Personnel News

The High Cost of Wrongful Discharge

Be Ready When Key Employees Leave

Fighting Absenteeism With Well Pay

Nondiscriminatory Decisions Need Not be Sound

Arbitrator Reinstates Insubordinate Worker

Cash Back on Health Plans

Avoiding Unionization

Fighting the Rumor Mill

Top level executives who make major policy decisions affecting most or all of the workforce often feel they should not be expected to explain their reasoning. When an unpopular edict appears, bad feelings strikes, dissension in management, and irreparable damage to human resources development programs can result.

By offering an explanation for a key decision, you can sell the idea and defuse a potentially explosive situation. For an even better presentation of a major decision, announce the need for a change before the decision is made, outline the problem and solicit input. Then, even if the final decision is unpopular, subordinates will react with greater understanding of the situation and fewer feelings of shock and betrayal.

Wrongful discharge suits are not very common but, when they are brought against a company, the cost can be incredibly high. The reason rests in the legal theories surrounding employment-at-will.

Statutory cases, where an employer is accused of violating laws protecting employees, are the least expensive because awards are set based on economic loss to the plaintiff. Attorney's fees are usually added on, but the total cost is still relatively low.

Suits brought over contract disputes are also comparatively tame. Like statute actions, awards in contract cases are intended only to repay the plaintiff for lost earnings.

When a tort action is brought, however, the award can be astronomical. The reason: juries can make awards for suffering as well as monetary loss. Even worse, punitive damages can be awarded, and amounts are unlimited. Juries can be very generous with a company's money.

The loss of a key employee can put management in a serious bind unless preparations have been made in advance. Prior to the separation, a plan should be in hand for selecting and training a qualified replacement.

Ideally, key employees who are looking around, for whatever reason should be identified before they act. Informal conversations about their views on company procedures can be revealing. When supervisors feel certain employees are unhappy or considering career options, they may want to sit down and rough out their options should Employee X resign.

Perhaps the most helpful tool in minimizing the effect of losing a key employee is the rotating file. Every supervisor should keep a file of applicants who performed well in interviews, but could not be placed at the time they applied. By continuously interviewing applicants, even when a department has no openings, supervisors can maintain a list of qualified replacements.

Some companies have found a pool of ready replacements in their own personnel. By encouraging a high degree of interdepartmental communication, companies can produce workers who are sufficiently familiar with operations to fill vacated positions. Cross-training on a regular basis will further ease job transitions.

Another strategy involves testing possible replacements by asking them to fill in when key employees take vacation time. This should be done with the knowledge of all parties concerned.

Companies that have "reversed" their sick pay programs are reporting valuable benefits. By offering incentives for days worked ("well pay") rather than compensation for a set number of absences, employers can significantly reduce absenteeism. Companies seeing decreases of more than 30% are not uncommon. Wellness pay, particularly when used as part of a larger wellness program, can also improve employee morale by showing that the company is concerned about the health of its people.

The defendant in a discrimination suit is not expected to prove that the action in question was sound business practice, only that no intent to discriminate against the plaintiff was present. Going one step further, the defendant actually bears no burden of proof. It is the plaintiff who is required to prove a case.

In a recent case, the plaintiff, a black woman, had been fired for repeatedly making mistakes in recording transactions. She was under suspicion of having stolen money hidden by the errors.

Her case was based on the fact that recording mistakes were very common and no white employees had been fired. However, the court noted the specific errors she made were not made by others. She also claimed that her employer had no basis for the suspicion of theft.

Here, the court made its point. While the employer may not have had a solid basis for its suspicions, the "correctness" of the decision was not at issue, the court said. As long as no purposeful discrimination could be shown, no case was present.

A recent arbitration decision clearly states that not all acts of insubordination justify termination. While the employer found the worker's actions "abusive behavior toward management," the arbitrator felt otherwise.

The worker had been called in by her supervisor to receive a copy of a written warning for a small incident the previous day. After reading the warning, she said, "Is this all?" When the supervisor replied "Yes," she tore up the warning, dropped it, and walked out. The employer fired her for "disorderly conduct and abusive behavior toward management." However, the arbitrator set a two-month suspension as the proper disciplinary action.

The arbitrator said the worker's behavior was insubordinate, but not abusive or profane or Greatening It was a message of contempt that, while wrong, was not of the flagrant nature warranting termination.

Employees at a number of companies can now get cash refunds if they use less than their allotted health care funds. In an effort to control mushrooming health care costs, the companies are giving workers a health care "account" each year. If the account is not used up by claims, the difference goes to the employee.

However, the cash incentive plans have two major flaws. First, employees may not seek needed treatment, preferring the cash refund. Critics also say companies that have the plans may be rewarding younger employees who usually don't need as much medical coverage.

Another knock against this type of plan is that it has no bearing on the fact that health care providers run the show.

Unionization elections are now being won more frequently by management than by the unions, the reverse of past trends. The methods used by companies to fight unionization were explored in a recent survey.

Four types of management practices found to be common to anti-union efforts were: personnel management practices designed to promote good morale; defensive tactics to complicate unionization procedures; measures to detect organizing activities; and the election campaign.

Employee selection procedures can help, it was found, if people with experience in union settings are avoided. As for barriers to union organizers, the only significant factor was restrictions placed on solicitation of employees. The other popular measures examined include informing employees that management wishes to retain the non-union status of the workers (employed by 57% of respondents); restriction of access to lists of employees (21%); and establishment of plants in non-union locations.

Two methods of detecting unionization activities showed a significant relationship to election results: review of employee complaints; and training supervisors to detect organizing activities.

During the actual campaign, successful efforts are likely to be directed by a general manager with the help of an outside consultant. A number of communications channels had significant results with firms which used a variety of methods having the best record. Speeches, posters, personal letters, payroll messages, handbills, and movies were all significant factors.

Campaign issues that could be advantageously discussed include the personal disadvantages of union membership (most effective) , the possibility of strikes, the negative image of the labor movement, and the employer's good points. Compensation was not found to be an important issue.

Rumors are as much a part of any business organization as supervisors and workers. The grapevine can be a valuable means of communication, but it can also be a source of dangerous gossip and unrest.

Many experts see a need to respond to rumors, but others believe that, by repeating the rumor, even in denying it, management further spreads false information. On the opposite end of the spectrum are those who suggest a strong attack on harmful rumors about company operations.

When companies are contemplating controversial moves, it is often best to publicize the situation before rumors can get started. Effective communication is indispensable in combating rumors; one large firm even has a rumor hotline that responds to employee inquiries.

Employee publications are being used in many places to dispel specific rumors and promote the idea that rumors are frequently unfounded.