What Is Management s4

LECTURE LINKS

LECTURE LINK 8-4 Other Issues in Human Resource Management

A. BACKGROUND CHECKS: SECURITY AND PRIVACY ISSUES Traditionally, employers have used background checks to screen applicants looking to get the best new employees. Today’s heightened concerns for security, coupled with improved technology, means background checking has become more widely used. Current events illustrate some of the reasons for this increase. Child abuse and abductions prompted the enactment of new laws that require background checks for anyone seeking to work or to volunteer to work with children. After the corporate scandals of the early 2000s, executives, directors, and officers face a higher degree of scrutiny. The threat of terrorist attacks has led to tightened security and screening of candidates to work at airports, train stations, and car rental agencies. Another reason for increased scrutiny in the hiring processnegligent hiring suits are on the rise. If an employee’s actions hurt someone, the employer may be liable. A company in Pennsylvania lost a lawsuit when it failed to perform a check that would have uncovered an applicant’s history of inappropri- ate behavior to women. The increase in the crime of identity theft has employers checking to be sure applicants are who they say they are. (This is a double-edged sword, as some applicants have been the vic- tims of identity theft and unknowingly lost potential jobs because of false information on their records.) Federal and state laws require background checks for certain jobs; for instance, in the health care industry, and of anyone seeking to work with children, the elderly, or the disabled. With companies increasingly relying on pre-employment background checks, it’s important to get the information right. But the background checking industry lacks consistent standards, which can cause errors that can disqualify reputable job applicants. One applicant for an Office Depot cashier position was rejected when a criminal background check revealed a lengthy history of drug convictions in Washington, although she had never been to the state. She fought for six weeks to clear her name and eventually got the job. Even more disturbing are the cases in which pre-employment screening misses something important. In 2005, FedEx Corp. was accused of hiring a sex offender who was later charged with molesting an 8-year-old boy while at work. FedEx did a background check on the employee, but it did not reveal his criminal history. Background screeners say it can be difficult to uncover criminal histories. The FBI’s criminal database is generally not public, except for law enforcement and similar organizations. In the FedEx case, the employee worked in Connecticut but had a criminal record in Maine. Searching across state and coun- ty jurisdictions is virtually impossible. Records are scattered across the 3,142 counties in the United States. Despite the necessity of these background checks, applicants are not without rights. For example, employers need to obtain written consent from applicants before performing background checks. The Fair Credit Reporting Act requires a specific notification of rights and notice that a consumer report (background check) is being performed by an outside company. If there is “adverse action” (the candidate is not hired, for instance) because of information obtained on the consumer report, the person must be noti- fied that he or she is entitled to request a copy of the report.

8.1 There are time limits on disclosure of some information. Bankruptcies may not be considered after ten years. Civil suits, civil judgments, records of arrest, paid tax liens, accounts placed for collection, and any other negative information (except criminal convictions) may not be reported after seven years. Some information requires the authorization of the subject. Education records and military ser- vice records are confidential except for “directory information” such as name, dates, degrees, and military rank. Medical records are confidential, and the subject’s specific permission is required for release. The Americans with Disabilities Act allows potential employers to inquire only about an applicant’s ability to perform specific job functions. While the Internet has made it possible for employers to perform basic checks with their comput- er and a credit card, labor lawyers caution against depending on websites since information obtained may not be complete or up-to-date. For instance, an arrest may show up but the acquittal or dropped charges may not. A national task force funded by the Justice Department has been established to recommend national standards for screening companies. The standards cannot come too soon.i

B. NETWORKING Networking is the process of establishing and maintaining contacts with key managers in one’s own organization and in other organizations, and using those contacts to weave strong relationships that serve as informal development systems. Of equal or greater importance to potential managers is a mentor, a corporate manager who supervises, coaches, and guides selected lower-level employees by intro- ducing them to the right people and generally acts as their organizational sponsor. In reality, an informal type of mentoring goes on in most organizations on a regular basis as older employees assist younger workers. However, many organizations, such as Intel, use a formal system of assigning mentors to employees considered to have strong potential. It’s also important to remember that networking and mentoring can go beyond the business environment. For example, college is a perfect place to begin networking. Associations you nurture with professors, with local businesspeople through internships, and especially with your classmates might provide you with a valuable network you can turn to for the rest of your career.ii

C. PAY EQUITY Another controversial workplace issue is that of pay equity for women vs. men. Put simply, pay equity goes beyond the concept of equal pay for equal work. Federal and state equal-pay laws have been in effect for many years. The Equal Pay Act of 1963 requires companies to give equal pay to men and women who do the same job. For example, it’s against the law to pay a female nurse less than a male nurse unless factors such as seniority, merit pay, or performance incentives are involved. Pay equity is the concept that people in jobs that require similar levels of education, training, or skills should receive equal pay. This somewhat thorny issue has become more important as women have become a sizable and permanent part of the labor force. Pay equity centers on comparing the value of jobs such as a bank teller or librarian (traditionally women’s jobs) with jobs such as truck driver or plumber (traditionally men’s jobs). Such a comparison shows that “women’s” jobs tend to pay less—sometimes much less. In the United States today, women earn approximately 77% of what men earn, though the disparity varies considerably by profession, job experience and tenure, and level of education. In the past the primary explanation for this disparity was that women only worked 50-60% of their available years once they left school (experience and tenure), whereas men, on the whole, worked all of those years. This explanation doesn’t hold much validity today because fewer women now leave the workforce for an extend- ed time. Other explanations suggest that many working women devote more time to their families than men do, and thus accept lower-paying jobs with more flexible hours such as retail sales clerks.

8.2 INTRODUCTION TO BUSINESS: Instructor’s Resource Manual In the 1980s, pay critics proposed instituting a concept called comparable worth that required by law that people in jobs that require similar levels of education, training, or skills should receive equal pay. Evidence, however, did not support the idea that comparable worth would lead to better market equilibri- um; in fact, many felt it would create more chaos and inequity. In today’s knowledge-based economy, women appear to be competing financially with men in growing fields such as health care, biotechnology, and knowledge technology. Studies conducted at the University of Michigan found that earnings of women with baccalaureate degrees were 96% of men’s. Female engineers and anesthesiology nurses often earn more than what their male counterparts are paid. However, Heather Boushey, an economist at the Economic Policy Institute, believes that the government puts too much faith in the idea that education will automatically close the pay gap. She and other critics claim that because of the rejection of comparable worth, government and other institutions are overlook- ing the pay gaps, especially gaps that women with children face. As women continue to comprise a large percentage of the labor force, pay equity will be a challenging employee/management issue.iii

D. CHILD CARE Child care became an increasingly important workplace issue in the late 1990s and remains a workplace concern today. According to the U.S. Census Bureau, a sizable number of today’s 50 million working women are likely to bear children during their working years. Such statistics obviously raise concerns among employers for two key reasons: (1) it’s estimated that absences related to child care already cost American businesses billions of dollars annually, and (2) employee child care raises the controversial workplace question of who should pay for child care services. Many workers strongly challenge workplace benefits for parents and single parents, arguing that single workers and single income families should not subsidize child care for dual-income families. Federal child care assistance rose significantly after the passage of the Welfare Reform Act of 1996. However, in 2005 Congress froze the funding of the Child Care and Development Fund at its current level. Thus, the issue of child care remains an important one to business. Questions involving responsibilities for child care subsidies, child care programs, and even parental leave have spurred much debate in the private and public sectors of the economy. The number of large companies offering child care as an employee benefit is growing. Working Mother magazine high- lighted companies such as Bristol-Myers Squibb, IBM, and JP Morgan Chase as being particularly sym- pathetic and cooperative to working mothers. Other large firms that offer extensive child care programs include Johnson & Johnson, American Express, and Campbell Soup. A few companies even provide emergency child care services for employees whose children are ill or whose regular child care arrangements are disrupted. (BONUS INTERNET EXERCISE 8-4, “Best Companies for Women Workers,” on page 8.Error: Reference source not found addresses these concerns.) However, according to Inc. magazine, only 3% of businesses with fewer than 100 employees provide child care at work. Some small companies, however, have found that implementing creative child care programs helps them compete with larger organizations in the search to hire qualified employees. For example, Haemonetics Corporation in Braintree, Massachusetts, has a state-of-the-art child care facility called the Kids’ Space at Haemonetics. In the summer, the facility includes Camp Haemonetics—the kids come to work with their parents and then get bused off for swimming, hiking, and so forth at a near- by state park. At noon, they come back for lunch with Mom or Dad, and then return for more camp activi- ties until about 5:00 p.m. In 1986, entrepreneurs Roger Brown and Linda Mason recognized the emerging attraction of child care as a benefit in the workplace. The husband-and-wife team started Bright Horizons Family Solutions Inc. to provide child care at worksites for employers. Today, the company runs nearly 600 child care centers for about 400 companies. What’s obvious to businesses of all sizes is that working parents consider safe, affordable child care an issue on which they will not compromise. Companies have responded by providing:

CHAPTER 8: Human Resource Management 8.3  Discount arrangements with national child care chains.  Vouchers that offer payments toward whatever type of child care the employee selects.  Referral services that help identify high-quality child care facilities to employees.  On-site child care centers at which parents can visit children at lunch or during lag times throughout the workday.  Sick-child centers to care for moderately ill children. The number of single-parent and two-income households makes it certain that child care will re- main a hotly debated employee–management issue. However, a workplace storm is brewing over an issue employees and managers have not faced in times past: elder care.iv

E. ELDER CARE The workforce in the United States is aging. The 2000 census showed that since 1990, the number of people ages 65 and over jumped by 12%, to 35 million. The number is expected to double by 2040, with 77 million Americans over 65. In 2012, the overall labor force will grow by 12% but the percentage of workers ages 55 and older will increase by 49%. Most of these workers will not have to concern them- selves with finding care for their children. However, they will confront another problem: how to care for older parents and other relatives. The number of households with at least one adult providing elder care has tripled since 1992. It’s estimated that 15% of the U.S. workforce now provides care for an older family member or friend, a number that is expected to grow over the next decade. Current estimates suggest that companies are presently losing $11 billion a year in reduced productivity, absenteeism, and turnover from employees who are responsible for aging relatives. Sandra Timmerman, director of MetLife’s Ma- ture Market Institute, suggests that elder care is the key workplace issue of the next decade. The U.S. Office of Personnel Management (OPM) found that employees with elder care responsibilities need information on medical, legal, and insurance issues, as well as the full support of their super- visors and company. The OPM also suggested that such caregivers may require moving to flextime, telecommuting, part-time employment, or job sharing. Some firms, in reaction to the effect of elder care on their workforce, have begun to offer employee assistance programs. At JP Morgan Chase, employees are offered elder care management services that include a consultant who conducts a full-fledged needs assessment program for the employee. AAA and UPS offer health-spending accounts in which employees can put aside pretax income for elder care expenses. Unfortunately, few U.S. companies (large, medium, or small) provide any type of elder care programs or benefits; the primary focus has been on the rising cost of employee health insurance. Nor does the government provide much relief with this issue. Both Medicare and Medicaid place heavy financial burdens on family caregivers. The AARP and the National Alliance of Caregivers expect costs to companies to rise even higher as more and more experienced and high-ranking employees become involved in caring for older parents and other relatives. Their argument makes sense, since the jobs older workers hold are often more critical to a company than those held by younger workers (who are most affected by child care problems). Esti- mates are that costs to employers could skyrocket to $25 billion annually. Already many firms realize that transfers and promotions are sometimes out of the question for employees whose elderly parents need on- going care. Unfortunately, as the nation gets older, the elder care situation will grow considerably worse. With an aging workforce, this employee– management issue promises to persist well into the 21st centu- ry.v

8.4 INTRODUCTION TO BUSINESS: Instructor’s Resource Manual CHAPTER 8: Human Resource Management 8.5 i Sources: Gwen Shaffer, “Background Checks on the Rise at Companies,” Philadelphia Business Journal, March 28, 2003; David Hench, “Requests Surge for Criminal Histories,” Maine Sunday Telegram, December 1, 2002; Employment Back- ground Checks: A Jobseeker’s Guide, Privacy Rights Clearinghouse, Revised April 2003; and “Background Checks by Companies Spark Worries,” The Clarion-Ledger, Associated Press, December 30, 2005. ii Sources: E. R. “Bud” Glesinger, “A Formal Mentoring Program Puts Informal Goodwill to Work,” Houston Business Journal, January 6, 2006; Meridith Levinson, “Shmooze or Lose,” CIO, March 15, 2005; and Bob Nelson, “The Mentor Ex- perience Has a Power to Transform a Career,” Portland (Maine) Business Journal, January 20, 2006. iii Sources: Janet Stiles, “Equal Pay for the Sexes,” HRMagazine, May 1, 2005; John Leo, “Of Men, Women, and Money,” U.S. News & World Report, March 21, 2005; Linda Tischler, “Bridging the (Gender Wage) Gap,” Fast Company, January 2005; and Dr. Al Lee, “Ask Dr. Salary: Do Women and Men Earn Equal Pay in 2007?” www.payscale.com; and www.money.cnn.com. iv Sources: Melissa Hennessy, “Adventures in Babysitting,” Human Capital 2005 CFO, 2005; Nadine Heintz, “Can I Bring the Kids?” Inc., June 2004; J. J.Cummins, “Keeping Baby Close to Work,” Star Tribune, January 21, 2006; www.working- mother.com; and www.Haemonetics.com. v Sources: Charley Hannagan, “Elder Care Becomes Issue in Workplace,” Syracuse (New York) Post-Standard, January 1, 2006; Della Pacheco, “Aging Employees, Parents Face Care-Giving Challenges,” Indianapolis Business Journal, April 11, 2005; and Marlon Manuel, “Bridging the Distance; Adult Kids Spend More Time on Road to Help Aging Parents,” Atlanta Journal and Constitution, May 2005.