June 16, 1999
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C A R E E R S
C O R P O R A TE
Executive Pay
Hikes Checked by
Worker Review
Bi W il l ia m B o i t _____________ ________
W hen John W alter resigned un-
der pressure as A T & T 's second in
com m and. the $25 m illion he netted
for nine m onths o f w ork was seized
on by critics as an exam ple o f incor­
rigible excess in corporate Am erica’s
highest ranks.
B ut as com pensation o f top ex­
ecutives soared to record levels last
year, the pay aw arded one corporate
chief, G eorge F isher o f Eastm an
K odak, fell by nearly $4 m illion in
what most analysts considered a good
year for Kodak.
His pay cut was the product o f a
new system ofcompensation at Kodak
in which em ployees rate the corporate
brass on how well they’re doing.
Under the executive pay plan, a por­
tion o f Fisher’s salary and bonus is
linked not only to what the workers
think ofhim, but also to his performance
on key indicators o f "public responsi­
bility” including the environment.
It’s definitely not sweeping corpo­
rate Am erica,” said Scott Clinger, a
research analyst with the United States
Trust C om pany o f Boston, which
manages assets o f “socially respon-
sible” investors. "But more com pa­
nies are looking at it. .And people are
struggling with the issues.
At Sears, Roebuck and Co., all
300,000 em ployees are filling out
questionnaires in a new process o f
determ ining executive bonus pay.
The so-called “at risk” com pensa­
tion accounts for about one-third o f
the pay for upper-level managers.
The w orker feedback, aimed at
b o lsterin g ac co u n tab ility in the
com pany’s upper tier, is part o f a
larger quest by Sears. "O ur vision is
to be a com pelling place to shop,
work and invest,” said Tony Rucci,
executive vice president o f adm inis­
tration at corporate headquarters in
H offm an Estates, 111.
In setting bonus pay, Sears as­
signs a given w eight to each o f three
measures:
em ployee satisfaction (25 percent);
custom er satisfaction (25 percent);
and financial perform ance (50
percent).
W ith results o f the new measures
still being tabulated, it’s too early to
tell what effect they will have on
executive com pensation at Sears.
Workplace Diversity
Programs Work Best
When They Expand
Beyond Race
Bv P amela S c
h a e f f e r
____________
An im portant part o f the diversity
story at A llstate is evaluating leaders
in term s o f their skill in building a
supportive w ork environm ent. Di­
versity skills are assessed through an
extensive quarterly survey that asks
em ployees for anonym ous feedback
on how the com pany fares w ith both
its custom ers and its em ployees.
C rockett said that up to 25 per­
cent o f an A llstate m anager’s bonus
is linked to perform ance on a “diver­
sity index,” determ ined from survey
results, and to achieving diversity
goals in "succession planning" tar­
geting and nurturing em ployees to
fill key positions nationwide.
As a follow -up to diversity train­
ing w orkshops, Bank o f A m erica in
1995 b eg an cre atin g "d iv e rsity
business co u n cils” w hose m akeup
is intended to be a m icrocosm o f
the com pany itself, m irroring the
d iversity o f the b an k ’s 93,000 em ­
ployees. The councils are charged
w ith d evising p ractical w ays to
achieve the ultim ate goal o f an all-
Companies Seek To e “Family Friendly”
Bv W il l ia m B ole
______
"Fam ily friendliness” has becom e
a catch phrase in corporate America.
But w hile m ost big com panies have
family policies on paper, fewer seem
friendly to em ployees who m ake use
o f them, said Bailyn, w ho helped
Xerox make the changes.
Indeed, the offering ofw ork-tim e
options has becom e a "double-edged
sw o rd ,” often giving em p lo y ees
greater flexibility but also jeo p ard iz­
ing their career prospects, says a new
study funded by the Ford Foundation
in N ew York.
Adjusting their “work- family lens,”
MIT researchers looked at how rigid
schedules and w orkers’ maneuvering
around them affected em ployees and
business performance. It w asn t a
pretty sight, managers conceded.
The primarily female workforce o f
400 tapped personal days and sick time
to handle family matters. Unplanned
absences ran high, phone stations were
left unattended, and resentment led to
faster turnover, all o f which proved
costly, said Xerox’s Collier.
Exam ining their unspoken as­
sumptions - nam ely that w hen em ­
ployees win, the com pany loses -
m anagers came to recognize their
"culture o f control,” said a w orking
paper released in April by MIT.
They cam e up with a radical idea:
take decisions about w ork sched­
ules out o f the hands o f m anagers
and supervisors.
It is now the em ployees, through
their w ork team s, who set the sched­
ules. They can have time o ff w hen
they want. They also have real op­
tions such as extended family leave,
inclusive w orkplace.
The diversity councils have imple­
m ented a variety o f approaches for
their particular business areas, rang­
ing from m entoring program s, to
perform ance review s for managers
based on diversity objectives, to tem ­
porary w ork assignm ents designed
specifically to allow em ployees to
broaden their skills. The com pany
also posts all open positions, includ­
ing those for senior vice presidents, a
sign that the "old boys ’ netw ork" has
lost its edge.
lusinesses Need Strategies
to Avoid “Beeper Burnout”
T h e d em an d s p la c e d o n the
country’s lim ited num ber o t infor­
m ation technology w orkers is result­
ing in overw helm ing w orkloads and
beeper bum out, say the authors o f a
new book.
Thomas F erat: and Ritu Agarwal
studied the practices o f 32 com panies
for their book “Coping W ith Labor
Scarcity in Information Technology
The authors say while com panies
need to do the obvious to recruit and
retain information technology profes­
sionals, like stepping up recruiting
efforts and offering competitive com ­
pensation packages, they also need to
balance their concern for productivity
with a concern for employees satis­
faction and career development.
Companies with the highest reten­
tion rates, Ferratt said, were those that
were able to develop a sense o f com­
munity, give consistent feedback, of­
fer recognition and tangible rewards
and recognize employee’s personal
as well as professional identity.
The key is to have a m ix o f inter­
esting, challenging w ork that pays
TR EN D S
well, an overall concern for the indi­
vidual, recognition o f stress and ways
to relieve it, and a long-term career­
planning strategy for the employees.
Ferratt acknow ledges that there
are costs associated w ith making a
com pany an attractive place to work,
and m anagers need to be trained in
this shared vision, w hich m ay cut
into productivity. H ow ever, Ferratt
points out, those com panies inter­
ested only in productivity will suffer
losses as w ell in a greater turnover
and a higher stress level.
a "com pressed w eek" (usually 40
hours in four days), jo b sharing and
reduced sum m er hours.
“Now, you ju st leave a voice mail
with your work group. They all know
what you’re doing, and they step up
to the task o f covering for you when
you’re not there, and you do the same
for them.” said A rronte, a custom er
service trainer w hose father took ill
in 1992, around w hen the changes
began. He died a year later.
Aside from better morale and im­
proved customer service, the most
striking result is that the rate ofabsen-
teeism there has plunged by at least 30
percent, according to the MIT paper.
Collier said she could not think o f a
single employee at the customer service
unit who puts in a “normal” work week.
According to Xerox, the study pro-
duced similar results am ong sales and
technical workers in Dallas and at its
engineering unit in W ebster, N.Y.
L D P G r a p h ic D e s ig n
G raphic
d esig n for t o d a y ’ s g ro w ing b u s in e s s .
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