Every manager knows that labor is potentially the biggest cost in any operation, and the ability to manage it effectively plays a huge part in the success or failure of an operation.  Engaged, motivated, properly trained employees can be extremely productive, and their value to an organization will increase over time.  It is for this reason that many managers, fearful of not hitting budget, goals, or other key performance measures, choose to jeopardize their own position by partaking in wrongful business practices with their labor force.  Seemingly simple transactions like not providing overtime pay when applicable or asking workers to clock out while continuing to work to avoid overtime pay is not an option, regardless of how creative the rationale might be.  Not providing performance evaluations or fudging them to eliminate possibility of pay increase is a common practice, and can have far-reaching residual influence towards the working environment.  Misrepresenting inventory levels, sitting on invoices instead of paying them promptly, and not allowing injured workers to seek medical treatment are other common ways to skew financial results and effectively ruin a management career under the guise of being a good company man or woman.

Part of the temptation to jeopardize one’s own integrity is intrinsic.  Managers want to be recognized as top producers, valuable cogs in the machine, or rewarded for outstanding performance.  Skewing data used to measure performance is the easiest way to do so.  Additionally, pressure is applied to managers to deliver results, and increasingly, managers are choosing to jeopardize their own code of ethics to “get their boss off their back.”  Is denying an expense report reimbursement because it is a day late or trying to rescind earned vacation not taken really in the best interests of the company financial statement?  If a manager is found to have knowingly done something unethical, the response or explanation never sounds good, and the apology that comes prior to the resignation or termination is along the lines of pleading.

In the interest of doing well by doing right, I offer these few tips to managers that are feeling conflicted:

• Know what is expected of you.  Get it straight from your job description, employee handbook, or your boss in orientation.  Sure, there are interpretations, but let it be your own, not from someone else.
• Most companies have a vision statement, principles, or both.  Know it, live it.  Ideally, your own ethics and principles are closely aligned with them.
• Ask questions.  We all know about assumptions- ignorance is no defense, and more often than not will not save you or your job.
• Practice the Golden and Platinum Rules.  By treating others the way you would like to be treated- and the way they want to be treated- this alone will eliminate a great number of “integrity dilemmas.”

Finally, be humble enough to ask for help when you need it.  Traditionally, managers are viewed as experienced oracles that have all the answers, but are often guilty of making something up or taking the path of least resistance.  Managers often will not lose their positions because they did not deliver desired results.  They are provided coaching, training, and resources to get a handle on the issue/area that needs help.  However, many managers have been terminated for lying, cheating, or stealing.  Besides- your integrity is the only thing no one can take from you.

Employees, however, are a sharp bunch.  They know what the rules are, and are willing to play by them as they are defined in writing.  Kings and queens of loopholes, the courts are filled with instances in which a written policy has been twisted so far beyond the spirit of the rule, it is simply no longer recognizable. Using the adage of where there’s smoke there’s fire, here are a few common signs of smoke.  If some of these things are happening with some regularity in your operation, you may be harboring what could be described as a hostile work environment.

Internet abuse- If your workplace requires computers and Internet as a source to complete work, chances are your workers are using the Internet for purposes other than work.  Video, music, and articles that portray violence (for example) can serve as a negative undercurrent in any work environment.  Further, they can be attached to an e-mail to share with co-workers for the purposes of intimidation or retaliation.

E-mails- Similar to the use of videos off the Internet, e-mails can be used to convey threats or negative messages.  Instead of providing a video with a hidden meaning or threat, an e-mail can remove any doubt with a direct message to the intended target.  Another “bonus” is the ability to send inappropriate photos, jokes, or comments to co-workers, and sometimes beyond the office.

Gossip- While very difficult to oversee, gossip and the grapevine are present everywhere.  However, gossip usually comes in very blatant packages- several employees huddled together, speaking in hushed tones and stifling laughter who quickly disperse when a manager or supervisor approaches.  If a manager is among the group, the problem is much worse than originally thought.

Aggressive/threatening talk and behavior- Employees are often repeating lines and scenes from movies and songs; many have negative or aggressive messages.  While this may seem a bit trifling, remember the last time you heard someone describing and acting out the MMA event they just saw? That could be mistaken for a hostile work environment as well.

Passive-Aggressive behavior- While this may be the most difficult to identify, it is probably the most prominent.  One example would be practical jokes that are crude or offensive in nature, always with an anonymous perpetrator.  Other instances have much more malicious intent- theft, misuse, or intentional damage to tools or personal belongings, random bad language or aggression when there is no one of authority present, or inappropriate conversations between two or more people with little discretion used towards the content of the conversation.

While these are the most prominent examples, chances are there are other indicators present.  The first line of defense (and one becoming more prominent) is a policy towards Internet, social media, and office e-mail use.  A heightened awareness towards these types of behaviors in your workplace can go far towards eliminating or diminishing their presence.  As always, consistent application of written policies is the key.  Managers that choose to ignore these instances because it is inconvenient to address them could be guilty of providing a double standard or placing the health of the operation at risk.

When choosing a third party consultant, there are factors to consider beyond an attractive ad in the phone book.  The ultimate decision of choosing a consultant with which to partner belongs solely to the operation, but what things should be considered when making that decision? Defining the objective and desired result is a logical place to start.  Being able to communicate what exactly you hope to achieve is paramount to the decision process.  Be it a payroll service, a marketing group, or any other type of specialist, the idea is that you will be able to identify how they can help you, and the consultant can better fit a solution unique to the organization.  If an operator is uncertain what the end looks like, how will they then know when they are there?

Testimonials are very helpful, and operators would be well served to gather the opinion of other business owners.  By simply asking other associates if they might recommend someone, an operator might be saved a great deal of time and effort in their search.  In addition to potentially shortening the source process, operators may also get advice as to who to avoid.  While some other business owners may be reluctant to share details of their success stories, they will usually be more than willing to share an unpleasant experience.  Similarly, an operator should ask for references from a potential outside consultant.  All reputable consultants are willing to provide previous companies and managers for whom they have performed work.

An operator should also insist on a face-to-face meeting with a potential consultant prior to entering into an agreement with them.  While this may sound like an obvious step, there are plenty of managers that attempt to save time and money by compiling a search solely through Internet searches, website visits, and e-mail correspondence.  Similarly, a common mistake is the reliance on Internet resources, thinking that reading something online (or in a book) suddenly makes an operator an expert.  A frequent example is the use of QuickBooks for payroll and accounts payable services, with the lure of not paying a professional to perform the job.  While appearing to be simple enough, there is a myriad of other functions provided by consultants not provided by these quick fixes readily available.  Operators, while cost conscious, are often guilty of attempting to save money in the wrong areas.  Cheaper is rarely better, and looking to save (or eliminate) costs on consultants eliminates the consideration and value of an operator’s most important asset, their time.

Finally, the issue of trust is the foundation on which an operator/consultant relationship is built.  Operators have gone to great lengths to secure the right consultant for their business.  The biggest pitfall of operators is when they start to listen to non-experts.  Remember that any consultant has the best interests of the operation at heart- because what they are saying is not what you want to hear does not make a consultant any less of an expert.

While no one will begrudge these entrepreneurs their feelings of distrust towards the outside world, more than a few ideas have failed rather quickly due to a lack of a planned strategy.  Further, most of these ideas were not given a fair chance to develop, and with the proper advice, said idea man could be enjoying a fishing boat in Baja with regularity.  Many failed ventures are the result of listening to people that are not experts in their field, or in short, bad advice.  Can you imagine sinking a great deal of money into an idea rounded into shape based on the ideas and opinions of family members, casual acquaintances, and friends of friends?

The single most valuable piece of advice I can give to anyone is to be smart enough to know what you do not know, and align yourself with those that do.  With financing becoming increasingly difficult to secure for any venture, the first thing any lending institution wants to hear is your idea, closely followed by the written business plan.  Pointing to your head and saying, “everything’s right up here” is a surefire way to end any negotiation towards securing financing.  The person with the great idea is often not the right person to gain the financing, write the business plan, or see the idea become more than a reality.  A viable business model usually includes input from several sources, and the chances of success increase when that input is from an expert in their field, not someone that may have a casual understanding and strong opinion.

The case for a consultant, or an expert in their field, is an easy one to make.  Besides being a subject matter expert, they are not emotionally invested.  Simply put, experts with no emotional ties to any business model are not being influenced or swayed by anyone or anything.  Further, an expert can do the work in half the time (or less) it might take for any highly motivated person without the expertise, and the learning curve is effectively eliminated.

The next time someone scoffs at getting an outside consultant involved in a matter thought of as private or confidential, remind them that there are experts that make a living advising in such matters. Regardless of topic or industry, the best thing you can do is to remind that person to be smart enough to seek out an expert instead of trying to negotiate the school of hard knocks by themselves.  Even a family member who is an attorney would support that advice.

The first, simply, is that the new manager has been promoted beyond their effectiveness.  Commonly referred to as the Peter Principle (for Dr. Laurence Peter, who expanded on this practice famously), these managers have been “rewarded” for their competency in their previous position, with little or no preparation to develop a new set of competencies.

The second reason managers fail is the lack of ongoing development provided to them.  Most supervisory positions require a great deal of meaningful interaction with employees, and the new manager is a poor communicator.  A fundamental inability to  address issues that are negative in nature lead to bigger problems down the line in the form of favoritism, perceived bias and double standards.

The third reason that managers fail is just the opposite.  This group is eager to please their own bosses and the company, and are extremely willing to criticize employee efforts, to the point of deteriorating morale.  This group can be extremely toxic to any work environment, but their methods are often overlooked if desired results are attained.  This group can be extremely rigid, using the mantra of “holding people accountable” to excess.

While fighting the stigma against all management types is essentially impossible, there are a few practices that can be taught at all levels that will better develop managers as leaders while upholding the integrity of the organization.  Here are a few:

• Recognize desired behaviors- Results always follow behaviors.  By focusing on the process instead of the result, any organization can recognize what is working and what is not.  Be willing to praise a great effort that resulted in a no sale.  Praising results only can jeopardize the integrity of the process, as well as the organization.
• Be consistent in application of rules and regulations- Probably the greatest issue among managers is the inability to be consistently firm but fair.  The result can be a perception of favoritism, and will only lead to bigger problems.  A common example is the one employee who never arrives on time.  Gone unchecked, the inability of this employee to get to work on time becomes a joke- until the manager attempts to enforce attendance policy with another employee.
• Be consistent among managers- This point dovetails off the previous one.  If there is no unity among the team of managers, things quickly become divide and conquer.  Employees quickly identify the “weak link” and will be consistent in steering towards that manager, effectively neutralizing other management team members that are upholding the standards of the organization.
• Document, document, document-   Did I mention document?  A lack of documentation often results in several negative instances for an organization, and can often make even the highest performing managers appear like a group of incompetent buffoons.  Particularly in environments where progressive discipline is in practice, a lack of timely documentation can result in a perceived bias or discrimination, and setting unwanted or inappropriate precedence.

In short, managers are indeed responsible for upholding the standard, but are often not properly equipped to do so.  The responsibility they carry on a daily basis is often overshadowed by fear, unwillingness, or inability to perform.  A manager, like every other employee, is not a finished product, and needs to be willing to address their own weaknesses in order to better serve the organization.  By recognizing these common traits quickly, organizations can better develop managers to fulfill the desired purpose of being effective ambassadors of the company.

From an applicant perspective, this may not seem completely fair, or even efficient.  Most applicants never receive anything from any of these employers beyond the confirmation that their application or resume was received, and that the employer is in the process of carefully considering all applicants.  The fact of the matter is that most job seekers frequently apply for jobs they are ill prepared to perform.  Based on salary, title, schedule, or another attraction, applicants send off a resume on a lark, with little attention provided towards experience and education requirements.  Quickly, the morale of job seekers is quickly shot due to lack of response, and desperation creeps in.

It is at this point of desperation that any response is celebrated, and given much more consideration than it merits.  Predators with job offers that require no experience, no interview, and seemingly great pay for little work start to get more attention than they deserve.  These fictitious jobs all work essentially the same; the final result usually leaves the applicant out some or all of what savings they have left and another lesson from the School of Hard Knocks.  If getting rich were so simple, would we not all be wealthy?

Recently, such a “company” used our business name and a bogus Santa Rosa address in their mass e-mailing to potential “employees”.  The e-mail went to a large group of job seekers, using “resume spiders” to gather a database, hoping to find a few desperate folks who would respond with a return message for more information.  The result for us was a large amount of phone calls and e-mails, produced by those that wanted to provide some effort towards checking out this “company” on the Internet.  While we are appreciative of the folks who quickly figured out this offer was bogus and warned us of the scam, we cannot help but feel violated, and wonder if this attempt at swindling innocent people might somehow negatively affect our business. 

For future job searches on the Internet, it will always serve well to follow the following advice when fielding responses:

• Applicants should always be wary of firms that are actively seeking workers through cold e-mails, providing language like “We found your resume…” or “Are you still looking for work?”
• If an applicant has not heard of the company, an Internet search is always helpful.  Attempt to match a contact name and address from the e-mail to the Website.  In our case, neither were applicable, raising red flags to the job seekers.
•  Always be suspicious of any position being offered without so much as an interview.  Legitimate offers will always have a more elaborate onboarding process- the job posting and resume gathering is only the first step, not the entire process.
• Any position that is offering a seemingly exorbitant salary for little work usually indicates a great deal of risk.  Do not let your best judgment be altered by your desperation.  That is exactly what these frauds are counting on.

In closing, the practice of online job searches is here to stay.  However, the online search is only the first step.  Reputable companies will always pursue the most attractive applicants with proper correspondence to complete the search.  If companies are tempting applicants with the lure of no experience, well paying, work-from-home offers, it really is too good to be true.  We have been told for years that anything worth having does not come easy.  Why would easy money be an exception?

Since employees have been seeking jobs, applicable experience has been considered a tangible form of rating applicants.  The school of thought goes that if this applicant has a great deal of experience, it would be reasonable to think that applicant has a better opportunity to be successful than one without experience.  The down side is that applicants know this thought process, and have been guilty of taking creative license when describing their experience on a resume.

There are several professions where experience is readily apparent, and can be of value to employers- trades like electricians, plumbers, and construction workers are good examples.  To the contrary, there are employers that require very specific behaviors and have extensive training programs.  Particularly in retail and heavily branded organizations, the consistency of products and services is paramount, and the goal is to instill the importance of best practices. An argument could be made that in these instances, an employee with very little or no experience might be desired, as there is no accompanying “baggage” or “bad habits” inherited from previous jobs.  A new worker is essentially a block of clay, one that is easily molded and instilled with the values of the organization.

Before we completely dismiss experience as a preference in our employee searches, we need to consider two factors that get little consideration proper in the process, the culture of the company, and the pace of the workplace.  It is extremely difficult to teach someone to find another level of effort when there is an inherent need to “get it in gear.”  Managers have been accused of being less than cordial in attempting to squeeze effort out of workers who have no inherent sense of urgency, often the result of experience.  Further, some applicants have all of the desired education and experience, and have little or no chance of adapting to the culture of the organization.

So how do I recommend that hiring managers address this issue?

While soft skills are not necessarily required of many positions, they are extremely difficult to teach and are growing in their importance towards workplace harmony.  Organizations need to align their hiring practices with the culture of the organization and its training practices.  By placing greater value on things that are difficult for the organization to train, the applicant will have a greater chance of finding success in their new position.  By aligning or ranking the requirements in order of importance to the open position and weighing them appropriately, an organization may indeed place less (or no) importance on experience if the training process is thorough and detailed.  A hiring manager might be surprised at how overrated experience might be, and will require applicants to stand on their ability to adapt, take direction, and get along in a cooperative environment.

Employers continue to insist that good help is hard to find. How could that be possible with all of the competition for the few jobs that are available?  Any employment attorney will tell you that parting ways with an unproductive, poorly performing employee can have the potential of retaliation from the dismissed worker.  The truth of the matter is that due diligence with pre-employment practices could have prevented a large number of these high- maintenance workers from being hired in the first place. The justification for not providing the effort is time- it just seems to take too much of it.   Further, employers are limited as to what information they can provide concerning former employees; calling an ex-employer is often an exercise in futility.  The assets of a company require managers to do more than just a pedestrian interview.

Plenty of owners and operators are guilty of crisis hiring.  A candidate just happened to come in looking for work and there just happened to be a position open.  True, these instances are much more common with positions that require very little experience, skill, or aptitude.  However, the practice of a manager or operator allowing circumstance to dictate the decision-making process is disturbingly common. 

A familiar trap is placing a premium on experience in a similar position.  While experience can be translated into competency, it does not allow for consideration towards other important factors: compatibility, adaptability to company policies, and coachability to name a few.  Applicants are also getting training towards writing resumes, handling interview questions, and essentially packaging themselves to be more attractive.  In the current environment, enhancing experience and education on a resume is quickly becoming the rule and not the exception.  This fact alone should motivate employers to call previous employers of potential candidates.  Employers will verify dates of employment and position held.  Any other information you might get is a bonus, but if an applicant is fudging longevity and position on their resume in hope of getting a job they are truly ill equipped to perform, an operator would rather know prior to extending a job offer.

Further pre-employment practices are somewhat dependent on job descriptions, but background checks, DMV reports, and in some cases, drug testing- are all viable options, and are highly recommended when hiring someone that will be responsible for company assets or supervising other workers.  Cash handling, dealing with confidential information or driving company vehicles are all reasons to incur a small cost to prevent potential problems.  One recent example is an auto repair shop that carried insurance for their employees driving vehicles belonging to customers.  The owner of the shop was a little dismayed when he was told his rates were going up because the new mechanic has a recent DUI on his record.

While pre-employment services vary in scope, their importance as part of the risk management plan of any business cannot be ignored.  The time required is a small inconvenience to protect the assets of the organization.  Like many applications in the world of human resources, consistent application is the key.  There is nothing like a perceived double standard to stoke the flame of entitlement of a former employee with an attorney by their side.

Over the last few years, many outsized workers have chosen to get into business for themselves.  While these workers are to be applauded for their ambition and drive, the lack of a long-term strategy is often the cause of failed ventures.  We have all heard the brutally daunting statistics about new businesses that fail in the first year or two and no amount of management acumen and experience or previous business success can overcome a failure to plan for the future.  Simply put, how will operators know they have arrived if they do not know where they are going?

I work with many small business owners, many who have a great deal of expertise and are extremely talented.  It is shocking to me how little thought has been put forth towards long-range strategy.  Furthermore, there seems to be a belief that their experience is the predominant factor in achieving success.  We all can agree that experience has its place and its benefits, but this thinking can be extremely dangerous to the chances of survival of these businesses.  When I begin working with these operators, I attempt to assess what type of groundwork has been done, observing practices and speaking with owners.  It is interesting to say the least, when I ask about the future.  Where do you want your business to be in 2, 5, 10 years? When the question is met with a laugh, a shrug, or a blank stare, I have a good idea that the operation is not working towards years, but hoping for weeks and months.

So, what is your goal?  There are several reasons operators want to make a go at their own businesses, usually it is something they love to do, or something they do extremely well.  Unfortunately, ownership requires a large number of additional concerns that essentially pull owner/operators away from what they got into business for in the first place. It should be every organization’s intention to secure survival through growth and profitability.  Any operator should have written responses to the following questions before taking the plunge:

• Why are you in business?
• What are your economic goals?
• What is your operating philosophy in terms of quality, image, and self-concept?
• What are your core competencies and competitive advantages?
• What customers/clients do and can you serve?
• What are your responsibilities to stakeholders- employees, community, and competitors?

The answers to these questions will go a long way towards defining both short and long-term strategies for an operation. Further, it will require operators to look at the bigger picture, instead of measuring success in terms of just surviving.  A great deal of planning and resources go into a new business, it is my hope that all that work is as rewarding as it should be.

            Fast forward to potential workplace issues, particularly those that could be extremely damaging to the financial performance of an organization.  In today’s rocky economy, workers are increasingly concerned with their positions and the place they occupy within the organization.  Once employees have been “wronged” in the form of disciplinary action, cutbacks due to slower volume in the form of layoffs, or denied a raise due to poor performance review, they are more likely than ever to seek retribution towards the offending organization.

            While there has been a sharp spike in employment litigation, the numbers, when written down, are just staggering.  From the Small Business Administration (SBA), there has been a 2000% increase in cases since 1995, with the average court settlement at around $200,000 and litigation costs averaging $50,000 (!!!). The downside of these increasingly scary numbers is that there has been an extreme increase in cases settled out of fear that defending an organization would prove too costly.

            Now the logic of paying someone to go away flies in the face of a basic instinct, which is to defend yourself (especially if you are positive you are innocent of said charges), and protect the integrity and reputation of the organization. There is nothing worse than “rewarding” an ex-employee or disgruntled client with a large cash settlement to drop a suit and make a business decision to take the lesser (potentially) of two financial hits, not to mention the accompanying media storm.

            So the question that many are asking is, what recourse do I have?

            An annual evaluation of management and human resources practices by a third party should be part of any organization’s strategy. In addition to insuring compliance with the latest legislation, an evaluation will also observe management and supervisor practices towards rest and meal periods, performance evaluation measures, and disciplinary practices.  An evaluation will identify any potential problems and confirm that the company orientation, handbook, and hiring practices- to name just a few potential concerns- through the eyes of a third party, who has no influence or association within the organization.

            Finally, an investment on training frontline managers or supervisors in the art of tact and dealing with subordinates can often be helpful in avoiding potential workplace issues.  There are a large number of companies that invest in this type of training, but usually reserve it for executives.  The fact remains that the management that is the first line of leadership usually has the most interaction with employees, and where most claims are avoided, or nurtured to full-blown lawsuit fruition.

It seems these days that the best defense is, in today’s workplace, a good offense, where proactive steps to prevent potential problems is the best course of action.