Stepping Over The Line

Yesterday evening I met an individual who works in management at a local ford dealership who gave me a business card and invited me to call him if he could ever be of assistance. He was a very gracious individual until told the following; I drive a Ford F-150 today but I informed him my next truck was likely to be a Toyota Tundra. Over the next few minutes I listened to a discussion of the myriad quality problems Toyota is experiencing. This is not particularly surprising. We expect car salesmen to talk up their own products and talk down the competition.

In the vendor selection and contracting for employee benefit service providers an employer however has the expectation they will receive unbiased and objective guidance from a consultant. I mean none of us would be stupid enough to hire the Ford Salesman to guide a selection of a new truck and expect objective opinions about the Chevy, Dodge, Nissan and Toyota alternatives, right?

Consider the curious case then of Hewitt Associates which guides employers in the selection of vendors and carriers for their employee benefit programs in addition to providing HR and Benefit Outsourcing Services. Hewitt has announced the acquisition of LCG Consulting a provider of total absence management solutions.

Does this mean Hewitt will cease vendor selection consulting jobs in the field of absence management? Did I miss that press release? How will they maintain any objectivity in evaluating absence management capabilities of companies and vendors who compete with Hewitt and why on earth would these companies ever want to allow Hewitt Consultants to obtain an insiders perspective of the systems, services and processes they utilize to deliver absence management solutions?

Is it not interesting how what is a clear conflict of interest for the car salesman is somehow justifiable in the world of consulting?

Baseball and Talent

Houston Astro's 1st baseman Lance Berkman was ejected from last nights Astro's-Rockies game in the 8 th inning over a called strike out on a pitch he thought was clearly a ball.

Lance Berkman is known as a very cool customer who rarely displays much emotion so to see the meltdown with him throwing helmets and equipment onto the field was a rarity. I skipped the 9Th but learned I missed a bench clearing brawl which followed Carlos Lee being beaned and manager Phil Garner felt compelled to get his own self tossed.

The appeal of baseball to me is that you can enjoy it so many ways over the course of a season and there is drama in it always;

• Reading the box score to see whose performing (OK)
• Listening to the game on the radio (good)
  
• Watching the game on TV (better)
  
• Watching the game live in person when you are working or supposed to be working and someone else is paying for the tickets (best)
• Second guessing the manager (big fun)
• Watching young talent develop like Hunter Pence (cool)
  
• Second guessing the GM ( we all live for this, right)
  

Next time your gathering with family and friends and someone starts talking about their job candidly and whats really happening on the job stop and ponder how you would react if that employer was your favorite baseball team.

Lets look at companies from an baseball perspective.

• Is the company competing for a pennant?
• Does the team have the talent to compete?
  
• Is talent deployed properly?
• Is the company well managed and well coached?
• Does the team play with passion or are they just mailing it in?
• Would fans buy the pay scale as commensurate with performance ?
• Who is poisoning the clubhouse and whats being done to prevent that?
• Is the team passionate?
• Do people leave when they become free agents or do they choose to stay?
• How is the culture? Really, how is it?
  

Frankly, I think most Astro's fans were relieved to see a spark from Berkman. It shows he still cares and that's important when your team is 9 games under .500.

HR professionals know the tired sports analogy may be the only way to convey quickly to management the merits of a proposal or the case for change.

Fear Not Vendors

Sixty three years ago today Allied forces landed in France to liberate Europe as operation Overlord began. As I write this US forces in Iraq and Afghanistan are without question deployed in harms way. We owe these individual's gratitude and respect for they must manage their own fear to accomplish their job. They faced and still face great danger.

There is a great deal of fear I observe almost daily coming from vendors who are certainly not faced with life threatening danger. As an independent insurance consultant most of the fear I encounter comes from vendor carrier personnel who fear the impact loss of a key account can have on their employment. This fear is very real for many. Shifts to centralized service models by many vendors have stretched many account managers very thin. This has impacted the vendors ability to spend sufficient time with their customers to stay in touch with their employers issues and objectives. The end result of infrequent interaction and common understanding between vendor and customer often leads employers to wonder why they are being ignored. When a problem invariably arises communication is difficult when neither party understands where the other is coming from.

Unfortunately, the culture at some vendors provides legitimate concerns for account managers who know all too well their job is tied to key account retention despite a caseload which affords 60-70 hour weeks just to fight service related fires. It can be a recipe not just for personal unemployment but also for burnout especially when you factor in corporate culture, re-engineering frequency not to mention family obligations--two parents working, single parents, aging family members.

Many vendor service models are predicated on hiring account managers who are fundamentally uncomfortable with conflict. This is a conscious effort to sever a relationship which could be used against the vendor who fears if they were good enough to move the business initially they could do so again to a competitor should they leave. These vendors transition their customers systematically from type A salespeople to support staff. Of course, the sales people are quite adept at communicating and understanding where their prospects are coming from because their income is tied to this skill and they further recognize that conflict presents opportunity masquerading as a problem. Using a DISC variation the sales people are primarily D & I personalities and the service personnel are normally C & S personalities.

In assessing vendors and in addressing service related issues it is often helpful to focus obviously fearful service employees on specific tasks and a time frame for completion. Fear is a palpable and discernible emotion we should all recognize. Understanding where the fear is coming from is essential to properly managing a vendor or even selecting a vendor.

Fear can be a powerful motivator for the soldier attempting to stay alive but can also be usefully harnessed in vendor management when understood and alleviated with a focus on required tasks. At the end of the day fear either works for you or against you and the choice is your own.

Depression Untreated Got EAP?

On the heels of the VT shootings Houston has seen murder suicides at Johnson Space Center last Friday as well as another murder suicide at an upscale apartment complex yesterday.

On a personal note my own 6 year old niece was spending Sunday evening with her nanny when the nanny's spouse attempted suicide. He had been depressed recently.

60 Minutes ran a very interesting piece Sunday night highlighting similarity between school shooters and presidential assassins.

As 60 Minutes noted;

"With the school attackers that we studied there’s no profile, there’s no set of demographics that they share. But there are certain behaviors that they undertake," Georgeann Rooney, a threat assessment specialist at the Secret Service, tells 60 Minutes.

Behaviors that, she says, are like those of assassins. "This isn’t an individual who just snaps and wakes up and decides they are going to attack their school. There’s a planning process," Rooney says. "This planning, a lot of times, if you know what to look for it can be detectable."

And one theme they detected was bullying: two-thirds of the school shooters were victims of bullies. "They'd call you gay, call you stupid or fat or whatever. Kids would sometimes throw rocks at me and push me and kick me and hit me and stuff like that," Luke Woodham [school shooter]told researchers.

The Secret Service research reads like a road map to the mind of Virginia Tech killer Seung-Hui Cho; he mentioned suicide to others, and he planned for months, buying one of his guns nearly three months before the attack.

HR & Benefit managers are frequently challenged to justify the ROI associated with EAP programs. Yet after every tragic event we are faced with evidence friends, families and co-workers were often aware of a problem manifested in behavior.

Murder is the Number One cause of on-the-job death for women in the workplace and 20% of those women, on average, are murdered by their partner at the workplace (Bureau of Labor Statistics, 1993). Here are some tips for managers and supervisors to make your workforce safer

Interdependent Benefits Need An Integrated View

Aetna (NYSE:AET) today announced that employee assistance services will be a standard part of the servicing of fully insured health plans for all small group employers.


Here is a very useful study of Depression in the workplace--warning funded by Pharma--so make sure you have therapuetic infusion baked into your Rx & DM plan design.

Surveillance exposes Disability Fraud-Black Hole II

Chalk one up for the good guys. As you read this stop and ponder what happens when behavior like this becomes engrained in a company's culture. Hat tip to BenefitsLink which has a great aggregation service for the story here.

Employee On Short Term Disability Terminated Based On Video Surveillance

from Spencer’s Benefits Reports: An employer did not violate ERISA when it terminated an employee on disability leave based upon surveillance showing the employee engaging in physical activities beyond his supposed disabilities. This was the decision of the Tenth Circuit U.S. Court of Appeals in Denham v. Sunoco, Inc. (No. 06-5040).

John M. Denham worked at Sunoco’s lubricants refinery in Tulsa, Okla. On May 25, 2000, Mr. Denham began a medical leave of absence due to neck, shoulder, and back ailments, and he began receiving short term disability benefits under Sunoco’s disability income plan. As required by company policy, Mr. Denham periodically reported his medical condition to his supervisor and to Sunoco’s company physician at the Tulsa refinery, Dr. Campbell. Mr. Denham also gave consent for his medical records to be shared with Sunoco.

During the time that Mr. Denham was on disability leave, his supervisor heard comments from other Sunoco employees indicating that Mr. Denham might have been engaging in physical activities apparently incompatible with his disabilities. In order to verify these rumors, Sunoco hired a private investigative agency to look into the matter. Rex Merritt, a local investigator experienced in surveillance work, then followed Mr. Denham and videotaped his activities. Mr. Merritt submitted a videotape to Sunoco’s human resources department showing Mr. Denham working on a truck, making a trip to a local auto-supply store, and unloading 50-pound sacks. On Nov. 15, 2000, Mr. Denham was summoned to Sunoco’s HR department, where the videotape was shown to Mr. Denham, Dr. Campbell, and other HR personnel. After Dr. Campbell concluded that Mr. Denham could not have been performing the activities shown on the videotape with his claimed impairments, Sunoco terminated Mr. Denham’s employment.

Now stop and ponder what happens when behavior like this is becomes part of your culture and word spreads. If your firm has 3000 employees and 1% behave this way each and every year what is the economic impact. Lets do the math and assume a $50,000 annual salary (low for a refinery) and 60% STD and LTD plans with a 6 month STD benefit period and followed by LTD.

STD Cost $15,000 per claim X 30 claims = $450,000 in direct costs
LTD cost of $30,000 per claim X 30 claims= $900,000 in direct costs

Total Direct Costs = $1.350,000 annually



A refinery must be efficient to drive profits but for the sake of argument lets low ball the productivity ROI and call it a 2-1 return on labor costs.

Total Indirect Costs = $2,700,000 annually

Total Direct and Indirect Cost of STD Fraud equals $4,050,000 annually.

Notice we have not even included costs for over-time or excess staffing but these are very real for an employer in this predicament. Welcome to the black hole, that giant sucking sound you hear is the black hole of STD (see earlier post by The Group Guy) crushing your benefits and payroll budget. Fraud--a little goes a long way.

The good news is I have solved this very problem at numerous companies large and small.