Saturday, January 30, 2010

I’m a Bully, He’s a Bully, She’s a Bully; Wouldn’t You Like to Be a Bully, too?

Commentary
by Professor Tony Wheeler
Assistant Professor of Human Resource Management

Reflexively, you’re saying to yourself, “No!” But have you ever experienced the following. You work on a team tasked with redesigning a long existing process. Your team spends months collecting data about the process, and the team comes to a radical decision about changing that process. Knowing that any recommended change will be met with resistance, the team extensively prepares a well thought, well researched presentation to make to other members of the organization. While making the presentation, a single coworker hijacks the presentation, interrupting you with questions and complaints before you can even explain your recommendation. As other coworkers, including you, plead with this coworker to let the presentation conclude before raising questions, the coworker continues to escalate his or her complaints to the point of yelling at you in front of everyone. You feel humiliated and belittled. How do you respond to this coworker in future meetings when he or she unloads on you or another coworker?

I recently experienced this situation when a colleague, who has a reputation for doing so, let loose on me. I’ve seen this type of behavior happen at almost every organization for which I have worked, and the only word to describe this type of behavior is ‘bully’. How do I respond to workplace bullies?The same way about 33% of employees who have been the target of bullying or even just been a bystander: I bully the bully. And no one feels good about it.

So let me explain some conclusions I’ve drawn from the findings of some theoretical research I recently completed on workplace bullying. (I’m collecting data this spring)

First, the basics. While we think that bullies have certain personality traits (aggressive, egocentric, and just plain old mean) that predispose them to bully, workplace bullying research suggests that environmental factors play a stronger role in who will become a bully and who will not. If you work in an organization that has an unsupportive, competitive, and stressed environment, where you feel overloaded in and have unclear expectations about your job, and have a laizzes faire ) supervisor, you will likely see bullying occur in your workplace. Bullies emerge in resource scarce environments, and bullying becomes a behavioral means to an end. That end is the acquisition and protection of personal resources that any employee feels they need to complete their jobs

When you don’t feel like you can meet the demands of your job and when you think you have no support from your boss, coworkers, or HRM department, even you might engage in bullying. If you don’t, surely someone in your workplace will. Workplace bullying data suggests that up to 25% of you currently experience or witness bullying in your organization, and almost 50% of you will experience or witness bullying over your career.

The organizational and personal costs of workplace bullying are staggering. In Great Britain, it is estimated that bullying costs Great Britain’s GDP more than $3B a year and costs employers an estimated 19 million employee absentee days. The targets and bystanders of bullying report decreased job satisfaction, commitment, and performance as well as increased turnover rates, depression levels, suicidal tendencies, and heart attack rates.

Once bullying occurs in any organization, it has a corrosive effect on targets and bystanders of bullying. It introduces more stress into an already stressful and unsupportive environment, and there is a 33% chance that non-bullies will see that the best defense of bullying is to become one. Because the organization allows bullying to occur in the first place, employees quickly realize that the organization tacitly encourages it happen. So employees learn that bullying in their organization might be the best way to get ahead or at the very least survive. Interestingly, heretofore bullies will stop when they change jobs into a more supportive environment.

I need to emphatically stress that becoming a bully to cope with bullying isn’t the most effective coping strategy. To the contrary, research suggests that everyone involved, including the bullies, dislike themselves for allowing the bullying to take place. Unless you are a sociopath, most employees know that bullying is wrong. And all of those bad health outcomes remain.

I do want, however, to emphasize that you can easily identify the climate in which bullying emerges. You can take a “resource temperature” of your workforce. Lower levels of support equal higher chances of bullying. Higher levels of stress equal higher chances of bullying. To stop bullying before it occurs, your organization should implement a zero tolerance bullying policy. And enforce it. Although Robert Sutton of Stanford University famously wrote that organizations should terminate problem employees, the mere presence of a bullying is corrosive. Organizations need to prevent bullying before it occurs, and I argue that resource support is the way to do it.

When my research gets published (hopefully!), I’ll be happy to forward to anyone who wants to read it. In the meantime, I’m here to discuss any questions you might have.

Saturday, January 16, 2010

Teacher Evaluation and Performance Management

Commentary
by Professor Tony Wheeler
Professor Richard W. Scholl


What is at stake for your company when measuring performance? For the state, measuring teacher performance could be worth an additional $100M to a K-12 budget already approaching $700M, but it appears that the teacher unions have gotten in the way again (Projo, 1/15/09). In one corner, we have the state wanting to measure teacher effectiveness via student test scores. In the other corner, we have at least one teachers' union wanting a more comprehensive assessment of teaching effectiveness.

For many years, the topic of teacher evaluations has surfaced in discussions of educational improvement. On the surface, it stands to reason that the performance of teachers is an important determinate of student learning. Most recently, the use of student standardized tests scores as a measure of teacher performance has been a sticking point in obtaining union support for the state's grant proposal for federal Race to the Top funds. One aspect of the state's Race to the Top application, is that 51% of a teacher's evaluation will be based on test scores. While we are not fully aware of all the specific issues regarding this specific use of student test scores as teacher effectiveness evaluations, we believe that there a basic principles of performance management that bear directly on the issue of how teachers should be evaluated and for what purpose evaluations should be used.

Performance Management is More Than a Set of Evaluation Metrics
Typically, performance management constitutes a process whereby employers observe, document, and improve employee performance. Effective performance management involves the integration of appraisal, feedback, development, and behavioral change processes working in concert to improve employee performance. While in any performance management process there comes a point when it is appropriate to terminate ineffective employees, given the cost of replacing employees, effective companies attempt to first diagnose the causes of low performance and make efforts to improve performance. The use of student test scores as the foundation for a strategic performance management process appears to solely focus on "getting rid" of "teachers that can't cut the mustard." Like any type of employee performance, teaching effectiveness is a complex set of behaviors stemming from a combination of knowledge, skills, abilities, motivation, role expectations, and available resources. Before jumping into a plan of evaluation and action, we recommend a fuller understanding of the causes of ineffective teacher performance and student learning gaps. 

Outcome versus Process Measures of Performance
A fundamental issue in performance appraisal is whether to measure employee performance using process/behavioral measures or to use outcome/results measures. Each type of appraisal outcomes has issues to consider. For example, when using process measures, there is the danger of reducing creativity and forcing all employees to use a single method which may not fit all situations. In using outcome measures, we run the risk that employees lack control over the factors that lead to the desired outcomes.

Based on the current issue at hand, let's focus on the use of outcome measures. First, is the student achievement test a valid and reliable measure of student knowledge? Notice, knowledge not learning. You must document changes in student scores to determine student learning. Second, you then have to make the link that those changes in student learning directly result from teacher influence and not from things like parental involvement, socio-economic status, and the like over which teachers have no control. Third, what cut-off will the state establish for student performance that then suggests some "objective" evidence of teacher performance? Is it a certain amount of year-over-year performance from each student that is then aggregated (to school, grade, or teacher level)? Or is it some arbitrary number, like each student must pass a certain percent of the test? In either case, how can the state factor out teacher effectiveness from those numbers? Fourth, in their book Freakonomics, Steven Levitt and Stephen Dubner note how test scores can be manipulated and teachers feel pressure to "teach toward the test." In our opinion, the state's desire to use student test scores to account for 51% of a teacher's performance simply increases teachers' motivation to do whatever they can do to improve test scores. That's not student learning. Proceed at your own peril, State of Rhode Island.

Educational Improvement versus Teacher Evaluation
Whether or not test scores or other objective measures of learning have a place in teacher evaluation, we believe that it is imperative for schools to be able to assess student learning. In commenting on the use of test scores to evaluate teachers, Debra Gist, the state's education commissioner is quoted "We don't take this lightly. We will develop a very clear plan, based on very solid evidence. We need a consistent measure that is objective and reliable … that has some ability to reconcile what a fourth grader in Westerly is learning with what a fourth grader in Woonsocket is learning."

We could not agree more, but there is a big difference between using outcome-based assessments of learning as a part of an educational continuous improvement process and using these metrics to evaluate the effectiveness of an individual teacher. In many years of studying and working with performance management practices, we have learned that there is often a conflict over whether the same metrics are used for teacher development or for decisions about employee pay, promotion, or termination. When teachers' careers are at stake, they will naturally feel pressure to deemphasize student learning issues and instead concentrate on simply increasing student test scores by any means. In essence, the state wants student learning but implements a system designed to boost test scores. The focus on outcomes leads to teachers ignoring the very learning that the state wants students to experience.

Friday, January 15, 2010

Potential Changes in Health Insurance and Pensions for 2010

Commentary
by Dr. Suzanne Taylor
Adjunct Professor

Just how the new health care bill will affect human resource management and labor negotiations is not certain, but what is certain is it will affect just about every aspect of health insurance as we have come to know it. Here is a summary of some of the major issues remaining to be resolved.

Retiree health insurance benefits will most likely become more expensive for employers. The Medicare Modernization Act provides subsidies to employers offering prescription drug coverage. The subsides will become taxable and the employer's liability under FASB 106 will increase as will the need to put aside more funding or to eliminate prescription drug coverage altogether. Reliance on the newly revised Medicare prescription program should reduce or drop the donut hole. It may be that legislation will prevent employers from changing benefits offered to employees and their beneficiaries once a person has retired. This could cause employers to cap their contributions to the cost, eliminate retiree health insurance as is already happening in both the private and public sectors, or even cut the benefits of active workers.

The cost of providing retiree insurance for early retirees under 65 will not be a part of Medicare.

On the other end of the age continuum, the youngest generation is in trouble as the House Bill would end the CHIP, Children's Health Insurance Program, and redirect the millions of uninsured children to Medicaid or to the new health insurance exchanges where moderate income Americans can buy subsidized insurance. In the Senate bill, CHIP is preserved until 2015, two years past its current expiration date, but two Senators: Rockefeller (W. Virginia) and Casey (Pennsylvania) are hoping for more.

As to the exchanges and how they will work; little has been determined. The expansion of Medicaid and how far it will go and in what direction is yet to be determined. Medicaid pays doctors and hospitals far lower reimbursement rates than private insurance. This is due in part to the fact that the states pick up some of the added costs. Both House and Senate versions will pay the states' additional shares in the first two years and 95% after that. California has indicated its additional costs, not paid by the federal government, will amount to an additional $3 billion a year.

Furthermore, one of the least understood aspects of the bill is just how the new insurance will be sold on the open market. The Senate bill requires states to create new insurance market places. The House bill would establish a national exchange, but the states could opt out if they had the capacity to run their own exchange.
Another problem is who will oversee the new federal regulations? Will it be the states, that are understaffed now, or a new federal regulatory commission?

What of the Cadillac tax proposed to be placed on plans, whose premiums exceed $8,000 for single and $23,000 for family plans, and how much it will rise in the future? As of January 15, 2010, there appears to be a compromise reached which increases the threshold to $8900 for individuals and $24,000 for family coverage. For people in certain high risk jobs, the threshold would be higher, up to $27,000 for family coverage. Moreover, state and local government workers and benefits from collectively bargained plans would be exempted until 2018. And in 2015, the cost of dental and vision coverage would also be deducted from the plan limit. It is still believed that the tax would slow the growth of health spending. The proposed tax is still subject to further modifications as it has not been fully agreed upon by all. It is thought, however, that the thresholds would probably rise less than health insurance premiums as the bill states the rise would be in correlation with the CPI plus one percentage point. The 40% tax on the excess to be paid by the insurer is expected to begin in 2013. Some still remain who want no excise tax at all. The House bill suggestion was to tax very high wage earners, but that proposal appears to be given up for now.

It is predicted that there will be no mandate for employers to insure their workers; rather it will be a mandate for individuals to carry insurance. Moreover, insurers will be able to charge older people two and a half times as much as younger ones. As of now the House bill has a two to one ratio and the Senate a three to one ratio.
What role, if any, will Health Savings Accounts play in the new designs?

Each of the bills is over 2,000 pages and both contain many recommendations for a variety of review commissions, some within the IRS and others within Health and Human Services.
Of course, not the least concern is how the package can ultimately be put together in the next month or so to pass both the Senate and House and gain the President's approval. Overall, Tom Daschle predicts that the starting date for the new bill would be "somewhere around 2014."

Just this concern of what health care is going to look like would be more than enough for one summer course, but we must also take some time to look at the growth of defined contribution plans and how money can be safely invested in these hard economic times. The big question is will defined benefit plans survive and how can we save for the costs of retirement by planning ahead to have sufficient assets for living and affording health insurance.

Sunday, January 10, 2010

What Is the Worth of the Person Tasked to Fix RI’s Economy?

Commentary
by Professor Tony Wheeler
Assistant Professor of Human Resource Management


Apparently not $250,000. Ioanna Morfessis withdrew from her appointment to head RI's Economic Development Corporation (EDC). For those who don't know the purpose of this Governor-appointed group, the EDC (http://www.riedc.com/) basically assists the state in developing economic policies and strategies to enable the state to economically prosper. You could joke, as I often do, that the EDC has failed and miserably at that.

But its past failures that have contributed to the state's lackluster (to put it nicely) economic conditions should highlight the need to step outside of the state to find fresh ideas. Instead, the media focuses on Morfessis's proposed salary instead of her qualifications or worth to the state. The focus on her salary, in my estimation, misses the larger picture.

First, is she or anyone else who might head the EDC worth that salary? Some of you might say no. I disagree. Given the troubles the state faces, what will it take to attract, motivate, and retain the most qualified, best performing head of the EDC? That is the purpose of compensation: to attract, motivate, and retain. Compensation also signifies what a job is worth, both to the company and to the market. Yes, $250,000 is a lot of money, especially compared to what most people in the state earn, even the President of URI or the Governor himself. Do other states pay similar amounts to their respective EDC heads? I'd say that given the problems this state faces, maybe $250,000 isn't enough.

Now the Governor appoints Keith Stokes, the Executive Director of Newport County's Chamber of Commerce, to head the EDC for a temporary 1 year term. Why did the Governor seek an out of state replacement for this position only to find a replacement in the state? And why is his contract offer only $185,000?

Second, with the focus on salary, what signal does the state send to future directors, especially given that the state will need to hire a permanent replacement next year? The state faces serious economic adversity, and the head of the EDC holds a serious position. The state should ask itself again: What is this job worth?

Handling the performance management of this job is for a different post altogether.

Much Ado about Nothing (Job Satisfaction)

Commentary
by Professor Tony Wheeler
Assistant Professor of Human Resource Management


Okay, maybe the title of this entry understates the importance of job satisfaction, but the recently released national job satisfaction report and subsequent media stir over the report overstate and simplify the power of job satisfaction. Or worse.
Before we start, can we agree that the next time you say "A happy worker is a productive worker," lightening will strike me down. I have two young kids and prefer to live to see them into adulthood. Is a happy worker a productive worker? Yes…just the same as a productive worker is a happy worker. What's that, you say?

You heard me right. Employees who feel under-employed (not using their knowledge, skills, and abilities) often report very low job satisfaction. In a state like Rhode Island, where unemployment is near 12% with another 5-10% added on for under-employment, you can see how employees doing work beneath them might feel pretty dissatisfied. The generally lousy economic conditions also make people less satisfied with their jobs, even if they're lucky to have them.

But let's continue to discuss the job satisfaction-performance relationship. Empirically speaking, that relationship has a very weak, almost zero, positive relationship. Job satisfaction explains less than 1% of job performance. That's it (although it does explain quite a bit more turnover). So you are probably more likely to find a very satisfied unproductive employee than you are to find an unsatisfied, unproductive employee. Think about someone who has just experienced a traumatic personal event (parent passes away, spouse loses job, divorce, etc). How productive will that employee be over the next couple of days? Does that have anything to do with their job satisfaction?

Sometimes job satisfaction is a canary in a coal mine. It tells you that something is wrong, but you don't know what's causing the problem. It could be something out of a company's control. Job satisfaction is also capricious. It can change from day to day. How satisfied are you with your job after returning from a wonderful Caribbean vacation? That's why job satisfaction can be much ado about nothing.