The Medici Effect
A Business Case for Diversity

Frans Johansson was raised in Sweden by his African-American-Cherokee mother and Swedish father, and has an MBA from Harvard Business School. He is a frequent speaker on the power of creativity and innovation, and recent audiences have included Sprint Nextel, Nike, Pepsi, General Motors, SAAB, Motorola, IBM, EDS, Unilever, JP Morgan Chase, Pfizer, TeliaSonera, and Honeywell. He is author of the widely praised, award-winning book, The Medici Effect: What Elephants and Epidemics Can Teach Us about Innovation (Harvard Business School Press, Paperback Edition).

It is often said that one of the strongest business cases for diversity is that it fosters innovation. But is this assertion true? And if it is, what are the implications for Human Resource professionals? The stakes are high because corporations across the world feel tremendous pressure to innovate. If, indeed, diversity drives innovation, then HR could have a significant impact on a company’s growth prospects. In fact, HR should be an essential part of a corporation’s innovation strategy.

Well, it is true. Diversity does drive innovation—particularly groundbreaking innovation, the type of innovation that companies are desperate for. During the 1990s, there was a movement afoot for American businesses to show a more heterogeneous face. In many companies, HR departments were charged with the responsibility of overseeing the hiring of more women and minority employees. As diversification efforts broadened across the U.S., analysts began to see a connection between increased diversity, a rise in innovation, and higher profits.

One doesn’t have to be an organizational analyst, however, to understand why this would be true. On the one hand, the information age has brought all of the globe’s consumers into a single market. If clients and customers are diverse, the provider of goods and services had better be, as well. Secondly, our companies are competing against those of other cultures and countries. Old-fashioned American competition dictates that we meet our competitors on their terms, and we can only do this by understanding the needs of their customers and by providing for them better than their “home” corporations do.

Diversity generates more ideas - and more different ones
When we talk about diversity, we’re not just talking race and gender. In the workplace setting, a diverse work team might include employees from different cultures, ethnicities, people from different departments and disciples, people of many generations—even people with different economic and educational backgrounds. We know that the more divergent the backgrounds of team members, the more perspectives there are. The more perspectives, the more ingredients in the creative soup.
To illustrate, we can see how this works with one aspect of diversity—cultural background. The amazing thing about people from different cultures is that they can look at the exact same thing and have completely different associations about it. Take something as basic as the color yellow. In the U.S., we may associate yellow with cowardice. But in Malaysia, the color yellow conjures up royalty. In Venezuela, yellow means lucky underwear. And that’s just the color yellow! Imagine the marketing possibilities when your brainstorming group is dipping from such a diverse pool of ideas.

The point is that bringing together people from different cultures will drive new and different ideas. People and teams that break new ground also generate and execute far more ideas. The more ideas you have, the better chance you have of finding the right solution to a particular business challenge.

A classic example of how diversity on a team can generate more ideas happened in World War II, when the Allies were fighting a losing battle against the German navy. When a German submarine spotted an Allied convoy, it would send a coded signal to other German submarines in the area. These submarines would then gather into a group formation, known as “wolf packs,” and attack the ship with punishing success. Between 1940 and 1041, the Germans sank more than fifty ships a month, with casualties exceeding 50,000.

The Allies were helpless against these attacks because their code-breaking team was unable to crack the German coding system, which was produced via a coding machine known as the Enigma. British intelligence therefore built the most formidable of code-breaking teams, headquartered in a large Victorian mansion called Bletchely Park. Although cryptologists had traditionally come from the field of linguistics, this new group also contained mathematicians, scientists, classicists, chess grand masters, and crossword addicts, all of whom worked together in supreme secrecy. Together, this diverse team managed to break the Enigma by bouncing ideas off one another and generating many new, unusual perspectives. As a result, it turned the tide of the naval battle.

A new role for HR
Where does HR fit into all of this? HR has a new role in this unfolding business landscape: that of overseeing innovation efforts and generating revenues by diversifying the workforce.

The main argument for having a diverse workforce is the increase in innovation. Business leaders know that heterogeneous workforces are rich seedbeds for ideas. Yet companies rarely tap employees for insights and experiences specific to their cultures. Furthermore, barriers of language, geography, and association may prevent diverse employees from coming together on innovation efforts.

This is where HR comes in. When HR takes a leadership role in facilitating diversification, profit happens. Let’s look at some examples of how this works in real business settings.

In 1996, L’Oreal acquired Maybelline, headquartered at that time in Memphis, Tennessee. They hired an Indian who grew up in Kenya named Ketan Patel, who was interested in getting together people from different approaches, traditions, cultures, and so on. He started hiring people from all over the world, mixing it up as much as possible because he wanted these different perspectives. Patel’s teams examined market after market, and looked how they could do things differently. For instance, they came to understand that Japanese women are very concerned about having curled eyelashes. So they reformulated a mascara brush and product to do that, something the homogeneous Japanese cosmetics firms had never thought of. In two years, Maybelline was the number one brand of mascara in Japan.

At MTV Networks, one cross-cultural group discovered new and profitable marketing opportunities in the congruence of North American country music and Latin American music, which use many of the same instruments, feature singers with similar vocal styles, and—in the U.S. Sunbelt—appeal to much the same audience.

The probability that you will get good, original, innovative ideas by imposing more complexity into team chemistry is simply much higher.

Finding new combinations at work
HR can facilitate diversity within the company in another way—through occupational diversification. This is the act of moving between, or switching, fields through different jobs, projects, or hobbies, and it can be a highly effective way to generate unique insights and innovation at your company.

It makes sense to spend time on a variety of projects in different fields if one wishes to find new combinations and generate innovative ideas. Unfortunately, most organizations do not work like that. Usually a company is set up to identify the optimal job for each employee. Once that position or area has been identified, the company then supports further specialization.

One firm that understands the advantages of workers with highly varied experiences is Bain & Company, one of the world’s leading strategy consulting firms. While Bain certainly has practices and experts, its consultants work in areas outside their specialties. You can find the head of health care, for example, working on media strategy. The company makes people switch areas and fields on a regular basis, and HR plays a key role in facilitating this fluidity.

A variation on this theme happens at Corning. Lina Echeverria, head of the glass research group at Corning, encourages creativity in her researchers. To get them to innovate, she tells them, “Follow your heart. Do something you are interested in, do something you can get energized about.” In other words, stepping outside of known boundaries is rewarded at Corning. Echeverria asks people to interact, share, and collaborate in order to create or join projects they are excited about. She even created a special “creativity room,” where people can talk about whatever is on their mind, to encourage cross-fertilization of ideas.

Spotting innovative opportunities in your company
When HR works closely with the heads of product development, marketing, and sales, they can more easily spot innovative opportunities throughout the company. HR can take a leadership role in staffing for diversity—connecting people from different industries and fields, as well as integrating cultures and ethnicities.

Look at Pepsi-Co., where diversity was responsible for a hugely successful new product line. The Hispanic employee affinity group at Frito-Lay, a division of Pepsi-Co, provided input for a line of guacamole-flavored potato chips. This became a $100 million product.

Another example of profit from diversity: Russell Corporation, an Atlanta-based company that specializes in athletic clothing, discovered that a large number of Russell employees had graduated from historically black colleges and universities. The group then used those graduates to create products for the black university market, resulting in an $8 to $10 million deal. Encouraged by this success, Russell has since created several additional development groups that combine employees of different ethnicities and religions.

Creating the Medici Effect at your company
In competitive business markets, HR can learn a valuable lesson from the Medici family, which ruled the city of Florence some 500 years ago. The Medicis sponsored creators from a wide range of disciplines—sculptors, scientists, poets, philosophers, financiers, painters, and architects—who converged upon the city of Florence. Leonardo DaVinci was among them. The Medicis brought these people from as far away as China. In Florence, these creative people found each other, learned from one another, and broke down barriers between disciplines and cultures. These diverse groupings ignited what became one of the most creative eras in Europe’s history: the Renaissance.

This is not about the Renaissance or the Medici family. It is about the effect that they created and how we can create the same effect in the organizations that we work for. Forward-thinking HR professionals can help to create the Medici Effect by encouraging diverse teams, which more readily generate ideas for new products and market strategies.

(Editor’s Note: For information about author Frans Johansson and his book, go to www.themedicieffect.com, or contact the Employers Group Editor, Wendy Taylor, at (213) 765-3979, wtaylor@employersgroup.com. )

By Kimberly Nwamanna,
Helpline Consultant

We have all heard devastating stories related to layoffs. Certainly, many companies respond to their economic challenges by laying off workers without much strategy or planning. Should your company have no other choice but to layoff employees, a structured approach is crucial during this sensitive process. After all the future outcome of your business and people's lives are at stake.

A layoff is a daunting task. Gather your courage - you will need it, and roll up your sleeves to tackle the task at hand.

Many companies find themselves paralyzed by the overwhelming possibilities of determining how many employees will be affected by the layoff. Regardless of what you call it: Rightsizing, downsizing, reorganizing, repositioning, reducing or any other epithet - a layoff produces the same result - an employment loss.

Terminations resulting from layoffs are by definition permanent or temporary. Layoffs fall under the definition of “separation from a position for lack of funds or lack of work” as stated in California Labor Code Section 1400 – as opposed to terminations for reasons of misconduct or poor performance.

The WARN Act is applicable if…
Generally speaking, if you have more than 75 employees, full or part time, that have been employed with you for at least six of the twelve preceding months; and your company is planning to close a plant, layoff, or relocate 50 or more employees your company most likely has obligations to comply with the notice requirements of the Federal Worker Adjustment and Retraining Notification Act (see January 2007 article Plant Closures and Layoff Requirements for WARN guidelines). The WARN Act highly recommends that employers give notice to their employees even if they are not subject to the requirements under the law.

Getting started
Foremost, figure out who will get laid off, and how you will deliver the message. Make certain that the decision to conduct and select individuals to be laid off is economically justified and unbiased. Many companies haphazardly rely solely on performance reviews, compensation factors and subjective judgment by management in setting criteria. Frequently subjective criteria are weak and narrow, and commonly affect a disproportionate number of minorities, women or workers over age 40.

Carefully document criteria for selecting who will be laid off and consistently apply this method for each group that will be impacted by the layoff. A company should be prepared to respond and affirm their layoff decision especially if the layoff favors one group of workers over another. Clear, concise, consistently applied, economically justified and unbiased documentation is capital.

Considerations about advance notice
Many companies, such as General Motors, Intel and Pfizer, announce plans for layoffs months before they know precisely when or how many workers will be let go. These companies have proven that being transparent and undertaking an ethical commitment to provide as much notice as possible eventually rebound the viability of the organization even through such a tumultuous event. These companies then have the ability to engage employees early in the reinvention of the company enhancing the probability of success.

Communicate!
Even if your company is not subject to comply with a 60-day notice as required under the WARN Act, a strategy that includes advance notice proves to be advantageous.

• Develop a communication plan that will express the reason for the layoff.
• Highlight reasons the cuts are needed.
• Clearly state why the decision was made and how it is a hardship for the entire company.

Senior management should be visible and accessible throughout this process to answer questions and employee concerns. Choose a spokesperson to promote and ensure that everyone will receive the same message. The spokesperson selected should be prepared to respectfully respond clearly to an array of emotions and questions. Adhering to open and transparent communications will deter misinformation and help you control occurrences such as the relentless rumor mill.

An analytical approach of conducting a layoff in part is necessary, but typically overused as a coping mechanism for a company. Contrarily, taking the human element into account ironically enables the company to cope with variables such as the rumor mill, employee perceptions of the event and future anxieties.

Alternatives to layoffs
Before you move forward with communicating the layoff, take a look at layoff alternatives such as:

• Temporary reassignments
• Mandatory vacations or unpaid leave reductions
• Voluntary layoffs
• Shorter work week schedules
• Eliminating overtime
• Job sharing

Put security procedures in place
Before you move forward with communicating the layoff, review your security procedures. Your company may need to hire someone to ensure the safety of all your employees, as well as your assets.

• Create a procedure to escort laid off employees, which not only includes a method to protect the company, but also maintain their dignity and is flexible enough to allow them to say their goodbyes.
  
  
• Develop violence and suicide prevention guidelines to handle issues that arise before, during and after the layoff.
  
  
• Identify appropriate and prohibited behaviors during this process to ensure that management will not play favorites, or inappropriately communicate the layoff; such as stating "if it was left up to me you'd still be here," which counters the company's approach that the layoff decision is an objective and company-wide event.
  
  
• Remind employees that if their behavior is extremely disruptive they may be subject to disciplinary action that may include termination.
  
  
• Determine if it is appropriate to offer severance pay and benefits post-layoff.

Severance agreements
If you plan on asking employees to waive rights in signing a severance agreement, certain conditions must be met. In order to have the employee successfully waive age discrimination claims, the severance agreement must comply with the Older Workers Benefit Protection Act (OWBPA) for employees over the age of 40.

This act requires that the employee get a minimum of 21 days to review the severance agreement before signing it and have at least seven days after signing it in which to revoke their signature. Consult with an employment law attorney if you are planning to include a severance agreement as part of the layoff.

After your company has selected who will be laid off, besides the notice requirements under the state or federal WARN Act, provide your employees with additional resources and information that will assist them into transitioning back into the labor force. Outplacement services provide much needed help with resumes, interviewing techniques, career transitioning and training. Include sample resumes, names of local outplacement firms (and a contact) that specialize in their career, as well as guidelines on where and how they can post their resumes.

Helping employees in their job search
Keep in mind that it may have been years since any of these individuals have had to look for a job, so what may seem obvious to you may be foreign and new to them. Contact the Employment Development Department (EDD) downsizing assistance department or WARN Coordinator to assist you with information about downsizing and how to help your employees find other jobs at no cost to you. The EDD has a local Rapid Response Teams that will assist your affected workforce on outplacement, career transitions, healthcare, and technical training.

Consider contacting local competitors, and networking with their HR contact. Your competitors may have plans to recruit for the same skill sets that you have planned to layoff.

As a matter of delicate planning, carefully consider what to say, and when and how you communicate the layoff. Create a script that ensures that you do not forget any critical information. What you say should be communicated swiftly since most employees are aware that something is about to happen.

If you have more than one employee that will be laid off, and if practical, communicate the layoff to the affected group at the same time. A group announcement generally lowers everyone's anxiety of not knowing if they will be called in next. Employees need to know that the layoff is a company-wide business decision rather than a personal one.

Create a plan for a smooth transition
Employees will want to know who will be assuming additional responsibility, and how the new procedures are to be considered, and how the accountability structure will look now that there are procedural gaps post-layoff. Immediately acknowledge that the entire company has experienced a difficult event. Give employees, including management, time to grieve their losses. Get employees geared up to focus on a new goal, by outlining a road map rendering realistic objectives. The more you use open-book management techniques the more the survivors will be willing to commit and strive towards achieving stated goals.

Continue your planning and communications for those who are the survivors. Post-layoff survivors may be angry, show fear and shock, and feel insecure. We will explore post-layoff survivors in a subsequent article.

Social Networking Websites

By Mark Nelson, J.D.,
Helpline Consultant

As MySpace users graduate to the business community, the online networking model continues to infiltrate the workplace. In fact, business networking sites have exploded in recent years and not just to help users change jobs or remain in contact with old business colleagues. Marketing departments and even software developers have learned to adapt the model to exploit its employees’ contacts to generate sales opportunities, among other business-related interests. Business schools and social anthropologists alike are watching to see what use(s) will be made of this tool in the coming years.

What, then, is the HR community to make of these networking sites? And what role should HR play in their proliferation? In large part, it all depends on what employers and their employees are hoping the sites will accomplish for them in the long run. Alternatively, it also depends on what business etiquette will demand and the law will require of those employees who actually use the tool.

Below, we have addressed a few of the larger picture issues to keep in mind regardless of what happens down the road.

Never post employees names without consent
Recently, the EG Helpline took a call from an HR professional who learned her marketing department was planning to post the company’s entire employee list on a business networking site (the thought being that the more times the company’s name was mentioned on the site, the better). While the employer had the good sense to exclude private information about its employees, they did provide detailed business contacts as well as information about the employees’ job titles, etc. When employees learned they had no say in what was posted, they strenuously objected. The company ultimately decided against posting.

Even if your employees have a responsibility to network for their jobs and you want to encourage them to capitalize on the opportunities these sites afford, at the very least obtain your employees’ consent before posting anything about them. Additionally, make sure the employees understand the scope of what will be posted online.

Publishing the names of your employees who have no business-related reason to use a networking site may provide a number of additional complications. For example, if you desire to have a union-free environment, posting a comprehensive list with job titles can provide a union organizer with the names they need to determine both the size of their ideal bargaining unit and just whom they should contact to start the campaign (i.e., department leads, etc.).

Protect your company’s image as portrayed by your employees
Another HR professional contacted us recently to discuss an employee whom the company learned was posting sexually-explicit vignettes on a social networking website, along with detailed information about her employer, including pictures with the company’s logo. The company did not care about the employee’s life outside the office (i.e., legal off-duty conduct away from the work site), but was very concerned about the corporate image being tarnished by association. Moreover, they learned of the post only after a customer directed them to it. The HR professional immediately contacted the employee and instructed the employee to remove all references to her employer.

Of course, this doesn’t suggest you should then scour all possible networking sites (professional and personal) that your employees may populate, but it does provide an example of what employers should anticipate before permitting employees to use the sites.

Discourage the use of networking sites to manage your employees
Some department managers have begun using the networking sites to post information on departmental gatherings and, in some cases, are using the sites as the primary mode of communication with their subordinates. HR should interpret this to mean their managers are not being provided the tools necessary to communicate with their departments on the company’s own intranet.

As a general rule, it is in the company’s best interest to ensure employee-to-employee electronic communications remain where the company can monitor them. Removing business-related communications to an outside web address that can be accessed from personal computers increases the likelihood that employees have a reasonable expectation of privacy in those communications, even when addressed to a coworker. Should those employees exchange inappropriate e-mails, etc., the employer has unnecessarily complicated its efforts to investigate the matter.

Additional considerations
Because of the anonymity the Internet affords, HR must be wary of the contacts their employees make online, even from reputable websites. There is no hand-to-hand exchange of business cards – no name with a face and, in some cases, no name at all. The potential for someone to create a hostile environment for your employees and do so anonymously makes it critical that employees understand their responsibility to report such behavior. If you anticipate opening the door to such networking opportunities at your workplace, take into consideration the complications of using networking sites before revising your handbook’s next electronic communications policy.

Last but not least, HR should be wary of the potential for abuse. Employees should understand that these sites are for the purpose of professional networking, not the more familiar context: social. Clearly communicate that abuse will not be tolerated.

Summer Internships

By Dagmar Muthamia,
SPHR, Helpline Consultant

An internship is designed to provide students with closely supervised practical experience in the workplace usually with the opportunity to earn academic credit. Interns acquire skills and experience they will use in a field of work not in a specific position for a specific employer. They usually do not become employees of the company where they interned. Interns are trainees in a sense, but the term trainee is much broader and includes those hired for a specific position as “trainees” while learning the skills they need to do the job. Sometimes the terms are used interchangeably.

What is an unpaid internship?
Internships may be paid or not paid. Whether or not you pay interns depends on whether or not they are employees. Most interns are employees under federal and state laws and as such must be paid at least minimum wage and applicable overtime.

Whether trainees are employees under the Fair Labor Standards Act (FLSA) will depend upon all the circumstances surrounding their activities on the premises of the employer. If all of the following six criteria are met, the trainees are not employees within the meaning of the FLSA.

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.
   
   
2. The training is for the benefit of the trainees or students.
   
   
3. The trainees or students do not displace regular employees, but work under their close observation.
   
   
4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion his/her operations may actually be impeded.
   
   
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period.
   
   
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

California has six additional criteria

1. The clinical training should be part of an educational curriculum.
   
   
2. The students should not receive employee benefits.
   
   
3. The training should be general, so as to qualify the students for work in any similar business, rather than designed specifically for a job with the employer offering the program.
   
   
4. Upon completion of the program, the students should not be fully trained to work specifically for the employer offering the program, but should require further specific training for such employment.
   
   
5. The screening process for the program should not be the same as for employment and should not appear to be for that purpose; it should involve only criteria relevant for admission to an independent educational program.
   
   
6. Any advertisements for the program should be couched clearly in terms of education, rather than employment, although the employer may indicate that qualified graduates will be considered for employment.

Child labor laws
If the intern/trainee is under 18 child labor laws regulating hours of work and prohibiting certain hazardous tasks apply. A work permit obtained from the school is necessary unless the youth has already graduated from high school or received a GED.

Safety
OSHA regulations must not be ignored. An intern needs training in safety and emergency evacuation just as much as a regular employee.

Liability for injury
You need to determine who is responsible for injuries at the work site and in transit if the intern is coming from school to the work site as part of the internship program. If the intern is an employee the company's workers' compensation policy will cover on-site injuries.

What should you do?
To learn more about internships contact your local high school, community college or university. You may want to consider paying interns at least the minimum wage. Many companies do this.

Attention Federal Contractors!
OFCCP Sends Out Scheduling Letters

By Ahmed Younies, Director,
Compliance and Specialized HR Services

As of April 2, 2007, the regional offices of the Office of Federal Contract Compliance Programs (OFCCP) have scheduled compliance evaluations of subject federal contractors from a second Fiscal Year (FY) 2007 scheduling list. The agency released an initial scheduling list in November 2006.

The new scheduling list includes about 4,500 facilities that have been either self-identified as being an establishment of a federal contractor, or have been identified as such by OFCCP. The OFCCP generated this list through its Federal Contractor Selection System (FCSS). This system uses multiple information sources and analytical procedures to select contractors for review, including a mathematical model that ranks federal contractor establishments based on an indicator of potential workplace discrimination.

As part of the selection process, the OFCCP attempted to better identify whether a potential contractor actually holds a current federal contract by matching the EEO-1 list to external federal contract databases. The list also includes a number of establishments identified through external federal contract databases as part of OFCCP's Contracts First Initiative.

Some establishments are excluded based on a variety of factors, including these:

• are currently undergoing a compliance evaluation;
  
  
• were evaluated within the last 24 months;
  
  
• have received the Secretary of Labor's Opportunity Award or an Exemplary Voluntary Efforts Award within the last three years, or
  
  
• are covered by Functional Affirmative Action Program (FAAP) agreements with OFCCP.

These establishments will be selected for evaluation through a separate process.

OFCCP has mailed a Corporate Scheduling Announcement Letter (CSAL) to the Chief Executive Officer (or designated point of contact) of each parent company with more than one establishment listed for the scheduling of a compliance evaluation this Fiscal Year. Companies who received a CSAL as a result of the November 2006 scheduling list may not receive another letter unless one or more additional establishments appear on the newly-released scheduling list.

It is also possible that federal contractors other than those specifically identified in the CSAL may be evaluated by OFCCP for other variety of reasons, such as:

• subsequent scheduling releases;
• contract award notices;
• directed reviews;
• individual complaints, or
• the conciliation agreement monitoring process.

The OFCCP, however, will not schedule more than 25 new evaluations of a single contractor during a scheduling cycle (approximately 12 months).

(Editor’s Note: For additional information concerning the CSAL, FCSS, or AAP requirements please call EG’s Director of Compliance Programs, Ahmed Younies, at 800.748.8484, Extension 3942, or e-mail ayounies@employersgroup.com.)

Overview of Benefits in Mergers and Acquisitions (Part 1)

By Tanya Butler, M.S., Helpline Consultant

For companies facing a merger or acquisition situation, this article covers some key points – a check list so to speak – of the necessary considerations when it comes to employee benefit plans. No matter what types of plans, participants in any plan being merged are entitled to have the valuable benefits, rights and features of their plan maintained after the merger.

Code § 411(d)(6) protects participants from the reduction or elimination of protected benefits upon plan mergers and transfers. Protected benefits include accrued benefits, early retirement benefits, retirement-type subsidies and optional forms of benefit.

Features of distribution options that are subject to protection include payment schedules, timing of payment, commencement of benefits, type of distributions (in cash, in-kind), and election rights with respect to optional forms of distributions.

Under a special testing rule in Treasury Regulation § 1.401(a)(4)-4(d)(1)(i), if these provisions are carried over to another plan, even though they benefit only some of the employees participating in the merged plan, there will be no discrimination problem for the acquisition year and for all later plan years, if certain requirements are satisfied.

Thus, for example, if a company that maintains a defined benefit plan, that permits lump-sum distributions at retirement is acquired by a company that has a defined benefit plan that does not permit lump-sum distributions, the merged plans can continue to allow lump-sum distributions to employees from the acquired company and not to other employees.

Under the special testing rule, the merged plan is treated as satisfying the non-discriminatory availability requirements with respect to the lump-sum distribution option for the year of the acquisition and all later years.

Nevertheless, if any of the rights, benefits or features that must be preserved are greater than those being provided to the existing employees of the acquiring company, employee relations problems often ensue. To prevent any resentment arising among the combined workforce, many companies’ solve this problem by providing the more generous of the conflicting provisions for each issue that arises.

401(k) Plans – rules and risks
The most common plan being maintained today is a 401(k) plan, and it is very likely that both companies will be sponsoring such a plan. One of the unique issues presented by 401(k) plans that must be addressed involves a plan fiduciary's duty with respect to the designated investment options made available to participants to invest their individual accounts. ERISA establishes a level of oversight that is required with respect to the fiduciary responsibility of the plan sponsor for selecting investment alternatives and monitoring performance.

These standards, however, are not always met. A company acquiring or merging with another company with a plan that’s not in compliance subjects itself to a suit by a disgruntled participant who suffered investment losses.
To avoid this type of risk, an acquiring company may choose to have the target company terminate its plan prior to merger or acquisition. With respect to such a termination, participants anticipate distributions. However, this presents its own set of problems, since 401(k) plans generally can make distributions only on a participant's death, disability, hardship, attainment of age 59 or severance from service. Whether a severance from service results from a merger or acquisition depends on the particular set of circumstances.

In certain instances, the application of the so-called same desk rule prevents the employees performing the same functions before and after the transaction from receiving a distribution, because they have not incurred a severance from service for plan purposes. Therefore, the plan could be terminated, but distributions could not be made.

The same desk rule, however, has statutory in Code § 401(k)(10), one of which allows corporate entities selling at least 85 percent of their assets to another corporate entity to make lump-sum distributions upon plan termination.

A new exception just issued by the IRS in Revenue Ruling 2000-17 allows any entity that sells less than 85 percent of its assets to another entity to avoid the same desk rule. If the transaction is structured adequately to avoid the same desk rule, the plan may be terminated and distributions made to the participants before the merger or acquisition occurs.

If the plan termination is not accomplished, however, until after the merger or acquisition, the acquiring company will be considered the sponsor at the time of plan termination, making it impossible to rely on severance from service as a triggering event to justify distribution.

(Editor’s Note: Part 2 of this article by Tanya Butler will appear in next month’s newsletter, and will include information about rollovers, participant loans, and executive nonqualified supplemental retirement plans – along with some closing notes about defined contribution/defined benefit plans and welfare plans.)

By Dwight Turner,
Art Manager/Webmaster

Editor’s note: Considering the timeliness of this subject, this article was compiled and written by one of EG’s own technology professionals. Information was taken from an article entitled The Brave New World of Electronic Discovery: Is Your Organization Prepared? by attorneys Christopher S. Andre and Scott K Dauscher of Atkinson, Andelson, Loya, Ruud & Romo for the firm’s March 2007 Management Alert newsletter. Members of this employment law firm frequently contribute to Employers Group’s newsletters. The Capitol Review section will return to this spot in next month’s newsletter.

In light of the recent fiasco revolving around whether the White House should have saved e-mails from Republican Party and campaign accounts – which suddenly figured into the investigation as to whether U.S. attorneys’ firings were politically motivated – the issue of “electronic discovery” has reached news headline proportions. As of this writing on April 13, the White House was still working to recover emails that were purportedly deleted.

For many years companies have historically relied on paper documents, but the personal computer changed everything. Today’s workplace, while still relying on paper documents, continues to move toward a paper-free environment where important documents are created and stored on desktops, laptops, PDAs, memory sticks and even cell phones.

Recent amendments to the Federal Rules of Civil Procedure (FRCP) became effective December 1, 2006. These amendments will almost assuredly increase the frequency with which companies involved in litigation will be required to produce electronically stored information.

Such companies should clearly understand that e-mail, word processing documents, spreadsheets, data bases, image files, instant messages, and even audio sources (sound files and voicemail) are all fair game in today’s Electronic Discovery environment. This applies to both federal and state litigation, as attorneys and the courts become accustomed to the extent the Electronic Discovery amendments will provide access to electronically stored information.

What the Federal Rules of Civil Procedure amendments mean to you

• Duty to Disclose without being asked
  Rule 26(a)(1) requires parties to provide to other involved parties a copy of (or a description by category) of all documents, electronically stored information, and tangible items that the disclosing party may use in legal proceedings. The location of such information must also be provided. This is an automatic requirement and must be met before a discovery request is received. This will necessitate parties and their counsel to act on these requirements at an early stage in the litigation in order to ensure that the required disclosures are made.
  
  
• Duty to Discuss electronically stored information
  Rule 26(f) requires that counsel must discuss, at an early stage in the litigation, any issues relating to disclosure or discovery of electronically stored information.
  
  
• Duty to Produce
  Rule 26(b)(2) and rule 34 require a party to produce electronically stored information initially disclosed to the other parties or identified in a discovery request. If a party contends that electronically stored information is not reasonably accessible; the party making the contention has the burden of proving that contention. The party is still required to “identify, by category or type, the sources containing potentially responsive information that it is neither searching nor producing.”
  
  
• Safe Harbor
  Rule 37 provides that a company may not receive sanctions for failing to provide electronically stored information lost as a result of the “routine, good-faith operation of an electronic information system.” “A party is not permitted to exploit the routine operation of an information system to thwart discovery obligations by allowing that operation to continue in order to destroy specific stored information that it is required to preserve.” Therefore, an organization may not diminish its obligation to preserve all potentially relevant evidence whenever it can be reasonably anticipated that a lawsuit will be filed.

California’s Electronic Discovery statutes and regulations are not as extensive as the federal rules, yet they do provide the necessary tools and authorize discovery of electronically stored information from adversaries.

Companies located in California should consider the following:

• A litigant may obtain a court order requiring a party to preserve electronically stored information. This can include information that might be deleted or overwritten as a matter of routine.
  
  
• A litigant may require other parties to state how electronically stored information is kept, to disclose the existence of electronically stored information, and to specifically identify electronically stored information.
  
  
• A litigant may make inspection demands requiring another party to produce, for inspection, another party’s computers and storage media such as computer back-up tapes and hard drives.
  
  
• A litigant may, by disposition, obtain testimony from another party’s personnel about how the party keeps electronically stored information.

Failing to comply with discovery obligations can lead to severe consequences against a party that has failed to preserve and/or disclose relevant electronically stored information.

Consequences for failing to comply with FRCP rules may include:

• Significant monetary sanctions
• An order adjudicating one or more issues adversely to the party
• Barring a party from using evidence that otherwise would have been permitted.
• Terminating litigation adversely to the party

Important steps to help your organization prepare for Electronic Discovery

• Develop a document retention and destruction policy.
  
  
• Develop the ability to preserve potentially relevant electronically stored information so that the original files are prevented from being altered and/or destroyed.
  
  
• Familiarize yourself with the company’s information systems to better help your organization inform its counsel, at the outset of litigation, of important knowledge such as how the information is stored, located and retrieved.
  
  
• Develop and adhere to sound information systems usage policies. Personnel should refrain from inappropriate use of email and/or access to the internet. “Smoking guns” that are never created are never discovered by adversaries.
  
  
• Consult with counsel on the federal and state electronic information discovery requirements before becoming involved in litigation.

Companies that help businesses track and search their email and other electronic data are experiencing a surge of interest in the wake of the recent amendments to the Federal Rules of Civil Procedure. Companies used to focus on how they stored information. Now they are focusing on how to retrieve it. Stay informed on FECP regulations – and don’t let the info bugs byte.

Undocumented Alien Wage Claims OK’d

By Jim Kuns, J.D.,
Senior Helpline Consultant

Four undocumented alien employees sued their employer, claiming they were not paid the required California prevailing wage for work they performed on a public works project. A California Court of Appeal reversed a lower court decision and held that federal law did not preempt state law in the matter, and did not prevent the employees from bringing their wage claims – see Jose Reyes v. Van Elk, Ltd. (2007).

Jose Reyes and others (employees) did welding-related work for Van Elk, Ltd. (employer) on projects, which were claimed to be public works projects, and therefore subject to California's prevailing wage law - Labor Code sections 1720-1861. Section 1773 of the code mandates that a public entity that awards any contract for public work must specify the current prevailing wage in its call for bids. The current prevailing wage rate must be paid for each craft, and job classification used on the project.

The company asked the court to decide in its favor because the employees were unauthorized to work in the United States, and thus ineligible to bring the lawsuit. The company relied in part on supportive language in the Federal Immigration Reform and Control Act of 1986 (IRCA) and a U.S. Supreme Court decision - Hoffman Plastic Compounds, Inc. v. NLRB (2002).

The lower court granted summary judgment for the company in part because it was assumed the employees were unauthorized to work because they refused to provide proof during pre-trial fact discovery that they were authorized. The lower court also determined that the employees had no right to bring the suit based on the Hoffman case, and that state law on the matter was preempted by IRCA, the federal law.

On appeal, the California Court of Appeal, Second Appellate District had to decide whether an employee's undocumented status alone means he/she has no standing or right to bring a suit for the payment of prevailing wages.

In its discussion the court recognized Hoffman’s opinion that “…IRCA forcefully made combating the employment of illegal aliens central to the policy of immigration law. Among other things, the IRCA established an extensive ‘employment verification system’ designed to deny employment to aliens who (a) are not legally present in the United States or (b) are not lawfully authorized to work in the United States. It is a crime for an unauthorized alien to subvert the employer verification system by tendering false documents. Both employers and unauthorized aliens who violate the IRCA may be punished by civil fines and criminal prosecution.

“Under the IRCA, it is unlawful to hire or continue to employ an alien the employer knows to be an 'unauthorized alien,' defined as one who is not lawfully admitted for permanent residence, or authorized to be so employed by federal immigration and nationality law or by the United States Attorney General. …The statute provides for graduated civil penalties for violations, and criminal penalties for employers who are found to have engaged in a pattern or practice of hiring unauthorized aliens in violation of the law. …It is also a crime to knowingly accept a false immigration document for purposes of satisfying the requirements of the statute.”

In the Reyes case, the court acknowledged that the company made claims that the employees provided false documents to obtain employment. However, the only “facts” regarding the issue was a statement in the Company’s that each employee was "an undocumented worker not legally authorized to work in the United States." The court found no "fact" that plaintiffs provided false documents.

The court noted that the only cited evidentiary support for the claim that false documents were provided was in an admission by one of the employees that he had submitted false employment information to the company. According to the court, “[f]alse employment information is a vague term and could mean any number of things, including false information about an applicant's employment history, and does not necessarily mean the applicant submitted false work authorization documents.”

The court reasoned therefore, that there was no reason to determine whether or not the employees had submitted false documents to prove their authority to work. The court quoted a New York case, Ulloa v. Al's All Tree Service, Inc. (2003) “…if there had been proof in this case that the Plaintiff had obtained his employment by tendering false documents (activity that is explicitly unlawful under IRCA), Hoffman would require that the wage claim [for unpaid wages] be disallowed in its entirety.”

The court also noted that other jurisdictions had taken the position that Hoffman would not prevent and unauthorized alien from collecting payment for work already performed. For example a federal court in Zavala v. Wal-Mart Stores, Inc. (2005) decided that “…the FLSA did not preclude undocumented workers from obtaining relief for work already performed.

The court was persuaded Hoffman did not prohibit such relief because, in contrast to Hoffman, the plaintiffs in Zavala were seeking unpaid wages for work already performed, the definition of ‘employee’ under the FLSA was broad and not limited to citizens, and post-Hoffman interpretations by the Department of Labor and post-Hoffman court decisions construed the FLSA to cover undocumented workers.”

The court found no reason for federal law to preempt California law in the Reyes case. The court went on to support another California court in its decision in Hernandez v. Paicius (2003) that section 1171.5, of the California Labor Code required an employer who hires an undocumented worker to “…also bear the burden of complying with this state's wage, hour and workers' compensation laws.”

When hiring employees, employers should make sure that appropriate care is taken when completing an I-9 and reviewing an applicant’s authority to work. It is recommended that you keep legible copies of both sides of all work authorization documents submitted by all applicants.

Recognizing Drug and Alcohol Abuse in the Workplace

Carol Allen is Director of Corporate Development for Employer Support Systems Company (ESS-Co) and a Certified Employee Assistance Pro-fessional (CEAP) with more than 20 years experience in management and organizational development, corporate training and Human Resources.

Have you ever suspected that an employee might be under the influence of alcohol or drugs at work? At the time, you weren’t sure what to do, so you did nothing. I think most of us have been in a similar situation where the thought that an employee might be under the influence crossed our minds, but we did not have the tools to deal with the situation.

Is there anything we can do or any way we can better prepare ourselves for a potential substance abuse problem in the workplace? The answer is, yes, there are several measures that a company can take to address drug and alcohol abuse issues in the workplace.

Putting a program and policy in place
It is not easy to understand and recognize the signs of drug and alcohol abuse or even to know what to do about it. A first step in dealing with the problem is to establish and implement a comprehensive company workplace substance abuse program that includes a written policy. The training of supervisors and managers on the company’s substance abuse policy as well as education on recognizing the warning signs of substance abuse from a physical, emotional, cognitive, psychological and work performance standpoint is critical to the effectiveness of the program.
Providing drug awareness training to employees, as well as informing them of available resources, can prevent substance abuse in the workplace and encourage those who abuse drugs and/or alcohol to seek help in overcoming their problem. An Employee Assistance Program is one of the available resources to assist employees and their companies in dealing with substance abuse and alcohol problems.

Ascertaining safety and fitness for duty
An employee should be evaluated for safety in the workplace and then determine whether he/she is fit for duty. The employee’s behavior that you are witnessing may have many possible causes. It is important not to accuse or try to diagnose the employee. There may be a valid reason for the behavior (such as a reaction to a prescribed medication).

By remaining objective and focusing in on observable behaviors, you will be in a better position to assess the situation and determine what may be the appropriate course of action. It is important not to get pulled into the drama of an employee’s life and allow them to escape the logical consequences of their behavior. Sometimes supervisors and mangers enable employees, which only reinforces their behavior and can present a safety or other productivity risk.

Possible warning signs of substance abuse
Some of the physical manifestations of possible substance abuse are: increased pulse rate, increased blood pressure, flushed face, abdominal pain, runny nose/bloody nose, sensitivity to light, dilated pupils, increase in breathing rates, odor of alcohol, fatigue/drowsiness, excessive visits to doctor for bone fractures, accidents, sudden increase or decrease in appetite, weight loss or gain, nausea or vomiting, dry mouth, cardiac arrhythmia, perspiration/chills, muscular aches/weakness, unsteady gait, and seizures.

An employee’s emotional and psychological well being may be affected by alcohol or drugs. Some behaviors may include: depression, feelings of worthlessness, tearfulness, irritability, diminished interest, agitation, talkativeness/rapid speech, insomnia, trouble concentrating, hallucinations, confusion, distraction, visual misperception, thoughts of suicide, self-destructive behavior, verbal or physical threats, desire to hurt others, angry outbursts, destruction of property, spousal abuse, problems with authority/police record, frequent visits to doctor to obtain medications for insomnia, anxiety, tension, isolation or withdrawal from others, excessive talking, and change in personal hygiene and/or self care.

Work performance indicators
Typical work performance indicators of a drug or alcohol abusing employee may include all or some of the following behaviors:

Excessive sick leave, Monday and/or Friday absences, excessive tardiness, increasingly improbable excuses for absences, higher incidence than other employees of colds, flu, gastritis, frequent unscheduled short-term absences, continued absence from workstation, frequent trips to water fountain and bathroom, repeated physical illness on the job, excessive accidents on the job, carelessly handling of machine or equipment, work requires great effort and time, difficulty in recalling instructions or details, difficulty in recalling own mistakes, alternating periods of high and low productivity, takes needless risk in an attempt to raise productivity after supervisor admonishments, misses deadlines, makes poor decisions, makes mistakes due to inattention or poor judgment, receives complaints from internal or external customers, improbable excuses for poor performance, over reacts to real or imagined criticism, wide swings in morale, borrows money from co-workers, and unreasonable resentments.

Steps to take when warning signs appear
After observing some of the warning signs of possible substance abuse, it is time to document your observations and take action. It is important to document the facts immediately and accurately. Focus on the specific behaviors you witnessed and be consistent by setting the same standards for employees.

Your next step would be to consult with your HR professional to determine what the most appropriate course of action should be. Many companies, at this point, refer employees to their Employee Assistance Programs for guidance and evaluation. Employee Assistance Programs provide a confidential diagnostic evaluation of the employee’s dependence on alcohol or drugs, refer the employee to education classes or treatment centers, monitor their treatment, and then assist the employee and the company in reintegrating the employee back into the workplace.

Many drugs are abused ranging from clearly illegal substances with no medical value, like heroin, to prescription drugs and alcohol, which are ingrained in society. The three most troublesome drugs in the workplace are alcohol, marijuana, and cocaine. Illegal drug use is not limited to the use of “street drugs” like marijuana or cocaine. It is also illegal to medicate yourself with your own prescription drugs or to take prescription drugs not specifically prescribed to you.

As you can see, even with substance abuse awareness training and a comprehensive substance abuse policy, understanding and recognizing the signs of alcohol and drug abuse in the workplace is not easy. Staying objective, focusing on observable behaviors, documenting, and taking action are all essential in promoting a healthier, more productive, and substance free workplace. Everyone benefits - the company, the supervisor, the employee, the employee’s family, and the community.

Leading, Growing and Working with Generation Y

By Jeff Hull,
Director of Learning Services

You’ve heard about Generation Y, but what are you doing to prepare for their arrival in your workplace? This generation is tech-savvy, brand aware, they know what they want and they expect to have their needs met. Their arrival also means that for the first time in history, four generations will be working side-by-side in companies everywhere. Making sure all of these groups work in harmony will be a challenge for even the most prepared of companies.

Who is Generation Y?
As a group, they are definitely to be reckoned with. At just more than 70 million (more than three times the size of Gen X), this group was born between 1977 and 1994 and the bulk of them are just now beginning their careers. Generation Y has also been referred to as echo boomers and millennials. According to BusinessWeek, this group is very similar to its parent’s (baby boomers) generation in size; however, almost everything else is different. One in 3 is not Caucasian; 1 in 4 live in single-parent households, and 3 in 4 have working mothers. And most, if not all, have been using computers since nursery school.

What are they about?
They want to be heard, recognized and given responsibility. This group is different than most generations because they have been more nurtured than others, participated in many activities since nursery school and given credit for participation rather than achievement. They also want to examine new ways of doing things and are not satisfied with status quo. They need to be involved and quickly get bored with unchallenging tasks.

What do they know?
First of all, they are tech-smart. Almost all have grown up with a keyboard in hand, making them the most technologically astute workforce entrants to date. They also grew up hearing terms such as work-life balance, 401K and retirement planning. They have seen first hand the effects of corporate America on their parent(s) and are more cognizant and tolerant of change than many other generations.

What are the employers’ challenges?
This group will speak up and expects to be heard. Policies, such as dress codes, vacation, personal time and work schedules, may need to be re-worked for added flexibility. Companies with “command and control” types of management will need to change and give these workers more responsibility – and then make them accountable for their decisions. Micro-management will not be tolerated. One-on-one meetings and phone calls on important topics will likely be replaced with blackberry messages.

According to a study by Lee Hecht Harrison, “60% of employers say they are experiencing tension between employees from different generations.” Additionally, according to an article in USA Today (11/8/05), “more than 70% of older employees are dismissive of younger workers abilities. And nearly half of employers say that younger employees are dismissive of the abilities of their older co-workers.”

What can an employer do?
According to the American Society for Training and Development’s (ASTD) magazine (8/06), Generation Y employees “expect more control, more authority and more discretion in how they spend their time at work. They demand praise, affirmation and promotions.” An employer cannot just simply grant everything to them, but must be willing to invest in these individuals and enable their success based upon organizational contributions. Employers must make these expectations clear to employees

The skills of the Generation Y will certainly mesh well with organizations striving for creativity, innovation, and being resourceful. Naturally, organizations wanting to better understand the Generation Y market, would certainly benefit from hiring Generation Y employees.

According to the ASTD article, organizations must assist all employees, not just Generation Y, in identifying their strengths and weaknesses. This is a personal process rather than obtaining feedback through a performance evaluation or 360 degree feedback. One easy way to help someone identify individual strengths is through the SIGN process.

The individual should recognize how they feel while doing a task. If they feel good, then most likely that task is playing to their strengths. Once known, employees should spend more time doing tasks that involve their strengths rather than tasks associated with their weaknesses. This will result in better performance and happier employees.

Can training help?
Yes. Prior to deploying any training on generational issues, organizations should:

• Recognize the importance of understanding generational issues in the workplace
• Identify situations where generational issues frequently occur
• Determine how these issues are affecting important relationships

These steps will allow an organization to minimize the negative impact of generational differences and maximize the opportunities for individual, team and organization success. A training program should include real-world situations so that employees can recognize, respond and resolve differences involving generational issues where productivity, teamwork and customer satisfaction could suffer.

An organization that can draw on the different perspectives, skills and strengths of a multi-generational workforce will enhance creativity, productivity and innovation. It will give both employees and managers across all generations the skills necessary to acknowledge the issues and then take action to resolve them in ways that enhance productivity and mutual respect.

(Editor’s Note: Employers Group offers a multi-generational diversity course that includes the four generations (traditionalists, baby boomers, Generation X and Generation Y). This program is available for on-site delivery. Please email training@employersgroup.com for more information, pricing and availability.)

How to Retain Good Employees...
and Bring in a Few New Ones!

By Jennifer Shin,
Research Marketing & Communications Coordinator

Since late 2006, the Human Resources world has been abuzz with forecasts of low unemployment rates (this past March marked a five-year low in unemployment at 4.4 percent), high turnover and competitive compensation/
benefits packages, leading to worries that retaining and recruiting quality employees would be even harder for 2007.

Any HR professional knows finding good employees is one major challenge, but keeping employees happy and willing to stay with the company is entirely another. Fortunately, Employers Group’s 2007 HR Practices and Benefits Survey has just been released, providing inside information as to what other employers are doing to engage new and current employees.

Have a formal recruitment strategy
Talented employees frequently cite the two reasons that draw them to company is a higher salary and a culture of caring. Consequently, there’s little surprise that almost half of the 190 California companies surveyed (48.1%) said they have a formal recruitment strategy in place for 2007 to market and draw new talent to their company. Such strategies to recruit new talent were to: develop effective marketing materials and strategies; personally contact existing employees to inform them of job openings; form department search committees with diverse membership, etc.

Reward your current employees
Another key way companies are retaining and recruiting is by recognizing their current employees. Half of all companies surveyed said that they have an established practice of paying a bonus to employees for new referrals. Another 67.6 percent said they also offer current employees a gradual yearly allowance of vacation days earned per year, so that the longer an employee stays the better benefits they receive.

Other companies have incentive or employee recognition programs that reward current employees. Careerbuilder.com suggests that companies offer quarterly or holiday bonuses, share stock with employees, plan a company trip out of state or do something as simple as taking employees out to dinner to build employee work relationships and maintain employer/employee relationships.

More employers are nurturing growth
Employee development is closely linked to the growth of a company; and many employers are finding that employee growth has direct and indirect benefits. More knowledgeable, skilled, and capable employees directly impact a company’s ability to satisfy customers, resolve problems and crises, and adapt to changing market conditions. As a result, according to Employers Group’s survey, 62.6 percent of companies are offering to pay for an employee’s continuing professional education, ultimately helping their company gain expertise in new technologies and markets, which can save money in the long run.

Flexibility is key
According to the survey, companies are also recognizing that flexible work schedules are considered a major perk by most workers, and it can help an organization attract and retain key employees. According to EG’s 2007 HR Practices & Benefits Survey, 41.0 percent of companies offer alternative work schedules, which include flextime and compressed work weeks. The companies that reported having a formal flextime policy jumped from 8.7 percent in 2006 to 32.8 percent in 2007.

Flextime allows employees to begin work early in the day or stay later in the evening, depending on needs and preferences. On a flextime schedule, employees work their regular number of days and hours each week. This scheduling system allows employees to schedule their work week around personal commitments and responsibilities like meetings, appointments, school, and abilities to acquire child care.

For the employer, this scheduling system helps to meet their staffing needs when the qualified workforce is relatively small by creating less absenteeism, reducing overtime, reducing role conflicts, and improving employee productivity.

Create a great place to work
Benefits alone will not recruit and retain talented employees, instead the key is to ultimately create a work environment that engages, nurtures, and rewards its employees. Companies should reflect on their workplace culture and, more importantly, on their employees’ wants and needs. For example, policies such as flextime can be a draw to employees with families who are seeking a company that respects work-life balance, whereas educational reimbursements can be especially appealing to younger employees looking for growth.

Ultimately, by implementing such policies, companies are creating an employee-friendly workplace that is not only attractive to current and new employees, but promotes better business performance and sound people practices.

(Editor’s Note: For more information about this article or if you are interested in implementing a Best Workplaces Program to see how your company ranks, please contact Research Services today at surveys@employersgroup.com or call EG’s Director of Research, Juan Garcia,at 213.765.3969.)