WHY CONVENTIONAL EMPLOYMENT
RELATIONS DON'T WORK:

 REDESIGNING PRACTICES TO INCREASE
PRODUCTIVITY AND MINIMIZE LIABILITY

Stuart H. Brody, Esq.1


At one point or another, most human resources professionals have had the
disturbing thought that traditional employment relations not only fails to minimize
liability, but actually decreases productivity. However, amid the flood of new
management theories sweeping the marketplace, standard practices such as handbooks,
job descriptions, performance appraisals, hiring procedures and discipline administration
are infrequently questioned.

It is time to step away from accustomed thinking and take a hard look at practices
we take for granted. This process yields some surprising conclusions, pointing the way to
creative changes in employment practices.

Let us begin by recognizing that employment relations is built on mutual mistrust.
Many managers perceive an array of undesirable characteristics in the American worker:
rampant dishonesty (including resume fraud), workers compensation abuse (estimated at
nearly 20 percent of all claims), abuse of sick pay and other leave policies, drugs and
alcohol in the workplace, inadequate skill, deficient motivation and above all, readiness
to sue at the drop of a hat.

For their part, American workers have little expectation of fairness from
management. Studies have placed employee expectation of ill treatment--the so called
"trust gap"--at a full 88% of the workforce. American workers are no longer the loyal
legions that dutifully performed the work of America's post-war corporations. Today,
they view themselves as survivors of the brutal realities of corporate restructuring,
redefinition and downsizing, and they are sensitive to every threat to their jobs: from the
corporate merger to the overzealous supervisor.

For every abuse alleged by employee advocates, there are legislative champions
urging intervention. Intense battles are waged in the halls of Congress and state capitals,
but employers have not been winning the war. Even Republican administrations have
produced laws of breathtaking scope, such as the Americans With Disabilities Act, The
Civil Rights Act of 1991 and the Family and Medical Leave Act.

Amid the expanding web of regulation, and waves of new litigation, advisors
have urged employers to respond defensively: handbooks with disclaimers, job
descriptions with exhaustive lists of "essential functions" to defend against claims under
the Americans With Disabilities Act, performance appraisals to justify discipline,
interview techniques which curb relevant questions to avoid discriminatory ones, and
neutral reference policies which perpetuate the re-employment of poor, even dangerous
workers. Employment relations is in danger of becoming a collection of techniques to
minimize liability, with little thought of how this defensiveness, perpetuates mistrust and 
lowers productivity.

The question for human resources professionals looking for a better way is simply
this: can changes be made, in small steps, to enhance productivity and minimize liability
more effectively than the prevailing defensive strategies? Happily, the answer is yes.

The Employee Handbook: No Promise, No Hope, No Use

Let's begin by examining the shortcomings of conventional employment law.
They are most conspicuous in the employee handbook. The handbook, or personnel
manual, is the most comprehensive statement of employee rules and benefits. Handbooks
try to strike a benevolent tone and elicit a cooperative attitude. However, to the chagrin
of most employers, courts have taken employers' statements (and promises) in handbooks
seriously. After a decade of litigation, more than forty states now hold that the "at-will"
doctrine, is not an absolute limit on the rights of employees. In these states, handbooks
can create a contract.

Faced with huge damage awards for wrongful discharge, employers fought back
with the disclaimer. Disclaimers state that descriptions of procedures in the handbook are
illustrative only, and can be changed at any time. And, the "at will" statement, which
frequently accompanies the disclaimer, states that employees can be terminated at any
time.

Disclaimers and "at will" statements deliver this message to employees: "These
are our rules, and we expect them to be followed, but we're going to change them when
they don't suit us, and fire you when you don't." The core document, around which an
employee bases his expectations of life in the company, has become essentially an in
terrorem device. This is hardly an effective means to motivate employees.

These devices have also made their way into job applications. Interviewers are
pledged to adhere assiduously to the script; any remnant of the prospect of longevity is
removed from the hiring process.

Why have a handbook at all? No law requires a handbook. Any notice employers
are legally required to provide to their employees can, indeed most must, be given
independently of the handbook. Even when the handbook alone could discharge a legal
duty--such as communicating a sexual harassment policy--reliance solely on the
handbook could increase the employer's risk of liability. For instance, a sex harassment
policy buried in a handbook, unaccompanied by training or other periodic expressions of
employer opposition to sexual harassment, might prove as harmful as having no policy.
In addition, when disciplinary practices depart from those stated in the handbook --a
frequent occurrence--the handbook succeeds only in furnishing employees with evidence
of arbitrariness.

Serving little legal purpose, offering information of marginal significance and
confirming the message of vulnerability, handbooks do little more than provoke
employees to an inflated notion of their rights. Understandably, they can't get it out of
their heads that what the handbook says must be followed, notwithstanding the
disclaimer. For all that the handbook accomplishes, employers could get by with a thin,
unadorned document of rules that would not otherwise be learned through posting or
other customary dissemination, or assumed by the employee as a matter of common
sense.

Despite these drawbacks, for most employers the handbook is the only
opportunity to encourage team spirit and promote the welfare of the workplace
community. Reasonably, they don't want to abandon the handbook until an alternative
emerges. But is an alternative feasible? What would it look like?

One alternative is a written contract, a document that provides protections in
exchange for specific responsibilities undertaken by the employee. Does this sound far
fetched? Absolutely. The vast majority of employers do not have the confidence that
employees are skilled, intelligent and responsible enough to justify sharing power with
them. Again, employment relations are at a stalemate based on mutual mistrust. How can
employers break this stalemate?

The first place to look is how the workplace operates. Typically, employees
perform limited and specialized functions within a group or department. Supervision--
many layers of it--links functions within departments, and departments to other
departments within the business.

Roles in the Workplace: Over Specialized, Over Described, Under Utilized

Imagine for a moment breaking up the specialization and assigning a group, or
team if you like, to handle an entire process of the business, for example, "an order
fulfillment team" rather than separate purchasing, receiving, accounts payable and
accounts receivable departments. Each employee on the team, so far as possible, is
responsible for performing the whole process. Giving employees a meaningful role in a
central process of the business, rather than limited responsibility for an overly specialized
function, can bring a measurable increase in productivity.

This, in simplified form, is the essence of re-engineering. But we don't have to
slap on a fancy name to make it credible. Would anyone in the profession of Human
Resources argue that productivity is not increased when workers see more meaning in
what they do? As self evident as this is, it runs counter to one of the central concepts of
employment relations: the job description.

The goal of the job description is specificity, to list job duties as exhaustively as
possible. Yet the more specific job descriptions become, the more they breed tiny islands
of isolated activity. Rather than making an employee responsible for a broad role in an
overall process with others, it makes him accountable for limited functions to a
supervisor.

As limiting as job descriptions can be, most legal advisors implore employers to
revise job descriptions, and create an exhaustive list of "essential functions" as the front
line of defense against suits under the Americans With Disabilities Act. This, in theory,
allows employers to claim an "undue burden" in making accommodations for those who
cannot perform those essential functions. But this is a trap. The more detailed the job
description, the less persuasive the assertion that all those roles are essential. In court, if
an employee shows that the duties in the description are not the ones followed, the
defense to a disability discrimination case crumbles. It is worse than having no job
descriptions at all.

Instead of fashioning a questionable defense to an ADA claim, the job description
should offer an opportunity to re-design the work process more broadly. This can be
done in small steps without undertaking a giant re-evaluation of every job description.
Here's an example from a client who took such a step after being sued:

An EEOC complaint was filed by an employee in the product research
department claiming denial of a publicity writer's job. The employer insisted there was
no case because there was no such job. Publicity writing had been only done sporadically
by an information analyst in the marketing department at the request of the sales
department. Publicity writing wasn't in anybody's job description. The employee who had
done that work left the company six months earlier, and the company was getting along
just fine without him.

Instead of mounting a legal defense based on the absence of an identifiable job
description,  the company took a frank look at whether this employee's story made sense.
That is: are writing functions valuable to the company, can she perform them, and can
they "add value" to the work of the employee by engaging her in something she really
wanted to do?

We found that the answer was yes, if writing could be made a central marketing
function, not just something done sporadically at a salesman's request. The sales
department was asked how they could use a writer. There was surely no shortage of ideas
on that score: publicity brochures, informational hand-outs, customer satisfaction
inquiries and so forth. And the employer concluded that the complaining employee had
the skills to perform these functions.

The employee, however, was not given the job of "publicity writer" that she
requested. Rather, her research duties were blended with the writing and sales functions
into an integrated marketing process. She is now linking design, manufacturing and
marketing functions that were artificially and unproductively separated into a series of
inter-departmental hand-offs.

She does not have a job description. She is responsible for a process: translating
market research into sales. Her responsibilities are derived as much from how she and her
co-workers define them, as from the supervisor who instructs her. And, not only did she
withdraw the EEOC charge, the added responsibility fostered greater productivity.

Does this work in every case? Absolutely not. It's not going to work where an
unskilled, uneducated workforce is incapable of problem solving, or working
cooperatively. And quite frankly, if labor costs are low, or there is little competition, you
wouldn't even want to try. Absent competition, the inefficiencies of a disaffected
workforce can be tolerated. But once you say that it might be possible to motivate an
employee by giving her more responsibility, it's possible to think about changing your
job descriptions to facilitate productive work. Indeed, an employee-involved
environment actually creates new and more effective ways to limit liability.

Involving the Employee in Human Resources: Creating New Ways to Limit
Liability

Imagine for a moment that employees in a department or process group
participated with management and shared in a decision to deny an accommodation to a
disabled employee. Participation by co-workers in such a denial may be a more effective
defense than a decision made exclusively by management no matter how soundly
portrayed. Those most intimately familiar with the work may merit more credibility than
a bureaucratic decision.

In response to this theory, some suggest that employees are likely to favor leave
for a fellow employee. However, this is not generally so if, by granting the leave, co-
workers make life difficult for themselves. Experience has shown, that when given the
chance to participate in the design of absenteeism standards, for instance, employees
often propose rules more stringent than those proposed by the Human Resources
Department. In addition, the group is more inclined to make adjustments to maintain
productivity. By saying it's okay to grant an accommodation, they are also saying they
will take the responsibility to get the job done.

The role of the human resources professional in guiding co-workers to such
judgments is critical. Rather than losing control over consistency and centralization (the
traditional cornerstone of a litigation defense) he or she can provide a stronger defense by
managing the decentralization. It takes skill to ensure proper consideration of legal
standards and promote responsibility, but this skill can lead to extraordinary results.
Here's an example:

Faced with one employee who was particularly aggressive in leave taking, a client
tried an experiment. He gathered all members of a corporate planning department,
including the chronic leave taker, and initiated a discussion of how they felt about all
those absences. Co-workers were respectful, but direct. They explained how frequent and
unpredictable absences forced unfair burdens on them and damaged department
productivity. Guess what? Absences and tardiness abated, there was more notice and
coordination of leave, and fewer requests to accommodate disabilities.

Does this sound intimidating? Although some co-workers expressed doubts about
the employee's illness, no law forbids such skepticism; the ADA or the FMLA do not
require employers to believe the reasons employees offer for the leaves or
accommodations they seek. Critically, at no time did the head of Human Resources imply
that the employee would not receive any right he was entitled to. She indeed assured him
of the opposite. She just wanted him to hear how co-workers felt about it.

The involvement of employees in decisions usually considered beyond their
power could be especially useful in another contemporary context: leave taking under the
Family and Medical Leave Act. This law affords an employer almost no discretion, other
than requiring the employee to produce medical certification of a "serious health
condition" if leave is requested for that purpose. As long as the employee meets the
criteria and wants to take off twelve weeks, that's it, he goes.

Accordingly, the employer is dependent on cooperation from the employee in
coordinating the leave. However, the opinion of co-workers can heavily influence an
employee's choice, that is, scheduling leave to cause the least disruption to team
efficiency. Under this approach, the HR manager does not direct, supervise or control,
but facilitates, coordinates and counsels. In an involved environment, the HR role
expands rather than contracts. This takes extraordinary skill, but could reduce liability
more effectively than the conventional defensive approach to employment relations.

Performance Appraisals: Threat of Discipline or Cornerstone of Productivity

Performance evaluation is another area in which employee involvement may be
more productive than a highly-structured defensive approach. Customarily, performance
appraisals are one-sided, allowing limited input by the employee. Judgment criteria are
often abstract and value-loaded, like "capable," "dependable," "communicates well,"
rather than process oriented, such as "responsibilities undertaken," "objectives
accomplished," "goals defined."

Since supervisors don't tend to view employees in broad process oriented terms,
the temptation is to compare performance against the job description, which, as we
discussed, can be a narrow and distorted characterization of the employee's role. Or,
worse, supervisors will give a highly subjective, idiosyncratic end-of-the-year summary
just to get the darn thing over with. The truth is that most supervisors regard the appraisal
as a form of progressive discipline with sugar coating. Indeed, most employment lawyers
see the performance appraisal the same way: as a means of buttressing a defense to
subsequent discipline.

This is a most unproductive approach: most terminations are not strongly based
on past appraisals. Even when appraisals are responsibly done, they often inartfully or
incompletely describe the fault upon which subsequent discharge is based. Even more
frequently, an intervening and overriding basis, not reflected in the performance
appraisal, is the determining factor for the discharge or discipline. An inconsistent or
inartfully drafted performance appraisal can actually harm the employer's defense.
Indeed, it is frequently a marvelous opportunity for employee's counsel to subpoena all
similarly situated employees, to portray inconsistencies and engage in knit-picking
comparisons to prove disparate treatment.

 Stripped of its disciplinary connotations, the performance appraisal could be used
to guide and encourage employees into expanded responsibilities, to encourage team
solidarity, to re-design work process and to refine an employee's career goals within the
organization. It is the counterpart to the involved hiring process, exploring what the
individual needs to succeed in the company and determining whether the employer can
(and should) meet those needs. Compare this with what hiring has now largely become:
an obsession with avoiding discriminatory questions and deleting any possible reference
to the long term.

Even the lowest level employees can be guided to articulate some sense of their
goals, and in doing so, identify the bases on which they will be evaluated. The
performance appraisal can then assess whether the plan is working, whether to go
forward in the employment relationship and how. And if the employer elects not to go
forward, it may have a defense stronger than the customary unilateral disciplinary
approach: a consensual understanding of the standards an employee must meet.
 
This "consensual understanding" is not a "formal" contract, but the beginning of
shared responsibility. The employer says, "we will support you in your goals where
possible and feasible, but you must fulfill your responsibilities."

ADR: A Deadlock Revisited or True Alternative?

Dispute resolution is another area where the sharing of responsibility, may
increase productivity and minimize liability. Alternative dispute resolution, or ADR, has
received a great deal of attention, but its primary application, arbitration, is not an
alternative at all. Arbitration has become more like traditional litigation: complex
discovery maneuvers, delays before hearing, and long trial-like proceedings. Incongruous
results, poorly reasoned decisions and surprising verdicts in favor of employees have
contributed to employer dissatisfaction.

A real alternative would diffuse disputes before they evolve into controversies.
For example, employers contemplating initial steps to increase participation might
consider, an "investigator" or "ombudsman". This individual has the prestige to persuade
and mediate to achieve a solution. This investigator should have the prestige to convey
the message to employees that he or she try to resolve disputes and should not necessarily
be from Human Resources. Indeed the CEO could serve from time to time, lending a
special measure of prestige.
 
And rather than leap in to a broad range of issues, the investigator could be
limited to those areas of employee performance identified as the biggest problem. Is it
discipline, supervision, job functions, work planning or skills development? This small
step can foster the impression of openness and fairness. Rather than some vague
references to an "open door" (as routinely appear in handbooks), it offers a structured
means to address critical concerns to both employer and employee.

  If the concept of an investigator sounds alien, remember that at least one variety
of investigator is already mandated by law, in the area of sexual harassment.
Unfortunately, the investigator's role in this context reveals its weaknesses, not its
potential strengths. The case law of sexual harassment requires the employer to
investigate a charge of sexual discrimination, to assign culpability, and take appropriate
disciplinary action.

Across the country, in small and large businesses, corporate investigators or their
lawyers are doing just that. They take evidence from "victim" and "perpetrator," often in
closed sessions cloaked in unnecessary formality, with lawyers often representing each
side. Co-workers become enmeshed as witnesses while the rumor mill churns. Finally a
decision is rendered, which inevitably leaves one, or both sides, embittered.

 The more constructive investigation would focus not on the vindication of rights
but on the repair of the environment that was fouled by the harassment. The message to
the participants should be: "I'm here to help you find a way to work together productively
for the company." But since the punitive aspect is so overriding (that is, "which one of
you is right"), this focus is lost. The participants must be shown that restoring a work
environment of respect and cooperation is just as important as protecting the respective
legal interests. Taking appropriate corrective action against someone committing sexual
harassment--a legal requirement--is not inconsistent with creating a path back to
communication and enlisting the participants' help. An investigator in a dispute, sexual
harassment or otherwise, treats seriously the employee's complaint, but also imposes a
serious responsibility on the employee to improve the environment complained of.

Redesigning Work: Productive Practices, Not Abstract Theories

 The concepts of employee involvement discused here are not about "making
nice" or an abstract political idea. It's about sharing power for a very utilitarian goal:
making the workplace more productive. The examples discussed demonstrate several
points about the productive advantages of involved employees:

1.Re-designing work, as with the "publicity writer," is apt to increase
motivation and add value to the business.
2. Employee involvement in human resources administration, such as leave
taking and performance evaluation, may also increase motivation.
3. These "involvements" not only yield a more productive workplace, but
minimize liability more effectively than traditional defensive approaches.
4. Involved approaches can be taken in small steps without thoroughly
revamping HR policies.

As management professionals pondering these strategies, don't be afraid to
challenge your lawyers and consultants to be creative in their approaches. Ask them to
weigh traditional defensive theory against the possibility of productive engagement of
workers. In  each situation, dare them to innovate. Remember, like the employees, their
role is to "add value."

And dare them to help you take risks, for even pragmatists, especially
pragmatists, know that risk is indispensable to business success. Remember, if you elect
to re-engineer your environment--to repair the fan belt while the engine is running--as
GE Chairman Jack Welch put it--make your advisors put on overalls and get greasy
helping you with the repairs.

_______________________________

Stuart H. Brody, Esq. is Senior Counsel to the Labor and Employment Group of
the New York law firm of Gibney, Anthony and Flaherty. He has represented clients in
all areas of employment law for twenty years. He has appeared before state and federal
labor boards, employment practice agencies, trial and appellate courts, and the United
States Supreme Court.
 
Mr. Brody has advised city, state and federal officials on industrial relations
matters, and has lectured nationally and internationally on this topic. He also maintains a
national practice in labor arbitration and mediation. He has served on numerous public
boards and advisory commissions concerned with labor issues and held several public
offices.


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1.Peter Cousins, Esq., a partner with Gibney, Anthony & Flaherty, gave
valuable editorial assistance to the production of this article.