A Structure for Employee Relations
| An organization and its labor force are dependent on each other and must work together to optimize their relationship to succeed. Whether employees are represented by a union, as is the case throughout the four major sports leagues, or not, there are many other variables and issues that must be contemplated for this relationship to prosper. Employers and employees alike must correctly analyze and adequately address these issues to maximize shareholder value, whether these shareholders literally own the company or figuratively do so in the case of sports fans. The six prevailing issues that require consideration on the labor front are: [1]
Building Long-Term RelationshipsBuilding long-term relationships with workforces has enabled companies and organizations of all sizes to prosper. In professional sports, success can only be attained once a league has achieved long-term labor peace. Without such peace, leagues are unable to convince TV networks to pay billions of dollars for the rights to broadcast games unless the contracts have clauses stipulating "make goods" in the case of a work stoppage. This fallout arises due to the network concerns about a sport's long-term stability and their fears that advertisers might not be able to reach as many viewers should ratings decline as fans become disenfranchised. Essentially, any sports league or company for that matter that is perpetually embroiled in labor strife cannot maximize profits. This macro perspective on the impact of securing positive long-term employee relations is complemented by the need to do so on a micro level, one highlighted by individual employee or player relations. With the exceptions of Bo Jackson, Deion Sanders, and a handful of other two-sport superstars, sports leagues seldom have to worry about their players jumping ship from league to league because the major professional sports leagues are both monopolies and monopsonies (where there is but one "buyer" for the athlete's services the pro league) that lack significant competitors. This doesn't mean, however, that individual teams don't face extraordinary employee relations issues, particularly when dealing with high-priced free agents, players who are able to change employers when their current contracts expire. In much the same way treating an employee professionally and with respect pays dividends, treating a player or coach "right" can make the difference in retaining that employee even when the money being offered is significantly less than what the competition is offering. It also leads to establishing long-term, mutually satisfying employee relations. Dallas Mavericks owner Mark Cuban pays his players well, leading some to believe he is one of the best owners in the NBA. But it might be the creature comforts he provides his employees that really make the difference. Cuban purchased a new Boeing 757 team plane, partly because the NBA charter didn't have the amenities that would enable his players to properly recover from fatigue during extended road trips. The Mavericks play in a new arena and Cuban has gone out of his way to do all the little things from putting more plush in the players' courtside towels to commissioning the building of comfortably padded leather chairs to accommodate his players. What Cuban does for his players is akin to what many dot-coms did in 1999 and 2000 for employees who were asked to work long hours before (if ever) cashing in. Internet companies "compensated" employees with pool tables, video games, and customized office furniture in an effort to maintain motivation and reduce employee attrition. An athlete might also accept less money if he or she has the option to play for a successful organization, a team that not only has the chance to win a championship, but also the commitment to seeing that it happens. Successful organizations that are doing well and are committed to doing even better find it easier to retain and acquire employees, and they are provided a measurable competitive advantage in the process. Having a supporting cast of well-qualified people also contributes to building long-term relationships. Although Joe Sakic, Patrick Roy, and Rob Blake were unrestricted free agents immediately after they helped the Colorado Avalanche win the 2000 2001 Stanley Cup, each decided to resign with the team prior to exploring the market in search of other lucrative contracts. Of course, offering Sakic the largest contract in NHL history at the time didn't hurt, but the personnel commitment around him was certainly a factor in his decision. Long-term, mutually beneficial, and bargained-for relationships minimize the strife between organizations and their employees. Once these ideal working relationships are formed the ability to avoid and overcome conflict is greatly increased. Counterproductive conflicts not only contribute to the animosity between management and unions, but can also foster disdain from customers. NHL and Ottawa Senators star Alexei Yashin, after consulting his agent Mark Gandler, held out the entire 1999 2000 season. Yashin, who was scheduled to make $3.6 million in the final year of his five-year contract, was awaiting a raise from the team before playing his final season. Yashin thought he deserved more money because he was a finalist for the league MVP award. Essentially, out of nowhere, the player who was featured on all the team's promotional materials would not be playing. In a surprising and unusual move, a group of 11,000 season ticket holders attempted to recover $27.5 million worth of damages for Yashin sitting out, claiming that they had purchased one product (a team including Yashin) but were given another (a team without him). However, as with many labor matters where the customer is affected by internal company affairs, the judge eventually ruled that the contract was between the Ottawa Senators and Yashin, and the fans had no legal standing. Although the Senators made the playoffs (the team was eliminated in the first round) without Yashin, the fallout to the Senators thanks to his failure to honor the contract was tremendous. Yashin, legally forced to grant the Senators a final year, played as a lame duck of sorts, knowing the team would trade him when the season ended because he had so severely alienated the fans and embarrassed the team. As expected, Yashin was traded to the Islanders for the second pick in the 2001 NHL draft and signed a 10-year, $87.5 million contract. Many Ottawans will never forget the bitter taste that Yashin's holdout left in their mouths and Yashin, despite his prospects of future success in the league, will always be associated with the holdout. Some companies are so embroiled in their internal employee relations wars that they forget how it is all affecting the customer relationship. No matter how talented or valuable an employee appears to be to an organization, this value has limitations. No single employee exists who is more important than the organization itself and the brand name it has achieved. Dealing with ChangeOrganizations and their labor forces must work diligently to make sure that any changes that do occur, regardless of their origin or controversy, are handled as favorably and seamlessly as possible. Creating an environment where change is dealt with in a positive fashion will help both sides to accept the outcome and begin to make the best of the consequences surrounding it. The best executives are those who strive to monitor the pulse of the changes necessary to improve their company on a daily basis. Revered managers are those who explain changes to their workforce and do their best to smoothly navigate major transitions in management philosophy. In the sports world, major transitions involve the hiring and firing of managers and head coaches. Although it is often said that firing managers and coaches does little to improve team performance, because it's the players that play, sports economist Gerald Scully found that changes at the top, in general, actually do improve team performances, especially in baseball and basketball. However, it's not only about the change itself, or even who the new manager is. How the change is made is actually just as important. The following illustrates one of the most botched managerial changes in modern sports history. It was clear to many fans that Arkansas State athletic director and head football coach Joe Hollis had to go. Hollis had compiled a 13 42 record over five years and his team had lost 18 out of its last 21 games heading into the final game of the 2001 season. School President Les Wyatt reportedly told Hollis that he would be fired at the end of the season. To Hollis, that probably meant the day after the last game; but to Wyatt, that somehow meant before the last game concluded. Late in the fourth quarter of the final game between Arkansas State and Nicholls State, Wyatt wanting to make sure that the press knew about the firing before the media left for the postgame press conference distributed the following memo to those in the press box:
If that wasn't enough, with less than a minute to go in the game, the Lynyrd Skynard song "Gimme Three Steps" blared on the stadium's public address system. Although Chris Wyche, ASU's assistant athletic director, later told reporter Keith Merritt of Tribalgrounds.com that he wasn't aware of the words to the song, it seemed too much of a coincidence that one of the lines in the song suggests that "you won't see me no more." If any hope of a "smooth transition" remained, it was dashed when Hollis was handed the press release as he walked off the field. He refused to talk about his firing at the press conference and when the players were asked about the firing, they, of course, told reporters that they hadn't heard the news. In July 2002, Arkansas State announced Dean Lee as its new athletic director, bringing to a close an awkward chapter in the school's sports history. If you think that once a worker is laid off, he or she has severed ties with the company, think again. If an organization fires employees the way Arkansas State fired Joe Hollis, the damage will go far beyond a single former employee. Although in this case a new athletic director and a new coach were hired shortly thereafter, it remains the case that prospective job candidates might indeed remove themselves from consideration if they are concerned about how employees current and former are treated. Earlier in the chapter it was noted that success in sports is predicated on labor stability and media distribution (i.e., lucrative TV contracts). Because the NFL has consistently anticipated change, and done so hand-in-hand with the NFL Players Association (NFLPA), the two have secured long-term labor peace. In turn, this peace has enabled the NFL to negotiate the most lucrative TV contracts in sports. Under terms of the current $18.3 billion agreements with Viacom Inc.'s CBS, News Corp.'s Fox, and Walt Disney Co.'s ABC and ESPN, payments to the league will increase to $2.8 billion in the eighth and final year from $1.75 billion in 1998. As impressive as these totals are (they dwarf the TV revenue generated by the NBA and MLB), what is truly astonishing is the ongoing spirit of cooperation between the NFL and the NFLPA. Rather than bicker over every minute detail relating to league revenue and expenses, the two sides have recognized that working together will afford them tremendous economies that enable the sport to outpace all others in terms of financial success. For example, the two sides agreed to set aside $342 million from 2002 2005 to make up for a possible temporary decrease in television revenue when the current TV contracts expire after the 2005 season. This was done in an effort to ensure that the players have something set aside for a "rainy day." The "rainy day" feared by the NFL and NFLPA is what each side believes to be a decline in the sport's most important source of revenue that generated from broadcast television. Historically, the revenue generated from the sale of its broadcast rights has provided individual teams with enough money to pay their players. Generally speaking, because the NFL and NFLPA have achieved such an extraordinary working relationship, teams basically break even before considering any other revenue streams. This has contributed to rapid escalations in franchise values and made the NFL the most profitable sports league of all time. Despite the earlier discussion about the air traffic controllers strike of 1980, the airline industry has also demonstrated great examples of employee relations, including one involving Southwest Airlines, which has one of the highest employee retention rates in the industry. Although Southwest the official airline of the NFL has routinely paid its employees below the industry average, those employees continue to perform their jobs well due to their quality of training and depth of performance incentives, as well as an extensive profit-sharing pension program. This development led some to believe that the old-fashioned bond of loyalty between employees and company might have vanished throughout much of corporate America, but remained strong at Southwest. In December 1997, Southwest flight attendants agreed to a six-year contract that was described as one of the best (union contracts) in the industry. In September 1998, Southwest Airlines' 2,800 pilots voted to keep the second half of an unusual long-term labor contract that integrated stock options, profit sharing, and wage increases. In exchange for no wage increases during the first five years of the contract, the company's pilots received options to purchase 3.15 million shares of Southwest Airlines common stock in each year of the contract, were to receive 3 percent wage increases during the second half of the accord (raised to 5 percent during the 1998 renegotiation), and receive compensation based on the company's profitability. As part of the negotiations, the company's CEO, Herb Kelleher, asked to have his salary frozen for at least four years. Not surprisingly, in January 2000, Southwest Airlines was included on Fortune magazine's list of the 100 Best Companies to Work for in America. However, much like professional sports, and MLB in particular, sustaining long-term labor peace in the traditional business world can be very difficult, particularly because it usually requires a confluence of favorable events and developments to ensure stellar employee relations. Southwest's stock remained, by many accounts, a good buy (due in part to relatively low employee costs that contributed to profitability), even in the wake of the terrorist attacks of September 11, 2001. Ironically, because of this, employees with whom Southwest was negotiating, including mechanics (with whom they reached agreement in August 2002 following the involvement of federal mediators), flight attendants, and pilots, were inclined to seek what they believed to be their fair share during the first half of 2002. Unfortunately, for all parties involved, this occurred during the same period in which the stock market fell dramatically, compromising South-west's long-standing and revered track record of strong employee relations. Keeping employees happy while holding down their base pay is a challenge, but Southwest has accomplished it. After New York and Washington, D.C. were struck by terrorist attacks, many airlines were forced to lay off thousands to avoid bankruptcy in the ensuing months. The industry, which lost more than $10 billion from January 2001 through August 2002, required serious federal aid. Nonetheless, Southwest was able to avoid layoffs and major losses partly because of the favorable relationship it enjoyed with its employees. So, although dealing with change in labor and management matters is critical to function, working in tandem to anticipate and deal with change whether anticipated or not is essential to prospering. Navigating "Hot-Button" IssuesThe third prevalent part of labor and management codependency deals with the legal side of the relationship. Certain issues between parties, typically dealing with wages, benefits, and working conditions, require serious negotiation and, in many cases, collective bargaining. With such hot-button issues, there is seldom a courteous air of give-and-take. Neither side, when thought to be battling for their very livelihoods, allows the other side much leeway, especially when lawyers are involved. Rather than rely on litigation, some unions prefer to utilize activist groups to impact business and influence the decision-making process. Two hundred employees of the New Era Cap Company, which is the official cap maker of MLB, were willing to sit out almost a year (from July 2001 to July 2002) in pursuit of better wages and an easing of production quotas. As a result of making the effort to keep most of its production in America, New Era attempted to leverage its American employees. Although New Era was able to compensate for its striking workforce, those on strike and represented by the Communication Workers of America had gained the ultimate leverage. The union received the support of the United Students Against Sweatshops and the Worker Rights Consortium and, thanks to student activists at many major universities, more than a dozen schools said they would stop doing business with New Era until the company treated its employees better. In July, the employees signed a new four-year deal that gave them relaxed quotas, improved health benefits, and allowed shifts to be determined based on seniority. Hot-button issues, particularly those supported by external stakeholders such as special-interest groups, which are not adeptly dealt with early, can manifest themselves into larger, farther-reaching dilemmas. However, with less pressing issues, both sides should bend over backwards to accommodate as doing so demonstrates a resolution-based approach to negotiations. This, in turn, can foster a dialogue that enables both sides to work together to move the relationship forward. In 1995, NHL Commissioner Gary Bettman faced just such a situation in his dealings over a "hot-button" issue with the NHL Players Association Executive Director Bob Goodenow. Unfortunately, the outcome served to do nothing more than extend the sport's economic problems into the foreseeable future and force it to revisit its management labor relationship years later at a time when the stakes had become even larger. The owners began the negotiations insisting they needed a salary cap. However, the Players Association, as expected, dismissed this request. The owners countered by proposing a luxury tax. But because the luxury tax would essentially limit teams' spending on players, the union interpreted it as essentially a salary cap and declined to accept it. After missing slightly less than half the season, the owners, many of whom needed the revenue generated by playing games on a regular basis, finally tabled the request. Bettman thought the board understood this fully that if a cap or a tax was indeed necessary, it would have required losing at least one season. As a result, Bettman believed the board and the owners were comfortable that the agreement wasn't worth the rest of the season. The 103-day lockout came to an end and reduced the season's schedule to 48 games. In the process of tabling the hot-button issue of player costs, the NHL and the NHLPA missed a golden opportunity to demonstrate to fans and, more important, to TV networks and sponsors, that each side was willing to bargain absent acrimony, to achieve the same level of stability enjoyed by the NFL. Acting in the Best Interests of the GameThe fourth element of employee relations requiring attention is the premise that both sides must realize that the other has specific interests it is trying to protect or extend. Even though these issues might not be in direct conflict, it does not necessarily mean that they are mutually respected rights or positions. Management's overriding interest usually lies in the success of a firm as viewed by its shareholders. In sports, leagues often cite the need to act "in the best interests of the game," a time period that lasts in perpetuity. Team owners, on the other hand, are concerned with increasing the value of their teams over a certain period time, one lasting only as long as their ownership tenure. Athletes, as well as their agents and unions, have an even more narrow time period covered by the "best interests" doctrine: the length of their careers, which typically average three to five years. Once all parties involved in a labor relations matter recognize the interests of the others, they will be in a position to work to achieve a deal that benefits all involved. Typically, resolving labor disputes, such as salary and bonus levels, requires three steps. First, the parties must create and build a relationship. Next, they must plan and prepare jointly for change and the future. Finally, the parties must conduct the actual negotiation. Although it is often recommended that neither side speak to the media in specifics during labor negotiations so as not to "open up" the closed-door meetings to the world, controlled leaks to the media can be advantageous. Sports leagues and their unions can gain leverage by spinning their positions with prominent sports writers in The New York Times and Los Angeles Times through "on-" and "off-the-record" comments. So, too, can small companies or unions that gain the favor and sympathy of a local columnist or on-air personality. Having public sentiment in your favor can give you that much-needed home field advantage that can ultimately pressure your collective bargaining opponent to yield to demands. Because the sports world does not attempt to form picket lines to get attention, league work stoppages serve as the next best way to use the media in labor negotiations. For both sides to effectively control their message in the media, a single point person should be responsible for the overall message disseminated in media circles. This doesn't mean that each side must be limited to only one person publicly stating the company's line. It just means that one person has to be the filter knowing exactly where information is being placed and how it is phrased or presented. From a sports league perspective, the filter is controlled through threats, or more simply put, large fines. During the 1998 1999 NBA lockout, Commissioner David Stern imposed a $1 million fine on owners who commented on the labor negotiations. During the 2001 and 2002 seasons, MLB commissioner Bud Selig also threatened a similar fine on any owner who talked about MLB's volatile labor situation. In 2002, MLB decided to have its executive vice president of labor relations Rob Manfred and its executive vice president of baseball operations Sandy Alderson travel around the country talking to baseball reporters about the labor situation, so as to further discourage individual owners from talking. As talks heated up in August, Manfred conducted frequent conference calls with reporters to describe the day's events. The Players Association declined to hold such conferences. In a well-managed labor campaign, neither side grants hundreds of media interviews. There are only a select few, often to columnists that either management or the union trusts implicitly. In sports labor negotiations, a side might be as proactive as to update the situation for a USA Today, Washington Post, or ESPN.com reporter. This same side might only contact a local writer if he or she says that the other side has commented and the scoop could be picked up (and spun) nationally. Regardless of the media platform utilized, trust in a particular writer is also essential, as being misquoted or taken out of context can be disastrous to a negotiation. NBA players certainly didn't gain much sympathy with the public when Boston Celtics guard Kenny Anderson decided to make himself a spokesman. For the average working man, an overrated player like Anderson who had four children with three different women couldn't have been the ideal person on the player's side to personalize what the lockout's impact meant on daily life. While the negotiations were stalled, Anderson, who had recently signed but was not receiving a seven-year, $49 million contract, implied that he was going to have to start belt tightening. Anderson then explained that after his "hanging out money" ($120,000), rent for his Beverly Hills home ($12,500), alimony payments ($7,200), and taxes ($2 million), he'd only have about $2 million remaining to invest. Anderson thought his first budget cut might have to be his Mercedes one member of his eight-car fleet that included Range Rovers and Porsches that costs $75,000 annually to insure. Anderson's comment was a disaster for the Players Association. Of course, when the lockout ended and it was time to return to work a couple months later, Anderson said he was only joking. Having your side's leader quoted is important, but also having a different representative's voice, such as an appointed league attorney, can also be effective. David Stern and his deputy commissioner, Russ Granik, provided the press with the league's perspective in the 202-day lockout (a lockout is essentially a strike by management). The NBA owners clearly won their public relations battle, whereas MLB management had a tougher time with its Players Association. What was the difference? First, Stern was trained as a lawyer. He knew how to choose words carefully, was adept at persuasion, and understood the art of negotiation. He knew how to portray to the fan that he and management had a genuine interest in returning to work. Selig, on the other hand, was a wealthy car dealer who lacked Stern's communication skills. With 28 years of ownership of the Milwaukee Brewers under his belt, Selig took a hard stance from the beginning and made it appear to all that heard him that negotiation was not a top priority. As a result, baseball's owners struggled in the game of public relations. Stern and Granik held constant teleconferences to discuss how negotiations were proceeding and posted the transcripts online. Meanwhile, Selig and MLB spent more time in the winter of 2001 being reactive to the press, calling many reporters to express how dissatisfied they were with a report or feature column instead of being a proactive part of it. Stern also went out of his way to let fans know that he was trying, along with the players, to come up with a formula that allows the negotiating process to be a long-term success story. MLB, on the other hand, rarely let fans know that it was concerned about them. Stern consistently gives the impression he cares about the overall state of the game, at least in the eyes of the customers the fans. Selig, however, who began the negotiations for a new collective bargaining agreement just days after an exhilarating seven-game World Series between the New York Yankees and the Arizona Diamondbacks, didn't come off quite as well. That's because for him the first step in the new collective bargaining agreement negotiations was to announce that the owners had unilaterally agreed to fold two teams. This was despite the fact that the Players Association apparently had the right to know about anything affecting all terms of their employment. Selig then called an emergency meeting in Chicago, where owners extended his contract. The Players Association quickly responded by filing a grievance that resulted in the Twins no longer being a candidate for contraction, at least through the 2003 season. These developments were followed by the House Judiciary Committee calling a hearing to try to strip MLB's antitrust exemption, which, if successful, would remove baseball's power to make unilateral decisions regarding franchise movement. Selig was constantly lambasted in the press, economists took the side of the union, and all the while the union's executive director, Donald Fehr, didn't have to lift a finger to achieve a public relations victory. The point of all this isn't necessarily to be positive in the press about negotiations like Stern was. It's to realize where public sentiment lies and get your position across in a manner so you can gain the support of the national or local masses. Losing the battle of the media burdens your side when you step up to the bargaining table. Regardless of the platform chosen picketing, calling talk radio shows, or leveraging long-standing and strategic media contacts successful labor relations requires that both sides acknowledge, beyond the use of rhetoric, that the other party has interests it seeks to protect or extend. Ultimately, this acknowledgment must be extended to the point where both sides act "in the best interests of the game." Leading by ExampleEstablishing an appropriate framework for change is also a critical part of labor relations. If there is going to be a (positive) change in the relationship between management and employees, management must work diligently to set the tone and dynamic under which any change will occur. This includes amount of effort given toward the negotiations, overtures about what sacrifices will need to be made, and leading by example by minimizing unnecessary chaos. When establishing the tone and dynamic, it is important to bear in mind the need to improve the current working relationship, as well as envision what an improved business relationship will yield for the parties involved. Once management demonstrates it wants to (or needs to) initiate changes, it must embrace employees if it expects the new relationship to be productive and long-lasting. This must be accomplished even in circumstances where the employer employee relationship is only slightly jeopardized. To make rapid changes in the company, important decision makers routinely feel the need to demonstrate that they are sacrificing something as well. During times of downsizing and lack of annual bonuses and holiday parties, many CEOs make it a point to show that they are in effect "one of the guys" by making it clear that their pay will be frozen as well. The extreme side of this was seen in 2001 when key decision makers reduced their multimillion-dollar salaries to a single dollar to save some employees from being released. John Chambers and John Morgridge, Cisco's CEO and chairman, lowered their salaries to $1. So, too, did former CMGI CEO David Weatherall. Ironically, and despite companywide belt tightening, Weatherall insisted that CMGI would hold on to the naming rights deal it negotiated with the new New England Patriots stadium despite a stock plunge of 99 percent. Many were quick to point out that these "sacrifices" were somewhat hollow, because only a modest connection exists between executive compensation and the number of employees retained. Nonetheless, the symbolic gesture of leading by example was generally well received, a lesson begrudgingly learned by the University of Washington (UW). As a result of a state ethics investigation, UW adopted a policy that specifies which employees and guests can be invited to postseason football bowl games at the university's expense. The investigation centered around whether the school violated state laws by using proceeds from bowl appearances to spend on airfare, game tickets, and other activities for themselves, their friends, and certain UW employees. The investigation arose following an anonymous tip that indicated athletics director Barbara Hedges allowed colleagues in the athletic department to take their families to the game using revenue earned from appearing in the Rose Bowl. The trip included air and ground travel, four nights at the Beverly Hills Hilton, Rose Bowl tickets valued at $125 each, souvenir packages, and Disneyland passes. UW President Richard McCormick's Rose Bowl guest list included 89 people, most of whom were university employees, UW regents, and their spouses. The list included four legislative leaders, Washington Governor Gary Locke and his family, and McCormick's in-laws. Although the actions of the athletic department's administrators were consistent with those of previous administrations, UW revised the president's contract to allow him to bring his spouse and dependent children to postseason athletic events at the university's expense. UW also will stipulate in other employee contracts whether the university will reimburse the employees for family travel to bowl games. In a settlement approved by the Ethics Board, UW reimbursed the board $8,500 for the cost of the nine-month investigation and agreed to adopt invitation guidelines to bowl games. Both sides, though, said they were ready to go forward and believed the new policy would prevent future misinterpretation. The value of "black-and-white" guidelines, especially in matters dealing with perks and who qualifies for them, is enormous. The relatively minor indiscretion just described was chosen to highlight the fact that even the little, often overlooked, or otherwise deemed insignificant things matter. They matter not only to ethics boards, they matter to employees. When companies change policies, whether relating to dress code or vacation benefits, they must effectively communicate the reason for doing so with clarity and reason if the current working relationship is to be maintained, let alone improved. Not doing so breeds employee cynicism and hurts companywide morale. Ideally management will recognize that the system it has in place is imperfect or in need of refinement. Even great organizations have their flaws and great managers know it. In 1998, the Bowl Championship Series (BCS) became the official framework for determining college football's national champion. The BCS, which runs through the 2005 regular season, consists of four bowls that each host the national championship game twice in rotation the Rose Bowl presented at the time by AT&T, Nokia Sugar Bowl, FedEx Orange Bowl, and the Tostitos Fiesta Bowl. Each year if the system isn't perfect, it is refined. Consequently, through the 2001 bowl season, there has always been a consensus national champion. In 1999, an undefeated Kansas State lost in shocking fashion in overtime to Texas A&M in the Big 12 conference championship. The team slipped out of all of the BCS bowls, despite ending the season being ranked fourth. That led to a change where any team ranked either third or fourth and did not receive an automatic bid because it had lost its conference championship had to be selected as an at-large BCS team. In 2000, Florida State went to the national championship game to play Oklahoma because it had a higher BCS ranking than Miami. This was despite the fact that the two Florida schools had the same record (11 1) and Miami beat Florida State during the regular season. Fans and journalists once again called the system flawed, as they had done the year before when Kansas State slipped all the way to the Alamo Bowl. Because of Miami, the BCS was tweaked again for the 2001 season. The formula now gave bonus points for wins over top 15 teams while replacing the two computer polls that stressed margin of victory over the quality of the opponent with two other polls that didn't place as much emphasis on margin of victory. To some degree, John Swofford, the BCS Commissioner, thought this was a necessary evolution of the formula. However, in 2001, Nebraska, because of a late-season loss to Colorado, didn't even play in the Big 12 Conference championship game. Yet because of a series of losses by Texas and Tennessee, Nebraska played in the National Championship game. Fans and media members then said that schools from conferences with championship games shouldn't be able to play in for the National Championship if they weren't even considered the conference champion. In June 2002, new BCS coordinator Mike Tranghese notified the computer pollsters that the BCS was undergoing another change it would only accept formulas that did not take margin of victory into account. Although the BCS certainly has its shortcomings, its willingness to change to provide a better relationship with its athletes and other stakeholders, especially fans, is noteworthy. What part of your company's formula, perhaps refining the criteria used for promoting employees, needs to be refined? If the media openly criticized your company's way of conducting business on its way to its "National Championship," would your organization be more willing to refine its system like the BCS has? Improving the relationship between management and labor requires an inclusive approach to managing employee relations. This must include a willingness to work together, as well as a commitment to refine employee relations whenever possible. Leading by example and bending over backwards to do "right" by employees and the products they sell measurably contributes to productive and long-lasting labor relations. Managing the RelationshipThe final employee relations issue to consider is the constant, proactive management of this relationship. Neither side should harbor any hidden agendas at any point in the process. Even though a trusting relationship between labor and management seems an improbable feat, it always makes financial and public relations sense for both parties to try to foster long-lasting and well-managed relations from the outset. Doing so enables each party to act in the best interests of its respective constituents while creating positive change for those involved and affected by the management changes. The parties must realize that without the other, neither could survive, let alone prosper. Appreciating this understanding begins as early as the interview phase, whether you are a company looking for a new president of marketing or a legendary sports team looking for a new head football coach. Prior to managing the relationship, both parties must enter into it with clean hands. As the University of Notre Dame found out, entering into an employer employee relationship that is not predicated on trust leads not only to public embarrassment, but severely damages its relationship with its constituents. Just five days after Notre Dame announced it had selected Georgia Tech head coach George O'Leary to replace Bob Davie, O'Leary was forced to resign after it was discovered his bio in the Georgia Tech media guide, which was passed on to Notre Dame, contained false information about his athletic (it said he was a three-year letterman at University of New Hampshire, but he never played a game) and academic credentials (it said he earned a master's degree from New York University, but he only took a couple of classes there). O'Leary stated that due to a selfish and thoughtless act many years ago, he had personally embarrassed Notre Dame, its alumni, and fans. Bearing in mind that the integrity and credibility of Notre Dame was impeccable, he decided to resign his position as head football coach effective December 13, 2001. Notre Dame's athletic director Kevin White accepted O'Leary's resignation after making it known that he thought the inaccuracies represented a very human failing. Nonetheless, to White they constituted a breach of trust that made it impossible for Notre Dame to go forward with the relationship. O'Leary's resume flap proved not to be an isolated case. Over the next eight months, at least seven sports executives or coaches including United States Olympic Committee president Sandra Baldwin, incoming Dartmouth athletic director Charles Harris, incoming Georgia Tech defensive coordinator Rick Smith, and UCLA men's soccer coach Todd Saldana were relieved of their duties because of similar résumé flaps. The entire process by which Notre Dame handled Davie's firing and O'Leary's hiring was called into question by those impacted by the relationships' mismanagement. Among those dismayed by Notre Dame's poor employee relations included alumni, former coaches, and the media. Because it is not possible to successfully navigate ill-formed employee relationships, they should be avoided from the outset. Few employer employee relationships are as high-profile as coaching or managing a storied program like Notre Dame, but it is precisely its high-profile nature that mandates the school take any and all precautions when addressing personnel matters. Simply relying on word-of-mouth references can be disastrous, as such recommendations routinely focus on the rose, forgetting it might have thorns. In business, such oversight leads to litigation arising from employee actions (and inaction) and can also damage the company's reputation with other employees or shareholders in much the same way the O'Leary situation damaged Notre Dame's reputation among coaches and alumni. Therefore, companies should strive to be pragmatic instead of symbolic when agreeing to long-term contracts with top executives. Organizations should be candid with themselves and ask, "Are we signing so-and-so to a long-term deal to show analysts or outsiders that we are more stable than we actually are? Or are we signing this person because we truly believe shareholder value will be enhanced?" In many cases it is not only preferred, but also less expensive to hire the right person for the right reasons rather than extending or entering into an awkward relationship. Properly establishing and then proactively managing relationships spares organizations the time and resources associated with replacing those employees that should never have been hired in the first place. |
EAN: 2147483647
Pages: 93