November 2011 - Management

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Bankrupt American Airlines

11-30-2011 11:19 PM with no comments

Tom Horton, the new American Airlines (AA) chairman and CEO, announced yesterday (November 29, 2011) that AMR Corporation, the parent company of AA, was bankrupt. He succeeds Gerard Arpey, former chairman and chief executive, who opposed bankruptcy and retired Monday when the members of the board unanimously voted to file for bankruptcy with intent to restructure. Chapter 11 of the federal bankruptcy code allows a business to reorganize to try to become profitable again. Typically, management is allowed to keep running the day-to-day operations, but a bankruptcy judge must approve major business decisions.

American Airlines was once the world's largest airlines. Now, AA has significant debt, which includes labor and fuel costs. Other airlines transformed themselves into profitable companies after declaring bankruptcy and cutting costs. AA tried to control labor costs, but labor talks stalled. It failed to negotiate a new contract with the pilots' union (Allied Pilots Association). Other unions at AA are the Association of Professional Flight Attendants and the Transport Workers Union. Transport jobs include mechanics, dispatchers, baggage handlers, and airplane cleaners.

Employees unionize in order to gain an opportunity to exercise some degree of control over employer decisions affecting their employment conditions and general welfare. When they are unionized, human resources policies can no longer be determined unilaterally by the employer. Instead these policies and practices are subject to the terms of the labor agreement, which has been negotiated by the union. A major responsibility of the local union officers is to insure that these terms are observed and that the rights of members provided by the agreement are protected.

In a November 30, 2011 Dallas Morning News story on page 5D, "An Air of Resolve," Terry Maxon reported that American's pre-bankruptcy negotiations to unions included the offers listed below.

  • An end to company-paid retiree medical benefits
  • Revised scheduling to make pilots and flight attendants work more hours each month and, for flight attendants who fly part time, more hours per month to qualify for benefits such as health coverage
  • Outsourcing of jobs, including daytime cabin cleaning, fuelers and driers at a number of stations
  • An end to defined-benefit pensions for new employees at the least

Restructuring is frightening for employees. No one knows what will happen. Cutting costs usually means cutting labor costs. The workforce may be reduced. Some jobs may be eliminated, and employees will lose their jobs. Other employee's wages and benefits may be reduced. Employees may lose their retirement benefits. Pensions may be in jeopardy.

Why do you think negotiations between American Airlines' management and the unions broke down?

Posted by Gemmy Allen

Cyber Monday

11-29-2011 11:26 PM with no comments

Many employees with Internet access at work shop from their computers on Cyber Monday, the Monday following Thanksgiving. The phrase "Cyber Monday" was coined in 2005 by Shop.org, a unit of the National Retail Federation (NFR), to encourage online sales. Cyber Monday is the online equivalent of Black Friday, the day after Thanksgiving. In addition to their own Websites, more than 700 companies feature their Cyber Monday deals in one place at cybermonday.com, a one-stop shop for consumers looking for the best Cyber Monday promotions.

Most retailers offer Cyber Monday promotions and incentives, like free shipping, to capitalize on shoppers using their personal computers, tablets, and smartphones to shop. Vicki Cantrell, Executive Director of Shop.org said, "In addition to putting the finishing touches on their websites, retailers have invested heavily in mobile apps and related content as the appetite for Cyber Monday shopping through smartphones and tablets continues to rise."

According to IBM Coremetrics Benchmark, this year's Cyber Monday online sales set a record. (The full report is attached.)

Cyber Monday 2011 Compared to Cyber Monday 2010 (year/year)

  • Consumer Spending Increases: Online sales were up 33.0 percent over 2010, with consumers pushing the average order value up from $193.24 to $198.26 for an increase of 2.6 percent.
  • Shopping Peaks at 11:05am PST/2:05pm EST: Consumers flocked online, with shopping momentum hitting its highest peak at 11:05am PST/2:05pm EST. Consumer shopping also maintained strong momentum after commuting hours on both the east and west coast.
  • Mobile Sales and Traffic Grows: On Cyber Monday, 10.8 percent of people used a mobile device to visit a retailer's site, up from 3.9 percent in 2010. Additionally, mobile sales grew dramatically, reaching 6.6 percent on Cyber Monday versus 2.3 percent in 2010.

Cyber Monday is an example of Americans' work and personal lives merging. How does shopping online affect the employee's work day? As a manager, would you rather have employees shopping online at work or driving all over town during their lunch hour looking for the perfect gift?

Posted by Gemmy Allen

Black Friday Decisions

11-28-2011 8:51 AM with no comments

Management decisions leading up to this holiday season included opening at midnight on Thanksgiving, instead of the day after known as "Black Friday." The biggest crowds shop on Black Friday, so managers thought shoppers wanted to start earlier. Retailers pay rent and overhead on their stores 24 hours a day. So, operating stores as much as possible is good for business. But, managers must schedule more than enough staff for the day. Specific employees can run cash registers while others can be out on the floor, located next to the best deals, to help dissolve any potential pitfalls that might occur.

Furthermore, to generate sales, managers decided to use social media to spread the word on their deals. This is the first year that social media has played a major role in the holiday shopping season. People on Facebook and Twitter receive online offers and many decide to remain home to shop in order to miss the crowds.

Crowds can pose problems. Online-coupons, bargain-obsessed shoppers, and early store openings create frenzy in some stores. Sleep-deprived shoppers can injure themselves or others. Furthermore, crowds in dark parking lots can attract thieves.

Will midnight openings become the standard for future Black Fridays or will managers decide the business isn't worth it?

Posted by Gemmy Allen

Give Thanks for Ethical Businesses

11-23-2011 11:46 PM with no comments

It is good to read about ethical businesses, especially at this time of Thanksgiving. The Foundation for Financial Service Professionals established the American Business Ethics Award (ABEA) in 1994. The foundation is a charitable organization created "to foster research, education and ethical practices amongst financial service professionals to benefit the public." Each year, the ABEA recognizes one large company, one mid-sized company, and one small company. The companies "exemplify high standards of ethical behavior in their everyday business conduct and/or in response to a specific ethical crises or challenges."

2011 American Business Ethics Award

Small Company Category (less than 250 employees)
Eye & Laser, Inc, Lancaster, South Carolina - Ophthalmic medical practice

Mid-Size Company Category (250-2,500 employees)
Corgan Associates, Dallas, Texas - Architecture & Design Firm

Large Company Category (more than 2,500 employees)
Kimberly Clark, Irving, Texas - Maker of health, hygiene and well-being products

In a Kimberly-Clark press release, Chairman and CEO Thomas J. Falk said, "We are honored to be recognized for our ethical business practices. Creating a culture where our employees are committed to driving business results ethically and doing the right thing for our communities and environment contribute directly to the success of our company."

Kimberly-Clark's ethical way of life is rooted in core values that require authenticity, accountability, innovation, and caring as the driving influence in all its business decisions, transactions and initiatives. Conducting business in accordance with these core values starts at the top and carries through to each of the 57,000 Kimberly-Clark employees whether those employees are based in the U.S., China, Australia, South Africa, Brazil or any other of the 36 corporate locations the company maintains worldwide.

Kimberly-Clark's code of conduct, which is available in 27 languages, focuses on the higher standard of doing the right thing, not just that which is legally required. To stress the importance of living by this code, Kimberly-Clark requires formal training, team leader coaching, and publishes "Ethical Moments," a series of articles that focus solely on the ethical dilemmas the company's employees may encounter in the workplace.

ABEA nominees are asked to tell a story about some practice or event they think is particularly noteworthy from an ethical point of view. Can you share an inspiring and uplifting story about good works, such as instances of returning checks, going the extra mile in service, or just helping others?

Posted by Gemmy Allen

Professionals Behaving Badly

11-22-2011 10:42 AM with no comments

For most of us, the holidays are a busy time of year.  For many managers, the holidays are the busiest time of year. Thus, holiday time can be stressful for everyone involved. It is important to remind employees to be professional, remain calm and to be courteous, even when customers overreact and/or act badly.

Something to remember when holiday hours are taking a toll on you and your staff is that you can choose your behavior. The way people behave towards you is usually dictated by the way you behave towards them. You can use your behavior to hinder the transaction or to help the transaction.

Helpful behaviors are visual and verbal.

  • Acknowledge the customer as soon as possible.
  • Be friendly and welcoming.
  • Look at the customer and be attentive.
  • Apologize for any delay.
  • Use the customer's name.
  • Confirm that you are listening.
  • Lean forward and use open gestures.
  • Check that you've understood.
  • Make helpful, alternative suggestions.
  • Agree on the next step.

Think about a recent shopping experience. How was the employee helpful? What other helpful behaviors would you add to this list?

Posted by Gemmy Allen

Pin your interest for management?

11-21-2011 2:59 PM with no comments

Pinterest is a virtual pinboard that lets you organize and share things that you find interesting. People use it to plan events, decorate rooms, and organize their favorites. You can share things you find on the Web and browse other people's pinboards to get ideas and inspiration.

Right now, Pinterest is used more to show clothing, jewelry, food, and travel ideas. It isn't necessarily a Web site that managers are using. I searched for management and time management and found tips for stay-at-home moms and teachers.

Despite the lack of management categories, Pinterest has over 30 categories and more are being added. Install the "Pin It" button to your bookmarks bar and "pin" new items to Pinterest as you search and browse Web sites. With an account, you can share what you are pinning and follow what your friends are pinning.

Mangers could use Pinterest with their employees by pinning a topic in Pinterest. For example, a retail store manager could take pictures from the company's Web site and post to Pinterest. A restaurant manager could take recipes from the chef, post them on the company Web site, and post to Pinterest. Anyone could link pictures of charts and graphs and post them to Pinterest.

Describe how a manager and employees could use Pinterest to plan a holiday event.

Posted by Gemmy Allen

Establish Harassment Policy

11-18-2011 10:18 AM with no comments

As previously discussed, managers should encourage whistleblowers and investigate harassment. Furthermore, it is important for managers to establish a formal policy prohibiting harassment. The policy should be communicated to all employees in the company, regardless of management level. The policy should be reviewed and updated on a regular basis. An effective harassment policy should contain these points:

  • A broad definition of the type of conduct that constitutes harassment.
  • A statement that offenders will be subject to appropriate discipline, up to and including discharge.
  • A statement encouraging employees who feel victimized by harassment to report the offensive conduct.
  • A statement requiring employees and supervisors to report any offensive conduct that they experience or witness.
  • A statement providing assurances that there will be no retaliation against an employee reporting harassment.
  • A statement indicating that all reports of harassment will be promptly and thoroughly investigated and prompt remedial action will be taken should the company conclude that harassment has occurred.

The EEOC explains prohibition against harassment. An employer's policy should make clear that it will not tolerate harassment based on sex (with or without sexual conduct), race, color, religion, national origin, age, disability, and protected activity (i.e., opposition to prohibited discrimination or participation in the statutory complaint process). This prohibition should cover harassment by anyone in the workplace - supervisors, co-workers or non-employees. Management should convey the seriousness of the prohibition. One way to do that is for the mandate to "come from the top," i.e., from upper management.

The policy should encourage employees to report harassment before it becomes severe or pervasive. While isolated incidents of harassment generally do not violate federal law, a pattern of such incidents may be unlawful. Therefore, to discharge its duty of preventive care, the employer must make clear to employees that it will stop harassment before it rises to the level of a violation of federal law.

The EEOC explains protection against retaliation. An employer should make clear that it will not tolerate adverse treatment of employees because they report harassment or provide information related to such complaints. An anti-harassment policy and complaint procedure will not be effective without such an assurance.

Management should undertake whatever measures are necessary to ensure that retaliation does not occur. For example, when management investigates a complaint of harassment, the official who interviews the parties and witnesses should remind these individuals about the prohibition against retaliation. Management also should scrutinize employment decisions affecting the complainant and witnesses during and after the investigation to ensure that such decisions are not based on retaliatory motives.

The EEOC explains effective complaint process. An employer's harassment complaint procedure should be designed to encourage victims to come forward. To that end, it should clearly explain the process and ensure that there are no unreasonable obstacles to complaints. A complaint procedure should not be rigid, since that could defeat the goal of preventing and correcting harassment. When an employee complains to management about alleged harassment, the employer is obligated to investigate the allegation regardless of whether it conforms to a particular format or is made in writing.

The EEOC advises employers to designate at least one official outside an employee's chain of command to take complaints of harassment. For example, if the employer has an office of human resources, one or more officials in that office could be authorized to take complaints. Allowing an employee to bypass his or her chain of command provides additional assurance that the complaint will be handled in an impartial manner, since an employee who reports harassment by his or her supervisor may feel that officials within the chain of command will more readily believe the supervisor's version of events.

It also is important for an employer's anti-harassment policy and complaint procedure to contain information about the time frames for filing charges of unlawful harassment with the EEOC or state fair employment practice agencies and to explain that the deadline runs from the last date of unlawful harassment, not from the date that the complaint to the employer is resolved. While a prompt complaint process should make it feasible for an employee to delay deciding whether to file a charge until the complaint to the employer is resolved, he or she is not required to do so.

The EEOC explains confidentiality. An employer should make clear to employees that it will protect the confidentiality of harassment allegations to the extent possible. An employer cannot guarantee complete confidentiality, since it cannot conduct an effective investigation without revealing certain information to the alleged harasser and potential witnesses. However, information about the allegation of harassment should be shared only with those who need to know about it. Records relating to harassment complaints should be kept confidential on the same basis.

A conflict between an employee's desire for confidentiality and the employer's duty to investigate may arise if an employee informs a supervisor about alleged harassment, but asks him or her to keep the matter confidential and take no action. Inaction by the supervisor in such circumstances could lead to employer liability. While it may seem reasonable to let the employee determine whether to pursue a complaint, the employer must discharge its duty to prevent and correct harassment. One mechanism to help avoid such conflicts would be for the employer to set up an informational phone line which employees can use to discuss questions or concerns about harassment on an anonymous basis.

Source: The U.S. Equal Employment Opportunity Commission, "Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors," http://www.eeoc.gov/policy/docs/harassment.html.

Posted by Gemmy Allen

Investigate Harassment

11-17-2011 11:02 AM with no comments

Employers can be held responsible for harassment by a supervisor, even if they knew nothing about the harassment. Both the Supreme Court and the U.S. Equal Employment Opportunity Commission (EEOC) stress the importance of investigating alleged harassment. Employers have an incentive to implement and enforce strong policies prohibiting harassment and effective complaint procedures. Furthermore, employees have an incentive to alert management about harassment before it becomes severe and pervasive. If employers and employees undertake these steps, unlawful harassment can often be prevented, thereby effectuating an important goal of the anti-discrimination statutes.

What is harassment?

The EEOC defines harassment as activity that involves discriminatory treatment based on race, color, sex (with or without sexual conduct), religion, national origin, age, disability, genetic information, or because the employee opposed job discrimination or participated in an investigation or complaint proceeding under the EEO statutes. Federal law does not prohibit simple teasing, offhand comments, or isolated incidents that are not extremely serious. The conduct must be sufficiently frequent or severe to create a hostile work environment or result in a tangible employment action, such as hiring, firing, promotion, or demotion. A tangible employment action might occur if a supervisor fires or demotes a subordinate because she rejects his sexual demands, or promotes her because she submits to his sexual demands.

How should a manager investigate a harassment complaint?

Employers should set up a mechanism for a prompt, thorough, and impartial investigation by incorporating the elements below, as outlined by the EEOC in "Guidance on Employer Liability for Harassment by Supervisors."

SAMPLE QUESTIONS TO ASK DURING AN INVESTIGATION

These questions should be used as a guideline only. They should be tailored to the facts of each particular situation.

Questions To Ask the Complainant

  • Who committed the harassment? What exactly occurred or was said? When did it occur and is it still ongoing? Where did it occur? How often did it occur?
  • How did you react? What response did you make during or after the incident occurred?
  • How did the harassment affect you? Has your job been affected in any way?
  • Are there any persons who have relevant information? Were there witnesses? Did you tell anyone? Did anyone see you immediately after the incident(s)?
  • Did the alleged harasser harass anyone else? Do you know whether anyone else complained about harassment by that person?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • Do you know of any other relevant information?

Questions To Ask the Alleged Harasser

  • What is your response to the allegations?
  • If the harasser claims that the allegations are false, ask why the complainant might lie.
  • Are there any persons who have relevant information?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • Do you know of any other relevant information?

Questions To Ask Third Parties

  • What did you see or hear? When did this occur? Describe the alleged harasser's behavior toward the complainant and toward others in the workplace.
  • What did the complainant tell you? When did he/she tell you this?
  • Do you know of any other relevant information?
  • Are there other persons who have relevant information?

Posted by Gemmy Allen

Encourage Whistleblowers

11-16-2011 9:11 AM with 3 comment(s)

Business is all about building relationships. People choose to relate to businesses they trust and respect. Thus, managers, as well as employees, must understand the impact of violating societal values and choose an ethical course of action.

Most companies have standards of business conduct. Some suggest that employees ask themselves, "Before I make a decision, have I considered how it would look in a news story?" The answer helps the employee to decide whether an action is appropriate.

It seems that legendary football coach Joe Paterno and Penn State University president Graham Spanier did not use this simple test. Both men were fired in response to the sexual abuse scandal. They did not take appropriate action.

Encouraging and enabling whistleblowing can protect the company and its managers and employees, while preventing damage. Employers should set up a mechanism for a prompt, thorough, and impartial investigation.  

The Sarbanes-Oxley law, passed in 2002, required publicly held companies for the first time to set up processes to deal with many types of whistleblowers. Congress passed the Dodd-Frank law, which encourages whistleblowers. It provides financial incentives for employees to blow the whistle on securities fraud and other wrongdoing.

As a manager, you will observe and/ or deal with some sort of scandal during your career. If you view something that should not occur, will you be a whistleblower and report what you saw to your superiors and anyone else who should be informed?

As a manager, how would you encourage employees to inform you of anything questionable?

Posted by Gemmy Allen

Customer Service in Higher Education

11-15-2011 10:55 AM with no comments

Customer service is important in any organization, including higher education. Students are consumers of higher educational products. Thus, colleges and universities must deliver on institutional promises.

Why is exemplary customer service important in a community college?  Modeling good customer service behaviors supports the mission of the community college. Students are more likely to stay if they are treated well. Other external customers - community members, vendors, and donors - expect a good experience. Internal customers (all employees) are easier to work with and more likely to stay if they receive good service from others. We're all part of a customer-supplier chain. Good customer service makes our jobs more pleasant, less stressful.

A Service Leadership Team was formed by the Dallas County Community District (DCCCD) to develop a set of customer service recommendations and guidelines. Best practices in student services were developed with input from hundreds of DCCCD employees who are dedicated to improving student success through improved customer service.

One result was to use the acronym to remind us to give our customers a better experience. The acronym chosen was LEARN -- Listen * Emphasize * Acknowledge * Respond * Notify.

The Customer Service Leadership Team at Mountain View College (MVC) developed the following video to reinforce their customer service training. Here's the video link to the MVC video http://video.dcccd.edu/mvc/CUSTSERV_FINI.wmv.

Even though the video was developed for MVC, how does LEARN apply to any customer service situation?

Posted by Gemmy Allen

Compliments or Concerns?

11-14-2011 10:34 AM with no comments

Think about a recent encounter you've had with an auto mechanic, your bank, the phone company, a restaurant, hospital or clinic, or any retail establishment. Were your expectations exceeded? Or, was it a horrible experience? Did you tell the management about your experience? Did you tell anyone you know about your experience?

If you are like most people, you remember the bad experiences much more than the good experiences. Most people will take their business elsewhere when they are treated badly. Furthermore, they tell all their family and friends about their bad experiences.

As a manager, it is rare to receive customer compliments, but, when an employee does receive a customer compliment, it should be a big deal!

Employees work hard every day and deal with all types of customers. When an employee exceeds customer expectations, and that customer recognizes the employee, the manager should acknowledge that employee! Give the employee verbal praise, relate the compliment to top management, and share it with other employees. Celebrate success!

Customers have a choice of where to spend their money. Every business has competition. What can managers do to encourage customers to tell them about good and bad experiences? What should be done about bad customer experiences?

See the attached "101 Ways to Recognize People" from the Human Resources Department at the University of North Texas. How would you like to be rewarded for providing good customer service?

Posted by Gemmy Allen

Example CEOs

11-11-2011 12:08 PM with no comments

Matt Harrington, president of Edelman, attended an ethics and trust conference at Southern Methodist University (SMU) in November 2011. His company is the largest independent public relations firm in the world and publishes the Trust Barometer. He sees distrust deepening.

When asked about CEO trust improving in this year's Trust Barometer, he said, "They were more upfront about the economic conditions and the storm they were trying to navigate and the tough actions they had to take. That earned them some level of credibility. Every CEO hasn't taken that route, but many have."

Harrington specifically mentioned CEOs with credibility problems. "We're in a cycle of Reed Hastings (at Netflix), Brian Moynihan (at Bank of America) and a variety of CEOs who've gotten high visibility of a nonconstructive basis. That's been coupled with a spate of CEOs losing their jobs and getting extraordinary payout packages, none of which engenders trust."

He gave Howard Schultz, CEO of Starbucks, as "a perfect example of someone who - whether its internally or externally - you know what the business is about, what his values are, what he's driving for, and who you're dealing with."

Source: Cheryl Hall, "Edelman Chief Sees U.S. Distrust Deepening," The Dallas Morning News, November 9, 2011, D 1, 5.

Give some more examples of trusted CEOs, as well as those with credibility problems.

Posted by Gemmy Allen

CEO Credibility Rises

11-10-2011 10:35 AM with no comments

The Edelman Trust Barometer 2011 showed a distrust of business, but it showed an increase in trust of Chief Executive Officers (CEOs), as seen in the graphic below. Fifty percent of the respondents said that CEOs are credible spokespeople about a company, especially in challenging situations such as a product recall and a situation where the local community has been damaged. 

CEOs lead rise in trust in authority

If you heard information about a company from one of these people, how credible would that information be? 

Informed publics ages 25 to 64 in 20 countries
"Extremely credible" and "very credible" responses only

 

 After years of being at or near the bottom, CEOs fared better in the 2011 Trust Barometer. Why do you think that happened?

Posted by Gemmy Allen

Distrust of Business

11-09-2011 2:21 PM with 1 comment(s)

Edelman is the world's largest independent public relations firm and publishes the Trust Barometer from an annual survey it conducts in 20 countries. Respondents are described as "opinion elites" (affluent, college-educated, and well-read). The 2011 Trust Barometer indicates that American consumers distrust business. Six in 10 Americans respondents doubt business will do the right thing. Trust in U.S. business was just five points ahead of last-place Russia.

In addition to business, Americans distrust government, nonprofits, and the media, with media distrusted the most. In the U.S., trust in banks dropped from the No. 3 spot in 2008 (71 percent) to second from the bottom in 2011 (25 percent), tied with financial services.

The most important corporate reputation factors are quality products, trust, transparency, and employee welfare. Richard Edelman, president and CEO, said, "Trust has transformed the license to operate for business. Company actions must deliver on the expectation for a collaborative approach that benefits society - not just shareholders, transparency about how it makes money, and communication in surround-sound through all forms of media - from mainstream to new to social to owned."

What do you think managers can do to increase business trust?

Posted by Gemmy Allen

Job Enrichment at Zappos

11-08-2011 10:35 AM with no comments

Zappos, an online shoe and apparel shop, wants motivated employees. At headquarters, employees dress up in costumes on a regular basis; have a nap room, phenomenal company benefits, and many more perks. Tony Hsieh, chief executive, told ABCNews.com, "One of our core values is to create fun and a little weirdness. We really recognize and celebrate each person's individuality, and we want their true personality to shine in the workplace."

To keep high-quality employees, Zappos offers new employees $4,000.00 to quit at the end of their training session. Zappos does not want employees who are only working for a paycheck; Zappos wants employees who want to be at work. Two to three percent of new employees take the $4,000.00 at the end of their new employee training session.

The classic article on employee motivation is Frederick Herzberg's, "One More Time: How Do You Motivate Employees?" The idea is to enrich jobs. Employees gain an enhanced sense of responsibility and achievement and are motivated to do their best work.

  • How does Zappos enrich jobs?
  • If you were offered $4,000.00 at the end of your new employee training session, would you take the money and go, or would you stay?
  • What do you think about offering new employees any type of severance to leave?

Posted by Gemmy Allen

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