Thursday, November 24, 2011

How social technologies are extending the organization

http://www.mckinseyquarterly.com/How_social_technologies_are_extending_the_organization_2888

How social technologies are extending the organization

Our fifth annual survey on the way organizations use social tools and technologies finds that they continue to seep into many organizations, transforming business processes and raising performance.

NOVEMBER 2011 • Jacques Bughin, Angela Hung Byers, and Michael Chui

how social technologies are extending the organization article, companies using social technologies extensively can improve financial performance and market share, High Tech

Companies are improving their mastery of social technologies, using them to enhance operations and exploit new market opportunities—key findings of our fifth annual survey on these tools and technologies, in which we asked more than 4,200 global executives how organizations deploy them and the benefits they confer.¹ When adopted at scale across an emerging type of networked enterprise and integrated into the work processes of employees, social technologies can boost a company’s financial performance and market share, respondents say, confirming last year’s survey results.

But this is a very dynamic environment, where the gains from using social technologies sometimes do not persist, perhaps because it takes so much effort to achieve them at scale. Some companies, respondents indicate, reaped fewer benefits and thus became less networked, while a smaller percentage learned how to deploy these technologies to become even more networked. Executives say that their companies are using them to increase their agility and to manage organizational complexity. Many believe that if organizational barriers to the use of social technologies diminish, they could form the core of entirely new business processes that may radically improve performance.

Usage at scale and continued benefits

Social technologies as a group have reached critical scale at the organizations represented in our survey. Seventy-two percent of the respondents report that their companies are deploying at least one technology, and more than 40 percent say that social networking and blogs are now in use (Exhibit 1). These technologies are being deployed across sectors, at the high level of 86 percent of the respondents’ companies in high tech and telecommunications, but at 62 percent of companies even in the energy industry (Exhibit 2). Levels of reported benefits not only remain high when respondents’ organizations use social tools for internal purposes but have also increased among those that use them for communicating with customers or for integration with partners and suppliers (Exhibit 3).

The performance edge of networked enterprises

Last year, we identified a small group of respondents who indicated that their companies had experienced superior performance from the use of social technologies across key stakeholder groups. We repeated the analysis this year, looking at the average level of improvements in business benefits that executives reported. Four clusters emerge from our analysis. Executives at internally networked organizations note the highest improvement in benefits from interactions with employees; those at externally networked organizations, from interactions with customers, partners, and suppliers. Executives at fully networked organizations report greater benefits fromboth internal and external interactions. In the fourth and by far the largest group, developing organizations, respondents report lower-than-average improvements across all interactions at their organizations.²

As we found last year, the number of fully networked organizations is small. But the percentage of externally networked organizations is higher and that of internally networked ones lower (Exhibit 4),³ reflecting the fact that the gains from the use of social technologies are not static (see discussion below). We call the companies in the fully and externally networked groups extended enterprises, since their use of social technologies in customer and partner outreach blurs the boundaries of the organization.We found statistically significant correlations between self-reported corporate-performance metrics and certain business processes that networked enterprises use (Exhibit 5). The market share gains respondents report are correlated with two such processes. First, these organizations use social tools to scan external environments. Second, they use them to match employees to tasks: internal wikis and social networks help project leaders to identify employees with the most appropriate skills and to assign these employees to the projects for which they are best suited.

Another key performance measure, self-reported operating-margin improvements, correlated positively with the reported percentage of employees whose use of social technologies was integrated into their day-to-day work. Among the companies of respondents who took the survey in previous years, these improvements also correlated positively with gains in the reported percentage of employees whose work is highly integrated with social media. Market share leadership in an industry, the final self-reported performance measure, correlated positively with the integration of social tools in employees’ day-to-day work, as well. Consistent with last year’s analysis, we found that market leadership correlates negatively with fully networked and externally networked organizations. While market leaders may use social technologies within the organization, they might be less inclined than market challengers to push for a full range of benefits.

Notes² As we did last year, we sorted the respondents into four clusters based on the average mean improvement reported across the different benefits when Web 2.0 is used in interacting with employees, customers, and external partners or any combination thereof. Fully networked enterprises are defined as those with an average improvement greater than 10 percent when Web 2.0 is used to interact with employees, customers, and external partners. Externally networked enterprises are those with a greater than 10 percent average improvement when Web 2.0 is used to interact with customers and external partners. Internally networked enterprises are those with an average improvement greater than 10 percent when Web 2.0 is used to interact with employees. The remainder of respondents work for what we classify as developing enterprises. ³ See Jacques Bughin and Michael Chui, “The rise of the networked enterprise: Web 2.0 finds its payday,” mckinseyquarterly.com, December 2010.

Networked organizations: Not a steady state

We also analyzed the responses of executives who participated in both the 2010 and 2011 surveys for changes in our defined enterprise clusters. According to these responses, a surprising number of organizations made the transition from one type of enterprise to another. Roughly half of the internally and externally networked enterprises slid back into the category of developing organizations; that is, they did not maintain the benefits of using social technologies that they had achieved earlier. Less than 15 percent of the companies in any given category moved up to the next tier—in other words, from a developing to a networked enterprise or from an internally or externally networked enterprise to a fully networked one (Exhibit 6). It appears that it is easier to lose the benefits of social technologies than to become a more networked enterprise, which suggests that significant effort is required to achieve gains at scale. We also found initial indications that if the percentage of employees who integrated social technologies into their day-to-day work declined, their companies were more likely to backslide.

Changing processes

We asked respondents about current and future uses of social technologies for a range of business processes and found that the greatest number say their companies use these tools to scan the external environment for new ideas. Respondents also report that different technologies are better suited to specific types of business processes, as the accompanying heat map shows (Exhibit 7). Social networking and blogs, in particular, are used most heavily in externally focused processes that gather competitive intelligence and support marketing efforts.

Respondents expect social technologies to modify many of their organizations’ current processes. In addition, many believe that entirely new processes could arise if barriers to use—cultural obstacles, for example—fall (Exhibit 8). The respondents affiliated with fully networked organizations are the likeliest to believe that greater process change will occur in their own organizations. In larger numbers than respondents in other clusters, they think that social technologies will lead their companies to adopt entirely new processes under current conditions and to do so even more aggressively if all constraints were removed. This optimistic view may reflect the fact that these respondents are seeing the greatest level of benefits across the board.

Peering ahead three to five years, many respondents expect still more profound organizational changes (Exhibit 9). They say that with fewer constraints on social technologies at their companies, boundaries among employees, vendors, and customers will blur; that more employee teams will be able to organize themselves; and that data-driven decision making will rise in importance.

Looking ahead

Our research shows that respondents affiliated with fully networked organizations say that they continue to realize competitive gains and performance improvements. Senior executives should think strategically about how social technologies can support business processes by helping organizations to navigate the external environment and to forge stronger links with customers and vendors. Integrating social technologies into the workflow and using them to optimize internal processes will, these results suggest, provide additional competitive benefits.
Don’t rest on your laurels: competition will increase as the adoption of social tools and technologies continues to rise and as progressive companies use them to improve their processes. Indeed, many companies we categorized as networked organizations last year slipped to a lower rung this year as the benefits their executives reported fell. Integrating Web technologies into the daily workflow, our results suggest, is the most effective way to maintain competitive position or become more networked.
Companies should prepare for more substantial disruptions. Since many executives believe that significant changes will occur as (or if) constraints on social tools and technologies are lifted, companies that can create change themselves—instead of reacting to it—are likely to benefit the most.
About the Authors

Jacques Bughin is a director in McKinsey’s Brussels office; Michael Chui is a senior fellow of the McKinsey Global Institute and is based in the San Francisco office.

The authors would like to thank Angela Hung Byers for her contribution to the development of this article.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com.

If you are seeking an Executive Coach for yourself or your organization, consider contacting CB Bowman, MBA, CMC at Executive Leadership, LLC 908.509.1744 cb@exec-leadershipllc.com; http://www.exec-leadershipllc.com.

CB Bowman, ia a Certified Master Coach and president, CEO of Executive Leadership, LLC. She is also the Chairperson and Founder for the Association of Corporate Executive Coaches (http://www.acec-website.org).

Wednesday, November 23, 2011

We're Hiring Many business schools have trouble filling faculty positions

By BETH GARDINER
Reprint from the WSJ: http://online.wsj.com/article/SB10001424052970204224604577032232809553166.html?mod=WSJ_Careers_CareerJournal_4&_nocache=1322107548493&user=welcome&mg=id-wsj

When it comes to hiring, business schools are running up against one of their most basic classroom lessons—the law of supply and demand.

While thousands of new schools have opened around the world in recent years, the number of new Ph.D.s in business subjects has held relatively steady, and many schools are now facing a serious shortage of well-qualified faculty.

For top institutions in the U.S. and Western Europe, it has mostly meant a jump in the salaries that professors with strong research records can command. But some less-wealthy schools in the West, and many B-schools in the developing world, are having real trouble filling teaching posts. Often, the jobs remain vacant or are filled by visiting or part-time faculty, or by moonlighting businesspeople without doctorates.

"Every year we have about eight to 10 posts to fill in accounting and finance," two areas where the shortage is most severe, says Sue Cox, dean of Lancaster University Management School in England. Three senior posts have been vacant for years, she adds. "It seems to me that we're perpetually advertising" to fill top positions. "It's always the first thing on your mind."

Visiting schools around the world in work for two of the big accreditation bodies, Ms. Cox says she hears about the dearth of academically trained teachers constantly. "It's a universal problem," she says.

At Brunel Business School in London, about 10 faculty posts are empty at any given time, says Zahir Irani, the school's head. Those with the right qualifications know their value, and often pit potential employers against one another.

"I've had many cases where people will sign the contract and then never turn up" because they've gotten a better offer, he says. "Three weeks before you expect them to arrive, you get an e-mail saying 'Thank you, but I'm not coming.' "

For a school to maintain accreditation with the Association to Advance Collegiate Schools of Business, at least half of its courses must be taught by Ph.D.-holding faculty who are active researchers. Widely publicized rankings also use professors' research output to help measure a school's quality.

While many deans say students can learn much in courses taught by businesspeople without Ph.D.s, advocates of the traditional academic model say that without a critical mass of professors who are pushing forward the boundaries of business thinking, institutions can't give students the intellectual skills to thrive in a fast-changing economy.

In many places, "the balance is out of whack," and B-schools with too few research-minded faculty have become little more than trade schools, says AACSB President John Fernandes.

But he says the mismatch between the dribbling Ph.D. pipeline and the burgeoning hiring needs of new B-schools is so great, particularly in emerging economies, that it will be near impossible for the sector to sustain the old approach of relying on teachers who are deeply engaged in business research.

"Is this model doable in the U.S., never mind the global context?" he asks. "The answer is definitely no."

Instead, he argues, the schools will have to find ways to expose greater numbers of students to each research-oriented professor. That is likely to mean increasing class sizes, using less academically minded teachers as intermediaries between students and Ph.D.-holding faculty, or connecting students and professors electronically.

Increasing the number of business Ph.D.s is also crucial, he says, but it won't be enough.

The AACSB estimates there are now 14,000 business schools in the world, thousands of them new institutions in regions like Asia, Latin America and Eastern Europe. Only a few run doctoral programs, which are expensive and require intensive involvement by senior faculty.

More than half of the 2,000 or so business Ph.D.s who graduate each year come from American schools, and many are hired abroad. Under tough budget pressures, some U.S. universities have reduced their production of Ph.D.s, says Richard Sorensen, dean of the Pamplin College of Business at Virginia Tech. And most business students just don't seem interested in forgoing private-sector salaries to pursue academic careers, many deans say.

A wave of retirements of faculty hired as business schools expanded in the 1970s and '80s is exacerbating the problem, Mr. Sorensen says.

In fast-growing economies like India's, the gap between the need for solid management training and the supply of qualified teachers is particularly large.

The Indian School of Business in Hyderabad, one of the country's top B-schools, relies heavily on visiting faculty from Europe and the U.S. because it is unable to hire enough professors with doctorates, says Senior Associate Dean Sanjay Kallapur.

The school has only been able to attract professors of Indian origin, and that pool is far too small, Mr. Kallapur says. And ISB cannot compete with the salaries offered by B-schools in richer countries.

If it had the faculty, Mr. Kallapur says, his school could easily attract enough students to double in size.

The shortage also limits ISB's research reach. "There are so many problems here waiting to be studied," he says. "There are so many things that people are even willing to fund us to do but we have to say no because we don't have the faculty."

It's international growth that has made the market so tight. The China Europe International Business School in Shanghai wants to expand its faculty by 30 in the next three years, says Dean John Quelch, who himself came from Harvard Business School.

CEIBS hired a London headhunting firm to approach 150 European business professors about applying for jobs, Mr. Quelch says. And this year, the school helped sponsor a professors' conference in Texas, emblazoning its logo on attendees' hotel room card keys to raise its profile. That's led to a surge in job applications.

But most of China's scores of new business schools don't have CEIBS's resources, and they are struggling to hire quality faculty, Mr. Fernandes says.

Working with the AACSB, a handful of American B-schools have begun training professors with degrees in nonbusiness fields like psychology, sociology and economics to teach in business schools.

The effort is producing about 60 new business professors a year, says Mr. Sorensen, whose school trains about 10.

In the meantime, salaries are skyrocketing. For a nine-month-a-year job, Virginia Tech offers between $140,000 and $160,000 to new business Ph.D.s, two to three times what it pays starting professors in other fields, Mr. Sorensen says.

For universities unable to pay that premium, attracting good faculty is a struggle, says Brunel's Mr. Irani. And with the Ph.D. pipeline so small, he sees little hope of things easing. "If you take a long-term view, it's a bleak picture."

Ms. Gardiner is a writer in London. She can be reached at reports@wsj.com.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com
If you are seeking an Executive Coach for yourself or your organization, consider contacting CB Bowman, MBA, CMC at Executive Leadership, LLC 908.509.1744 cb@exec-leadershipllc.com; http://www.exec-leadershipllc.com.
CB Bowman, ia a Certified Master Coach and president, CEO of Executive Leadership, LLC. She is also the Chairperson and Founder for the Association of Corporate Executive Coaches (http://www.acec-website.org).
Among mid to senior level professionals Executive leadership LLC is the go to company for individuals and companies seeking human capital repositioning, development and/or growth through coaching, counseling, and strategic advice.
With her Fortune 500 business background, laser like precision, and a take no prisoners approach she swiftly narrows in on the issue, and unlike others, she presents financially sound, creative and action oriented solutions with infinite possibilities

Friday, November 18, 2011

How to Write an Employee Handbook: A Sweeping Novel or a Short Story?

GRAND RAPIDS | HOLLAND | LANSING | MUSKEGON | SOUTHFIELD | STERLING HEIGHTS
wnj.com

How to Write an Employee Handbook: A Sweeping Novel or a Short Story?
11/15/2011 Steven A. Palazzolo

There are as many different types of employee handbooks as there are different types of employers. Some run 70 or 80 pages and have a rule for everything. And then there are the bare-bones handbooks that only contain a few company policies. There is no right or wrong way to write an employee handbook. In fact, there is no law that requires you to have one at all. Still, I think every employer should write one. It is just a good idea and might even help you if you get into legal trouble. Below, I’ve condensed a series of blog postings on writing an employee handbook. I got the idea of blogging on the topic after a client suggested the best way to put together an employee handbook is to write it as if you were writing it for your own company. My company? I never actually thought about writing a handbook that way. Until now. Let’s call my fictitious company Zo’s. And because I’m a lawyer, let’s assume it is a service company rather than a manufacturing company. So, let’s write a handbook. INTRODUCTION The first thing I’ll include is an introduction, which sets the tone for the company. It may be light, like mine is going to be, or more formal if that is your corporate culture. It also gives us a chance right up-front to introduce the at-will concept. That is, you want to be able to let employees go for any reason or for no reason and with or without notice. And you want to tell them this a non-threatening way. Not that you will ever fire someone without a reason, but why give away your right to do so? WORK RULES Page two of my handbook is going to contain “The Rules.” Here are the rules we expect you to live by here at Zo’s:

Rule 1: Be professional.

Rule 2: When doing your job or anything else at work, see Rule 1.

That’s it. Two rules that we expect you to follow whenever you are representing the company, dealing with a client or with each other, or just doing your job. By “Be professional” we mean use that good judgment we know you have, always be honest, reliable and committed to doing your best. Be a team player and take personal responsibility for your actions. These two simple rules cover everything you do at work. Thinking of starting a romantic relationship with a coworker? See Rule 1 and think again. Thinking of harassing someone? Is that really professional? See Rule 1. Want to exaggerate the performance of the company’s products in an Internet chat room? Rule 1 again. For the record, I borrowed these rules from the Tribune Company handbook way back in the Spring of 2008. You can see the article here. I defy you to find a situation that Rule 1 and Rule 2 won’t cover. EEO POLICY Page three is our Equal Employment Opportunity (EEO) policy. You need to have a policy like this to provide at least some protection if you have a charge of discrimination filed against you. So this particular policy is going to read a bit more like it was written by a lawyer. Mine reads like this:
It is the policy of Zo’s that no employee or applicant for employment, will be discriminated against based upon age, race, color, creed, religion, sex, sexual orientation, national origin, disability, veteran status or other protected class or characteristic established under applicable federal, state or local statute or ordinance. Zo’s will not condone, permit or tolerate discrimination as described above. Persons who engage in such discrimination will be subject to appropriate discipline up to and including termination of employment. If you feel you have been subjected to discrimination, or have witnessed any discrimination, please report it immediately to your supervisor, HR or straight to Zo. Any complaint of alleged discrimination will be carefully investigated. Should there be any violation of this policy, appropriate actions will be taken to correct the matter. Zo’s will not tolerate retaliation against anyone who in good faith lodges a complaint under this policy.
Here are a couple of additional things you should know. First, sexual orientation, which is included in the list of things we won’t discriminate against, is not a protected category under Michigan or federal law. But we include it anyway at Zo’s because we think it is the right thing to do. Second, you don’t need to allow people to report directly to the owner of the company, but you do need to give employees at least a couple of options.
ANTI-HARASSMENT POLICY While there is no statute that specifically requires you to have an anti-harassment policy, the U.S. Supreme Court says that if you want to take advantage of a certain defense to a sexual harassment charge, you have to have a policy. And when the Supreme Court says we think it is a good idea that you have a policy, we lawyers tend to agree. One more thing to keep in mind is the title. I like something like “Policy Against Harassment.” Do not call it a “Harassment Policy.” The former makes if clear you won’t condone harassment, the latter makes it sound like you allow harassment as long as you do it by the rules. It is also a good idea to make sure employees know you won’t tolerate harassment based on any protected category, not just sex or gender. The kind of harassment we are talking about in this policy is harassment based on one of the protected categories. What about a boss who continually and forcefully reminds employees to do their jobs? That doesn’t count as harassment. TECHNOLOGY POLICY At Zo’s, everyone has a computer, e-mail account and unlimited access to the Internet. And that, as you know, can cause some problems. We need a computer use policy. And at Zo’s, “computer use” includes how you use your e-mail account, the Internet and social media. So our computer use policy is going to say that Zo’s can monitor use of company-provided computers and computer systems, including e-mail. In addition, my policy will contain a reference to Section 7 of the National Labor Relations Act – even though Zo’s is a non-union employer. Basically, the National Labor Relations Board says a social medial policy that broadly prohibits employees from doing things like making disparaging remarks about the company is a violation of Section 8(a)(1) of the NLRA. And that is true if you are a union employer or not. SOCIAL SECURITY PRIVACY At Zo’s we also have a Social Security number privacy policy because Michigan has a SSN privacy policy law. So here is what it says:
Zo’s understands the importance of protecting the confidentiality of its employees’ Social Security numbers and those collected in the ordinary course of Zo’s business. Neither Zo’s nor any of its employees will unlawfully disclose Social Security numbers obtained during the ordinary course of business. Zo’s will limit access to information or documents containing Social Security numbers to those employees who need the information to do their jobs. In addition, Zo’s will shield Social Security numbers displayed on computer monitors or printed documents from being easily viewed by others. Unless required to do so, Zo’s will not use Social Security numbers as personal identifiers, permit numbers, license numbers, primary account numbers or other similar uses Zo’s may use a Social Security number to perform an administrative duty related to employment, including, for example, to verify the identity of an individual; to detect or prevent identity theft; to investigate claims; to perform a credit check, criminal background check or driving history check; to enforce legal rights; or to administer benefits programs. All provisions of this policy are subject to the language of the Social Security Number Privacy Act of the State of Michigan.
MISC. POLICIES I also would include a policy on solicitation and distribution of literature. We could argue about this one way or another, but I think it is a good idea to say that we want to keep these sort of non-work disruptions to a minimum. If you want to sell Girl Scout cookies for your daughter, do it on your breaks and make sure the people you are pestering are on break, too. And that is it for my small company. Zo’s isn’t big enough for a Family Medical Leave Act policy, but your company may be. How about leaves of absence? We will deal with them as they come along. Other types of policies that larger companies might want to consider deal with time off, personal relationships, attendance policies, drug testing and holiday pay. If you employ hundreds of people, you also might want to consider a workplace violence policy. But if you need to tell people they can’t hit or threaten co-workers or bring a weapon to work, you might want to rethink your hiring practices. I think we can always fall back on Rule 1: Be professional.

Steven A. Palazzolo is a labor lawyer with the Michigan law firm of Warner Norcross & Judd LLP. You can contact him at spalazzolo@wnj.com or 616.752.2191. Read Steve’s blog at http://zomichiganemploymentlaw.wnj.com.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com

Among mid to senior level professionals Executive leadership LLC is the go to company for individuals and companies seeking human capital repositioning, development and/or growth through coaching, counseling, and strategic advice.

With her Fortune 500 business background, laser like precision, and a take no prisoners approach she swiftly narrows in on the issue, and unlike others, she presents financially sound, creative and action oriented solutions with infinite possibilities

Saturday, November 5, 2011

Are Pharmaceutical Sales Reps Exempt As “Outside Salesmen”?

Are Pharmaceutical Sales Reps Exempt As
“Outside Salesmen”?
Diagnosis Unclear

© 2011 Fisher & Phillips LLP
By Grace Horoupian And Matthew Sgnilek (Irvine)

Just last August, the U.S. Court of Appeals for the 2nd Circuit issued
a ruling that sent shock waves through segments of the healthcare
industry. Then, as affected employers began responding to that decision, the
9th Circuit reached an apparently contradictory decision that may have
raised more questions than it answered.
Dueling Decisions
In the first, the 2nd Circuit held that pharmaceutical sales
representatives (PSRs) were not exempt from overtime as outside sales
persons under the Fair Labor Standards Act (FLSA). In Re Novartis Wage
& Hour Litigation. In making its decision, the court relied heavily on a
Department of Labor legal brief, which strongly urged a finding that the
PSRs were not exempt as outside sales persons.
The DOL’s contention that PSRs were not exempt caught the
industry off-guard and seemingly contradicted the position taken by the
DOL for over 70 years. Since the inception of the outside-sales exemption
in 1938, the DOL had remained silent on the issue and acquiesced to
findings that PSRs qualified for the outside sales exemption.
But the more recent 9th Circuit case of Christopher v. SmithKline
Beechman indicates that the impact of Novartis and the DOL’s
newly-adopted interpretation may be short-lived. In SmithKline, PSRs filed
a suit contending that they were not outside salesmen and should have been
paid overtime. SmithKline moved for summary judgment contending the
PSRs were exempt as outside salespersons and not entitled to overtime.
Breaking with both the DOL and the Novartis court, the 9th Circuit agreed
with SmithKline and found that PSRs were outside salespersons exempt
from overtime requirements.
The Underlying Principal
To qualify for the exemption from overtime pay under the FLSA’s
outside sales classification, 1) an employee’s primary duty must be
making sales or obtaining orders or contracts for services; and 2) the
employee must be primarily and regularly engaged away from the
employer’s place or places of business in performing this primary duty.
The key difference between the Novartis and SmithKline decisions
lies in the evaluation of whether a PSR’s primary duty is making sales.
The PSRs and DOL take a narrow reading of the exemption and argue that
because federal regulations preclude PSRs from making sales directly to
physicians, their primary duty is not making sales. Federal regulations
preclude PSRs from obtaining anything more than a non-binding purchase
commitment from the physician that, if provided with a product, the
physician will appropriately prescribe it. In adopting this narrow view, the
DOL disregarded the fact that PSRs were hired for their sales experience,
and trained in sales methods.
The SmithKline court rejected the DOL’s interpretation and took a
much more reasoned (and more realistic) approach. SmithKline found the
PSRs’ primary duty was making sales. The court reasoned a PSR’s
non-binding agreement with a physician to appropriately prescribe products
provided is, in fact, a sale. The court noted that like all other salespersons,
PSRs earned commissions based upon sales commitments and enjoyed a
largely autonomous occupation outside the office. In so ruling, the 9th
Circuit flatly rejected the DOL’s rigid interpretation of the exemption as it
applies to PSRs and even stated “deference is not warranted because the
Secretary’s position is both plainly erroneous and inconsistent with her
own regulations and practices.…”
In light of the split opinion between the 9th and 2nd Circuits, and
varying state laws that may impact the classification of PSRs, employers
should be cautious. You should discuss with employment counsel the
classification of these individuals under regional, state, and federal laws.

For more information contact either of the authors:
ghoroupian@laborlawyers.com, msgnilek@laborlawyers.com or
949.851.2424.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com
If you are seeking an Executive Coach for yourself or your organization, consider contacting CB Bowman, MBA, CMC at Executive Leadership, LLC 908.509.1744 cb@exec-leadershipllc.com; http://www.exec-leadershipllc.com.
CB Bowman, ia a Certified Master Coach and president, CEO of Executive Leadership, LLC. She is also the Chairperson and Founder for the Association of Corporate Executive Coaches (http://www.acec-website.org).
Among mid to senior level professionals Executive leadership LLC is the go to company for individuals and companies seeking human capital repositioning, development and/or growth through coaching, counseling, and strategic advice.
With her Fortune 500 business background, laser like precision, and a take no prisoners approach she swiftly narrows in on the issue, and unlike others, she presents financially sound, creative and action oriented solutions with infinite possibilities

Sarbanes-Oxley Whistleblower Protections Apply to Non-Tangible Employment Action

Sarbanes-Oxley Whistleblower Protections Apply to Non-Tangible Employment Action
November 2, 2011

The U.S. Department of Labor Administrative Review Board (ARB) has concluded in Menendez v. Halliburton, Inc., that an employer's release of a whistleblower's identity to other employees violated the whistleblower's right to confidentiality, which by itself constituted an adverse action against the whistleblower and thus violated the anti-retaliation provisions of the Sarbanes-Oxley Act of 2002 (SOX).1 The ARB determined that whistleblowers are protected against unfavorable employment action that is "more than trivial" and "non-tangible,"2 even when the whistleblower's reasonable belief was ultimately mistaken.3
Background. On May 8, 2006, Anthony Menendez brought a claim against his employer, Halliburton, Inc., under Section 8064 of SOX, alleging that he suffered retaliatory adverse action as a result of his report to the U.S. Securities and Exchange Commission (SEC) and his employer's Audit Committee of perceived defective accounting practices.5
In early 2005, Menendez filed a confidential complaint with the SEC regarding Halliburton's revenue recognition practices. The SEC subsequently notified Halliburton of the complaint. Menendez later notified Halliburton's Audit Committee of the concerns included in his complaint, believing his identity would be kept confidential in accordance with Halliburton's policy.6 Subsequently, Halliburton's general counsel transmitted an email to relevant Halliburton employees mandating document retention to comply with the SEC investigation, stating that the investigation was based on Menendez's complaints and divulging his identity. As a result, Menendez was shunned by colleagues,7 relieved of responsibilities and assigned a new immediate supervisor ranking lower than his previous supervisor. In September 2006, the SEC formally notified Halliburton that no enforcement action was being recommended.8
ARB's Analysis. According to the ARB, a successful claim under Section 806 must satisfy a three–part test: (i) the employee engaged in SOX–protected activity;9 (ii) the employee suffered an adverse action;10 and (iii) the employee's action was a contributing factor in the adverse action.11 In this regard, the ARB determined that exercising his whistleblower rights under SOX was a "protected activity"; and as a result of Halliburton's divulging his name and thereby breaching his confidentiality, Halliburton caused Menendez to suffer an "adverse action." As to the third factor, the ARB requested the Administrative Law Judge (ALJ) to determine whether Menendez's protected activity was a contributing factor to his adverse action.12
In developing its standard, the ARB defined adverse actions as "unfavorable employment actions that are more than trivial, either as a single event or in combination with other deliberate employer actions. . . ."13 The ARB determined that an adverse action is one that would discourage a reasonable employee from taking protected action and is "not necessarily retaliatory or illegal."14
The ARB concluded that under SOX Section 806, the employee needed to demonstrate only that such activity would deter a reasonable person from engaging in protected activity. The ARB continued by noting that the employee also asserted that this action breached his right to confidentiality, in violation of SOX Section 301, which requires audit committees of public companies to develop procedures to handle anonymous complaints from employees. Construing Section 301's requirement
that employers establish confidential channels of communication for their employees to afford consistency with Section 806's anti–retaliation provisions, the ARB determined that Section 806 provides whistleblower protection to employees who make use of such channels.
15 Accordingly, the ARB agreed with Menendez that the right to confidentiality that Section 301 affords effectively establishes a "term and condition" of employment within the meaning of Section 806's whistleblower protection provision, and that the exposure of his identity in connection with his complaint constituted a violation of that employment term and condition.16
The ARB concluded that "a reasonable employee in Menendez's position would be deterred from filing a confidential disclosure regarding misconduct if there existed the prospect that his identity would be revealed to the very people implicated in the alleged misconduct."17
For Further Information
If you would like assistance in reviewing your whistleblower policy and the manner in which you conduct investigations into whistleblower complaints or have any questions about the Menendez v. Halliburton decision, please contact Laurence Lese, Richard Silfen or Joel Ephross; one of the members of the Securities Law Practice Group; one of the members of the Employment, Labor, Benefits and Immigration Practice Group; or the lawyer in the firm with whom you are regularly in contact.
Notes
1. Menendez v. Halliburton, Inc., ARB Nos. 09–002–003, ALJ No. 2007–SOX–005 (ARB Sept. 13, 2011).
2. The ARB concluded that, irrespective of the breach of his confidentiality, Menendez in this case did not suffer any tangible employment consequences. In this regard, the ARB stated: "SOX Section 806's plain language states that no company 'may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment.' By explicitly proscribing non-tangible activity, this language bespeaks a clear congressional intent to prohibit a very broad spectrum of adverse action against SOX whistleblowers." Halliburton at 15.
3. A basic principle of Halliburton is that a whistleblower is protected in his report of suspect accounting practices regardless of whether his allegation is ultimately correct, as long as his belief is reasonable.
4. Section 806 of SOX provides in pertinent part: "No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 . . . or that is required to file reports under section 15 of the Securities Exchange Act of 1934. . . or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee –
(1) to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341, 1343, 1344, or 1348, any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by –
(A) a Federal regulatory or law enforcement agency; ****** (C) a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct)." (emphasis added).
5. On several occasions, Menendez raised the issue of accounting difficulties with his immediate supervisor, the chief accounting officer of Halliburton. Thereafter, Menendez submitted his claim to the SEC.
6. Halliburton's policy of confidentiality regarding whistleblower submissions to the Audit Committee provided, in relevant part: "Your confidentiality shall be maintained unless disclosure is: Required or advisable in connection with any governmental investigation or report; In the interests of the Company, consistent with the goals of the Company's Code of Business Conduct; Required or advisable in the Company's legal defense of the matter." Halliburton at n.27.
7. Indeed, the auditors at KPMG (Halliburton's auditors), with whom Menendez usually worked closely, also refused to interact with him. KPMG's legal counsel had instructed its employees not to interact with Menendez on accounting issues until the complaints were resolved.
8. The Audit Committee's investigation likewise concluded with no changes in the company's accounting practices. By letter dated October 17, 2006, Menendez submitted his resignation.
9. Halliburton did not dispute whether Menendez's actions were protected, but whether its action was adverse and whether Menendez's action caused its action. The ARB focused on "(1) [w]hether the ALJ erred in concluding Menendez engaged in activity protected under Section 806 of SOX; (2) [w]hether the ALJ erred in concluding that Menendez did not sustain adverse employment action within SOX Section 806 as a result of a breach of whistleblower confidentiality, isolation, investigation, removal of duties, demotion, and/or constructive discharge." Halliburton at 10. The ARB noted that "Furthermore, the reasonableness of Menendez's position is not necessarily undermined by the fact that the SEC ultimately approved Halliburton's accounting methods. An employee's non-frivolous complaint does not have to ultimately withstand internal or external review to merit Section 806 protection; such a standard would clearly undermine employee initiatives in bringing to light perceived misconduct. The Board has ruled that an employee's reasonable but mistaken belief in employer misconduct may constitute protected activity. Courts have also concluded, '[t]o encourage disclosure, Congress chose statutory language which ensures that "an employee's reasonable but mistaken belief that an employer engaged in conduct that constitutes a violation of one of the six enumerated categories is protected."'" Halliburton at 13–14.
10. The ALJ ruled that the confidentiality breach did not constitute an adverse action, finding that Halliburton did no more than identify the employee as having made allegations against the company "to a group of people who would have known it was him anyway," and thus, this action had "no practical impact" and, therefore, failed to constitute an adverse action under SOX. Halliburton at 21. The ARB disagreed and stated that once the employee's confidentiality was breached, evidence that he may have been identified in some other way was not only purely speculative, but also was immaterial to an analysis of adverse action. Halliburton at 25.
11. The ARB stated that "The statute is designed to address (and remedy) the effect of retaliation against whistleblowers, not the motivation of the employer. Proof of 'retaliatory motive' is not necessary to a determination of causation." Halliburton at 31.
12. The ARB noted that "If Menendez carries his burden of proving causation Halliburton can avoid liability by demonstrating by clear and convincing evidence that it would have taken the same adverse action in the absence of the protected activity." Halliburton at 11.
13. The ARB cited Williams v. American Airlines, ARB No. 09-018, ALJ No. 2007-AIR-004 (ARB Dec. 29, 2010), as the controlling standard, though it relied on Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), as a persuasive reference. Burlington requires the employer's action be one measured by both severity and scope of the action. "Briefly, the Supreme Court's holding in Burlington addressed both the degree and scope of protection Title VII's anti-retaliation provision (Section 704) affords. With respect to the degree of actionable harm, the Court held that a Title VII plaintiff bringing a retaliation claim need only show the employer's challenged actions are 'materially adverse' or 'harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.'" Halliburton at 16. The ARB continued: "The Supreme Court in Burlington also held that the scope of actionable harm under Title VII's anti-retaliation provision was broader than that of Title VII's anti–discrimination provision (Section 703). By contrasting the language of the anti-discrimination provision (Section 703) with the anti-retaliation provision (Section 704), the Court explained why the correct standard for claims under Title VII's anti-retaliation provision should not be limited to 'ultimate employment decisions' or 'tangible employment actions.'" Halliburton at 17.
14. According to the ARB, "An adverse action however is simply something unfavorable to an employee, not necessarily retaliatory or illegal." Halliburton at 29. The ARB found that "Nothing in Section 806 requires a showing of retaliatory intent." Halliburton at 31.
15. The ARB noted that "Rather than a limitation on what is to be considered an adverse action under Section 806, we are of the opinion that 'terms and conditions of employment' are not significant limiting words and should be construed broadly within the remedial context of Section 806. . . .Under Section 806, the language 'in the terms and conditions of employment' does not limit Section 806's intended protection to economic or employment-related actions." Halliburton at 18.
16. Halliburton at 24.
17. "Since the purpose of confidentiality is to encourage employees to come forward with the information about SOX violations, permitting an employer to indiscriminately expose the identity of an employee who presents information concerning questionable accounting or auditing matters would most assuredly chill whistleblower-protected activity, thereby defeating the very purpose the confidentiality provided by Section 301 was meant to achieve and, as a result, undermining the SOX's overall purpose and objectives. Employees who exercise their right under Section 301 to engage in confidential disclosures should be protected from employer retaliation under the Section 806's whistleblower provisions if the employer fails to provide the requisite confidentiality." Halliburton at 24.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, or should be construed, as legal advice. For more information, please see the firm's full disclaimer.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com

Friday, November 4, 2011

Negotiating Your Salary During A Recession

Negotiating Your Salary During A Recession.
OCT 25
Posted by Jim Tait

Why so serious? It's time to negotiate my salary!

My dear neighbor, Jerry used to tell me at least once a month that “I just need to win the lottery…if I could just win the lottery, I would be so done.” He’d go on and on about all the things that he would accomplish, places he’d go, and the things he would buy. So, for Christmas this past year, I bought Jerry a lottery ticket. He was very appreciative, and then said “you know Jim, I always thought the tickets someone bought were more like a ticket, and not a piece of paper.” It struck me then that Jerry was set on winning the lottery without ever playing. Same goes for compensation negotiations. Salary negotiation is an important component of any successful job search. In this economy you may feel that the initial salary offer is a “my way or highway” proposition or that asking for more can make you seem greedy and or selfish.

Negotiating salary is a process, and employers expect to negotiate. You can actually hurt yourself by not negotiating because the employer may begin to question your level of professional business acumen. Now, the goal is not to win, but to arrive at a mutually agreeable outcome. Use these tips in your negotiations.

The foundation for any negotiations is built upon knowing what you want, how to ask for it, and what alternatives you will accept. When you approach negotiations with factual information, and a firm understanding of what you need, common ground upon what is beneficial for all concerned will be easier to find.

Being prepared is a key component in driving successful negotiations. You need to calculate and develop a clear idea of what your minimum requirements are. You need to know how much you need to make on a monthly basis in order to keep and support your family’s lifestyle as well as being able to meet your longer term financial goals.

You want to get an unambiguous idea of both the total monthly number as well as the components along with having a cost figure assigned to each. This amount becomes your “last, best, and final”, the minimum salary that you can accept. From your research you should also develop a target number, the total package cash value of salary and benefits you are aiming for.

Research salaries and benefits for the types of jobs you are interested in as well as company specific salary and benefits information. You can research salaries for the career field as well as the geographic areas you’re interested in. You can begin you research by going here and utilizing the PayScale widget on the right hand side of the page.

You should also calculate your market value. This indicates where you are compared to others in your field. Most of the PayScale type tools will define a min, mid, and max of salary the salary range for the job you want. The lower you are in the range, the more room you have to potentially negotiate, and the higher, the less room you have. Keep in mind that many companies view candidates in the 85% to 100% range as virtually the same. The theory is that once on board at a higher point in the range, it become hard to provide the employee increases beyond the normal merit budget which can lead to retention issues.

There are other factors including: geography, industry, business maturity, and company size that can effect the determination of your worth. You are worth different amounts in different markets. And, you may be worth more to one company than you are to another. This further emphasizes how important doing your homework and being flexible will be.

Have the offer before you negotiate. You should have the information I described above before you interview. During the interview it is important to talk about the job and your value before you discuss salary. The time to discuss your salary is after the job has been defined and you are certain that you have described your value to the employer. If the interviewer begins discussing salary, simply say that you are flexible depending upon a more complete understanding of the job. The tactic is to move the conversation to the job and the value you bring to the company. It is helpful to role play this as you would also do for interview preparation.

So the employer brings up compensation. Now what? Don’t panic. You now have a firm starting point that you can be assured of. Your first response is to repeat the amount of the offer and then remain silent. The golden pause. While uncomfortable, you are sending a message that you are thinking about the offer. They too may be uncomfortable, and may “bump” the offer to ease their own level of discomfort. Whatever you do, don’t jump at the first offer. People, as well as employers value what they have to work to get, and you want them to work to get you. It is best to close off the discussion at this point by saying that you very much appreciate the offer, but that you’ll need a few hours or a day if possible to digest all of it.

Now pull out your research and evaluate the total compensation package including the benefits that are being offered. If you have been thorough the steps outlined above you’ll be able to define the dollar amount of those benefits in addition to the base salary for a total compensation amount.

Evaluating the offer, taking into account the value of medical, life, dental, vision, vacation, leaves of absence 401(k) plans, tuition reimbursement, employee assistance programs, relocation packages, and stock options. If the starting salary is not acceptable, are there sign-on or annual bonuses, accelerated performance review opportunities and raises that might be available to close the deal?

It is now time to share your research for starting salary range and to align it with your value. Be certain that your requested salary is within the local market value for your profession, and to show your facts and figures. If you can’t have justify your request and position, don’t. Try this: “Based on what others in this role are making at similar companies, the 10 years of experience I bring along with the value proposition for your company, I believe your offer is on the conservative side.” Compare your research with your offer regarding the min, mid, and max discussed above. Make the case for your value and record being a good return on investment for previous employers. If you have other offers, you have leverage. Draw attention to it, but do not dwell on it.

Be mindful that employers view compensation data differently than you. Two points employers often raise about research are the sources used to obtain the data, and whether the data matches your job profile, the company profile, and the geographical location. Have answers to both ready.

While you have certainly done this during the interview(s) have ready a list of what you have to offer in terms of your value. Describe your accomplishments and quantify your successes in terms of cost savings, increased productivity and overall contribution to the company. If you earned performance bonuses or incentive awards, mention those so that you’ll be strengthening your value proposition. Be prepared to trade. Decide which issues of compensation are most important to you. Vacation time may be important, while tuition reimbursement may not. Expect to make trade-offs.

Don’t negotiate against yourself. Once you’ve made your proposal shut up. Wait for a response and do not say something just to fill what you perceive as an uncomfortable moment. Be ready to make a concession, and do not concede unless you get something in return. Negotiate in a respectful manner. You can do this most effectively bu paraphrasing, pressing for specifics, and testing for understanding. It is important for the other party to feel that you have heard them, and so utilizing strong listening skills is a must. Negotiating and being confrontational need not go hand-in-hand. This person you are negotiating with could be your new boss or someone in the organization that has influence. Don’t confuse negotiating with being stubborn and unyielding. You can be pleasant and cordial, and still ask for difficult things. Further, in doing so, you demonstrate a key business skill that makes you an even more valuable.

Negotiating salary is filled with ups, downs and doubts. Don’t turn tail if an employer doesn’t immediately meet your expectations. Studies show that the individual who perseveres and manages uncertainty does much better than those individuals who concede quickly.

Now, get the offer in writing. Once you’ve agreed on terms, ask your new employer to write a formal letter offering you employment that outlines the specifics of what has been agreed to.

Lastly, relax and be reasonable…just like me.

PRESENTED BY: Executive Leadership, LLC SPECIALIZING IN: Human Capital Transition and Executive Coaching - (908) 822-9655 WEBSITE: http://www.exec-leadershipLLC.com

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Thursday, November 24, 2011