The primary systems of HR activity can be said to fall into three categories, checkpoints, boosters and correction devices. Checkpoints include such HR activities as selection into the organization, promotion, placement, and exiting the organization. Boosters are such things as training, job design, employee assistance programs, and compensation plans. Correction devices include performance appraisal, job analysis, discipline, and the protection HR offers to the organization from a legal standpoint.
All of these programs and activities serve to give HR authority over rank-and-file associates, but it also gives HR a certain type of authority over the entire organization. Judicious use of these forms of “power” is essential to the health of the relationship between HR and the other functions of the organization. If the power of HR is wielded in a heavy-handed fashion, other functions and levels within the firm may begin to assert their counter power, narrowing their zone of indifference, suspending their belief in the fiction of HR’s authority.
HR gets its power by holding a place of legitimacy in the organization, as one of the major functions, but also as being an instrument of individual rights, justice, human development, and productivity, as we have discussed. HR defends the interests of the organization against various types of aggression, to include legal threats from the labor market, legal threats from the government as it pertains to equal employment opportunity, inferences drawn about the organization among those in the labor market as to how “good of a place to work” it is, and the vast number of ways its relationships with associates can come to be “too expensive” for the revenue of the company.
There is a cost associated with maintaining the human presence in the organization and the cost of maintaining the “human face” of the organization. That is, HR adds value to the organization not only through the actual outcomes of its services but also through the way those services are perceived by those consuming them.
The ceiling on the cost of the human element of doing business is virtually unlimited. Consider the case of The Johns-Manville (JM) Corporation that made products containing asbestos throughout most of the twentieth century. Records show that they were aware early on of the potential for associates to develop, the often fatal condition called asbestosis, a disease that emanates from asbestos fibers lodging in the lung tissue of the human lung. Office or other building-related exposure to such fibers is not that likely to cause the disease, but work exposure proved to be lethal to many of their employees. JM spent most of their wealth settling claims against them brought by former employees.
So, HR is a cost center, in that it costs money to maintain; but it is also a function that is in a position to dramatically lower the ceiling on costs, if its activities are carried out in an effective fashion. Any HR activity has at least five transaction costs (from the standpoint of the organization) associated with it: preparing, arranging, running, controlling and correcting costs. For example if the HR activity is training, the costs are associated with planning the program, delivering it, covering the jobs of those receiving the training, scrutinizing the program for quality, and if anything that happens is inadequate or counterproductive, solving the ensuing problems.
When I call certain HR activities boosters, I mean just that, these are programs that presumably “boost” the organization’s associates in some way. How are they supposed to boost them? They are designed to help associates develop, which should lead to increased organizational productivity. Notice that we have finally formally broached the two subjects that often comprise 99% of what you find in HR discussions of this sort, development and productivity.
The picture I have of “Boosters” is that of few relatively-empowered human beings seeking wisdom in the way they deal with a few somewhat less powerful human beings, and arriving at the compromise decision to incur a few highly-quantifiable costs in exchange for the opportunity to manage the risk of other, often less quantifiable costs. You pay for an associate’s counseling now in hopes that he or she may not wind up shooting a warehouse full of his associates and himself a few months from now. There is a long history of such incidents in U.S. workplaces.
I am not saying every company that suffers the agony of such “violence on the floor,” could have avoided it if only they had put money in counseling; but EAP’s can be looked at as a type of preventive maintenance to help reduce the risk of such eventualities. The organization, like people who have preventive maintenance done on their cars, is wagering that it is better to pay a little now than a lot later.
Preventive maintenance should be done, but individuals and companies often do not always do it. And why do they not? Usually, in my experience, it is because preventive maintenance is often considered a luxury, the choice of the rich. We “poor folks” just wind up paying more after something goes wrong in the middle of operations. EAPs, are a great example of corporate preventive maintenance. Most companies consider them luxuries. In fact, over the years, unions have tended to advocate for them, often winning in their efforts, and thus, assisting a “poor” company to watch out better for its future, by paying a little up front to avoid a potentially devastating loss on the “back side”. I am going to get a little sexist here, so get ready to let me have it, but in these cases, unions are like wives (mothers? fathers?), insisting the person primarily responsible for repairs, do preventive maintenance that should have been inserted into the budget, without prodding.
Of course, EAPs and other boosters, may also be considered “unnecessary repairs” as opposed to “preventive maintenance”. When a person operates a machine that requires maintenance, she can go by the owner’s manual and perform services at the time or wear intervals suggested. Oftentimes, warranties are nullified or at least contestable, if the owner cannot produce records documenting timely service to the piece of equipment covered.
Unfortunately, there is no owner’s manual when it comes to servicing the needs or wants of associates. Should a company reimburse tuition for any college course an associate wants to take? Should the company invest in a workout facility so that associates find it more convenient to take care of their physical health? Should the company offer on-site daycare so that their minds are put at ease about the well-being of their younger children? What about flexible work schedules, dental and eye care, educational opportunities in such areas as money management, stress reduction, or work-family issues?
Seldom do you hear companies argue that benefits from these “Boosters” are an entitlement, that people simply should not be without such opportunities. The companies that offer such benefits tend to defend doing so by saying that it positively affects the bottom line, morale, or that it makes them more competitive in the labor market. They will cite evidence (or even make it up sometimes) that the payoffs exceed the costs.
What do company’s who do not do such things give as their reasons? Often you will hear such things as, we built an indoor running track and bought expensive treadmills and Cybex machines, and people used the stuff for a while, but then they quit, so we decided to cut our losses and sell the equipment to a local health club. Or you hear, we do not offer tuition reimbursement, although we did for a while; because we decided we could not justify the cost - too many people left shortly thereafter or we never realized any noticeable benefit from the knowledge they received. Now, the training our people need, we tend to provide ourselves. That is expense enough.
These companies are saying that we have looked at the potential costs and benefits of Boosters and have found them to be too expensive. During difficult financial times, these companies will look at their choices not to offer a “gravy-train” workplace, as being sound and prudent. During good times they may be tempted by such programs, but decide that there are more productive uses for that money, one of which might well be increased bonuses or other forms of compensation for top management. After all, they will often say, these executives are the reason we are doing so well or we have to stay competitive in our compensation packages or we will lose our brain power.
Boosters are almost always considered optional, always required to be justified by financial considerations (we can afford it or we must do so because it pays off), and often considered a form of compensation that may or may not also be thought of as a substitute for other types of benefits. The presence of Boosters, make a statement about the values of the organization.
If Philip-Morris or Brown and Williamson (tobacco companies) invested lots of money in employee health and wellbeing, it might be considered astute, noble, hypocritical, cynical, a smokescreen (sorry for the play on words) or even ironic. The same is true of a company like Ben and Jerry’s ice cream. They may have a great track record as a company that treats its people well, but it is also easy to see that the product they make is not exactly heart-friendly.
Firms that are in more humanity-neutral lines of work, such as software development, or the manufacturing of a durable good of some sort, do not have to worry about the occasional contrast between what they do for their associates versus what they do to their customers. Other firms that operate in dangerous lines of work, such as mining, or that engage in manufacturing processes that are dirty, risky or dangerous, have the same sort of contrast problem as tobacco, asbestos and unhealthy foods, companies.
Another factor that helps determine organizational stances toward boosters are industry traditions. It is simply not normal for heavy manufacturing firms to provide boosters. These industries tend to have been male dominated and not just any sort of male, but masculine males, with “tough minds”, “hard hearts” and “thick skins”. The prevailing value is that people who work here are not mollycoddled.
You might say boosters do not have a storied tradition in the more macho lines of work. (Actually, this hypothesis is testable, is it not, and would not be that difficult to study. You could simply take the percentage of males working in a profession as evidenced by data from the largest players in that market and the prevalence of boosters as part of their benefits’ packages, and run a correlation.) Notice how I am lured by the prospect of the aforementioned, correlation coefficient. In this case, though, it might actually help us draw a meaningful conclusion. The other way to look at this research issue, might be to explore the contrast between “dangerous” work and prevalence of boosters, versus “less dangerous” work.
Another factor that might influence whether companies offer these boosters I am describing (what is another way to describe them, programs that are considered optional or beyond minimal requirements of an employer?), might be the extent to which they are global in their coverage and whether they tend to consider it necessary to treat their workers the same all over the world or not. It could be that some MNCs find it intolerable to have workout facilities for their associates in the U.S. and to not have them for their associates in Indonesia. Notice how this raises the issue of equity that we have discussed at some length already.
Another factor that might come into play would be the education level of the workforce. Do you suppose it would be more likely that companies who employ mainly college graduates would offer boosters? If so, what does this imply about how we value human beings? Is a college graduate a superior human (more worthy of fringe benefits) to a high school graduate? Is an MBA graduate more fully human, more booster-worthy, than just a college graduate? These are a few of the issues I can think of that might affect whether boosters are offered.
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