights at 8 ET on CBS.

What do you think? Is your practice like a particular TV show? Is your tax firm like "True Blood," or your family-law practice like "Glee"? Share your thoughts in the comments below.

On knuckleballs, incentives, and goals

2010-09-10T00:26:02-04:00

The Red Sox can't manage to stay afloat in a tough division, but they can at least provide us with some useful management lessons.

Last night, veteran knuckleball pitcher Tim Wakefield started against the Tampa Bay Rays. Even though he gave up five runs (four of them earned), he qualified for the win by pitching five innings and having the Sox take the lead for good in the bottom of the fifth. Besides getting the win — only his fourth against ten losses — Wake accomplished a number of other things in the game. First, he became the oldest pitcher (at 44) in Red Sox history (spanning 110 years) to win a game for the team.

Once he got his tenth out in the fourth inning (thus reaching 130 innings for the season), he earned a half-million-dollar bump in his guaranteed salary (to $2 million) for 2011. (He also earned a $75,000 bonus for making his eighteenth start of the season.) So it's fair to say that the game was worth an extra $575,000 to Wakefield on top of the prorated portion of his $3.5 million salary for this season. And Wakefield could certainly look at it that way.

But the team should not conclude that this meaningless, late-season win cost it an extra $575,000. Yes, that was the marginal cost of the game. And last night's game was a spot start; the team could have had someone else pitch to avoid having Wakefield reach the starts and innings milestones that triggered the incentive pay.

But I'm certain that Sox management never considered a financial downside to having Wake pitch. By giving the pitcher various incentives to make more starts and pitch more innings, they encouraged a season-long performance that was plenty valuable to the team. The real cost to the team of last night's game was his pay for the total season divided by the 29 games he's appeared in — a number less than $140,000, which will decrease as he pitches more over the next few weeks.

Too often, employers worry about the marginal cost of someone reaching a threshold that triggers an incentive bonus. That's looking at it the wrong way. The right way is to consider the whole body of work, partially driven by the incentives.

Finally, last night's game marked another milestone for Tim Wakefield: it was his 179th win for the Red Sox. He's currently in 3rd place in team history, behind the immortal Cy Young and the tarnished Roger Clemens, who are tied for 1st at 192 wins. Wakefield has been open about wanting to reach 193 wins and become the winningest Red Sox pitcher of all time. It's a goal that drives him. The Red Sox know this, and I'm sure the team wants to help him achieve that goal.

Sometimes, goals can be even more important than incentive bonuses. A good employer helps its employees identify and reach for those goals.

For more Red Sox management lessons, see "An organizational belief" and "Clubhouse rules." For more reporting on Tim Wakefield, see this post by Boston Globe blogger Peter Abraham (@PeteAbe) and this article by Globe columnist Nick Cafardo (@nickcafardo).

What do you think about incentive bonuses and goals? Are they worth the extra cost? Share your thoughts in the comments below.

Job fair for ex-cons begins Nov. 4, only in Massachusetts

2010-09-09T00:13:55-04:00

Massachusetts has enacted a new law making it harder for employers to learn whether job applicants have criminal records. On August 6, Governor Deval Patrick signed the new Criminal Offender Records Information Act (CORI), which goes into effect in stages. The law makes Massachusetts the only state to prohibit most employers from asking about criminal records on job applications. Because with the unemployment rate as high as it's been in 20 years, this is what we want the state to focus on. Riiiiight.

All Massachusetts employers should now review their forms and procedures, and most will need to make changes to its application and recordkeeping processes. Here are five things you need to know:

You can’t ask applicants about criminal history (at first). Until now, Massachusetts had fairly complicated rules on what you could and couldn’t ask applicants about any criminal past. The new law simplifies this: You can’t ask at all on the initial job application. The only exceptions are the rare circumstances where an employer legally can’t hire a convict, or where a convict would be presumptively disqualified by law. This restriction starts November 4, so you have less than two months to change your applications.
But you can ask after the initial job application. The thinking here is that applicants with criminal histories won’t be automatically rejected without the employer first considering their qualifications. So you can still ask applicants if they had run-ins with the law — just not on that initial application, which is where most employers do it now. Of course, the new law makes it harder to verify what they tell you, because ...
More criminal records will be sealed earlier. Under the new law, misdemeanor convictions will be sealed after only five years (after conviction or release from prison), and felony convictions after ten. (This provision doesn’t go into affect until May 4, 2012.) There are a few exceptions, like certain sex crimes, murder, and manslaughter, as well as subsequent convictions. So while the new law doesn’t allow applicants to lie about older convictions, employers are prevented from learning about them. Oh, wait. The old law already allowed criminals to lie about sealed convictions. If an ex-con has a sealed record, the law allows him or her to answer "no record" when applying for a job. Nice ...
And it will be harder to perform CORI checks. Before doing a criminal-record check, an employer needs to verify the applicant’s identity and get his or her written authorization. If the employer then rejects the applicant based on the CORI results, it must first present the applicant with a copy of the results. If an employer conducts more than four CORI checks a year, it must develop a written CORI policy. Call your employment counsel for help with this policy if you think you’ll be doing multiple CORI checks.
There are also new recordkeeping requirements. An employer has to keep applicants’ written authorizations for CORI checks for a year afterward. On the other hand, employers can’t keep the results of CORI checks beyond seven years after either the date the applicant was rejected or the date the employee terminates. And there are serious penalties for employers who improperly share the results with third parties. Under most circumstances, an employer cannot share these results at all.

Do your job applications comply? If they look like most applications, they probably don't. You better start thinking about revising your employment application, as well as setting up a CORI policy (if you need one). You've got two months.

Think this is a good rule? Does the benefit of maybe preventing snap judgments by employers outweigh the impropriety of having the state censor otherwise-public information? Share your thoughts in the comments below.

Massachusetts hides antiemployer HR rule in "probusiness" law

2010-09-07T23:59:30-04:00

Massachusetts law has long required employers to give workers access to their personnel files upon request. Which is fine, I guess. But a new change to the law now requires companies to notify employees about any potentially negative information added to their files. The amendment, which Gov. Deval Patrick signed into law on August 5, was tucked away in an “economic development” bill laden with higher-profile items like the recent sales-tax holiday. (To see how "probusiness" the law is, check out the Governor's press release from the signing. No mention of this provision, natch.) I have no particular opinion on the rest of the law. But this new personnel-records rule is going to lead to more employee lawsuits.

Here are five things you need to know:

Employers must tell workers about negative entries. An employer now has to notify an employee when it puts into a personnel record any information that has been or may be used to negatively affect the worker’s job. This must be done within ten days. The law leaves unchanged an employee’s right to review or get a copy of their records within five days of requesting it. The only sop to employers is a limit on these requests to two a year. But that limit does not apply to the notice and review of negative entries.
There could be serious penalties for failing to comply. The Attorney General’s Office is charged with enforcing the statute. The amendment does not change the existing penalty, which is a fine of between $500 and $2,500. It’s not yet clear to what extent the AG’s Office will seek to enforce the law. Besides these penalties, the new law could cause problems for employers during other employment litigation. If discovery reveals that the employer failed to comply, this could hurt the employer’s credibility.
Employers now face a dilemma about documentation. On the one hand, we’re always warning clients to document employee issues as much as possible, just in case the issues go to litigation. On the other hand, the new law makes putting relatively innocuous information into a personnel file a much more-provocative event. Now a quiet, low-level note in a file carries the risk of unnecessarily agitating the employee. Agitated employees become disgruntled employees, and disgruntled employees sue. Under the new law, employers are damned if they do and damned if they don’t.
Many employers are required to keep personnel records. If you employ 20 or more workers, then you’re required to keep in personnel records any written information about:
- identity
- job title and description
- pay information
- start date
- job application
- evaluations
- warnings
- probationary periods
- waivers
- termination notice
- any documents on discipline
The law doesn’t benefit anyone (except lawyers). The amendment snuck in below the radar, without any discussion in the employment-law community. It’s antiemployer, in that it places companies at increased risk for employee lawsuits. While advocates could possibly argue that workers benefit from increased “transparency,” we disagree. There are times when a prudent employer should make a minor note in a file without escalating it to a human-resources event. Employees shouldn’t need to be stressed out by every less-than-positive note made in a file. But the new law makes that unavoidable.

So what do you do now? This is a tricky one. How to handle it depends on your current practice of handling personnel records as well as on your corporate culture. Talk with your employment counsel about devising a strategy for handling employee documentation in light of this new law.

Unfortunately, a paper trail could now take you down the wrong path.

What do you think? Is this going to be a problem for your workplace? Sound off in the comments below.