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GUEST COLUMN
Some Examples of How Large Corporations Treat Their Employees

By Don Phin

Up, Up and Away...

Let’s begin by talking about a great company, Southwest Airlines. This is a company that just happened to double the SP500 Index over the past five years. In this year’s annual shareholders report they stated, “The year 2000 was another ’championship season’for all of Southwest’s fans: our Employees; our Shareholders; and our Customers...Collectively our employees are our single largest share and stock option holders and are also our beloved customers....”

The year 2000 was Southwest’s 28th consecutive year of profitability, job security, plentiful profit-sharing and adding value. It also was their 9th consecutive year of increased profits. According to their legendary CEO Herb Kelleher, “This championship performance was produced by our Employees’ diligent dedication to maintaining low costs, and thus low fares, and to providing high spirited and winning Customer Service to themselves and to our passengers. The unity, altruism, and results oriented focus of our People is both my joy and my pride as we enter our 30th year of commercial air service.” Kelleher claims the Mission Statement for Southwest Airline is “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”

Kelleher could probably go on for days talking about his company’s brilliant business model. But the fact is, he’d rather talk about his people 365 days a year.

“Through this door pass the most courteous people in the world...”

What you have just read is a sign that appears inside many of Nordstrom’s employee entrances. It’s only one example of why they are known of having a friendly and knowledgeable workforce. Let me just share with you a couple of things that they say about their workforce in their Annual Report:

• “Our salesperson is the essence of our culture. It’s what sets us apart.”
• “They are the ones we rely on to uphold the standards that have been set, and we will continue to build upon these standards, one customer at a time.”
• “The number one thing about Nordstrom? It has to be our people. Their performance. Their actions. Our job is to support those folks.”
• “We believe it all comes back to placing the decision-making process as close to the customer as possible. To this end, all those who directly support our front line personnel...have been challenged to focus their time and energy prioritizing and acting up feedback we receive from our people and customers.”
• “Most of our executive team members got their start right on our sales floor, and through hard work, talent and commitment to core company values, find themselves in a position to help guide the company to reach its fullest potential.”
• “The attitude and actions of our people are not part of some marketing strategy, per se, but they are what set us apart in the marketplace. Our future is in their hands, and therein lies our best opportunity for success.”

Who wouldn’t want to work for a company like that? Wouldn’t you love to manage a company based on those same values and principles?

Both Nordstrom and Southwest Airlines lead by example. Their culture completely embraces the explosive power of a dedicated workforce. It illustrates their power to produce satisfied customers and a healthy bottom line, and their power to bring both joy and spirit to their daily activities.

What is Ford Thinking?

I recently read that nine employees of Ford Motor Company are challenging its controversial new evaluation policy. They claim Ford President Jacques Nasser is attempting to weed out older workers. Nasser is on record as claiming his desire for a “younger, more diverse management team.” According to the policy, employees are graded on a bell curve, with 10% of them receiving an A, 85% receiving a B, and 5% receiving C grades. Those who get C grades are not entitled to a raise or bonus, and if they receive a C grade for two years, they will be demoted or terminated.

I am not going to spend time discussing the belief that use of such a system is designed to weed out older workers. It is equally possible that many of the older workers have allowed themselves to become dinosaurs, which has placed them in this trap of being concerned about how a performance evaluation can affect their career.

As stated in an earlier newsletter, Dr. Deming stated 40 years ago that performance evaluations were destructive of performance. A performance evaluation based on a predetermined bell curve will be even more destructive.

What message does it send to your workforce to let them know that only 10% are considered excellent? What if the message was sent out that all of them were excellent? It seems that Ford has a belief system that total quality management thinking applies well to the manufacture of products, but not to the improvement of employee productivity. If we can have quality control circles for manufacturing performance, why can’t we have them for employee performance? How does Ford’s performance system actually get people to perform better?

Not surprisingly, one of the 60-year-old claimants who received a C grade alleged that his supervisor was unable to tell him specifically how his performance was deficient. I should let the supervisor know there’s this good book entitled Effective Phrases for Performance Appraisals. It’s on its eighth edition and sure to help fill in that blank space on the evaluation form.

Please, whether you are a company the size of Ford or one that employs five employees, understand that this type of thinking is destructive to your relationships and productivity. 

ABOUT THE AUTHOR

Don Phin is an attorney who for more than 16 years, has specialized in the litigation of employment and business cases. He has represented hundreds of employees, partners and companies in that time. Don has litigated wrongful termination, race and age discrimination, sexual harassment, whistle-blower, trade-secret theft, fraud, partnership dissolution and many other cases to a successful conclusion. In 1995, Don obtained the status of a Certified Professional Consultant to Management (CPCM). Since then, he spends a large part of his time consulting, writing, speaking and coaching.

Don’s seminars, workshops and reports have been delivered to such groups as the International Risk Management Institute, Insurance Marketing and Management Services, The Executive Committee, The CEO Club, The Society for Human Resource Management, Foundation of Enterprise Development, The National Human Resource Association and The National Association of Professional Consultants to Management.

Risk management is about possibilities and probabilities. It’s about assessing the 80/20 of exposure and then committing the strategies and tools needed to protect yourself. I hope these insights will help those of you battling on the front lines. If you have any questions regarding the trials and tribulations of managing in today’s high-risk environment, e-mail or give me a call at 800-234-3304.

riskVue | The webzine for risk management professionals
August 2001