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HR Magazine: Taking HR to the Next Level

Bill Leonard  7/1/2003

HR Magazine, July 2003Vol. 48, No. 7

This year's winner of the HR Magazine Innovative Practice Awards demonstrate how effective HR helps elevate corporate performance.

The three winners of the 2003 HR Magazine Innovative Practice Awards exemplify how HR departments can help their organizations reach a new level of excellence, according to the panel of HR professionals who selected the award winners.

“The winners are wonderful examples of ‘thinking outside of the box’ and clearly demonstrate the tremendous difference that innovative HR practices can have on an organization,” says Angela Williams, SPHR, president of HR Consulting and More in Gilbert, Ariz., and one of the three judges for the awards. The winners “combined good HR practices with a sound business plan.” They “created better work environments and enhanced the skills of their workforces, but they also focused on improving their communities, which is a key element some employers tend to forget or neglect.”

Each year, ADP Inc. and the Society for Human Resource Management (SHRM) Foundation co-sponsor the Innovative Practice Awards, which are presented to three HR departments that demonstrate innovation and creativity in developing successful human resource-related projects, activities, practices or programs.

The panel of judges was composed of three independent HR professionals who selected the winners based on the criteria of creativity, effectiveness, applicability and replicability. The awards are presented in three different categories according to the organizations’ number of employees. This year’s winners are:

  • 500 employees or fewer: Bob Chinn’s CrabHouse in Wheeling, Ill.

  • 501-2,500 employees: Cendant Mobility Services Corp. in Danbury, Conn.

  • More than 2,500 employees: Tennessee Valley Authority in Knoxville, Tenn.

The winners were to receive their awards in June at the SHRM 2003 Annual Conference and Exposition in Orlando, Fla.

“All entries this year were very strong and showed me that there are quite a few creative and dedicated HR professionals who are truly making a difference in their organizations,” says James W. Gray, SPHR, president of Jim Gray Consulting LLC in Charleston, S.C., and chair of the judges’ panel. Yet the winners stood out—when the judges held a conference call after separately reviewing the entries, they discovered that they each had ranked the three eventual winners as the best entries.

“All the winners are fairly simple in their approach—especially the one for larger organizations. Employers can easily take these programs and adapt them to their own HR practices,” says judge Gayle Troy, SPHR, human resource manager for Globe Firefighter Suits in Pittsfield, N.H.

500 employees or fewer
English Classes Enable Top-Notch Service

While Bob Chinn’s CrabHouse in Wheeling, Ill., is in the small-employer category, it is actually a giant among restaurants with 350 employees and a No. 4 ranking in sales nationwide. The restaurant management has placed a top priority on customer service and has worked to create a culture of pride among its workers.

Cultural diversity, however, proved to be a stumbling block for the restaurant staff in reaching the level of customer service excellence that the owners had envisioned, Bob Chinn’s CrabHouse, Wheeling, Ill.according to Chuen Tam, the restaurant’s former human resource manager. About half of Bob Chinn’s employees don’t speak English fluently—and most of these employees work as cooks, food preparation staff, dishwashers and buspersons in the restaurant’s kitchen area. The vast majority of these workers are immigrants from Mexico and central America.

“Communications between management and our employees is a real challenge, as is communication just among the individual employees,” Tam says.

To break down this language barrier, Tam coordinated an English as a second language (ESL) course for employees. The solution seemed simple to Tam, but he quickly discovered that implementing an in-house ESL program was easier said than done.

Funding was an issue, but Tam found resources when he attended a meeting about how the Chicago Bizlink—part of the nationwide Welfare to Work Partnership—could help employers recruit and hire new employees. Tam discovered that Bizlink had money available for training workers to improve work/life skills and that the money could be used to establish in-house training programs.

“Once we found the funding, the other parts of the program came together pretty quickly,” Tam says.

Since the restaurant has plenty of meeting rooms, it had no problem finding space for classes. Tam contacted nearby Harper College to provide instructors. So the only other detail was when to hold the classes. Tam surveyed employees and found that the best time was 7 a.m.—two hours before many of the employees report to work for the lunchtime shift. More than 50 students signed up for the initial session. Students were divided into groups based on their English proficiency, and each group met twice a week.

“We took attendance, but it wasn’t to punish or discipline anyone who missed a class,” says Tam, who is from Hong Kong and who participated in the advanced ESL class to refine his writing skills. “We did this to find out why they didn’t attend and to see if we could make class times more convenient for the people who had family care responsibilities.”

Tam says employees responded well to the program; many restaurant workers who ended their shift after midnight would be in class early the next morning. The classes last 12 weeks, and the dropout rate has been less than 30 percent, better than originally projected.

After the end of the first 12-week session, 80 percent of the students advanced to the next level and, to celebrate their achievements, the restaurant held a reception for all the students. Family, friends, fellow employees and officials from Bizlink attended the celebration. During the reception, one employee named Jose Dominguez, who did not speak English fluently before the class started, made a speech in English.

“The program has instilled a lot of pride in our employees in both their work and home life,” Tam says.

The success of the ESL course has been quite tangible, according to Tam. The number of errors in the reading and distribution of food orders has decreased, and employee productivity has increased. The courses also have improved employee morale and teamwork within the restaurant, Tam says. The turnover rate also dropped sharply after the ESL courses were offered and is now 38 percent per year—in an industry where 100 percent annual turnover can be the norm.

Officials with Bizlink were so impressed by the success of the ESL program that they decided to sponsor a class to help kitchen workers obtain their sanitation certifications from the health department.

Ultimately, Bob Chinn’s hopes to obtain enough funding to offer more sanitation and ESL classes, as well as other classes that could help employees obtain their G.E.D.s, says Alma Franco, HR administrator.

“The training program works because it is much more than preparing our employees to work in the restaurant. It’s about giving them the confidence and the skills to become part of their community, such as attending PTA meetings or applying for their driver’s license,” says Tam. “They are very appreciative of the opportunity that the restaurant has provided them and it clearly shows in their loyalty.”

501-2,500 employees
Mixing Business with Life

Cendant Mobility Services Corp. in Danbury, Conn., which provides relocation services, developed its work/life and flexible work options program to fully integrate an effective work/life benefits program into its overall business strategy.

“I’ve always been a strong proponent of work/life programs because, when done right, they can provide a real competitive edge and will strengthen your organization,” says Bill Maxwell, Cendant Mobility Services Corp., Danbury, Conn.Cendant’s senior vice president of global human resources, diversity, and managing director of intercultural services.

When Maxwell began working for Cendant in 1999, he believed that the lack of viable work/life benefits for its 2,300 employees was contributing to the corporate turnover rate and was lowering employee satisfaction. Through his HR experience with other employers, Maxwell believed that work/life benefits make a workforce happier, healthier and more productive. “When employee satisfaction is low, the customer service also suffers,” Maxwell says.

But when he arrived at Cendant, the work/life benefits program in place was failing because Cendant’s management believed it was costly and unnecessary. “A work/life benefits program must have the committed support of management before it will work,” Maxwell says. “The program that was in place just didn’t have that kind of support.”

Maxwell knew that he had a tough sell on his hands. “Having the strongest business case possible in hand was paramount when I made the initial proposal to start a new work/life benefits program,” Maxwell says. “And I definitely came to the meeting prepared.”

Maxwell and his staff analyzed Cendant’s turnover data and information from exit interviews. What they found clearly showed that the Cendant staff would welcome flexible hours and more benefits to help them improve their lifestyles.

“From that data, it then became an easy sale. There’s quantifiable data that shows if we could reduce the turnover rate by just one percentage point, we could save the company around $2 million,” Maxwell says.

In 1997, the year when Cendant Mobility was formed through the merger of three relocation companies, the corporate turnover rate was more than 30 percent. The rate dropped a bit after the merger but was still nearly 25 percent in 1999, when Maxwell and his HR staff set an ambitious goal to reduce turnover to less than 10 percent—which could represent a savings of nearly $30 million. According to Cendant’s latest data, the turnover rate for 2002 was 9.9 percent.

As soon as the HR department received the go-ahead to create a new work/life program, it began developing an implementation plan. Maxwell says they were careful to make sure everything was done correctly, and they devised a plan that would roll out gradually over two years.

The first step was to solicit feedback and ideas through employee focus groups including a wide variety of employees from clerical support to supervisors. Supervisors and management-level employees were separated from other employees, however, to encourage open feedback. It was crucial that employees felt free to speak during the group meeting, Maxwell emphasizes.

The next step was to launch a pilot program to a couple of selected departments and then closely monitor the effect. The pilot program was a flexible work options program offered to 423 employees in two departments. The results showed the HR staff that they were on the right track. Employee turnover for participants in the pilot program was 8 percent during a 22-month period when company-wide turnover was 24.1 percent.

Personal and sick-time use also decreased more than 70 percent among program participants. Once the pilot program concluded, the company launched a corporate-wide flexible work options program, which was well received by employees, according to Maxwell.

From this initial success, the HR department moved to provide a wider array of work/life benefits such as an onsite wellness program that includes classes in aerobics and yoga. Maxwell says one of the most popular benefits the company offers is an employee garden on the headquarters grounds. Because the space is limited, Cendant holds a lottery every year for available planting space.

A work/life benefits survey indicated that many employees were interested in advancing their education. So, the company now offers classes on site where employees can earn a master’s degree in business administration. Professors from nearby Fairfield University teach the MBA course, and Maxwell himself is the instructor for the HR management class.

“We can offer more options to the 1,600 employees here at the corporate headquarters,” Maxwell says. “But our other offices have been very creative and developed their own set of programs and classes that are very popular. For example, the Dallas office has a bowling team, and the Mission Viejo [Calif.] office has Yoga classes on site but also has arranged so employees can attend other classes at the nearby community college.”

The program has done much better than Maxwell dreamed. He says the biggest challenge now is keeping managers informed and educated about the positive effects of the programs.

“Just because employees aren’t at their desk from 9 to 5 every day doesn’t mean they aren’t working and producing, and that’s been the hardest idea to get across to supervisors. But they’re definitely learning,” Maxwell says.

More than 2,500 employees
Riding the Age Wave

While many organizations say they value human capital, the Tennessee Valley Authority (TVA) in Knoxville, Tenn., is one of the few employers that has developed an effective technique for measuring and retaining the knowledge and skills of its workers.

TVA has a highly skilled, experienced workforce of 13,500 employees, but the workforce’s strength is also a weakness. The average age of a TVA employee is nearly 47, and almost a third of employees plan to retire within the next five years.

“The average age has been skewed down a bit by our recruitment and hiring of younger entry-level workers recently,” says Ed Boyles, TVA’s workforce planning manager. “We Tennessee Valley Authority (TVA), Knoxville, Tenn.actually have a large number of workers who are 55 and older—so our workforce attrition rate will be very high over the next 10 years.”

With nearly 4,500 skilled workers set to retire, TVA management realized the loss of skill and knowledge was potentially devastating to the giant power company. Management turned to HR for help in finding a way to retain and transfer employee knowledge that is critical to the future of TVA.

The HR department began to develop and refine a fairly simple process to identify the knowledge and skills that were at risk of being lost forever as employees retire, to assess this risk and to find ways to ease the impact of the loss of key workers.

“What we discovered when we started this process four years ago was an informal system already existed and some work had been done by managers and supervisors in different divisions to document the knowledge and skills of their older and more-experienced workers,” says Phil Reynolds, vice president and COO of operations support for TVA. “It became our goal to make this process corporate-wide and for it to become a seamless model that was integrated into the day-to-day operations.”

For the past four years, the knowledge retention program has operated within several divisions and power plants as a pilot program. Reynolds says the results have been excellent, and this year the program will be implemented throughout the entire organization.

Since several divisions of TVA had an informal program in place, HR needed to formalize and refine the process. HR began by creating an annual survey of both line managers and employees to find out who was planning to retire. HR made it clear to employees that the survey was needed to collect data about workforce planning. Nearly 80 percent of the workers now complete the questionnaire every year.

The survey of line managers asks three basic questions:

  1. What knowledge will be lost when an employee retires?

  2. What are the consequences of losing this knowledge?

  3. How can the organization retain this knowledge?

With these surveys, HR easily can identify employees who, according to their supervisors, hold critical knowledge and skills. HR staff members then interview both the supervisor and employee to learn more about the employee’s specific knowledge content.

“This interview process is very important, because we found early on that the retiring workers really care about TVA and their jobs,” says Jerry Landon, SPHR, senior consultant for assessment and evaluations for TVA University. “They have devoted a good part of their lives to this organization, and many are very concerned that their knowledge of what makes this utility run will be lost or, even worse, just ignored when they retire.”

After the interviews, HR staff members grade each employee’s skills and knowledge on a five-point scale, Landon says. A score of five points means that transferring and retaining the employee’s skills and knowledge should be a top priority.

While few employees have been assessed as high as five points, “those that score that high receive special attention, and we ask these employees to take on some new roles as consultants, instructors and mentors,” Landon says.

In many cases, the assessment process recognizes important skills but also discovers that the best way of retaining this job knowledge is to simply write the procedures or processes down. And the assessment process also has caused the utility to look critically at how some functions are performed.

“For example, there might be one worker who has this very specialized skill in how to operate or repair an ancient type of electrical switch at a power station,” Landon says. “Well, the answer here might not be to keep doing this the same old way. The answer might be, let’s upgrade the switch. In the long run, we’re going to save the organization a lot of money by finding solutions like this.”

The process of assessing the jobs and finding ways to retain the workers’ knowledge is being well-received. The process has had a teambuilding effect within the organization, according to Jill Wallace, human resource service manager for TVA’s nuclear generation division.

“This is not rocket science; it really is a fairly simple process. But it has definitely made our workforce a stronger and more cohesive team,” she says. “It has people thinking about how their job affects the organization and raised the awareness that what they do counts and is important to the successful operation of this TVA.”

Wallace says the biggest challenge is integrating the program completely into the culture and daily processes of the utility. But she and the other HR professionals at TVA firmly believe the program has taken root and will continue to grow and improve because it has instilled in employees a sense of ownership and pride in their work. The program also has given the retiring employees a sense of leaving a legacy with TVA.

“They are providing TVA with critical knowledge that will keep the utility running efficiently for years, and there’s definitely a sense of pride in that,” says Dick Brabham, SPHR, human resource program initiative manager for TVA. “And the program is literally lowering the stress level among our supervisors, because we are acting on this problem and are doing something to keep the skills and knowledge line managers need to keep their sections operating. This program is helping them to sleep at night, and I don’t think that’s an exaggeration.”

Bill Leonard is senior writer for HR Magazine.

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 About the Awards

 

Innovative Practice Awards, co-sponsored by ADP Inc. and the Society for Human Resource Management (SHRM) Foundation, recognize creative and successful projects, activities, practices or programs of HR departments or related staff functions. Awards are made in three size categories according to number of employees.

Formerly administered by the SHRM Research Committee, the Innovative Practice Awards were created to honor the memories of Dale Yoder and Herbert Heneman Jr., professors of industrial relations at the University of Minnesota who helped promote the importance of the HR profession.

(The Innovative Practice Awards will not be given in 2004. However, in July 2004 HR Magazine will highlight companies being honored as part of SHRM's first Best Places to Work competition. These organizations will be announced at the SHRM Annual Conference and Exposition in New Orleans in June 2004.)