By Barbara Mitchell
HR expert / co-author
The Essential HR Handbook
“Progress might have been all right once, but it has gone on too long,” said well-known poet Ogden Nash. Indeed, the modern workplace is evolutionary, with resources—human and otherwise—in a state of constant flux. How organizations adapt and react can mean the difference between success and failure. Here’s why.
The workplace has changed significantly in this new century, and the pace of change isn’t slowing down. We have moved into a global economy in which events and actions in formerly remote parts of the world have a real impact on U.S. business. We’ve moved into the knowledge economy, too: The service industry has replaced manufacturing as the core U.S. enterprise.
Work that used to be done here is being “outsourced” to countries that pay lower wages. Technology is changing how and where we work. Employees are seeking a balance between their work and personal lives.
Meanwhile, the makeup of the labor pool in this country continues to experience major shifts. The U.S. Department of Labor estimates that by 2008, 70 percent of people entering the job market will be women and people of color. Further, we may face a significant labor shortage—depending on whether Baby Boomers (those born 1946-1964) retire when they are eligible or continue to work at least part-time.
These forecasts suggest that organizations should review their current policies and practices to be sure they are prepared for a different workforce.
Recent scandals have raised the bar considerably regarding workplace ethics—that is, moral principles and values that establish appropriate conduct. More than half of U.S. businesses report having some type of ethics policy—but that isn’t enough.
For example, Enron Corporation, a fast-growing energy firm that was brought down by accounting scandals in the early 21st century, had a comprehensive ethics policy that appears to have been ignored. In addition to the Enron scandal, firms such as WorldCom, Tyco International, and Arthur Andersen (auditors to both Enron and WorldCom) were greatly affected by their leaders’ unethical actions.
What can we do to be sure our organizations follow ethical practices? Many organizations are asking their HR departments to serve as the “conscience of the organization” and monitor behavior. Policies aren’t enough; employees need to see others, at all levels of the organization, conduct themselves ethically. Managers need to ensure that their organizational cultures demand ethical behavior.
Organization leaders should participate in determining what their ethics codes cover, then hold each manager accountable for ensuring that those standards are met. Most important, managers must be models of ethical behavior at all times.
Ethical issues for top management to grapple with include, but are not limited to:
• What information should be shared with employees?
• How much information should the employer share regarding a former employee who was fired or laid off?
• What impact should an employee’s personal life have on his or her potential for advancement?
• Should the organization make accommodations for a valued employee whose job performance is suffering because of a personal situation?
• Should employees be responsible for reporting actions they think violate the organization’s ethics? If so, to what extent or under what procedure?
Suggestions for codifying ethical behavior in an organization include having a written statement that is published and posted around your workplace, then following that code of ethics; discussing your code of ethics in the orientation process and then conducting mandatory, annual ethics training for everyone; informing employees how to report an ethics violation and ensuring that those who report them are not subject to retaliation; setting up a confidential hotline for reporting ethics violations; and encouraging continuing discussion of ethics in staff meetings.
Code of Ethics
Among the elements of workplace issues and behavior that a code of ethics might cover:
• applicable laws
• confidential or proprietary material
• conflicts of interest
• organizational assets or property
• acceptance of gifts, gratuities and entertainment
• privacy issues
• dealing with the media
• reporting ethics violations, including a non-retaliation statement.
Since the recent spate of ethics scandals, Congress passed the Sarbanes-Oxley Act of 2002 (SOX), which is having a large impact on the policies and procedures for publicly held companies (see below).
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002, commonly referred to as SOX, is also known as the Public Company Accounting Reform and Investor Act of 2002, a federal law enacted in response to a spate of major corporate and accounting scandals that diminished public trust in accounting practices.
SOX established new or enhanced standards for the governing boards of all U.S. public companies and management and public accounting firms. It also established the Public Company Accounting Oversight Board, charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies. SOX also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.
The law significantly expanded protection for employees who allege certain types of corporate misconduct. SOX allows the following employees to bring a lawsuit for reinstatement, back pay, and damages if they have been retaliated against for reporting corporate fraud or accounting abuses: employees of publicly traded companies and employees of any entity, public or private, that is a contractor to a publicly traded company such as an accounting firm.
SOX also imposes criminal penalties—including up to 10 years imprisonment—on anyone who retaliates against a person for providing true information to a law enforcement officer about the commission of a federal crime. For additional information on the Sarbanes-Oxley Act of 2002, contact your organization’s employment-law counsel and learn more here: www.soxlaw.com.
Main Message for Managers
Managing people in the 21st century seems to entail new challenges at every turn. Managers need to be aware of current events to stay ahead of new trends and issues. To take their organizations forward to the future, they should:
• prepare for an increasing number of women and people of color in the workforce.
• develop a code of ethics and monitor compliance with it.
• maximize the positive aspects so as to minimize the differences among generations in the workforce.
• create opportunities for employees to have work/life balance and flexibility.
• carefully evaluate whether outsourcing will benefit the organization.
• provide training on cross-cultural issues for both managers and employees.
ABOUT BARBARA MITCHELL
Barbara Mitchell is a human resources and organization development consultant who is widely known as an expert in the areas of recruitment and retention. She has experience in both for-profit and not-for-profit sectors and has consulted to a variety of organizations around the world.
She served in senior human resources leadership positions with Marriott International and several technology firms in the Washington DC area before co-founding the Millennium Group International, LLC (TMG) in 1998, which she sold in 2008.
She recently served on the Society of Human Resource Management as a Special Expert Panel on Consulting and Outsourcing in recognition of her expertise and long service to the HR profession. Barbara is a graduate of North Park University, Chicago, IL, with a degree in history and political science and has taken graduate level courses at UCLA. Contact Barbara by email.
ABOUT THE ESSENTIAL HR HANDBOOK
This 250-page reference guide, published in the fall of 2008 by Career Press, is a must-have for everyone who deals with employees on a daily basis, believe Mitchell and Armstrong, who wrote the book to shed light on the issues that keep managers up at night.
With this easy-to-read paperback, you’ll learn how to effectively and efficiently:
• Individually manage each employee, starting on his or her first day.
• Manage a multi-generational workforce.
• Appraise job performance.
• Coach and counsel.
• Provide equitable pay, benefits, and total rewards strategies.
• Minimize legal risk.
WHAT CRITICS ARE SAYING
“Finally, a complete, clear, and concise book that covers every essential element of that mix of art and science we call HR. It’s 100% applicable to the real-world challenges faced by today’s HR manager or business owner.” — Joe Calloway, author of Work Like You’re Showing Off.
“This should be required reading for all owners of growing businesses and new managers launching their careers. Seasoned HR professionals will also find value in this quick guide to the essentials of managing people.” — Stephen J. O’Connor, senior director of staffing, ESPN Inc.
“This book is easy to use, and full of solid advice and information from diversity to interviews to legal issue. If you are HR professional, you should have this book at the ready every day.” — Chester Elton, co-author of The Carrot Principle.