Current Practices
Stopper, Editor
HRPS Thought Leader Roundtable
William G. Stopper, Partner, The Walker Group
Facilitator: Ed Gubman, Gubman Consulting
For tbe third year, HRPS board members gathered on Sunday
morning before the stait of the HRPS annual conference to help
the Society keep its learning agenda fresh and responsive to
member needs. The learning agenda is a key element of the
HRPS vision of being the preferred provider of leading-edge HR
knowledge in five domains:
1. HR strategy and planning;
2. Leadership development;
3. Talent management;
4. Organizational effectiveness;
5. Building a strategic HR function.
In 2003, HRPS corporate sponsors vv-ere invited to participate
in tbe Thought Leader Roundtable. Ed Gubman, Ph.D.. CEO of
Gubman Consulting, facilitated the session and asked the partici-
pants to focus on three questions:
1. What are the most pressing issues facing our profession in the
next two to tlii'ee years?
2. What are your own professional aspirations for tbe next few
years?
3. Given the issues facing our profession and your professional
aspirations, what should HRPS do to support you?
The summary that follows highlights the discussion iiround
these three questions.
What Are the Most Pressing Issues Facing Our
Profession in the Next Two to Three Years?
Answers to the question involved two main issues: those
related to the business (human resource management), and those
related to the HR function itself.
Issues Related to the Business
Rate and Complexity of Change
The nature of change has changed. It is not just speed; disrup-
tion has been magnified as well. People are burning out. Yet
there is greater need for resilience and agility—and the ability to
move on. More complexity means new and different solutions
are needed, especially with international competition. And the
ability to translate tbe meaning of complexity and change for the
William G.
organization is critical. The trick is neither to lose sight of the
customer amidst all the change, nor to forget that societal and
generational values of the workforce are changing.
Globalization
There are real questions around the ability of the United
States to compete on labor cost if talent really becomes global.
There is a shift in offshore outsourcing, and the ability to predict
wbere the centers of excellence will be located is important, espe-
cially because knowledge work/strategic jobs—not just blue
collar work—are part of the shift. Suppose China, tor example,
develops the infrastructure to support importing knowledge jobs.
The Traq war (pending at the time) has the potential for long-
term business effects on brands, international travel and assign-
ments, and relationships among employees around political issues.
More complexity means new and different solutions are
needed, especially with intemational competition.
Besides the policy and HRIS changes arising from globaliza-
tion, there are other significant HR concerns:
1. Management's capability to recruit and manage a workforce
that reflects the global marketplace.
2. The impact of workforce and process changes on tbe morale
and culture of an organization.
3. The workforce's tolerance for stress compared to intemational
competitors. Will the U.S. work/life balance culture compete
successfully against countries with a 24/7 culture?
Talent and Knowledge Gap
Workforce planning will take on added significance. Will
predicted demographic shortages and education shortfalls trans-
late into talent shortages? Will retirements drain skills as well
as institutional knowledge from the workforce? How is tbat
knowledge being harvested and transferred to the organization?
Tbe ability to plan through the ups and downs of business cycles
will be important. For example, great pressure bas been put on
the workforce to reduce costs and increase productivity. Is
management ready for an upturn in the economy in terms of
recruiting and retention? Will critical skill needs again be filled
though immigration programs?
There is greater need than ever for succession planning.
The complexity of business today is beyond individual
knowledge. Our emphasis needs to change from leader develop-
ment to leadership development.
HUMAN RESOURCE PLANNING
Lack of Trust in the Organization and Leadership
Leaders are not leading, not standing up for the right things.
Trust needs to be restored. And HR is pulled between its busi-
ness partner role and stakeholder advocate role. It is hard to be
a whistieblower! Yet not stepping up to the table, not leading
change, brings HR's sui-vivability into question. Aversion to risk
and the need for control are two characteristics HR needs less of
in today's environment. HR needs to find its voice—in the Enron
situations, in executive pay excesses, in "life threatening situa-
tions'" when cowboy management is betting the ranch, aiid each
employee's future, on bad deals.
An Engaged Workforce—An Engaging Workplace
HR needs to model the way in restoring optimism: Define
reality, instill hope, inspire. Creating great workplaces that add
financial value is the goal. Keep motivation high, address stress in
ihe workplace, put a human face on technology, include everyone.
There is greaicr need ilian ever for .s-iiccession planning.
The comjiU'.xity of business today is beyond iiulividnal
knowk'di>e. Our emphasis' needs to change from leader
developinenr lo leadership development.
Issues Related to the HR Function Itself
Pressure on Costs
HR has the same cost-reduction pressures as the rest of the
business does. Unfortunately, the reductions come jusl when
demands are highest and the resources most needed. Cutbacks
mean less diverse experience, less rotation for the new genera-
tion of HR professionals, and therefore less ability to contribute
to strategic agendas. Take outsourcing, for example. What is the
strategic agenda? What should be outsourced and what should be
retained? Outsourcing both transactions and strategic functions
represents a real danger.
The Value Proposition
HR needs to be relevant as well as strategic. Crashing at the
right airport is worse than landing at the wrong one. HR's value
proposition has to be well-thought-out and well-articulated.
More than Just dollars are at stake—more than just proving the
ROl of the function. It is achieving and demonstrating the value
of the investment in people, of the contribution of HR operations
to business unit performance, of the benefit of HR initiatives.
Talking the language of business, understanding the business
analytics, finding the right partners in the organization—these
are now givens. With limited resources, doing what has the
biggest impact is increasingly important:
1. Make the difference by prioritizing and focusing. Achieve
value from investments. Avoid "short-termism." Do the things
that respect leaders' time. Focus on execution, not theory—and
avoid fads.
2. Solve the tension between the strategic and the ad niiui strati ve
HUMAN RESOURCE PLANNING
to avoid the "HR whipsaw." Adding new initiatives but not elim-
inating administrative responsibilities or outdated initiatives
leads to high stress and questionable quality. Avoid becoming
technology dependent, but use technology to serve Human
Resources. Use consultants wisely, but not too many!
Stewardship/Legacy
Transferring knowledge to the next generation is a key chal-
lenge. When stress and the demands on HR and the organization
are so high for so long, staying healthy and motivated as an
organization is difficult. The demographic age bulge affects HR
as well as other business functions. Entry-level hiring and devel-
opment programs could suffer and mid-level HR professionals
might not get the same level of fast development across many
roles that they once got. Watch the pipeline carefully: Is talent
recognized and developed? Is the pipeline of new talent inspired
or demoralized? There is no silver bullet—it is us!
What Are Your Own Professional
Aspirations for the Next Few Years?
The answers to this one were wide-i^anging: from earthy to
lofty, from the vague to the concrete, from highly professional to
highly personal, from short to long. Building the future, capturing
thoughts in writing, finding balance, influencing—these are the
prominent themes. Given the number of successful HR executives
who participated in the roundtable, skimming through the pot-
pourri of their responses to find a resonant thought may be more
interesting than reading commentary about them. Here's the list:
1. Make a difference.
2. Be intellectually curious.
3. Affect the environment rather than letting the environment
affect us.
4. Transfer knowledge to the next generation: Write, develop
others, mentor, gain new insights, have fun.
5. Renew HRPS.
6. Find outlets for creativity at different career stages.
7. Become a better "integrated talent manager," one who can
apply recruitment, performance management, and compensa-
tion management expertise to business issues and eliminate
silos within Human Resources.
8. Know performance metrics to propose that demonstrate HR's
contribution to business outcomes—measuring relevancy.
9. Act as a "clearinghouse" or ombudsman for the enterprise.
10. Serve as a resource for the board of directors on the estab-
lishment of appropriate rewards to ensure ethical executive
behavior-making sure incentives/oversight structures work.
11. Write extensively to capture knowledge.
12. Write a book with Ram Charan!
13. Develop new lenses lo teach leadership—create the "new."
14. Have fun in work, relationships.
15. Seek a new vision.
16. Leam/apply new things.
17. Show social responsibility. (Be a member of the Board
of Trustees at a university, help with a women's shelter,
volunteer for HRPS activities, etc.)
18. Understand what the next step is in growing a broad and
personally satisfying career and then introduce the new
role and balance it with the old roles.
19. Balance the demands of the "day job" (corporate) with
other desired roles (entrepreneur).
20. Balance freedom versus fear.
21. Get financial independence back.
22. Change focus: work-life balance—family quality time—
retirement/exit.
23. Build our leadership/replacement capability (organization-
wide and HR) to be able to step down/slow down.
24. Learn how to influence our children.
25. Go from intemal to external: Have a business, run a success-
ful business, use what I know to generate dollars for me.
26. Make a new affiliate of HRPS successful by using a
business approach.
27. Have a positive impact on our business (stockholder value
and employee development) with a rich culture in a rapid
growth environment.
28. Use all available tools to make HR really hum.
29. Make the HR departments more effective—make
execution easy.
30. Be part of enriching networks, senior professional
development.
31. Have an impact on CEOs and executive groups to make
them more emotionally intelligent.
32. Grow as a writer: biography, talent, leadership.
33. Use skills and experience to address issues in a rapidly
changing world context—to help organizations achieve
their goals.
34. Build commitment, quality.
35. Make sure HR is highly regarded.
36. As a new leader of HR, get leaders to know what strategic
HR is and to request help.
37. Understand which 50 percent of HR changes really work.
38. Be more courageous, assuring HR's voice is heard (and
requested),
39. Be called by the CEO and asked to help solve business
problems.
40. Build the HR organization and partnerships.
41. Sustain the physical stamina to be able to work to and past
age 65 (work smart, be invigorated).
ffR needs to he relevant a.s well as strategic. Make the
dijference by prioritizing ami focusing. Solve the tension
betv,'een the strategic and the administrative.
Given the Issues Facing Our Profession andYour
Professional Aspirations, What Should HRPS Do
to Support You?
This question did not generate many ideas, but the discussion
clearly underscored the commitment of members to the long-term
welfare and continued vitality of the Society. One participant
said, "Keep asking this question continuously. Keep focus on
the customer." Another offered a similarly practical suggestion:
'"Make sure the HRPS conference agenda and speakers foster
intellectual curiosity among participants."
Eour other participants recommended specific actions by HRPS:
1. Develop a code of ethics and responsibility.
2. Consider a Corporate Sponsor Foundation with a committee
to review grant proposals.
3. Take on an initiative of national impact: e.g., related to the
U.S. education system or corporate governance.
4. Sponsor a scholarship for deserving young talent.
This last recommendation sparked a great deal of discussion
about the future, not only of HRPS, but of the HR function itself.
Are new people attracted to the Society and the function? Do they
aspire to serve in responsible positions in their companies and
associations? Do our processes allow them to do so, or do we
"resei-ve" committee chainnanships and other responsible positions
only for the "more experienced, the more senior"? The recom-
mendation arising from the discussion was to develop a network
of virtual mentors to encourage the next generation of HR
leaders^internationally—to contribute to the HR function,
to join HRPS. The university contacts of the members are an
important resource to help develop such a mentoring network.
The Third Annual Thought Leader Roundtable ended with a
great deal of energy around this concept of fostering the talent
pool within Human Resources. Clearly, participants wanted to
make a difference as individuals and as a Society in pushing
worthwhile initiatives. The good news is that many of HR's
movers and shakers were leading the discussion and showed
their commitment to dt>ing something about the ideas generated.
Cognitive Consequences of Overwork
Souha R. Ezzedeen. Ph.D.. Paul Michael Swiercz, Ph.D.,
The George Washington University
Researchers Souha R. Ezzedeen, Ph.D., and Paul Michael
Swiercz. Ph.D., at The George Washington University.
Washington. D.C, recently concluded a study exploring the
cognitive aspects of overwork and work-life balance. Their
re.search supports the argument that a cognitive approach to the
study of work-lile balance can offer new and innovative insights
HUMAN RESOURCE PLANNING
into this persistent and important challenge. The cognitive
approach, which has proven useful in a variety of work-related
contexts, was specially adapted for this study to explore the
experience of interfering thoughts and worries of work during
nonwork time and in nonwork settings, a phenomenon the
researchers have labeled the "cognitive intrusion of work" (CTW).
Despite the serious attention garnered by "work-life balance,"
the problem has gotten worse, not better, with time. After years
of trial and error, Ezzedeen and Swiercz call attention to the fact
that there is still a great deal to learn about work-life balance.
This lack of substantive knowledge goes a long way in explaining
the piecemeal approach to work-life balance efforts within the
business community.
After a two-year research effort, which included interviews.
focus groups, and a cross-sectional survey of knowledge workers
across the nation. Ezzedeen and Swiercz successfully developed
and validated the CIW scale and its three dimensions: (1) work-
life cognitive conflict—the inability to balance work and life
from a cognitive standpoint; (2) work thought interference—the
interfering and intrusive work-related thoughts deemed to be
central to the notion of cognitive intrusion of work; and (3) work
role dominance^—^the adoption of work-related behaviors and
language in nonwork settings.
In addition to development of a promising new organizational
assessment tool, Ezzedeen and Swiercz were able to identify
interesting patterns of relationsbips between the CIW and other
variables; namely, the study indicates a positive association
between tbe CIW and work-to-life conflict, work centrality.
and burnout, and a negative relationship with job satisfaction
and life satisfaction. Surprisingly, tbe CIW was found to be
unrelated to turnover intentions, to selected demographic charac-
teristics, gender, and perceived level of family demands.
The results offer a promising researcb agenda around the
cognitive aspects of work-life balance. The next steps for tbe
authors will be to work with organizations toward the develop-
ment of more '"cognitively friendly" work environments and to
extend tbeir research to an international context, specifically
examining how the cognitive intrusion of work is experienced
across different national cultures and socio-economic settings.
Those interested in receiving an executive summary of the
research report should contact Souba R. Ezzedeen
(souha@gwu.edu) or Paul Michael Swiercz (prof 1 @gwu.edu)
at The George Washington University. School of Business and
Public Management, Depaitnient of Management Science.
Gaining the Advantages of
Team Intelligence
Jill Conner, Conner Associates; Jane Plasman, Director of
Organizational Effectiveness and Training, Colgate-Palmolive
Maximizing the effectiveness of teams is a front-burner
challenge for Colgate Palmolive. The reason is clear: Top-
HUMAN RESOURCE PLANNING
performing teams deliver strategic advantage. A team can
accelerate innovation, improve operations, and solve problems
in ways that strengthen the company's competitiveness.
The U.S. company division of Colgate Palmolive wants to
capture all the advantages superior teamwork can deliver. High-
performing teams will help position the company to meet its
aggressive business goals.
In early 2002, the U.S. company surveyed its people on a
broad range of topics. Two findings from the survey related to
how decisions are made: (1) People are slow to reach decisions;
(2) The right people are not always included in the decision-
making process. An action team of top performers thoroughly
explored the issue. They discovered that teams work in silos and
decision-making breaks down across functions.
The team recommended that senior management give priority
to team effectiveness training that would address these challenges
and strengthen overall team performance. But before the appro-
priate training program could be created, three fundamental
questions must he answered:
1. What factors explain the difference in team performance?
2. What behaviors are important for leading teams effectively?
3. What processes and procedures facilitate teamwork?
Understanding Team Intelligence
These questions led us to examine the existing literature on
team behavior. We were specifically interested in figuring out
if a team's shared ability to manage expectations, emotions,
and relationships can be a strong predictor of success. And, if
so, what specific capabilities are needed to deliver what we call
team intelligence (TQ)?
We investigated various team performance models proposed
by organizational theorists, psychologists, and HR professionals,
filtering their ideas through our own first-hand experiences and
observations. This conceptual framework proved fruitful as we
studied team behaviors, comparing high-performing teams with
less successful teams.
We concluded that four success factors influence team
performance. These factors can be measured and can build team
intelligence. To give team members an easy way to remember
and apply them, they are incorporated in the acronym GAIN:
goals, accountabilities, intra-team relationships, and new ways
to work. Here is a brief look at each factor.
Goals. High-performing teams have clear objectives and direc-
tion. The direction is aligned with business needs and supported
by all members. Priorities are realistic, explicit, and change in a
timely and appropriate manner. Timelines and outcomes are spec-
ified and all team members assume re.sponsibility for achieving
re.sults. In addition, individuals have clear goals that are aligned
with the rest of the team. Finally, measures and milestones are
put in place to track the team's progress and outcomes.
 TEAM SUCCESS FACTORS
ijoals
/\ ccountahilUies
Intra-teani relationships
I\e\v ways to work
Accountabilities. High-performing teams have well-defined
roles and responsibilities. Team members understand the work
they need to complete and agree on a timeframe for finishing
each task. The team is the right size and has the resources, skills,
and knowledge to achieve goals. Work is organized so these
goals can be reached quickly and effectively. Equally important,
assignments are distributed fairly among the team members.
Shared leadership is also encouraged and members take on lead-
ership roles at the appropriate times.
Intra-Team Relationships. High-performing teams demonstrate
collaboration and trust, and a high level of openness and hon-
esty. People are sensitive to team and individual responsibilities
and priorities. Members accept each other and avoid negative
judgments. They try to include each otber in key decisions. They
listen to each other and constructively resolve conflict. They are
committed to each other's personal growth and success.
New Ways to Work, High-performing teams adopt approaches
and processes that encourage collaboration. The team under-
stands and supports the operating principles that shape the
team's processes. This includes defining expectations for how
they want to work, to make decisions and to communicate with
each other. Meetings focus on results and team members share
information. Open discussions facilitate decision-making by
giving people the opportunity to express diverse viewpoints.
Members stay connected between meetings by tapping new
technologies that maximize virtual interaction. Finally, the team
improves the way it works by regularly evaluating how it func-
tions and exploring new ways of increasing effectiveness.
Advancing TQ
Identifying the four GAIN factors led to our next challenge:
to translate GAIN into a practical program that would actually
improve team perfonnance. We developed a two-and-a-half-day
training workshop that helps teams understand, build, and lever-
age TQ.
The TQ program uses action learning methodology, allowing
teams to focus on real business issues throughout the training
period. This training gives people a step-by-step approach for
improving their ability to collaborate successfully. Assessments,
feedback, peer coaching, and individual development planning
are essential features of the program. Participants learn about
the GAIN factors and practice the skills needed to enhance TQ.
ln addition, people gain insights into how their personal style
FIVE COMMON TEAM PROBLEMS
From time to time, teams face obstacles that truly test their
TQ. Following are five such problems and some actions you
can take to handle thenv—and improve the team's TQ.
Getting Stuck
The team flounders and is unable to move forward.
• Clarify objectives, priorities, and future tasks for the
whole team.
• Encourage the team to assess how work is being organized,
managed, and measured.
• Discover what is inhibiting team results, such as insufficient
information, resources, and/or motivation.
Overly Assertive Players
Certain team members dominate the discussions.
• Promote the entire team's participation by getting each
member to keep a record of his/her ideas and insights,
and to exchange these views with each other.
• Ask less-assertive team members to share their thinking.
• Gain consensus on the value of full participation in team
discussion.
Passive Team Members
Some team members don 7 actively participate.
• Direct questions to less-assertive, infrequently active team
members.
• Ask less-responsive members about their experiences and
insights.
• Break the work into pieces, where doable, and ask members
to tackle specific tasks.
Disregarding the Contributions of Others
Some team members ignore or discount the participation
of other team members.
• Emphasize the value of listening, and paying attention to
everyone's input.
• Stand up for other team members when their ideas and
opinions are ignored.
• Speak directly to people who regularly disregard the contri-
butions of others.
Avoiding Conflict
Difficult issues are not handled.
• Agree on rules of behavior early on.
• Have a one-on-one conversation with any team member
who is negatively affecting team performance.
• Hold a feedback session on the group process — where
everybody contributes—to determine how the team is func-
tioning and what factors may be barriers to effectiveness.
affects team performance. They also develop individual action
plans for increasing their effectiveness as team members and as
team leaders.
HUMAN RESOURCE PLANNING
 We piloted the TQ workshop, randomly selecting 16 employees
from different functions and assigning them to two cross-functional
teams. At the end of the training, team members evaluated their
experience positively. For example:
• 1 learned a great deal about team dynamics, and how understand-
ing individual behaviors can improve a team's effectiveness.
• The constructive feedback was most valuable because I'm
always working on becoming more aware of behaviors that
affect others negatively.
• The GAIN model is a useful tool for every day.
• It's valuable to see how my colleagues perceive me and to
compare this with how I perceive myself.
Participants also evaluated each segment of the pilot work-
shop. They responded with specific, insightful ideas that we drew
on to improve each area of the workshop. TQ training is now
ready to launch. In fact, we plan to start rolling out the TQ
workshop to several cross-functional teams at Colgate by year-
end. The first participants will be about 40 members of the U.S.
company's go-to-market teams. These include people from mar-
keting, sales, finance, and the supply chain who are responsible
for launching new products. They were selected because the
company believes that strengthening these team's effective-
ness—helping them reach their goals faster and deliver increased
results^—'Will have a measurable impact on the bottom line.
Corporate Social Reporting
Radhika Philip, Human Resources Director.
ITOCtiU International, Inc.
Cot-porations are increasini^ly publishing reports on their
social impact, as investors, customers, and employees say the
social agenda cannot be separated from^ the business one. But
even as corporations respond to the new demands, ihe value
that social reports offer in building corporate reputation is
clouded by questions about their completeness, accuracy, and
credibility. Social reports generally tend to generate more cri-
tique than appreciation.
BP Amoco is as dedicated to people as it is to profits. That's
the way it seems from its 2001 social report that lists employee
satisfaction survey findings, internal mobility opportunities, and
the percentage of employees who receive performance appraisals
and training each year. BP Amoco is not alone in its efforts to
publicize its people initiatives. Motorola's 2001 "Global
Citizenship Report" describes child-care and fitness centers,
rigorous learning programs, and balanced life initiatives that
the company offers its employees.
These companies did not always publish such reports. Not that
companies like BP Amoco and Motorola did not invest in people.
Many corporations nationwide have sponsored employee and
community development initiatives for years without publicly
reporting on them. Companies in the United States have typically
communicated what they do for workers and communities in a
I0 HUHAN RESOURCE PLANNING
piecemeal fashion directly to the stakeholders involved. They
publish compliance documents for government regulatory bod-
ies, skim over their initiatives for employees and communities in
their annual reports for investors, and internally communicate the
same to employees.
Social reports, on the other hand, are a means of formally
sharing with the general public a comprehensive picture of the
ways in which a company supports employees as well as com-
munities both domestically and internationally.
Unlike financial reporting, .social reporting is not government-
mandated. United States law requires large corporations to report
to the government on occupational health and safety, equal
opportunity, and fair wages. The law does not, however, require
companies to report their performance in these areas internationally
or to communicate the wider range of employee and community
development initiatives companies may carry out. And the law
does not require public reporting of such information. Even so.
over the past decade, hundreds of companies, like BP Amoco
and Motorola, have begun doing just that.
According to a survey done by KPMG in 2002. 45 percent
of the world's 250 largest companies and 36 percent of the top
100 U.S. companies is.sue non-financial reports. Along similar
lines. Price Waterhouse Coopers, in a 2001 review oi corporate
reporting, found that almost all of the top 100 global companies
(by market capitalization) publish some kind of commentary on
how they direct and manage the "social impact" of business.
Besides BP Amoco and Motorola,fi^rmssuch as Bristol Myers
Squibb, Dow Chemical, General Motors, Procter and Gamble,
The Ford Motor Company, and Unilever have begun publishing
social reports in the last five years. (See References for a list of
these reports.)
"Transparetiev is a .sobering process. At Ford. I can tell you
thai as we pulled togelher our firsl corporate si'cial report,
il was breathtaking to consider otir impact. What hii us was
how broad our impact was. What also hit us was how little
we really knew about our impact."
John Rintaniaki, Chief uf Staff fbr Ford
What Explains This Trend in Social Reporting?
Corporations are responding to investors, customers, and
employees who suggest that they will invest, buy, and work
elsewhere if a social agenda is not added to the business one.
Environics International, a large provider of public opinion
research, reports in a 2002 global survey that one in every four
consumers boycotted a company seen as socially irresponsible.
A 1999 Conference Board study of attitudes towards social
responsibility revealed similar findings (60% of people form an
impression of a company based on its regard for people, commu-
nities, and the environment). When it comes to investors, in 2001
they channeled $2.34 trillion, or about one of every eight dollars
under professional management in the United States, through
socially responsible screens before investments. Socially respon-
sible asset funds, once a niche market, grew 36 percent from
1999 to 200! and 42 percent from 2001 to 2002.
With this kind of interest in a company's social agenda, it
becomes important for corporations to show how they conduct
business with a concern for workers and communities. The past
year's crises in U.S. corporate accountability can only acceler-
ate the demand for corporate disclosure of the ways in which
they manage their impact on employees and on communities.
The increasing globalization ot the world economy will likely
do the same. Today significantly more workers in more countries
work directly, or through suppliers or subcontractors, for U.S.
companies than they did a decade ago. These workers frequently
work under dangerous health and safety conditions and may
receive relatively poor wages and benefits. Their communities
often have poor infrastructure and living standards. This setting
has caused concern for how U.S. companies manage their
impact on workers and their communities internationally. The
weakness of labor and workplace laws in many countries, lax
implementation, and the absence of mandatory multinational
labor and workplace standards, will continue to fuel the demand
for public reporting on corporate social impact overseas.
The pace ot globalization has fueled a vibrant response by
industry watchdogs such as Public Citizen, Global Exchange,
and Corporate Watch, which are using the media to prod citizens
into demanding greater corporate accountability. Proliferating
networks of electronic information aie offering more and more
stories in which corporations manage the social impact of their
operations in ways depicted as careless. According to Echo
Research, an international reputation analysis firm, media cover-
age of corporate social responsibility and of ethical investment
(in six countries including the United States) increased by 52
percent and 92 percent on average each year in 2000 and 2001.
Public reports on how a company manages its impact on
workers and communities are greatly appreciated by investors.
At home there is always the chance for litigation on a range
of employee and community issues. And the global economy
poses a range of people-related risks. A report that reflects a
socially aware approach will instill investor confidence in a
company's ability to avoid potential liabilities and damage
to corporate reputation.
With these trends, companies are realizing that developing
a socially responsible agenda and publicly reporting on their
initiatives is a powert"ul. if not necessary, means to attract and
retain customers, employees, and investors. As the trend intensi-
fies, and the dialectic between stakeholder interest and corporate
response sets in. newcomers to social reporting are compelled to
jump on the bandwagon.
The Opportunity for HR
HR departments can use the trend in social reporting and
available guidelines as a good opportunity to share, direct,
and manage much of what they are already doing for
employees. Many large U.S. companies are already
required to report on equal opportunity practices, wages,
and occupational health and safety standards in the United
States. These topics, along with a company's HR policies,
practices, and community involvement efforts, can also go
into a company's social report. Corporate HR junctions of
multinational corporations should move beyond U.S.-
focused HR policies, goals, and metrics and develop the
same for intemationai markets.
Problems with Social Reports
While corporations are beginning to report on the social
impact of their activities, a new controversy has erupted. Critics
are charging that the prevalent brand of social reporting is far
below standard. Mark Thomen (2002) of Social Funds describes
many reports as a "me'lange of generalities and soft assurances
without substance." Julian Blanchard (1998). a commentator on
social reports, finds:
The tendency is to only report good news .... Many
companies also provide inadequate information making it
difficult for readers to make rational decisions. The general
consensus is that corporate social reporting degenerates
into a public relations exercise that reveals very little of
companies true social performance... Current disclosure
practices are woefully inadequate.
Poor reporting gives the impression that a company is trying
to get mileage out of promoting itself as socially responsible
when in fact it is doing little. Or, if not intentionally seeking
to mislead, simply being careless. In either instance, social
reports can relTect badly on the company and cause more
damage than good.
Poor reporting, it seems, can be an outcome of any of the
following things:
1. Presenting values and intentions without supporting details.
Reports frequently limit themselves to presenting broad policy
statements rather than sharing real information. For example, a
company might state its standaids on supplier workplace condi-
tions, but not reveal how it achieves these standards.
2. Selectively omitting some stakeholders. Reports often present
anecdotal accounts on projects and programs for some stakehold-
ers rather than a comprehensive picture of how operations aftect
most stakeholders. For example, programs and policies in the
United States are described while those internationally are
not. Or initiatives for employees are discussed, and those for
HUMAN RESOURCE PLANNING
workers in subcontractor operations ignored. (Most social
reports have notably little on how they ensure that their business
partners follow labor and workplace standards.) Telling only part
of the story provokes questions about what bas not been covered.
3. Ignoring controversial topics. Reports also selectively discuss
some topics and not others. For example, a company may report
the amount it invests in staff yet neglect to inform us about how
many employees it had to let go because of cost-saving initia-
tives. A pharmaceutical company's report may describe the free
medical training it provides to a South African community, and
omit infonnation on its prohibitive pricing for AIDS medication
in the same area.
4. Making inaccurate claims. Companies are often critiqued
for making inaccurate claims in their reports. Most famously,
Nike was charged in May 2002 by the California supreme court
for knowingly misleading the public about working conditions in
its South East Asian subcontractor operations. The case was made
that Nike aggressively portrayed itself as a model of corporate
responsibility (through a public relations effort that included a
social report) while knowing its workers were subject to physical
punishment and sexual abuse. 14-hour workdays, dangerous
working conditions, and were often unable to earn a "living
wage." As a result of this "false advertising" accusation, Nike
suffered substantial costs to its reputation.
Doing It Right
Doing it right would entail providing a comprehensive picture
of most of the significant ways in which corporate operations
affect most workers and communities globally. Doing it right
would also involve providing substantive and honest reporting.
Be Comprehensive and Substantive
In defense of existing social reporting efforts, it has not been
easy for companies to know what they need to report. Reporting
both substantively and comprehensively—on all employee and
community initiatives across the globe—would be a huge task.
The easy choice has been to report vaguely on the general level
and provide selective details.
Reporting guidelines that specify content and measures do
exist. A leading set of reporting guidelines on social as well as
economic and environmental reporting was introduced in April
2002 by the Global Reporting Initiative (GRI), a collaborative
effort by representatives from industry, the United Nations,
nonprofit organizations, and accounting boards. AT&T. BMS,
General Motors, and Shell are among those companies now
releasing reports informed by GRI guidelines. (The Johannesburg
Stock Exchange requires listed companies to follow GRJ guide-
lines). Additionally, in 1997 Social Accountability International
(SAl) facilitated a group of diverse interests to develop compre-
hensive workplace and labor audit standards (SA 8000).
Companies such as Avon. Chiquita, Eileen Fisher, and Toys-R-Us
m IMAM np<;ni lor c PI
use these standards as the basis for social reporting. (See
References for additional information on guidelines.)
Private financial indexes that screen for social performance
also provide metrics (and associated content) diat can be used
for social reporting. The Domini 400 Social Index, launched in
1990, was followed by the Dow Jones Global Sustainability
Fund Index (1999) and the FTSE4Good series of indices (2001).
Employee topics offered by each set of guidelines are similar
more than they are different. Basic areas such as safety and
health, fair wages and benefits, working conditions, and protec-
tion of labor and human rights are addressed. Also included are
how an organization manages sensitive issues, such as conflict
and layoffs, and implements policies for equal opportunity,
diversity, and anti-harassment. Beyond legal issues, work-life
balance initiatives, training, employee-feedback processes, and
employee-community involvement programs aie outlined.
Using any of the above guidelines will help companies:
1. Know what to report on and avoid the uncertainty associated
with identifying expectations.
2. Take a comprehensive, yet manageable., approach in terms of
topics and interests covered.
3. Know what requisite amount of detail is required.
4. Take a global multi-stakeholder approach.
5. Benclimark and manage performance against metrics.
6. Develop credibility by showing a willingness to report on
compai'able information,
Make Honest Claims
The other component of "doing it right" involves making
honest claims. Companies can build trust by communicating
negative results as well as positive ones, and by explaining gaps
between performance and expectations. Where performance is
below standards, corporations can communicate that the inten-
tion is to improve. SustainAbility. a leader in helping companies
develop and communicate responsible agendas, praised Cbiquita's
2001 social report for coverage that "'includes courageous
accounts of weaknesses and failures, some of the most candid
and honest reporting we have seen to date."
Companies may find it advantageous to refrain from heavily
promoting themselves as socially responsible. Nike's experience
demonstrates that bold claims are risky, as there are always ways
to dispute them. Labor standards in subcontractor operations-
often widespread and under the control of business partners-are
difficult to monitor. Some suppliers will likely fail. Under these
circumstances a company should state that it will do its best to
ensure adherence to standards, yet underline the likelihood of
error. There is a greater value in setting and communicating
moderate expectations that can be met rather than setting high
expectations that will likely be unmet.
 tftiilever's Social Responsibility Mission
Corporate social re.spoiislhitiry at Unilever means responsibly
managing- multiple relationships every clay with employees,
consumers, shareholders, suppliers, governments, local com-
munities, and many others in society. Our commitment to high
.standards of corporate behavior is an integral parr of our
operating tradition. It is spelled out in our code of business
principles and is implicit in many of our business practices.
Unilever's "Social Review" covers:
• Employee compensation and bonus programs
• Compliance with labor laws
• Diversity in employment practices
• Standards in corporate behavior
• Workplace .safety and .security standards and metrics
• Investment in people
• Transparency and responsible behavior
• Sustainable development research funding
• Investment in community
• Code of business principles
• Affordable product
• Commitment to quality
• Meeting consumer needs
Some, like William Baue (2002), a writer with CSR Wire,
argue that the decision against Nike may influence "corporations
[to] decide thai the risk of litigation in California eclipses the
benefits of voluntary reporting." Communicating a social agenda
does expose a company to challenges against its claims; howev-
er, with the public's eye on corporate social initiatives, some
form of reporting is valuable. Companies just need to report with
caution and honesty. Mallen Baker of UK-based Business in the
Community (www.bitc.com) feels that "... it has been more or
less true to say that companies do not suffer negative conse-
quences from honest disclosure—only from covering up." This
will hopefully ring true.
Social reporting is a powerful means of building a company's
reputation and attracting customers, investors, and employees. It
is also a risky business. A superficial and spotty social report
may backfire on corporate reputation. Making inaccurate claims
can lead to potential liability costs and damage to corporate rep-
utation. These risks can be effectively managed by reporting that
is substantive, balanced, and accurate. Such disclosure, when
tempered with humility and a stated desire to improve, will be a
powerful means of building a company's reputation.
References
Arthur D. Little. Inc. (2CX)2). "The Business Case for Corporate Citizenship." Cambridge, UK.
Bauc. W. (2002). "Nike Greenwash Decision a Double-EUged Swiird." Corporate Social
Re.\ponsihilily Wire. October.
Baue. W. (2002). "New Report A.ssesscs lhe Slalus of Corporate Social Re.sponsibiliiy."
Sociiii Funds. June 2.
Birchard. W, (2000). "A Social Report for a Public AuiJii:ni:c." CFG Magazine. February' I.
Blani;hanl J, (1998). "A Ca-se for Mandatory Disclosure Rules."
Ciirpcriite Publiv Affiiirs. 8(3).
8P Aimico (201J1). "Environmentai and Social Review." corporate report.
Bristol Myers Squibb (2IX)2). ''Soeial Responsibilily at BrisKil Myers Squibb," corporate report.
Business in the Cumniunity; www.bile,com.
The Conferenue Board (19991. "Consumer Expectations of lhe Social Aeeonntability of
Business." New York, NY. September
The Conferenee Board (2002). "Corporate Citizenship in the New Century: Accountability.
Transparency and Global Stakeholder Hngagemcm." New York, NY. July,
Deloitte Touche Tobmatsu (2002). "Sustainability Reporting Seorceiird." August.
Echo Research (2003). "Giving Baek 2 — An Integrated Report on Corporate Social
Responsibility in Global Markers 2001-2002," New York, NY.
Environics Intemationai (2002). "Global Issues Monitor 2002," December.
Ford Motor Company (2001), "Corporate Citizenship Report," corporate report.
General Motors (2002), "Corporate Respotisibility and Sustainability Report, 2(X)l-2f)02,"
corporate reporl.
Greenhouse, S. 12002], "Court Says First Amendment Doesn't Shield Nike From Suit."
The New York Times, May 3.
KPMG Global Sustainability Service-i (2002), "The KPMG Intemationai Survey of
Coiporatt; Sustainability Reporting," London. UK.
Moskowitz, M. & Levering. R. (2002). "Best Companies to Work For."
Fortune, February 4,
Motorola {2001). "Global Citizenship Report," corporate report.
Muchene. C. (2001). "Corporate Soeial Repotting -Who Cares'?" ^r(YW"to7rv Magazine,
UK, September. Price Waterhouse Coopers research.
Stevenson, M, (2002). "The (Triple) Bottom Line on Corporate Social Reports."
The Center for Corporute Citizenship. Wallace E. Carroll School of Management,
Boston College.
Sustainability Ltd. (1999). "Engaging Stakeholders: The Soeia! Reporting Repon." London,
Taub, S. (2002), "Rise in Non-h'inanciiil Reports." CFO.com, June 3.
'ITiomen, M, (2002). "Benchmarking Corporate Environmental and Social Reporting."
Sociat Funds. December.
Thomen. M, (20(12). "Sustainability Ranks Chiquita\ Corporate Responsibility Reporting
among World's Best." CSR Wire. November 20.
Unilever (2002), "Social Review - Listening, Learning and Making Progress,"
corporate report.
Reporting Guidelines
Domini 400 Social Index, KLD Researeh and Analytics Inc., Boston, MA.
Dow Jones Susiainability World Indexes Guide, Version 3,1, SAM Indexes GmbH.
Switzerlatid. October 2001,
FTSE4Good Index Series, FTSF,, UK. London.
Social Accountability MOOO standards. Social Accounuilnliiy Inienuiiioricil. New York, NY.
Sustainability Reporting Guidelines on Economic, linv iron mental and Soeial Performance,
The Global Reporting lititiaiive, Bo.ston. June 20(XI.
HUMAN RESOURCE PLANNING I3