If UPS’ Accountants Can Deliver Holiday Packages, Human Capital May Be More Flexible Than We Expected

Now that the dust is clearing on the blow-out holiday sales season that retailers enjoyed last month, tales are emerging about the extraordinary steps that their supply chain managers took to meet customer demand.

What tales? Consider, for instance, the global delivery firm UPS. It received so many packages in the days leading up to Christmas that it was forced to ask hundreds of its accountants, marketers, and other office workers to join their colleagues in sorting and delivering packages.

Some were actually met at the doors of their office buildings and told to go home, change clothes, and report to operations facilities. Others were instructed to deliver packages with their own automobiles.

Pretty unusual, huh? Even more noteworthy is that the office workers completed these tasks responsibly. Apparently, their lack of training and personal unfamiliarity with delivery tasks failed to impede their performance.

That raises a few interesting questions. If accountants and marketers were able to succeed at these operating tasks, is human capital more flexible than we expected? If so, is the principle of work specialization overblown? And if true, are we spending too much time, effort, and resources on specialty training, and not enough on cross-training?

After all, cross-training was the fundamental Human Resource Management philosophy for centuries before Henry Ford and others developed modern Operations Management theory during the early 1900s. Business managers previously believed that it made more sense for craftsmen to learn all of the functions of producing a product or service, instead of specializing in a single function or two.

We now live in an era when many long-accepted assumptions about workers are falling by the wayside. For instance, riders now trust part-time Uber drivers as much as they ever trusted part-time taxi drivers. And travelers now trust part-time Airbnb hosts as much as full-time hoteliers.

Indeed, the UPS experience may simply represent another case of Human Capital being more flexible than we ever expected. And that very flexibility may be the harbinger of a human labor revolution.

The Ethics Of Data Scraping

What is your position on the ethics of data scraping? Is it right, or is it wrong?

Huh? You’ve never even heard of data scraping? That’s not unusual; most people probably haven’t heard of it either.

But if you utilize a professional networking web site like LinkedIn, you place yourself at considerable risk if you fail to consider the presence of data scrapers.

Why? Because these firms “scrape” information off publicly available web sites and then use the data to produce products and services. One such firm, a small organization named hiQ, culls information from LinkedIn’s public profiles. Then it relies on that data to identify employees who may be seeking jobs elsewhere, and it reports those employees to their current employers.

How can hiQ possibly know if a LinkedIn user is looking for another job? It might assume, for instance, that an individual who suddenly updates his LinkedIn job profile might be tidying up his resume for a career search.

It certainly isn’t a foolproof method, but data scrapers don’t guarantee the predictive accuracy of their information. That’s why hiQ’s web site promises employers that it will simply “provide a crystal ball that helps you determine …turnover risks months ahead of time.

LinkedIn, needless to say, is displeased with hiQ’s use of its data. It is now engaged in a legal action to compel hiQ to cease these activities.

So what do you think? Is hiQ acting in an ethical manner? Is it right to make a profit by using a person’s data, without notifying him, to inform his employer that he might be looking for employment elsewhere?

To be sure, reasonable minds may differ about whether data scraping is an ethical business activity. But regardless of your opinion about this question, perhaps we can agree on a practical implication.

The next time you’re ready to update your LinkedIn profile, you should stop and think for a moment. Do you really want to do it?

It may not be a harmless action. After all, your employer may be tracking you.

The Congressional Busy Season

As you probably already know, the current United States Congress ranks among the most dysfunctional in history. Given its state of inactivity, is it possible that our local legislators might be growing bored and fidgety with all of their free time?

Don’t count on it! Apparently, our elected officials aren’t concerned about their failure to pass productive legislation. Instead, they are spending their time proposing legislation that has no chance to pass into law, and passing legislation that serves no purpose.

Last week, for instance, the U.S. House of Representatives passed H.R. 4890, the IRS Bonuses Tied to Measurable Metrics Act. If enacted into law, it would forbid the Internal Revenue Service from paying any bonus compensation to its employees until it “puts taxpayers first.”

At first glance, of course, one might conclude that this Act is a reasonable one. After all, why should any employee receive a bonus if he doesn’t put his customer, client, or constituent first?

The problem with the proposed legislation, though, is that it bans the payment of bonuses to any IRS employee. In other words, the Service would be unable to recognize, incentivize, or reward any individual employee who wishes to “put taxpayers first.” Under such circumstances, why would any employee actually choose to do so?

The proposed Act itself serves no purpose because President Obama has already declared that he would never sign the legislation. But Congress passed it any way, and then moved on to a proposal entitled No Budget, No Pay. Sponsored by Senator Dean Heller of Nevada, the Act proposes that Congressional leaders should not be paid any compensation when they fail to enact a federal budget into law on a timely basis.

But … hold on! Wait a minute! Didn’t President Obama sign a No Budget, No Pay Act into law three years ago? Well, yes … he did. But it only applied to that single year of budgetary activities. And it didn’t actually require Congress to fund its own budget; it simply required that the legislators pass a resolution to approve one. So Congress proceeded to approve a budget that year, and then never funded it.

Apparently, our legislators are quite fond of “no pay” legislation. But in the case of the IRS law, they proposed it while knowing that there was no chance of it ever becoming law. And in the case of their own budget law, they passed it with terms and conditions that would ensure that they would never actually lose any pay.

Nice, eh? It’s the Congressional busy season, and our legislative leaders are busy at work, doing what they do best.

Can The NFL Learn?

We’ve now reached the second month of the National Football League’s 2015-16 season in the United States. Are you curious about how Commissioner Roger Goodell’s embarrassingly flawed (and eventually overturned) suspension of superstar quarterback Tom Brady is affecting the popularity of the sport?

Surprisingly, not at all. The NFL’s television ratings remain at an all-time peak, and three different teams are clamoring for the opportunity to enter Los Angeles, the second largest city and business market in the United States.

But it would be a mistake to simply conclude that Goodell’s botched investigation and disciplinary action left no scars. The Commissioner continues to be excoriated for his mismanaged investigation of an on-field controversy that affected the outcome of a playoff game.

Interestingly, although all professional leagues face similar challenges, other sports have adopted far different operational strategies to address them. Last week, for instance, Major League Baseball investigated a controversially violent slide by a Los Angeles Dodger that badly injured an infielder of the New York Mets and led to a victory by the aggressor’s team.

MLB investigated the slide after the conclusion of the game and suspended the Dodger player. The Mets went on to win the series, and the brief controversy ended with no lingering criticism of the review process.

This outcome is particularly striking because, during the game, the baseball umpires initially determined that the Dodger had done nothing wrong. Thus, the MLB felt compelled to overturn the determination of its own on-field umpires. The NFL, in comparison, simply upheld the initial ruling of its on-field referees during the Brady investigation.

So how did MLB resolve its on-field controversy so quickly and so effectively? In comparison to the NFL, which permitted its own Brady investigation to linger for months and then to be overturned on an appeal in federal court?

The answers to these questions may reside in the individual who led the baseball investigation and announced its findings. Joe Torre, the Hall of Famer whose on-field career included eighteen years as an all-star player and an astounding thirty years as a championship manager, serves as MLB’s full time Executive Vice President for Baseball Operations.

In other words, MLB utilizes one of its most respected and experienced on-field veterans to handle investigations of player controversies. It relies on that veteran to function as the public face of the sport when it determines and then announces the punishments of active players.

The NFL, on the other hand, asks its Commissioner to perform those tasks. Its Commissioner, Roger Goodell, is a life-long businessman who has never worn a sports uniform as a player, as a manager, or as a coach at the professional or college level.

To be fair, a dearth of on-field experience certainly doesn’t disqualify one from exercising sound judgment during punitive deliberations. But it does tend to embolden and enable critics who will inevitably leap to excoriate one’s punitive decisions.

So can the NFL learn to operate more effectively by adopting the organizational structure of MLB? If the employment of an experienced sportsman can help preserve MLB’s credibility when it overturns the decisions of its own on-field umpires, it might likewise enhance the trust that the public places in the NFL when it undertakes similar deliberations.

IBM: The Big Blue Employer

New York City is the home of at least three Big Blue Teams. Do you have a favorite one?

If you’re a fan of the National Football League, you’d likely prefer the New York Giants. Although that particular Big Blue Team actually plays across the Hudson River in the Meadowlands of northern New Jersey, the Giants are the pride of New York, having won two of the past five Super Bowls against the arch-rival New England Patriots.

Baseball fans, though, might instead name the Brooklyn Dodgers. Although Dem Bums moved to Los Angeles over fifty years ago, their fans still (in the words of long time Dodger Tommy Lasorda) bleed Dodger blue.

In the business world, however, the phrase Big Blue Team refers to IBM, the century old computer services firm with roots in New York City. Although the firm is now headquartered in the northern suburbs of Westchester County, it continues to maintain a solid presence in the Big Apple.

Why is IBM called Big Blue? For its blue logo, without doubt, and for its competitive industry strength as well. Nevertheless, its own employees have often employed the phrase in deference to its past history of paternalism and generosity as a corporate employer.

No Layoffs, Ever!

Although today’s IBM specializes in computer services, the firm spent much of the twentieth century involved in the introduction, development, and subsequent domination of several industry sectors involving business machines.

In fact, it began its existence as the Computing, Tabulating, and Recording Co. (CTR), and later changed its name to International Business Machines (IBM). The punched card machine, the mainframe computer, the electric typewriter, and the personal computer were all products of the vaunted IBM research and development laboratories.

In the post World War Two era of American global economic dominance, IBM joined other industrial icons such as AT&T, Eastman Kodak, RJ Reynolds, and Texas Instruments in adopting no layoff policies. Employees were guaranteed jobs for life, regardless of economic trends and business outcomes, as long as they fulfilled their professional responsibilities.

Like most other American firms, IBM’s no layoff policy and other employee benefits have been stripped away by senior management during the past two decades. And then, last week, Big Blue made a decision that severely impacted the firm’s retirement program.

I’ve Been Moved!

The decision may have surprised a few “old timers,” considering that IBM was widely respected throughout most of the twentieth century for its generous employee benefit plans. In fact, its employees would often joke that the acronym IBM stood for “I’ve Been Moved,” in recognition of the frequency in which they would be transferred from one city to another in furtherance of the company’s interests. Sizable pension plan payments, and other significant employee and retiree benefits, were perceived as compensatory rewards for lifetimes of corporate service.

But IBM shifted its employees from a traditional pension benefit into a 401k plan many years ago. Under 401k guidelines, employees must finance their own retirement needs by instructing their employers to withhold funds from each paycheck for depositing into tax deferred investment accounts.

Most companies also match each employee’s withholding payment with a supplemental corporate contribution on a paycheck-by-paycheck basis. Last week, however, IBM announced that it would only make a single annual “lump sum” payment to each employee’s retirement account in December of each year.

Timing Is Everything

Why will IBM delay all of its matching contributions to the month of December? One possible reason is that any employee who resigns prior to December will no longer receive any matching contribution. IBM, as a firm with more than 400,000 employees, experiences a significant number of employee resignations each year, and thus the firm will avoid a significant number of matching contributions by implementing this new policy.

Another possible reason, though, is that IBM will now reap a windfall benefit by investing its matching contributions from the time that each paycheck is paid until the time of its annual 401k deposit. As long as the investment markets are producing positive returns, employees will be unable to earn income on those matching funds during the course of the year.

Is IBM shortchanging its employees? On the one hand, one can argue that IBM is not burdened with any legal obligation to sponsor a 401k plan at all, and thus it can schedule its matching contributions as it sees fit. On the other hand, though, it is important to note that very few corporations have decided to follow IBM’s lead and implement this type of policy.

Presumably, then, very few of IBM’s employees will be referring to their employer as the Big Blue Team of pension generosity in the near future. Although last week’s announcement again places IBM at the forefront of managerial innovation, the beneficiaries of the firm’s new policy will not include its employees.

Moneyball Goes To Grade School!

Fans of the American sport of baseball enjoyed an unusual “double header” of activities this weekend. In addition to watching the annual ritual of spring training play out in Arizona and Florida, they also rooted for the baseball film Moneyball during Sunday evening’s Academy Awards telecast.

The film was nominated in three major categories: Best Picture, Best Actor in a Leading Role (Brad Pitt), and Best Actor in a Supporting Role (Jonah Hill).  Brad Pitt himself was a producer on the film; he took a “leading role” (so to speak) in securing the required financing of the entire project.

The film itself was based on a best selling book that described how the Oakland Athletics employed advanced statistical methods to assess available ball players. Using such methods, they were able to select and promote the very best players in their own organization, and to identify and trade for the finest talent in other organizations.

In a sense, the Moneyball approach to rating ball players with statistical measurements is similar to the process that grade schools and college programs use to rank their students. Last week, however, the City of New York turned its ranking system on its head by publicizing the evaluation grades of its own teachers.

Baseball vs. Biology

In the film Moneyball, Brad Pitt struggles to convince his coterie of senior talent scouts that qualitative baseball skills can defined and measured in a manner that produces reliable ratings. His scouts, however, stubbornly cling to the traditional belief that talent and ability are innate traits and thus cannot be measured and compared quantitatively.

Until recently, most grade school administrators clung to similar beliefs about their own teachers. After all, they argued, how can we measure the effectiveness of ninth grade biology teachers if we are asking them to inspire their students to become doctors, nurses, and medical researchers many years later? In other words, how can we possibly expect to measure inspirational qualities that will necessarily take many years to generate any results?

If we define the primary role of teachers, though, in a narrow manner as the “teacher of facts” to students, then we can utilize standardized tests to measure effectiveness. That’s the approach that the City of New York utilized to compile its teacher rankings; nevertheless, many critics are now identifying problems with the City’s compilation process.

A Pair Of Problems

One set of problems appears to involve concerns about public disclosure. Unlike most organizations, which generally treat performance evaluations as private and confidential documents, the City of New York dumped its entire set of ratings onto public web pages. Many now criticize the City for publicly humiliating teachers with “incomplete, misleading, and often wrong” ratings.

A second set of problems appears to involve concerns about the validity of the ratings themselves. They appear to have been calculated with an extremely high confidence internal, which is a statistical term that refers to a measurement’s inherent margin of error.

Imagine that you are a teacher who has become comfortable teaching an introductory biology course in a wealthy community where parents routinely hire (at their own expense) private tutors to help their children “ace” their exams. Faced with such a rating system, would you ever agree to teach an advanced biology course in a poor community where children live in single parent households with no financial resources?

Teaching To The Test

Ironically, New York City’s decision comes at a time when the federal Department of Education is dismantling its national No Child Left Behind program. One of the most significant complaints about that program (and about New York City’s testing process as well) targets its high level of reliance on standardized student tests, a process that may compel teachers to focus on “teaching to the test” by emphasizing rote memorization activities over critical thinking assignments.

In fact, very shortly before New York City published its teacher rankings on the internet, Bill Gates authored a lengthy and impassioned editorial in the New York Times to ask that the City refrain from doing so. His request was a highly noteworthy one, considering the role that the Gates Foundation has played in developing advanced (and highly successful) methods to modernize our primary education systems in the United States and overseas.

He titled his editorial Shame Is Not The Solution, noting that New York’s “value added” method of rating teachers on the basis of their “impact on students’ test scores” is a “big mistake.” Although today’s professional baseball executives use statistics like Wins Above Replacement to evaluate talent, Gates claimed that the same concept cannot be applied to public school teachers.

Of course, that’s exactly the objection that Brad Pitt’s character faced in the film Moneyball. In New York City, though, the fate of a baseball team is not at stake. Instead, the future of generations of students hangs in the balance.