Building Collaborative Organizations

Jim Tamm is Vice President of Business Consultants Network, an international consulting firm with affiliates in 18 countries. He is the co-author of Radical Collaboration: Five Essential Skills to Overcome Defensive-ness and Build Successful Relationships. Jim is on the faculty of the International Management Program of the Stockholm School of Economics, and has a diverse client base ranging from the United Nations and NASA to toy companies. He specializes in building a culture of collaboration within organizations. Prior to becoming a lawyer and then a California judge, Jim was an HR executive at General Electric.

As a Senior Administrative Law Judge for the State of California, I mediated over 1,500 employment disputes, and guess what? Almost none of them had to do with legal issues. People were before me because they lacked collaborative skills. They weren’t skilled at building strong working relationships.

When too many people in a company lack collaborative skills we call it a Red Zone organization, which is a very low trust, high blame, unsupportive workplace. People in the Red Zone are more guarded, cynical, and suspicious. They are less open, so it is more difficult to solve problems. They avoid risk taking because if anything goes wrong someone will get blamed, so creativity suffers. Life is painful in the Red Zone. As a result, Red Zone organizations need to pay employees more because they’ll leave at the first better offer. For an individual, a Red Zone mindset is a career killer. Nobody wants to work with a jerk, even if you are the most competent person around.

An opportunity for HR
Simply put, Red Zone behaviors and attitudes cost organizations a huge amount of money and lost productivity. This presents Human Resources executives with a unique opportunity to have a direct positive influence on a company’s bottom line. Considering the common complaint that HR is far too often a drag on the bottom line, it is an opportunity that doesn’t come along very often and shouldn’t be ignored. Turning around a Red Zone company, department, team or individual will eliminate a big problem and make you a hero.

Red Zone organizations became such a problem for the state that we teamed up with the Hewlett and Stuart Foundations to teach collaborative skills in the workplace. It turned out that teaching five essential skills transformed Red to Green. In Green Zone organizations there is high trust and low blame. People are more open and honest and much better at problem solving because they are willing to deal openly with difficult issues. Creativity soars because people are willing to take risks. If something goes wrong, the discussion centers around what they can learn from the experience rather than whose head will roll.

Bottom-line benefits
Research shows that in the long term, Green Zone companies outperform Red Zone companies in terms of income, profit, employee retention, expansion, and for publicly held companies, stock price. In the state’s Hewlett & Stuart Foundations project, conflict in almost 100 different organizations was reduced by 67%. Trust increased, communications improved and problem solving was much more effective. In a six-year follow up study of participants from nine different countries, people were 45% more effective at getting their interests met. That effectiveness goes straight to a company’s bottom line.

The state was not alone in seeing the value of collaborative skills. When IBM was picking their next generation of leaders, all the people they picked had a skill that IBM called “collaborative influence.” It’s the ability to get people to do things when you don’t control their salary; i.e., they do so simply because you have a good relationship. When Bell Labs looked closely at the difference between their good employees and the real stars, they found that the stars were adept at building collaborative networks. They knew who they could call when they had a problem. Other people were willing to help out because of the relationships that had been built.

If you want to create a more collaborative Green Zone environment throughout your company, or build more collaboration between HR and your clients, or if you simply want to boost your own career by increasing your collaborative influence, here are five skills guaranteed to make a big difference.

1. Collaborative Intention:
Staying non-defensive and making a conscious personal commitment to seeking mutual gains in your relationships.

This is the ability to stay in the Green Zone when your relationship hits a bump, or someone makes a mistake or does something unexplainable or confusing. A boss in one of my mediations was facing a hostile employee who was shouting at him for something the boss had done. Instead of getting defensive and attacking back or pulling rank, the boss was able to diffuse the situation by calmly responding, “John I can see that you’re upset. Can you tell me more about this and help me better understand what’s upsetting you. Then let’s work together to figure out a good solution.”

The boss’s response was very counter-intuitive; he wasn’t defending himself, he was staying in the Green Zone and asking for more information. When the employee started feeling heard, his demeanor changed and he moved from anger to problem solving. The key to staying in the Green Zone is remaining conscious of building mutual success and paying attention to your own blind spots.

2. Truthfulness:
Committing to both speak and listen to the truth, and being able to create an atmosphere where it feels safe enough to raise difficult issues.

The level of trust in any relationship is determined to a great extent by the amount of truth being told. I’m referring to the ability and willingness to tell other people about what is going on inside of you, i.e. being more self-disclosing. Telling the truth about yourself requires a combination of awareness, honesty and openness and it is far more effective than telling other people what you think is true about them.

One of the most important things you can do to improve the effectiveness of any organization is to increase the level of openness. It is impossible to solve problems if people aren’t willing to talk about them. I’ve had more than one employee complain to me in private during mediation that they feel insignificant in the way the boss treats them, but they don’t want me to share that information with the boss.

It’s pretty common for an employee to complain to HR about someone else and then add, but please don’t tell them I said that. Without a willingness to be more open, problems stay underground and leak out in unpredictable ways. Because others don’t understand what’s going on, they often make up stories and waste valuable time. Anyone reading the Columbia and Challenger Shuttle disaster reports will see that some employees didn’t feel safe sharing their concerns about safety issues. When people withhold information because it doesn’t feel safe, it can have a horrible impact on any organization.

Creating an atmosphere of truthfulness also requires that people listen better. Listening is not simply shutting your mouth, but that’s a great place to start. The two jobs of the listener are to create a safe environment for the speaker and to help the speaker feel understood. Continually summarize what you are hearing and feed it back to the speaker, checking for understanding about both the content and the emotional tone of the communication. When that happens, speakers report that they share much more information, are more articulate, and tend to like the listener.

3. Self-Accountability:
Understanding the choices we make through action or inaction, and taking responsibility for both the intended and unintended consequences of those choices.

I’ve mediated more school labor strikes than any other person in the United States and two comments I’ve heard from both sides in just about every strike are: “They didn’t give us a choice,” and “They made us do it.” What nonsense!

Most people believe, mistakenly, that their choices are narrow. People have more choice than they think. Many people forfeit choices without realizing that not choosing is also a choice. The way people make little decisions is a reflection of how they make bigger ones. The most effective thing people can do to feel more empowered is to change their belief system about how much choice they have in their lives. Beliefs that we have a lot of choice can mobilize people, while beliefs that we have little choice will paralyze people. A sense of influence over our own lives also makes undesirable events less demoralizing.

Taking responsibility for our choices means both the intended and unintended consequences of our actions. Many people act as if they’re not responsible for the results of their behaviors if the outcome is different than they intended. They judge others by their actions but themselves by their intentions. That attitude is not very accountable.

What we have found to be helpful in getting people to be more accountable is having them reflect on situations they are not happy with, ones where they tend to blame others for their circumstances. Then we ask them to review the situations without self-judgment or self-blame to see how they contributed to it. What choices were available to them, whether through action or non-action? When people see that more choices were probably available, they start taking more responsibility for future actions. Even if their choice is to not do anything differently, they usually stop complaining about the situation. Workplaces high in accountability are low in whining and sniveling—and think about how much easier that would make life in HR!

4. Self-Awareness:
Committing to know yourself deeply and showing a willingness to deal with difficult interpersonal issues.

Whether you want to improve a single relationship or change the culture of an entire organization, an important step is to increase people’s self-awareness. The ability to make effective choices and live an authentic life depends to a great extent on a capacity to be self-reflective. If people do not understand their own feelings, fears, values, intentions and patterns of behavior, their lives can be like corks bobbing on the ocean with no sense of control over their own destiny. Such travelers will always be a little puzzled about how and why their lives unfold.

The area of self awareness that has the greatest return on investment for a company is helping people become more aware of their own defensiveness. Defensive Red Zone behavior is a poison pill to relationships and an eventual career killer. Defensive people are inauthentic and other people don’t trust or like them. Some common examples of defensive behavior are blaming and shaming, sarcasm, demanding to be right, playing “poor me,” hearing only what you want to hear, all-or-nothing thinking, and withdrawing into deadly silence.

Defensiveness is unconscious behavior that undermines our ability to be in relationships and work well with others. Because it is unconscious, we often don’t know we’re being defensive until after the fact. When we get defensive, however, we’re not defending ourselves from other people; we’re defending ourselves from painful feelings inside ourselves that we don’t want to feel. These feelings usually have to do with fears about our lack of significance, competence or likability.

People can self-correct defensive habits by becoming conscious of them and then developing an “early warning system.” By knowing their own particular signs of defensiveness, they recognize when they’re becoming defensive, then they can immediately implement an action plan. They should literally slow down by taking a break or a short walk—or, if they’re in the middle of a conversation, even taking a couple of deep breaths. Tune in to any negative self-talk, such as “I can’t handle this,” or “they’re out to get me,” and change it to something more positive, like “I don’t like this but I can handle it.” Slowing down and taking a step back goes a long way toward changing defensive behaviors. Finally they should take action to moderate their particular defensive behavior. If they are flooding people with information they can become quiet for several minutes, gather their thoughts, and then make a point without being defensive.

5. Negotiating:
Skillfully negotiating your way through the conflict that is inevitable in any long-term relationship.

If your relationships don’t bump up against some conflict every once in a while, you’re either in very boring relationships, are in complete denial, or are overly medicated. Even the most collaborative, self-aware, accountable, non-defensive, truth-telling people will have a difficult time building collaborative relationships if they aren’t skilled at negotiating.
A negotiating process called the Interest-Based Approach builds relationships rather than undermining them. It has proven effective in business, politics, family relations, environmental disputes and even international peace negotiations when President Jimmy Carter used it to fashion the agreement between Anwar Sadat and Menachem Begin at Camp David. The approach focuses on the underlying interests of the parties before anyone starts looking for solutions. It involves several steps:

1. Set a collaborative tone by being open and direct about your intentions and reach agreement about the process you will use to deal with the dispute.
2. Discuss the problem and develop a list of issues that need to be resolved.
3. Gain an understanding of the underlying interests of the parties. Interests are the wants or needs that underlie the issues that need to be resolved. Don’t start working on solutions until you have a thorough understanding of all the underlying interests of all the stakeholders.
4. Develop a contingency plan. Know what you will be able to do on your own without the agreement of the other party if you can’t agree on a solution.
5. Work together to invent a large number of creative solutions to meet as many interests of all the parties as possible.
6. Evaluate possible solutions against the interests and contingency plans of the parties. Narrow the possible solutions and reach clear commitments where it is possible to verify compliance.

True collaboration begins inside the individual and works its way out into organizations. By concentrating on these five skills, people will not only become personally more effective, they can have a big influence on the effectiveness of their company or organization.

(Editor’s Note: For more information about Jim Tamm, or for ordering the book Radical Collaboration, contact Editor Wendy Taylor at Employers Group, wtaylor@employersgroup.com or call (800) 748-8484, extension 3979. Jim is also available for speaking engagements.

By Wendy Platt, CEBS, Helpline Consultant

Earlier this year, in violation of consumer privacy rights, ChoicePoint was fined $15 million for the failure to secure consumer information. ChoicePoint failed to protect its database, which was infiltrated by unauthorized individuals who illegally obtained personal information from that database.

In another breach, Honeywell had to advise several thousand current and former employees that their personal information reportedly had been posted on a third-party website. That breach, which is still under investigation, apparently included Social Security numbers and bank account information. As a result, Honeywell is offering its employees credit monitoring and identity theft insurance. On January 31, 2006, a preliminary injunction was issued against a former Honeywell employee for allegedly improperly obtaining and disseminating information in violation of the federal Computer Fraud and Abuse Act.

Whether companies have consumer or employee information, their obligation to maintain secure systems and protect privacy should be a top priority.

There are both state and federal protections against privacy violations, including personal and medical information. This means that employers not only must maintain confidentiality of health information (California Health Care Privacy Act and federal HIPAA), but also must ensure that personal and private information is secure and available only to those with proper authorization. While there are several federal and state protections, only a couple are highlighted in this article.

In Article 1, Section 1 of the California Constitution, California ensures that: “All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing and protecting property, and pursing and obtaining safety, happiness and privacy."

Generally, however, employees have no reasonable expectation of privacy when using company property provided that they are notified that the equipment used is company property and that it will be monitored. (When monitoring phone calls, if it is determined that the call is personal, the monitor must hang up. Legislation to cease monitoring e-mails when it is determined that the e-mail is private has not yet passed in California.)

Cell phones that take pictures not only can invade individual privacy in the workplace but can be instruments to photograph a company’s confidential information. Prohibit use of web-cams and camera phones other than for work-related purposes. Failure to do so may subject the employer to invasion of privacy, unlawful harassment and/or negligent supervision and negative retention. (Negative supervision or retention infers that the company is aware of an individual’s offending behavior, but fails to discipline, or when the behavior is egregious, fails to discharge, even when there has been a violation of company policy.) Be sure to follow company policies and follow-up and investigate harassment claims.

Radio frequency identification devices (RFID’s) can track employee movements within the workplace during the entire workday. Employers using RFID’s should notify employees how closely their movements are being monitored. Some RFID’s may be designed to be used for entrance to the company’s facility only. Most companies use RFID’s for security purposes.

Although at this writing there has not been litigation to determine at what point tracking is not permitted, tracking all employee movements throughout the day could violate their privacy. Employers should know which employees are using RFID cards and plan ahead for the loss of the card. RFID’s are only as secure as the security measures taken and the individual who possesses the card.

California has safeguards to protect individuals from identity theft, including use of social security numbers. Many other states as well as the federal government have been or are considering similar legislation to limit the use of social security numbers and other personal identifiers. Because of identity theft, it would be surprising if more stringent legislation were not adopted by other states. Be alert to such legislation.

The federal, Computer Fraud and Abuse Act (CFAA) provides for, under certain conditions, civil and criminal liability for unauthorized access or use of protected computer information by unauthorized individuals. Those who knowing or intentionally access a “protected computer” (includes computers used in interstate commerce) without authorization, or exceeds authorization that results in damage to the organization or individual(s) may be prosecuted. So, those individuals wanting to “get even” by hacking into a database, deleting parts or all of a database, or introduce a virus into the system, could be prosecuted.

As of June 1, 2005, as part of the federal Fair and Accurate Credit Transactions act of 2003 (FACTA) new rules require both large and small organizations using consumers reports to take appropriate measures to dispose of sensitive information obtained from those reports. Any business or individual using a consumer report for business purposes is subject to the “Disposal Rule” under FACTA. (See “FYI: Disposal of Sensitive Information” box on this page.)

Consumer reports include information from consumer reporting companies; lenders; insurers; landlords; government agencies; car dealers; attorneys; debt collectors; and employers. The Disposal Rule requires that sensitive and private information be destroyed but allows those who are covered by the Rule to determine what measures are reasonable based on the sensitivity of the information.

Costs and benefits of various disposal methods may be considered and could include shredding or burning as a means of destroying any document, whether paper or computer disks, that has personal information. Personal information includes telephone numbers, addresses, social security numbers, etc. Failure to destroy personal/consumer information could result in civil liability and fines.

Organizations have a duty to protect individual information, whether employee or consumer information and organizations are required to establish policies and procedures to ensure privacy protections and to investigate situations that would violate those policies and procedures. Some of the measures that organizations should consider are.

• Determine what types of information the company maintains – personal, consumer, or both.
• Establish security policies and procedures to protect information from unauthorized access, use, destruction or disclosure ensuring that consumer and employee information is secure. In some cases, organizations may choose to encrypt information.
• Identify privacy laws that are specific to the states (or countries) in which your company does business or has employees.
• Provide on-going training to ensure employees who have access to private information understand the rules, how to comply with company policies and procedures and federal and state laws.
• Establish disclosure procedures to those persons when there has been a privacy breach.
• Develop a policy to regularly monitor computer users who have access to protected information – monthly, quarterly – by a designated individual(s), perhaps more than one as a cross-check.
• Develop restrictions on computer use requiring passwords, use of firewalls and encryption as necessary.
• Employers should have a statement in the employee handbook indicating that the employer reserves the right to monitor employees, what is being monitored and when monitoring occurs, randomly or triggered when certain locations are entered, for example.
• Prohibit use of personal cell phones, cameras when employees are working, restricting use to “off the clock” time.
• When a facility is secure, employers should consider prohibiting all cell phone and cameras from entering the premises.
• Keep up-to-date on federal and state legislation regarding use of social security numbers. California already has such a laws in place – SB 168 and SB 101, which have been added to California’s Civil Code (commencing with Section 1798.85) and Labor Code (Section 226) respectively.
• Be alert to additions, updates and changes to federal and state laws regarding consumer and employee privacy.

Individuals as well as organizations have an obligation to protect the privacy of consumers and of employees. Organizations must establish policies and procedures ahead of a breach. Failure to take precautionary measures could make an organization ripe for privacy violations, harassment claims and expose employees and consumers to identity theft, not to mention hefty fines as mentioned previously. Doing so now is better than after a breach.

Hours Worked -
Determining Preliminary and Postliminary Time

By Mark Nelson, J.D., Helpline Consultant

In 1947, Congress amended the Fair Labor Standards Act to exclude from “hours worked” (i.e., time that employees are on the clock) actions of employees that are “preliminary” or “postliminary” to the employees’ “principle” activities. This is an often confusing issue, so this article offers some clarification.

Principal activities
Carving out from compensable time all actions that are preliminary or postliminary to a principal activity begs the question: what is a principal activity in the first place? The Code of Federal Regulations states that a principal activity is not simply the one defining task the employee was retained to perform, but rather all activities integral and indispensable to the employee’s primary job function. In other words, it’s not as easy as saying that because an individual was retained as a bookkeeper, that individual is only entitled to pay when the employee actually starts crunching numbers and ceases to be paid when they stop. There may be many additional tasks that individual performs that cannot be carved out as preliminary or postliminary work.

For example, a lathe operator will frequently oil, grease, or clean his machine prior to operating it. These steps are integral to the operation of the lathe and therefore a principal activity, and as a principal activity, require that the employee be paid for performing such operations. They do not fall under the auspices of preliminary work.

Alternatively, a garment worker may be assigned the task of distributing pieces of clothing to work stations before colleagues arrive. Obviously, garment workers can’t sew without clothing pieces; therefore such a task is a principal activity and compensable as well.

Finally, an employee in a chemical plant who must change into and out of a uniform on site in order to work with the chemicals is also engaged in a principal activity.

By contrast, if the company merely allows employees to change into and out of uniforms as a matter of convenience but those employees could leave the premises wearing their uniform, that task is less likely a principal activity. (All three of these examples are cited in the regulations themselves.)

Preliminary and postliminary activities
Preliminary actions are those tasks an employee performs before taking on principal activities, while postliminary are those activities done after the completion of all principal activities. Whether preliminary or postliminary, they do not factor in when calculating time an employee was on the clock.

Just because an activity happens at the beginning or end of a shift does not mean it is preliminary or postliminary and the employer is free to exclude it from compensable time. Case law addressing this subject states that the facts of each individual case drive whether the activity will be considered preliminary/postliminary or a principal activity. In other words, there are no clear line distinctions to which employers may refer for definitive answers. When in doubt, ask yourself whether it could in anyway fall under the very expansive definition of a principal activity and if the answer is probably, you’re better off compensating for that time or consulting labor and employment counsel if you intend not to pay for it.

Exceptions
Even work that would comprise preliminary and postliminary activities may still be compensable time if any of the following apply:

(1) a contract (like a collective bargaining agreement) obligates the employer to pay employees for performing a particular preliminary or postliminary activity; or

(2) the employer’s specific custom or practice in effect at that time has been to pay employees for the preliminary or postliminary activities (regardless of what the larger general industry customs or practices are).

Preliminary and postliminary activities continue to confound the most seasoned HR professional. If you would like to discuss the matter further or have a representative from EG visit your facility to observe those activities that occur at the beginning or end of the workday, please contact us at 800.748.8484.

Animals at Work?

By Dagmar Muthamia, SPHR, Helpline Consultant

A few years ago animals at work was a friendly workplace issue. Will employees be happy and more productive if you allow them to bring their pets to work? Later, the issue came along that it may be a reasonable accommodation for a disabled person. Several EG members have inquired recently about “service animals” in the workplace , so I decided to look into it—and this is what I learned.

What is a service animal?
A service animal is any animal that is individually trained to do work or perform tasks for the benefits of a person with a disability. The tasks must be directly related to the person’s disability. They include cats, birds, horses and primates; most, however, are dogs. The most common is the “seeing eye” dog that assists a blind person. Other tasks they may perform are: alerting persons with hearing impairments, pulling wheelchairs, carrying or picking up things, providing protection and rescue, or responding to a medical emergency. Service animals are not pets.

The Americans with Disabilities Act (ADA) defines a service animal as any guide dog, signal dog, or other animal “individually trained to provide assistance to an individual with a disability.” If the animal meets this definition it is a service animal whether or not it has been licensed or certified by a state or local government. Some service animals wear special collars and harnesses. Some are certified or licensed and have identification papers.

Therapy or companion animals
You may also hear about therapy animals, companion animals and social/therapy animals. Therapy animals are not legally defined in federal law but some state laws have definitions for therapy animals. They are usually not service animals. Companion animals are not legally defined. They are pets. Social/therapy animals are also not legally defined. These animals might or might not meet the definition of service animals.

Does the ADA require employers to allow service animals?
The ADA does not automatically require that employers allow service animals in the workplace; however, to do so may be a reasonable accommodation.

The ADA requires employers with 15 or more employees to make reasonable accommodations for people who are disabled unless it can be shown that it would cause an undue hardship. If a disabled employee needs a service animal at work as a reasonable accommodation, the employer must allow it unless it is an undue hardship.

It is also important to know that a disabled employee is not necessarily entitled to his/her first choice of accommodations. According to the EEOC, if there are other accommodations that would work as well as the disabled person’s preferred accommodation, the employer will have fulfilled its obligations to offer the other accommodation.

Possible safety risks
One of the primary objections to having animals in the workplace is that they may pose a safety risk. The Equal Employment Opportunity Commission (EEOC) is very specific that speculating about risks is not sufficient to deny the accommodation.

The employer must show that there is “significant risk of substantial harm…it must be a current risk, not one that is speculative or remote; the assessment of risk must be based on objective medical or other factual evidence regarding a particular individual… even if a genuine significant risk …exists, the employer must consider whether the risk can be eliminated or reduced below the level of a ‘direct threat’ by reasonable accommodation.”

An animal that is out of control and poses a direct threat to the health or safety of others may be excluded. However, you may not make assumptions about an animal’s behavior. Each case must be considered individually.

There are also some circumstances that would fundamentally alter the nature of a business that can result in the animal being excluded. An example is a dog that barks at a movie, which may be excluded from the theater.

Practical considerations
Allowing a service animal in the workplace may be more reasonable if you consider some of the following:

• Provide the employee with a private/enclosed workspace or an office space near a door and/or out of high traffic areas.
• Provide a designated area where the employee can tend to the service animal's basic daily needs, e.g., eating or bodily functions.
• Allow periodic breaks so the employee can care for the service animal's basic daily needs.
• If the employee only requires the service animal to travel to and from work, provide a designated area the service animal can occupy until the employee's shift ends.
• Provide general disability awareness training on the use of service animals in the workplace. It is especially important that all employees understand that a service animal is not a pet.

If a coworker is allergic to the service animal you might want to allow the employees to work in different areas of the building or provide one or both of the employees with private enclosed workspaces. Using a portable air purifier is also helpful in this situation. Allowing the affected employees to work different schedules may also make the accommodation easier. The employer can also add HEPA filters to the existing ventilation system and have work areas—i.e., carpets, cubicle walls, and window treatments—regularly cleaned, dusted, and vacuumed.

(Editor’s Note: Useful free information is available on the JAN website. JAN is the Job Accommodation Network funded by the U.S. Department of Labor's Office of Disability Employment Policy. For a fact sheet, go to www.jan.wvu.edu/media/servanim.html#Intro)

By Wendy Taylor, Editor and Legislative Coordinator

Certainly, California businesses want to hold on to Governor Schwarzenegger’s 2004 overhaul of the state’s workers’ compensation system. According to a study by Bickmore Risk Services (commissioned by the Department of Industrial Relations), the reforms enacted in 2004, and those initiated by Governor Gray Davis in 2003, have lowered insurance rates by 46 percent over the last three years, “dropping them below what they were in 1996.” Overall, the study reports, employer-paid costs are $8.1 billion a year lower than they were in 2003 and $15 billion below what they would have been in 2006 without the reforms.

That makes California employers happy, considering we are no longer the nation’s highest-cost state. But the glow of success may be slightly fading. Three ballot proposals were cleared for signatures last month. As of this writing (on February 21) the sponsor of these initiatives had not been revealed, but clearly they are intended to undermine the gains by employers in workers’ compensation as a result of SB 899, AB 227 and SB 228 in 2004. If any one of the initiatives qualifies for the ballot and is approved by voters, it might prove expensive to businesses, governments and non profit organizations.

Specifically, the initiatives are aiming to rewrite regulations that determine payments to permanently disabled workers, which have been a money-saving outgrowth of the 2004 reform. The Bickman study reported that the “reduced permanent-disability benefits have been reduced by as much as 50%.” Labor groups consider the current payments are not adequate and not properly compensating the seriously injured. Business groups, however, see this as a threat to the reforms and may lead to increased costs.

The governor has remained relatively neutral so far. According to an article in the Los Angeles Times on 2/21/06 (Workers’ Comp Changes Targeted), his spokesperson, Vince Sollito said the governor would consider refining permanent disability benefits should “valid statistical evidence show a need.” However, he would “vigorously defend the reforms from rollbacks that could imperil the $8.1 billion that employers have saved from the overhaul.”

2006 Workers’ Comp bills
Another development on the Workers’ Comp front is that a number of new measures have been introduced in this year’s legislative session before the February 24 deadline—and more are sure to be introduced at the last minute. As of this writing, the bills so far deal with a variety of topics, including expanding the definition of first-aid; physician designation; proof of workers’ compensation coverage; utilization of acupuncture in workers’ compensation claims; and death benefits.

Here’s a rundown of just a few of the 2006 workers’ comp bills submitted prior to the deadline for new bills on February 24:

AB 871 (Keene), health care organizations – Eases certain requirements governing health care organizations in the workers’ compensation system. This bill would match up these provisions to those applicable employers who have not entered into a contract with a health care organization for the providing of medical services.

AB 1209 (Yee), unlimited medical treatments – Deletes previous (effective 1/1/04) provisions proscribing that employees are entitled to a maximum of 24 (EACH) chiropractic, occupational and/or physical therapy treatments, which means unlimited visits would now be allowed.

AB 1862 (Vargas), first aid – Provides that first aid means any one-time treatment, and any follow-up visits, for the purpose of observation of minor industrial injuries that do not ordinarily require medical care. It changes the word “visit” in the existing law to the plural word “visits.”

AB 1883 (De La Torre), proof of insurance – Requires, by no later than July 1, 2008, the establishment of a workers' compensation enforcement-of-coverage program designed to detect unlawfully insured employers, and would authorize the continuous appropriation of moneys in the trust fund for purposes of the program. By expanding the purposes for which the trust fund may be used, this bill would make an appropriation.

SB 46 (Alarcon), insurance – Revises regulations on workers’ compensation insurance premium rates and creates a Commission on Workers' Compensation Rate Regulation (Commission). Institutes provisions for prospectively linking employer's safety and health program with insurance rates, and requires pass-through of reform savings to employers.

SB 538 (Kuehl), MPNs: accountability – Increases requirements for medical provider networks: 1) Requires MPNs to demonstrate to Division of Workers’ Compensation (DWC) within the Department of Industrial Relations (DIR) that they have the organizational and administrative capacity to provide services to covered employees; 2) Establishes a minimum ratio of at least one full-time treating physician for every 3,600 employees. 3) Increases the requirements of quality assurance committees administered by MPNs. 4) Requires MPNs to apply for certification from DWC every three years.

Stay tuned for further updates.

Wage or Penalty?

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

Is additional pay for missed meal or rest periods in California considered a penalty or a wage? Different California Appeal Courts have decided the issue both ways and the matter may have to be settled by the California Supreme Court. In a recent class action case, a Court of Appeal in the Second District determined that the pay for missed break periods should be considered a penalty - Mills v. Superior Court of Los Angeles (January 27, 2006). What difference does it make if the pay is considered a penalty or a wage? If it’s considered a wage, a back pay settlement can cover a prior four-year period, and only one-year if it’s considered a penalty.

Effective January 1, 2001 Section 226.7 was added to the California Labor Code by Assembly Bill 2509. The section states: “(a) No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission. (b) If an employer fails to provide an employee a meal period or rest period ... the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided.”

Deborah Mills, employed by Bed, Bath and Beyond Inc. (BBB), filed a class action lawsuit claiming the company, among other things, failed to provide hundreds of employees with their proper meal and rest periods. She asked the court to consider the pay for missed breaks to be characterized as a wage and not a penalty. She claimed BBB’s actions amounted to unfair business practices in violation of California’s Business and Professions Code section 17200, which states: “…unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice…” The statute of limitations or time to recover lost wages for section 17200 violations is four years. At the lower trial court level, the court agreed with BBB that any pay for missed rest periods was to be considered a penalty not a wage.

Section 512 of the California Labor Code mandates employers give employees a 30-minute meal period if they work more than five hours per day, and a second 30-minute meal period to those working more than ten hours a day. Additionally, the California Industrial Welfare Commission (IWC) requires a 10-minute rest period for every four hours, or major fraction thereof, that an employee works.

The Appeal Court determined that section 226.7 is not clear regarding whether the payment required is a wage or a penalty. The court noted that the California Supreme Court has defined a penalty as "…a sum of money made payable by way of punishment for the nonperformance of an act or the performance of an unlawful act, and which, in the former case, stands in lieu of the act to be performed…”

The court went on to analyze the legislative history of Section 226.7. It found that the section originated as Assembly Bill 2509 in the 1999-2000 legislative sessions. The original draft provided for penalties of $50 per violation against employers who failed to give meal and rest breaks, and also required double pay for the amount of missed break time.

When the bill went to the Senate the penalty provisions were modified to where the employer would be liable to the employee for one additional hour of wages for the workday, regardless of the amount of break time actually worked. The Assembly agreed with the Senate, and continued to describe the additional payment as a penalty. The bill as amended later became the law. The court noted that: “…to the very end of the legislative process the additional money an employer would have to pay for failing to ensure mandated break periods was considered a penalty.”

The court pointed out that the very definition of wages in the Labor Code includes: “…all amounts [paid] for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.” (emphasis added) Wages, for example, include an employee’s earned vacation pay/time, earned bonuses, and interest in profit-sharing. “[W]ages are fundamentally compensation for services rendered.”

The penalty pay required by section 226.7 for missed breaks isn’t pay for worked performed. “To the contrary, section 226.7 payments are fixed sums that become due the moment a break period is missed, regardless of the amount of time wrongly worked during a break period. For example, if even one 10 - minute rest break is missed during a day, an entire hour's pay is due. If a 30 - minute meal break is missed, an entire hour's pay is due. If all of the break periods in an eight-hour shift are missed, an entire hour's pay is due. The failure of section 226.7 to correlate the payment due to any additional labor performed by an employee undermines any argument the payment is a wage.”

On January 20, 2006 an Appeal Court in San Diego sided with those claiming the 226.7 extra pay is indeed a wage – see National Steel & Shipbuilding Co. v. Superior Court. At this time there is apparent disagreement at the Appeal Court level as to whether the payment is to be considered a wage or a penalty. The matter may have to be decided by the California Supreme Court.

What should employers do? Be sure to give your employees proper meal and rest periods in strict compliance with section 11 & 12 of your Industrial Welfare Commission Wage Order. The legal battle over whether the 226.7 payment is a penalty or a wage will ultimately determine how far back in time those payments may be claimed by employees.

Recognizing Chemical Dependency

By Tanya Butler, M.S., Helpline Consultant

You tell yourself, “I know all of my employees personally. Substance abuse isn't a problem in our workplace. It would be obvious if one of our employees was using drugs or alcohol at work.” Fortunately, significant strides that have been made in educating employers about substance abuse and how it can affect the workplace have made comments like these less common than they once were. Unfortunately, there is still too much denial and too many misconceptions among employers about who is using illicit drugs and alcohol and how this directly impacts the bottom line.

The facts are that 14.9 million American workers abuse alcohol and drugs. Chemical dependency can dramatically affect an employee's ability to contribute to your company's success. In economic terms, an addiction can lead to a drop in productivity, reduced product quality, increased absenteeism, and higher health care costs. In human terms, an addiction can lead to failed marriages, broken homes, severe emotional problems and even death. Depending on the nature of the individual's work, public safety can be jeopardized.

Employers who think alcohol and drug abuse will never be a problem in their workplace need to consider that more than 3/4 of adults who have serious drug and or alcohol problems are employed. Encouraging employees to find help when they need it can result in fewer accidents and fewer workers absent on Monday morning. It may even save an employee's life, family, or job.
Approximately 10% of America's workforce, some 14.9 million full and part-time employees, regularly abuse or are dependent on alcohol or drugs, according to the 2003 National Survey on Drug Use and Health. According to the Substance Abuse and Mental Health Services Administration, “of the adults (age 18 and over) characterized with abuse of or dependence on alcohol or drugs in 2003, 77% were employed either full or part time. This amounts to over 10% of full-time workers as well as over 10% of part-time workers."

Other facts to know:

• 76% of the world's illegal drugs are consumed in the U.S.
• Nearly 1 in 4 employed Americans aged 18 - 35 have used illegal drugs
• 1/3 of employees know of the illegal sale of drugs in their workplaces
• 20% of young workers admit using marijuana on the job

A dangerous and expensive problem
Alcohol and drug-related abuse by employees cost U.S. employers $100 billion a year, according to the The National Clearinghouse for Alcohol and Drug Information (NCADI). These staggering numbers do not include the cost of diverting company resources that could be used for other purposes toward addressing substance abuse issues.

They also do not include the "pain and suffering" aspects, which cannot be measured in economic terms. Costs can also be measured in the expense of absenteeism, injuries, health insurance claims, loss of productivity, employee morale, theft and fatalities.
According to NCADI statistics alcohol and drug users:

• Are far less productive.
• Use three times as many sick days.
• Are more likely to injure themselves or someone else.
• Are five times more likely to file worker's compensation claims.

Over recent years, studies have shown that:

• Absenteeism is two to three times higher for drug and alcohol users than for other employees;
• Employees with chemical dependence problems may claim three times as many sickness benefits and file five times as many workers' compensation claims;
• In many workplaces, 20% to 25% of accidents at work involve intoxicated people injuring themselves and innocent victims;
• On-the-job supplies of drugs and alcohol account for 15% to 30% of all accidents at work.

Casual drinkers a problem too
Remarkably, new research shows it is the social drinkers - not the hard-core alcoholics or problem drinkers - who are responsible for most of lost productivity, according to the Christian Science Monitor, specifically tying the hangover issue to production in the workplace

This study also found that it was managers, not hourly employees, who were most often drinking during the workday - 23% of upper managers and 11% of first-line supervisors reported having a drink during the workday, compared with only 8% of hourly employees. The study also found that 21% of employees said their own productivity had been affected because of a co-worker's drinking.

According to a study carried out in 1990, when airline pilots had to perform routine tasks in a simulator under three alcohol test conditions, it was found that: before the ingestion of any alcohol, 10% of them could not perform all the operations correctly; after reaching a blood alcohol concentration of 0.10/100ml, 89% could not perform all the operations correctly; and fourteen hours later, after all the alcohol had left their systems, 68% could not perform all the operations correctly

Some sectors and categories of workers are more affected than others. Those that have been identified as being at special risk include the food and catering industry, transportation, the maritime sector, construction, assembly line workers, military personnel and recreation and entertainment services.

Several characteristics of work are coming to be more clearly recognized as being related to the increased use of alcohol and drugs. These include job stress, occupational and co-worker norms, the availability of drugs and alcohol at the workplace and long periods spent outside the family environment. In contrast, it is also becoming steadily clearer that the level of awareness at the workplace, along with the development of an attitude of prevention and greater responsibility among the workforce, can be a very important factor in reducing the use of drugs and alcohol by individuals both at work and in the community. The following explains characteristics of addictions.

Addictions are chronic - Once an addiction is developed, it will always have to be addressed. An addict may manage to stop using alcohol or other drugs for significant periods of time, but the disease typically does not disappear. Rather, it goes into remission. Should “normal” drug use be attempted, “out of control” use will usually return rapidly.
Addictions are progressive - Addiction gets worse over time. With some drugs, the decline is rapid. With others, like alcohol, it can be more gradual.

Addictions are primary - Addiction is not just a symptom of some underlying psychological problem. Once the use of alcohol or drugs becomes an addiction, the addiction itself needs to be treated as the primary illness.

Addictions can be terminal - Addiction to alcohol or other drugs often leads to death through damage to major organs of the body. Also, the risks of contracting Hepatitis C and HIV rise with use.

Stress adds to the problem - Stress is a major contributor to the initiation and continuation of addiction to alcohol or other drugs, as well as to relapse or a return to drug use after periods of abstinence.

Drug and alcohol abuse is a problem that employers, workers and their partners just cannot afford to ignore. Drug and alcohol abuse is prevalent almost everywhere, sparing very few countries and workplaces. It is a major contributory factor in accidents, absenteeism, health problems, theft, lower productivity and job loss. For workers, substance abuse can result in deteriorating health, injury, disciplinary action, family problems, job loss, and therefore poverty and social deprivation. For employers, substance abuse leads to safety problems affecting the enterprise, the workforce and the public at large, and it gives rise to increased costs, lower productivity and loss of competitive edge.

Prevention works
When the issue of workplace substance abuse is addressed by establishing comprehensive programs, it is a “win-win” situation for both employers and employees, according to the U.S. Department of Labor. A study of the economic impact of substance abuse treatment in Ohio found significant improvements in job-related performance:

• a 91% decrease in absenteeism
• an 88% decrease in problems with supervisors
• a 93% decrease in mistakes in work
• a 97% in on-the-job injuries.

In today's economy with its emphasis on rapid reaction, innovation and the capacity to constantly renew skills, it is easy to see that ignoring workplace substance abuse problems, and absorbing their costs, is not a viable option.

Culture, diversity and Training

By Jeff Hull, Director, Learning Services

When culture and diversity are paired with training, one may automatically assume that the result would be a diversity training program. While that may be partially correct, integrating culture and diversity into learning programs goes beyond diversity training alone. So that each trainee can get the most out of learning, companies and trainers need to be ever more cognizant of cultural and diversity factors when designing and delivering training programs.

There are two popular ways that culture and diversity are integral components in learning: Utilizing and being aware of the trainees’ cultural characteristics and effectively conducting diversity training.

Cultural characteristics of trainees
Geert Hofstede, a professor at Maastricht University in the Netherlands, conducted research over the past few decades concerning workplace values that are influenced by culture. Through his research, he identified five dimensions of national culture based upon a continuum: Individualism-collectivism, uncertainty avoidance, masculinity-femininity, power distance and time orientation.

• Individualism-Collectivism
  Cultures with a high degree of individualism include the United States and the Netherlands. As an example, these cultures have historically used a top-down, authoritarian approach to decision making. On the opposite side of the spectrum are Mexico and Indonesia; because of strong familial roots more consensus is needed to make decisions.
• Uncertainty Avoidance
  Cultures with strong uncertainty avoidance tend to prefer having structure and by having clear rules. The Japanese, as well as the Russians and the French, shy away from uncertainty unlike Americans who prefer less clear rules.
• Masculinity-Femininity
  Masculine cultures are typically defined as those that are more competitive. Feminine cultures are typically defined as those that are more nurturing and helpful. Cultures that are more competitive include the United States and Japan, while Scandinavian countries are more nurturing.
• Power Distance
  Cultures with a higher power distance are those where hierarchies are most prominent and where there are inequalities of power and wealth. China, Mexico and Central American countries have a higher power distance than countries like Germany and the United States that have lower power distance.
• Time Orientation
  Cultures can be long-term oriented such as China, Japan and other Asian cultures due to perseverance and long-term success rather than short-term gains. The United States and Canada share in having a more short-term orientation, focusing more on the past and the present.

What does this mean in a learning environment? Companies and trainers must be aware of the complexities that cultural differences can pose both in the work environment and in the learning environment. As some examples, trainees with more collectivism will expect more team interactions and exercises in their learning environment than someone who is more individualistic. Trainees having higher uncertainty avoidance will require much more structure to their training programs and will dislike programs without agendas. Those that are more nurturing will enjoy more interaction with other trainees. Trainees having a higher power distance may feel uncomfortable asking the trainer questions. Trainees that are more long-term oriented will embrace long-term development plans and assignments, while more short-term oriented will want more immediate tangible results.

As can be seen, conducting training in culturally diverse environments can be a challenge; however, it is through cultural awareness that an effective training program can be designed and delivered.

Effective diversity training
While many companies conduct diversity training, there are two underlying reasons why many diversity training programs are conducted: (1) to change employee attitudes about diversity or (2) to assist employees in working in a diverse workforce. To this end, there are two typical types of diversity training programs: Awareness training and behavioral training.

Diversity awareness training
The most popular of the two, the basic premise to awareness training is that by becoming more aware of stereotypes and beliefs, employees will be better able to avoid negative stereotyping when dealing with others. By confronting stereotypes directly, employees will better understand how stereotypes can either help or hinder their interaction with others.

Behavioral training
The basic premise of this program is to change company policy and/or employee behaviors. This can be from simply examining employment practices that may not allow groups of employees to maximize their potential. It can take the form of immersing someone in another culture to better understand challenges and interactions. It can also take the form of actually teaching employees rules and appropriate behavior in their day-to-day interactions.

When designing or delivering a diversity program, it is important to have these characteristics associated with the program:

• The program must be structured so that all organizational, employee and management issues are addressed.
• Top management must fully support and endorse the program.
• The training must be a part of a diversity effort, not just one day of training.
• Manager and supervisor involvement is mandatory.
• Diversity is a business objective.
• Diversity is seen as a company-wide goal to increase revenue and profitability.

Regardless of the training topic, a company is delivering to its employees, culture and diversity play a significant role in the design, delivery and the training’s impact. It is through better understanding of one another that organizations and employees can be more effective and achieve the desired results.

The Paradoxes of Multiple Generations in the Workforce

A collaborative article by Tanya Butler (Helpline), Juan Garcia and Jennifer Shin (Research Services)

With life expectancy on the rise, and with workers being able to work beyond retirement age, for the first time in modern history the American workforce will encompass four separate generations working side by side.

It's likely for an organization to include members of multiple generations - the Silent Generation, Baby Boomers, Generation Xers, and recently the Millennials. The differences and similarities between these groups are a major challenge for HR professionals to engage all of these employees to the goals of the organization. To do so, HR will need to understand the motivation of each generation and design a compelling work climate that addresses the unique needs of each group while also creating a common ground.

The Silent Generation (born 1933-1945)
This generation grew up in a time of economic turmoil following the Great Depression. They dealt with economic hardships by being disciplined and self-sacrificing. Some may have seen wars in Korea and Vietnam, and most experienced the prosperity of the late 1940s and 1950s after they became teenagers or adults. They lived and helped reinforce the American Dream, enjoying a lifetime of steadily rising affluence. Employees from the Silent Generation are typically disciplined, loyal team players who work within the system, are committed and financially and socially conservative. They are often mechanically savvy but may not be literate in today’s technology. They have a huge knowledge legacy to share, and embody a traditional work ethic.

The Baby Boomers (born 1946-1964)
The most populous generation typically grew up amid economic prosperity, suburban affluence and strong nuclear families with stay-at-home moms. This generation was the first to be raised with television. The oldest among them grew up during a period of peace and prosperity in the U.S. and then a period of civil unrest and change, followed by inflation and corporate downsizing. They tend to be optimistic, competitive, and focused on personal accomplishment. They work hard—maybe too hard. This generation increased our workweek from 40 hours to 70 or 80 hours. They view change as sometimes painful but inevitable.

Generation X (born 1965-1976)
The GenXers are often said to be the “Me” group or generation of status-seekers. They were exposed to fast food, designer clothes for children, the war on drugs, AIDS, the falling of the Berlin Wall, the first woman Supreme Court Justice, and the first female and first black presidential candidates. High divorce rates, latch-key kids, parents’ preoccupation with careers vs. family, shaped the values and work habits of this group. GenXers are very independent; and expect immediate and ongoing feedback, and are equally comfortable giving feedback to others. They work well in multicultural settings, desire some fun in the workplace, and have a pragmatic approach to getting things done. They have a commitment to their work, to the team they work with and the boss they work for.

The Millennial Generation or Y Generation
(Broadly defined as the last generation born in the 20th century, including those in their mid and early 20s, teenagers, and children over the age of 5.)

Just beginning to enter the workplace, the Millennial Generation is being raised at the most child-centric time in our history. Perhaps it's because of the showers of attention and high expectations from parents, they are confident; sometimes, though, they appear cocky. Millennials are typically team-oriented and prefer to pursue tasks in groups rather than individual endeavors. Having juggled sports, school and social interests, they're good multitaskers. Preferring structure in the workplace, they acknowledge and respect positions and titles. An open work relationship with their bosses is a common work characteristic of this group. They, however, may not always mesh with GenXers' love of independence and hands-off style.

What do workers really want?
So, what are some symptoms employers will notice in the workplace that evolve from generational differences?

• Most seem to prefer flexible or fewer hours; work/life balance is important. Often, they choose time over money.
• Mature workers may have health issues and as they wind down their career, they may want to enjoy more free time for hobbies or families; but are interested in staying in the workforce.
• Meaningful work and innovation is important, especially to younger workers; therefore, lateral vs. upward career moves will be more common. They may care less about advancement than about work/life balance.
• Generations X and Y typically bring a consumer mentality to their employment. Loyalty is a transactional relationship and may have to be earned repeatedly depending on the circumstances.
• All age groups want timely and constructive feedback
  What kinds of tensions really exist?
• Younger workers’ connection to electronic communication devices makes them more accessible to work-related disturbances during off hours. Considering an insistence on work/life balance, we may see a backlash when work interferes with family life.
• The phenomena of upside-down management where older workers are managed by younger ones. Younger workers may be impatient with traditional organizational hierarchies and want more democratic and diverse teams. They often want to be a part of the decision-making processes and may challenge the ‘chain of command’ and ‘pay your dues’ philosophies as inefficient.
• Most GenXers are technology proficient. They expect to receive the tools to do the work. They like flexibility, a lot of resources, and minimal supervision. This may cause tension in an environment that expects close supervision and constant reporting.
• While the older generations value consistency and loyalty, the younger ones value flexibility, innovation, openness, and choices. This difference in work styles and values may cause friction.
• Younger workers are comfortable with technology and communicate and network easily using email, Internet, video conferencing, text messaging, etc. They may consider the costs (money and time) of travel largely unnecessary.

It is important to remember that if differences are not acknowledged and discussed, and solutions are not supported by top leadership, the resulting tensions may have a significant negative impact on productivity. As with any other dimension of diversity, each generation needs to respect the others, appreciate their differences, and recognize the values they can learn from each other.
Members of every generation want a positive, empowering work environment. Every manager has the ability to create a climate that is attractive to all team members and reflects each individual's approach and outlook:

Encourage employees to talk freely and openly about their career aspirations.

• Schedule career discussions with all team members.
• Provide feedback.
• Help build skills.
• Link employees' work to "bottom line" performance.
• Increase camaraderie-building events.
• Be open to new ideas from employees.
• Encourage work/life balance.
• Listen 75% of the time and talk only 25%.
• Ask for frequent feedback.
• Regularly recognize the significance of each individual's contributions.
• Beat the rumor mill - be a proactive communicator.