Focus on the Positive Good News and Optimism Predominate
May 1, 1999 12:00 PM, Foss Farrar
A STRONG ECONOMY heralds a good year for the trailer industry, said Bob Bushnell, president of the National Association of Trailer Manufacturers.
Reflecting a theme of optimism presented by speakers at the 11th annual NATM convention February 17-20 in Dallas, Texas, Bushnell said that he suspects many manufacturers of trailers under 26,000 pounds GVWR are faring well in the booming economy and are able to hold down trailer prices.
Bushnell, president of Western World Inc, a trailer manufacturer in Caldwell, Idaho, said his own company is a good example. "In some cases, we have added new features to existing models and still are able to hold firm on our prices," he said.
Some people in the industry are skeptical that the economy will continue its upward trend, Bushnell noted, but he added that he left Dallas persuaded by the optimism expressed by Delos Smith, senior business analyst with The Conference Board, a leading business membership and research organization in New York City, New York.
Smith, an economist whose views are broadcast on television and radio and written about in newspapers, told NATM convention participants that the US economic system is "almost perfect." The economy is in the best shape he's seen since he began his career in 1959.
High Consumer Confidence Trailer manufacturers operate in an environment where discretionary income is very important, Smith said. Consumer confidence is a significant factor in overall trailer sales. "If people are nervous, they are very defensive about what they buy," he said.
Consumer confidence measures in this country are extremely high, Smith said. The three organizations that have consumer confidence measures are The Conference Board, the University of Michigan, and ABC Money Magazine. All three give high confidence ratings. "More interesting, the Bureau of Census divides the country into nine regions," he said. "Every region of this country has high consumer confidence. This is very unusual."
Determining consumer confidence is simple, Smith said. It is based on the feelings, or gut reactions, expressed by people who are asked five questions about the economy. The first two questions are repeated to cover both the present situation and the situation six months in the future. They are: What are business conditions now? What is the employment situation -- Are jobs hard to get or are they plentiful? The final question: Six months from now, will income go up, stay the same, or go down?
The Conference Board rates consumer confidence at 127, an extraordinary rating, Smith said. "Anything over 100 is excellent. The record high is 142," he said, adding that the University of Michigan and ABC Money Magazine also give positive ratings.
Another indicator of a strong economy is high labor participation. "Even with all the layoffs, there is a labor scarcity in the United States," Smith said. "We have the highest labor participation rate in the history of the country."
Other Economic Signs Though the US savings rate is below that of other nations, it is measured by a system that worked well in the 1950s but isn't accurate today, he said. For instance, the financial markets have blossomed, and the $5 trillion added from these markets over the past four years isn't counted in the national accounting system. A strong housing market and productivity gains are other indicators of a positive economy.
"Why are we seeing this economy?" Smith asked. "To answer this difficult question, I think we should look at this new world of technology that speeds up the flow of information. This country is full of pioneers who are pushing ahead with the new technology. Others in our country are adapting to the changes brought about by these pioneers. And other people are left out."
A strong economy doesn't mean no problems, Smith said. On his travels by Greyhound bus around the country, he sees pockets of poverty only miles from affluent areas. One poverty-stricken area is in South Texas, between Corpus Christi and San Antonio. In contrast, Austin and Dallas to the north have had an influx of high-tech firms and the Dallas Metroplex is known as "silicon prairie."
Of course, the US economy is affected by the world economy. Problems exist elsewhere, particularly in Asia. The economies of Thailand, South Korea, and Mala ysia are in a downturn. Russia is in a mess.
"My number one concern economically is Japan," he said. "How do you get this country, the second-largest economy of the world, back into it? Beyond monetary and fiscal solutions, Japan must look for cultural solutions."
Get the Big Picture Economists must have a "world view" to do a thorough business analysis. Likewise, employers, including trailer manufacturers, must get the "big picture" to ensure business success, said the NATM keynote speaker, Casey Brandson, AllenBrand Public Relations, Jackson, California.
Getting the big picture is difficult in an increasingly complex marketplace. "Trying to succeed in business can be a very frustrating experience," Brandson said. "There are constant computer problems, fierce competition, and skin-tight budgets. In addition, companies must comply with endless regulations and keep up with paperwork required for personnel, insurance, and state and federal governments."
Businesses obviously must make money to survive. However, business leaders who define their success solely in terms of profit, power, prestige, and influence are not getting the big picture, he said.
"What does success mean to you?" Brandson asked. "What are you doing to take your company in the direction you want it to go?"
Focusing on the big picture is not simply looking at work as a series of tasks. Instead, it is examining overall aims or goals. For instance, a carpenter may say that his work is pounding nails. Or he may include the bigger picture by saying it is to create safe, comfortable shelters.
Henry Ford is an example of a business leader who looked at the big picture, Brandson said. Ford stated that his goal was to build cars faster and cheaper. The result was the creation of the assembly line.
Besides having vision, good business leaders need people to help them achieve their goals. "How you manage people influences all other indicators of success," Brandson said. "Being honest is by far and away the most important quality of leadership, according to a survey of 15,000 people."
Employee Performance Factors Leaders of top performing companies stress long-term employment and a work atmosphere promoting good morale, he said. Employee performance obviously is affected by workplace morale. A recipe for poor performance is not involving employees in decision-making, lack of reward for good work, and no opportunity for employees to advance.
Over a three-year period the Dana Corporation valve plant in Minneapolis, Minnesota, reduced manufacturing time by 92% by establishing measures for more employee involvement. They include: work teams with elected captains, improvement projects developed by the teams, and cross-training of production workers. Workers being cross-trained earn an extra 37 cents an hour.
Establishing rewards for good work also boosts employee morale. Training, profit-sharing, and awards for competition are examples. "The 'M' in morale equals money from increased employee productivity," Brandson said. "Behavior that is rewarded is repeated."
Brandson cautioned that companies should set up awards that can be achieved by all workers rather than exclusive awards such as "employee of the month." Exclusive awards ensure that almost every worker will be a loser. Instead, companies should set up reward systems for everyone who exceeds a certain measurable standard.
"Reward outstanding performance with theater and movie passes, and dinner vouchers," he said. "Acknowledge each employee's anniversary date with the company. Bring in lunch because you appreciate your employees. Have an annual celebration to celebrate the prior year's accomplishments. Then determine the top three goals your company would like to accomplish next year. Nothing is more important than shared goals, established together."
One of the best ways to build a winning organization is to ask for and act on employees' input, Brandson added. He noted that the highest ranking reason employees leave their jobs is limited recognition and praise (34%). This outranks compensation (29%), limited authority (13%), personality conflicts (8%), and "other" (16%).
Importance of Optimism Practicing optimism helps build a successful business, Brandson said. A study by Martin Seligman, a Temple University professor of psychology, concludes that optimistic organizations are powerful and pessimistic organizations are helpless.
Seligman based his conclusions on a study of a large insurance company that showed that salespeople who scored high on a test for optimism sold 37% more insurance than their colleagues who scored low on the test.
"Optimism is not positive-self talk," Brandson said. "It's not telling yourself that every day in every way you are getting better. That's delusion."
People are not born with optimism, he added. They learn it based on their experience and role models. If people learn it, then it's something that can be taught.
Seligman defines optimism by contrasting it to its opposite. Pessimism is characterized by three P s: permanence, pervasiveness, and personalization.
"Pessimists believe that problems are permanent," Brandson said. "If your view is that there's always some kind of a problem, then there's really no point in solving problems. That's why Seligman says that organizations with this attitude are helpless. Their attitude is 'why bother?'"
On the other hand, optimists view setbacks as temporary, he said. If something goes wrong one day, they believe that they can do better the next. They are in the business of solving problems. When they solve one problem, they tackle the next one.
Pessimists show pervasiveness by generalizing one bad experience into a catastrophe. Optimists, however, compartmentalize a negative experience. Finally, pessimists blame someone when something goes wrong. But optimists blame the situation.
Stick with the Facts "When you're not getting the performance you want, don't blame your employees," Brandson said. "Instead, stick with the facts: 'Here's what we're getting. Here's what we need. Here's the difference.' For example, if the company newsletter used to be produced every two weeks and now it takes 3 1/2 weeks to produce, point out the difference. Ask employees how the company can fix the problem."
Employers also should stick with the facts when compiling personnel files, said W C Daniel, personnel manager of Sundowner Trailers Inc, Coleman, Oklahoma. Sundowner Trailers has about 750 employees.
"If you have an opinion or comment you want to make, write it down and put it in your pocket," Daniel said. "All these files can be subpoenaed. Do not place anything in these files that you do not want to appear in court."
Though some human resources officials recommend that companies keep 23 files, Sundowner Trailers consolidates the information it needs into seven files. They include: personnel, I-9 forms (documenting work eligibility) , confidential, payroll, Consolidated Omnibus Budget Reconciliation Act (COBRA), worker compensation, and supervisors' working files.
"We keep basic information in the personnel file--hire dates, birthdates, social security numbers," Daniel said. "We also keep a copy of the original employment application. A lot of companies have information on application forms that could get them in trouble. Have someone review your forms to keep current with regulations.
"Certainly, our employee application doesn't ask questions about age, sex, marital status, number of children, religion, or whether applicants have been arrested for a crime. If your application form includes any of this data, clean it up and throw away the old form."
Daniel recommended that companies periodically evaluate their employees. Evaluations may be beneficial to the employer who finds himself in court defending a wrongful termination suit. Job descriptions with brief descriptions of essential job functions also are essential. These should be handed out to employees.
Evaluate Your Employees "How could you defend in court that the employee didn't do his job if you don't have a jobdescription?" he said. "And you aren't going to win a wrongful termination suit without employee warning reports. Did you inform the worker in writing of your expectations? The reports should detail what the employee is doing wrong, what the company expects, and when the company expects his performance to get better."
Sundowner Trailers requires that its employees sign a receipt for the company handbook, saying that they received, read, and understand the handbook. These receipts are kept in the employees' personnel files. Handbooks document company policies and procedures. They should be short and concise. A handbook should be written to fit a particular company's way of doing business.
"Make it fit your company, make it fit your employees," Daniel said. "Outline the things you want your employee to know. Get your owners and supervisors involved. Keep it as small as you can. Attorneys love it when they get a thick handbook because it's easier to find something in there that the company didn't go by."
Sundowner Trailers keeps I-9 forms separate from the personnel file, even though the law doesn't require that the records be kept separate. Required by the Immigration Reform and Control Act, I-9 forms are the company's proof of employee eligibility to work in the United States. Placing the forms in a separate file makes it convenient for Immigration and Naturalization Service officers to find any information they may want to check.
Confidential information including records checks and medical histories are kept in a separate file that company supervisors are not allowed to see, Daniel said. These files may include criminal history checks and worker compensation histories. "Have a good, legitimate reason for having these records," he added. "For example, if you don't have the Department of Transportation checking on you, you don't need to keep employees' driver records."
COBRA provides for the extension of medical insurance benefits to employees and their dependents after a qualifying event -- such as a change in employment status or death of the employee. COBRA must be provided by employers that employ 20 or more workers and who have a group insurance plan.
More Legal Requirements Employment law that has gone into effect over the past 20 years places more requirements on employers to reasonably accommodate workers with disabilities and differing religious practices, said John Neighbours, an attorney with Baker & Daniels, a firm specializing in labor law in Indianapolis, Indiana. In addition, employers are being held strictly accountable for sexual harassment in the workplace.
Workers are filing more lawsuits claiming discrimination based on these laws, noted Neighbours. For instance, claims filed with the Labor Department accusing employers of violating the Family and Medical Leave Act (FMLA) have increased 42%.
"There's a lot of silliness with many of these cases," he said. "The good news is that in many of the silly lawsuits, the courts are getting it right. More often than not, they are finding that it's OK for employers to expect their employees to work."
Trends in employment law include more reverse discrimination suits, more claims of religious discrimination, and the increased number of FMLA suits, Neighbours said.
"We have gone into an era when employers have moved labor relations out of the board room into a back-room support function," he said. "The irony is that this has occurred in the same era when we've seen an explosion of litigation in labor law.
"In the 1940s, 1950s and 1960s, in every executive office suite there was a vice-president for labor relations. At that time, 35% of manufacturing employees in American were represented by organized labor. But organized labor hit the skids in 1981. Today, organized labor's representation of private sector, nonagricultural workers of America has declined to less than 10%."
Meanwhile, the vice-president of labor relations has left the executive suite and has not been replaced by a vice-president for human relations, Neighbours said. There might be such aperson, but he doesn't have access to the board of directors. He doesn't have the ear of the CEO the way he probably should because of the rising costs stemming from employment law.
Important HR Issues "When your human resource people come to you, they've got important issues that affect your bottom line," he said. "Congress stepped forward and filled the void created by organized labor's decline by the passage of an alphabet soup of employment laws from 1981 until FMLA was passed in 1993."
Court rulings about workplace harassment stem from a law passed in 1964, Neighbours said. Sexual harassment is an outgrowth of the meaning of sex discrimination in the workplace. Most victims of sexual harassment are women. However, the Supreme Court recently considered a case of sexual harassment of a man in an eight-man off-shore rigging crew.
Companies are sued for two kinds of sexual harassment: "quid pro quo," in which an employer or supervisor trades work conditions for sex, and hostile environment.
"Quid pro quo only applies to people in authority, because it has to be trading something for something else, Neighbours said. "It could involve supervisors, assistant managers, or foremen. As employer, you are responsible for your managers in a strict liability way, according to the US Supreme Court."
Neighbours suggested that employers consider a "zero tolerance policy." This would be a company-wide rule that no manager or supervisor is allowed to date any employee. "Keep sexual harassment out of workplace or prepare to get your wallet out," he said.
Factors that may cause hostile environment include the display of sexually suggestive calendars or the telling of indecent jokes. When these activities are sufficiently severe and pervasive to interfere with the work of a reasonable person, they create a hostile environment.
The line that creates hostile environment is gray and wiggly, but the employer still has strict liability for his supervisors, Neighbours said. Only one exception exists: an adequate reporting system. Employers must be proactive in trying to prohibit sexual harassment by investigating, training supervisors, and informing employees of the procedure for reporting incidents within a sexual harassment policy.
"The Supreme Court said if you've been that kind of good citizen, they may let you off the hook," he said, "but only in a very narrow circumstance: If the employee doesn't report the sexual harassment to you."
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