Gruntled Employees

Uniting two airlines by focusing on culture

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

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

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

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

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

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

Maybe we're becoming more gruntled

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

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

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

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

Hat tip to The Boston Globe for the story.

Why employment law is like "Survivor"

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

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

Let me explain:

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

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

As in employment law.

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

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

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

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

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

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

On knuckleballs, incentives, and goals

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

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

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

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

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

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

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

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

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

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

Massachusetts hides antiemployer HR rule in "probusiness" law

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

Here are five things you need to know:

1. Employers must tell workers about negative entries. An employer now has to notify an employee when it puts into a personnel record any information that has been or may be used to negatively affect the worker’s job. This must be done within ten days. The law leaves unchanged an employee’s right to review or get a copy of their records within five days of requesting it. The only sop to employers is a limit on these requests to two a year. But that limit does not apply to the notice and review of negative entries.

2. There could be serious penalties for failing to comply. The Attorney General’s Office is charged with enforcing the statute. The amendment does not change the existing penalty, which is a fine of between $500 and $2,500. It’s not yet clear to what extent the AG’s Office will seek to enforce the law. Besides these penalties, the new law could cause problems for employers during other employment litigation. If discovery reveals that the employer failed to comply, this could hurt the employer’s credibility.

3. Employers now face a dilemma about documentation. On the one hand, we’re always warning clients to document employee issues as much as possible, just in case the issues go to litigation. On the other hand, the new law makes putting relatively innocuous information into a personnel file a much more-provocative event. Now a quiet, low-level note in a file carries the risk of unnecessarily agitating the employee. Agitated employees become disgruntled employees, and disgruntled employees sue. Under the new law, employers are damned if they do and damned if they don’t.

4. Many employers are required to keep personnel records. If you employ 20 or more workers, then you’re required to keep in personnel records any written information about:

   • identity
   • job title and description
   • pay information
   • start date
   • job application
   • evaluations
   • warnings
   • probationary periods
   • waivers
   • termination notice
   • any documents on discipline

5. The law doesn’t benefit anyone (except lawyers). The amendment snuck in below the radar, without any discussion in the employment-law community. It’s antiemployer, in that it places companies at increased risk for employee lawsuits. While advocates could possibly argue that workers benefit from increased “transparency,” we disagree. There are times when a prudent employer should make a minor note in a file without escalating it to a human-resources event. Employees shouldn’t need to be stressed out by every less-than-positive note made in a file. But the new law makes that unavoidable.

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

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

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

An organizational belief

As many readers know, I'm a big Red Sox fan. (That might explain my current bad mood, as the possibility of a playoff berth fades away with the end of summer.) Baseball aside, I've often written about the management style and philosophy of the current team. (See "Clubhouse rules.") Here's another example, along with an explanation of the philosophy behind it.

Red Sox first-base coach Ron Johnson has been away from the team for a month. His daughter was in a horrifying accident in Tennessee, where a car hit her while she was horseback riding. Most of the details have been kept out of the media, but the girl ended up losing her leg.

Yesterday, a reporter asked general manager Theo Epstein when he thought Johnson would return. Epstein wouldn't speculate, but his answer gave great insight into how the team treats its employees:

I’ll leave that to RJ or until he lets us make some sort of public disclosure. His priority is with his family, and that’s an organizational belief, that at times of crisis, family comes first. He’s doing a great job supporting his family through this tough time.

My emphasis. The quote's from Sox beat reporter Amalie Benjamin's notebook column in The Boston Globe.

If you're an employer or a manager, ask yourself this: Do you want to be seen as having the kind of workplace where employees' families come first in times of crisis, or do you want to be seen as the kind of workplace that counts days off, demands doctors' notes, and docks pay? I don't know this for sure, but I can pretty much guarantee that the Red Sox are keeping Johnson on salary and not tracking the days he has missed.

If you haven't already, adopt a similar organizational belief. The Red Sox might be destined for third place this season, but they're showing championship-caliber managerial skills here.

Motivating a team by hiding the Benjamins

At the beginning of ESPN's broadcast of last night's Game 1 of the NBA Finals, sideline reporter Doris Burke filed a story about how Boston Celtics head coach Doc Rivers motivated his team to make it to the Finals. Back in February, after the Celtics' only regular-season game at the Staples Center, home of their archrivals and the defending champions Los Angeles Lakers, Rivers got hold of an envelope and took up a collection from his players and staff. Everyone coughed up a hundred dollars — $2,600 in all. Then he told the team he was going to hide the envelope somewhere inside the Staples Center.

Rivers told them: “The only way you’ll get it back is if you come back here and get it.’’ And the only way that was going to happen was by making it to the Finals (assuming, of course, that LA also made it).

On Thursday, Rivers reached up under the drop ceiling in the visitors' locker room and retrieved the dusty envelope — and the $2,600 it contained.

Rivers is known for being a masterful motivator. But did his team of highly paid athletes really need to get their C-notes back? That's not the point. It certainly wasn't the money that motivated the team. By making a dramatic, fun gesture, Rivers got his players to visualize something concrete and real — a bulging envelope — rather than something as intangible as a championship berth four months in the future.

(Of course, the motivation didn't carry into the first game. The Lakers beat the Celts, 102–89.)

Here is the story in the Globe and the Herald.

What about your workplace? Is there some dramatic, fun, and concrete gesture that you could use to motivate your team? Share it in the comments below.

Clubhouse rules

I've written before about the lessons that other managers can learn from the Boston Red Sox (see "Division-leading employee management"). In today's Boston Globe Magazine, Charles P. Pierce profiles Terry Francona, the most successful manager in the history of the Red Sox. One of the recurring themes in the piece is how Francona strives to maintain an atmosphere of normality in the clubhouse: not to get too up after wins, not to get too down after losses.

Here's the money quote, which has a strong message for managers in any industry:

“That’s a big part of it,” Francona admits. “I want there to be an atmosphere where they want to show up every day and do the right thing. We can have rules out the [expletive], but if they want to do the right thing, we’ll be a better team. It’s about consistency. If they win the other night or if they don’t, they don’t need to come in here and see me either bouncing off the walls or dragging my tail. It doesn’t work. It’s got to be the same every day."

Too many managers in today's workforce seem to think that you need to have "rules out the [expletive]." Rules about sick days, rules about social media, rules about bereavement leave. Forget all that. As with the Red Sox, it's better to create "an atmosphere where they want to show up every day and do the right thing."

What do you think? Does your workplace need rules out the [expletive]? Or do you try to create a certain atmosphere? Sound off in the comments.

Rethinking noncompetes

I have to admit it: For the past 16 years, I've been a bit of an "employer snob." Professionally, I've described myself with the cumbersome and inelegant mouthful "management-side employment lawyer." (Seriously: you want to see someone fall asleep standing up at a cocktail party? Tell them you're a management-side employment lawyer. Don't get me wrong: the job's not boring. Just the label.) Labels aside, I've seen my role as someone who helps employers.

But over the years, as my practice has grown, I have developed a specialty in noncompete litigation. (Unintended consequence: some clients have asked me if I knew a good employment lawyer. D'oh.)

Noncompete practice is a little different from the rest of employment litigation because you tend to have management-side employment lawyers (snooze) on both sides of the cases. Which makes sense because you have employers on both sides: the old (enforcing) employer and the new (defending) employer. We do both sides at Shepherd, although if pushed, I'd probably say that I enjoyed defending more.

And here's where my problem comes from. I like to say that I don't represent employees, and that's generally true. If you want to sue your employer for wrongful termination or some sort of USERRA violation, I ain't your guy. But truth be told, when I'm defending a noncompete lawsuit, I am in fact representing (former) employees. To be sure, it is commonly the new employer who's paying my freight. But most of the time, the new employer is not named as a defendant. So, yes, I represent employees in noncompete cases. And quite honestly, we've had some very good success in doing so, against some of the largest law firms and employers in the world.

But I've only just come to realize that I've been looking at this the wrong way. It's not about choosing a "side" — employers on one side and employees on the other side. It's about following a principle.

Most noncompete lawsuits are brought for the wrong reasons: to punish former employees. To thwart competition. To send a message to competitors to stay away from our people. To send a message to our employees that you're not free to leave.

I have a problem with that.

As I've said many times over the past three and a half years on this blog, talent is the most important asset any company has. And it's up to the employers to find, train, manage, and keep this talent. Noncompete agreements, which are almost always forced down a new employee's throat without the possibility of negotiation, are a poor way to retain employees. Fear never inspires loyalty. And disloyal employees will find a way to leave eventually.

No, the better method is to give employees reasons to want to stay. But if they decide eventually that it's time to leave the nest, then they should be free to do so. Even if it means that they're going to compete.

With one exception. They can't take our stuff. And by stuff I mean two things: our secrets and our client relationships. If their old jobs required them to work with our secrets — our legitimate, protectable secrets, not stupid things like prospect lists — then they should not be allowed to take them to their new jobs. And if in their old jobs we paid them to develop and maintain customer relationships to the extent that they became the face of our company, then they should have to stay away from those relationships for a reasonable period of time. A year, say. Enough time to make the customers understand that the company was what made the relationship special, not the departed employee.

And that's it. If a company hires me to enforce a noncompete against an employee who has taken secrets or hijacked our customer relationships, then I'll go after that employee with every club in my bag. But if an employer wants me to help punish or screw over employees who simply wants to do their own thing, that employer's going to have to find a different firm.

The principle I'm interested in is fair competition, because that's what our system's all about.

So from this day forward, when it comes to noncompetes, I'm not about being on the employer's side versus the employee's side. I'm about promoting fair competition. The law is designed to protect against unfair competition, not ordinary competition.

Employees: If you are stuck with a noncompete and you want to go to another company or maybe start your own, we can help you — as long as you're not stealing secrets or unfairly commandeering customer relationships.

New employers: if you're looking to hire new talent but not looking to score your competitor's secrets, we can help you.

And old employers: if someone's looking to unfairly compete, we can help you.

It's not about employers and employees. It's about competition. That's the side we're on.

Why employment lawyers screamed more than those Denny's chickens

If you couldn't find the remote after the Saints pantsed the Colts (regretting their "We're baaa-ack!" call in the pregame yet?) in this evening's Super Bowl, you were stuck watching CBS's new show "Undercover Boss." I have to admit: I wasn't planning on watching it, and when the remote fell between the sofa cushions, I then planned on hating it. But in the end, I didn't. I'm not saying that I'm going to fan it on Facebook and start planning my life around it, but I did watch this debut episode.

The premise is simple: The president of a huge company goes "undercover" as a frontline worker for his own company to see just how miserable his employees can be. (In the pilot, it was Waste Management president and COO Larry O'Donnell.) To explain the camera crew following him around, a cover story was created that he was part of a documentary about working in entry-level jobs. (Oooh ... clever. The old base-your-lies-on-the-truth gambit.) Then at the end of the hour, he tears off his disguise (which apparently was a day of stubble, which distracted people from his five-hundred-dollar glasses) and reveals his COO-ness. Then he promotes all the nice people and sternly rebukes vaguely needles the employment-law-violating plant manager. Cue the credits.

After a night filled with chickens screaming during commercials for Denny's, I'm certain that employer attorneys around the nation had a similar reaction. Letting a camera crew film your bad employment practices and labor-law violations? Yikes.

On the other hand, the message that a company president should have firsthand experience with what his or her frontline employees are experiencing is a good one. Perhaps if more executives watch "Undercover Boss," they might worry more about how their employees are being treated.

Now pardon me while I go work on my day-old stubble so that no one recognizes me at work tomorrow ...