Outten & Golden: Empowering Employees in the Workplace

Peace and Good Will Towards Workers: It Starts at Home

December 20th, 2005 | Paula Brantner

It’s the holiday season, where you can read all kinds of heart-warming stories designed to make you feel all warm, fuzzy, and generous inside. However, if you’re an American worker, there isn’t that much good news around right now: a New York City transit strike, massive corporate layoffs among former industry leaders, and an increasing willingness by employers generally to lay off workers during the holidays. But a couple of recent stories indicate that there are some executives out there keeping their workers’ interests in mind. Why? These stories indicate it all starts at home.

It’s hard not to be a little depressed right now in thinking about the world of work. Whether you’re watching the transit strike in New York City wondering whether this is another strike that will leave its members worse off, or a worker in NYC just trying to get to work, the strike is rough on everyone involved. As one stranded commuter pointed out, “They [transit workers] are always suffering,” she said, “but this time it is the working people and the public suffering together.” (See Newsday article.) The transit workers labor under some pretty harrowing conditions (see New York Times article), but also can wield significant power, by virtue of the reliance so many New Yorkers have on transit. One commentator points out, “[A transit strike] is not absolutely devastating in a life-or-death way, but on the other hand is incredibly potent as a weapon.” (See New York Times article.) Stay tuned: it’s likely to stay ugly for a little while.

It used to be that companies, fearing a enduring reputation as Grinches or Scrooges, would hesitate to lay workers off during the holiday season. Not any more, John Challenger, chronicler of job trends, tells us. (See CNN/Money article.) In fact, he says, “It used to be taken for granted that you wouldn’t do layoffs during the holidays, but that hasn’t been the case for at least several years,” pointing out that an employee is actually 54 percent more likely to be laid off in the fourth quarter than any other time of year (especially as companies strive to clean up their books during the fourth quarter. (See Waterbury Republican-American article.) In the last month, we’ve seen such industry titans as General Motors, Merck, Whirlpool and Time Magazine announce significant layoffs.

The only consolation is that it’s also a good time to look for a job, according to Challenger: “January is one of the strongest hiring times of the year, and a lot of the work upfront that leads to those hires goes on now. There are industry parties to go to meet people, and about 20 percent of the people out there stop looking because they think there’s nothing going on. All of which makes this a good time to be looking for a job.” (See CNN/Money article.)

So where’s the good news, you may ask. There may not be so much of it this holiday season, but at least a couple of recent articles remind us that there are still corporate executives out there working very hard to do right by their workers. One headline reflects the utter incredulousness by which most people would view this statement: The Boss Actually Said This: Pay Me Less (available only to TimesSelect readers). The New York Times story by Gretchen Morgenson, the paper’s, if not the nation’s, leading journalist watchdog on corporate pay issues, tells of one Ethan Berman, founder and chief executive of RiskMetrics. The company, based in Manhattan, helps institutions and corporations assess risk in their investments; it is owned by its employees and three private equity firms. It will generate revenue of $100 million this year — hardly chump change in an era of much red ink on corporate profit and loss statements.

What makes Berman’s story so remarkable? In a two-page letter to his board of directors, Berman expresses disappointment in his compensation package for the prior year. Because it was too generous. Yes, that’s right: Berman asked for no increase in salary, zero stock options, a smaller bonus than last year and a piece of the company’s profit-sharing pie equal to that received by all employees — in a year when his company’s revenue grew by more than 40 percent. Contrast Berman to the executives profiled in this column by Ben Stein, hardly an apologist for the free market, called Executives Gone Wild: It’s Not a Pretty Sight. Stein’s right: it’s not a pretty sight when a Delphi executive calls for his workers’ pay to be cut from $25 an hour to $9 or $10, then turns around and asks the bankruptcy court for $510 million to pay its executives during Delphi’s transition out of bankruptcy. And that’s just one example.

What makes Berman a different model from more avaricious corporate executives? One clue resides in the article: it seems to have started at home. When Berman received his first large bonus (more than his annual salary) for toiling in the corporate world, he proudly called his father, merely to receive a sobering response: “The first words out of his mouth were ‘don’t ever feel that you are worth it.’ I don’t want him to say that to me again.” So Berman has become a “hard grader” of his own performance, saying to his board, “My job at this point is developing people, developing success plans to make sure this company will continue to grow and be successful 5 to 10 years from now, and I didn’t get that done.” I hope Dad is proud of his son now, as Ethan Berman is probably worth much more to his company and his workers than he will ever again give himself credit for.

An increased sensitivity to workers also starts at home for W. Douglas Parker, chief executive of the newly-merged America West and US Airways, who is in the midst of overseeing a complicated meshing of different corporate cultures. Parker must listen to an extremely influential flight attendant, his wife Gwen Parker, a former flight attendant and active union member. (See New York Times article.) Mr. Parker says, “In this business you’ll hear, ‘Well, what else are we going to do?’,” referring to repeated management demands to cut workers’ pay, increase their work and reduce benefits. “I was guilty of it in the past.” But, he added: “You can’t say to Gwen, ‘What else are we going to do?’ It’s not going to make for a nice evening at home.”

Mrs. Parker acknowledges that her support of unions caused some conflict early on in their relationship. But after her experience as a flight attendant at American Airlines, where, she says, “They always gave you the feeling you were so easily replaced,” she “helped Doug understand that…you want to be respected for the job you do.” (See New York Times article.) Mr. Parker now has the unenviable task of facing workers fearful of losing seniority and promotional opportunities and being asked for wage concessions and pension cutbacks. Unlike some executives, he’s taking his case directly to workers in employee meetings, attempting to honestly address workers’ fears about working for the post-merger airline. There are difficult post-merger concerns his workers face, and the solutions aren’t going to be easy. But Mr. Parker has already learned at home that you can’t just solve all problems at the expense of your employees.

Thanks to the people in their lives keeping them real, Ethan Berman and Doug Parker provide some examples worth emulating. We can only hope that more executives will be so honest, straightforward, and considerate of their people who make their earnings possible during this holiday season. And if you’re now feeling all warm and generous about Workplace Fairness, who brings these kinds of stories to your attention throughout the year, it’s not too late to contribute to our year-end campaign. Thanks for all your generosity!

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