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<b style="color: blue">Human Resource Associates</b>
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<span class="heading">HR - On The Job</span>
<p class="issue">The 10 Commandments For Family Firms</p>
<p>Many companies in this industry are family owned and operated. There are magazines, web sites, and consulting companies totally devoted to the complex issues of family firms. They deal with such subjects as working together; competing siblings; children’s spouses; succession planning; federal regulations; tax issues; disagreements on strategy, goals, and tactics; and even on who’s going to take over the top job.</p>
<p>When the economy gets really bad, family business strains can be even more severe. “I used to joke,” says Ted Clark, executive director of Northeastern University Center for Family Business in Boston, “that when times are good and there is tension between family members, a new car will solve the problem, but in tough times, they actually have to address the problem.”</p>
<p>And, in tough times, relatives may have to be paid less or even laid off. William Dunkelberg, chief economist with the National Federation of Independent Business, says that “businesses should not hire family members who don’t earn their way. If you hire a ne`re do well nephew, you are basically giving them your income” says Dunkelberg, “You should be able to pay people what they are worth.”</p>
<p>More than any other issue, decisions about the company’s future strategy creates the most tension, as 37 percent of all participants stated in a Price Waterhouse Cooper family business survey. Most problems arise when leadership isn’t clearly defined or when the strategy and agenda are just ignored.</p>
<p>Author and Consultant Dr. Mark Goulston, an expert in family-owned firms, offers these basic “10 Commandments of Family Business” as a starting point:</p>
<ol>
<li>Thou shalt work harder than any non-family employees.</li>
<li>Thou shalt think of thy company’s needs before thine own.</li>
<li>Thou shalt not bad-mouth thy company or family to others.</li>
<li>Thou shalt be accountable and follow through.</li>
<li>Thou shalt match authority with the responsibility that thou delegates.</li>
<li>Thou shalt make thy job easy to understand so others can do it in thy absence, and train thy replacement if thou leave thy job.</li>
<li>Thou shalt move aside when thy security needs conflict with thy company’s growth needs and when fear clouds thy vision.</li>
<li>Thou shalt remove deadwood early.</li>
<li>Thou shalt treat thy customers and thy employees better than thou expects in return.</li>
<li>Thou shalt listen to one’s trusted and respected consultants’ advice or replace them with ones thou trust and respect.</li>
</ol>
<p>And the law does not prohibit you from displaying these 10 commandments in public places.</p>
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<p align="center"><b><i>Have an employment question?</i></b></p>
<p align="center">Send it to <a href="mailto:[email protected]?subject=From HR On The Job">[email protected]</a>.</p>
<p align="center">Please include Company Name and Association in your e-mail. Company identification will be kept confidential.</p>
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<p class="heading">Hitchhiking on the Information Highway</p>
<p><b>Dateline:</b> April 2011</p>
<p><i>(Note: Although we attempt to provide the HRU update on the first of each month, we are normally delayed awaiting the release of several monthly government statistical reports. We will hereafter update the information as each report becomes available without waiting for all of them to be released.)</i></p>
<p class="section">Will The Circle Be Unbroken?</p>
<p>Pensions are pretty neat things. To one degree or another, every worker has one and some certainly are better than others. One of the best can be found in the case of some government workers who are only required to work for twenty years before they can take their pension. In many cases those pensions pay more than the employee earned while working. And in that they are lifetime pensions, many may be receiving those pensions for forty years or more. So a government worker who retires after twenty years of work making $85,000 a year can then be paid $90,000 a year for the next forty years as a thank you. And in some cases they never paid a penny into those pension plans. How long can any system last paying more for retirement than they paid for the work? Oh, and also pay it for twice as long as the work lasted.</p>
<p>How long indeed. The answer to that takes us into the next stage of a modern day merry-go-round or as some are calling it, a vicious circle. In Costa Mesa, California the new town mayor discovered that they were paying out more money to employees on union pensions than they were paying to employees still on the job! He was unable to get any concessions from the unions so he decided that he had to take a drastic step that may be a forerunner of things to come. <em>He has to lay off almost half of the city's current workers in order to have enough money to pay the retirees!</em></p>
<p>The vicious cycle comes about when it you consider that the retirement account doesn't even have any money. Like the U.S. Social Security fund, when you open that retirement lock-box, it's full of IOUs. The money to pay the retirees comes from the payments being made into the retirement account for the current employees. But when they reduce the number of current employees by half, the amount going into the retirement fund will also be reduced by half. So in order to pay the retirees he must lay-off current workers. But by laying off current workers he will not have the money to pay the retirees. The question again rises, how long can any system pay more for retirement than they pay for the work? How long indeed.</p>
<p>If you like complicated puzzles, think on this. Half-way through that forty year pension, the next group of retirees will have finished their twenty years and will be joining them. Now there are twice as many workers on forty year pension as before, but will still have the same number of workers (or fewer) paying in. The circle is unbroken.</p>
<p class="quote">“I don't want to abolish government.<br />
I just want to reduce it to the stage<br />
where I can drag it to the bathroom and drown it in the bathtub”<br />
- Grover Norquist</p>
<p class="section">More Circles Ahead</p>
<p>While we're on pensions consider the impact of pension costs (Which taxpayers are going to have to bail out all those failing plans?). What if suddenly there was a big increase in the number of government employees retiring? Well some experts are forecasting a boom in government and union retirements over the next five years, starting now. How do they know this?</p>
<p><em>Many government union plans are very generous in how they calculate pension amounts.</em> It's often based upon the earnings of the final five years of employment. That includes annual earnings, overtime worked, bonuses collected, incentives paid, vacations not taken, sick leave accumulated etc. So the more promotions, overtime etc an employee can pack into those last five years, the higher the pension amount. (<em>That's how the pensions can sometimes be more than the annual salaries.</em>) Those experts are reporting that the overtime hours of government employees across the country are exploding. In some areas an employee can more than double his/her income through the amount of overtime allowed.</p>
<p>Another method of increasing retirement amounts is by job injuries. Disability retirements pay more than regular retirements. A legitimate disability retirement in any industry is an honest process of compensating someone for the injury received on-the-job that will affect them for the rest of their lives. And the cost is minimal when you consider that fewer than 10% of private industry workers are on disability retirement pensions. But the reports show that the amount of injuries occurring during those last five years of government employment seem to be jumping significantly. A few years ago the Washington Post reported that over 75% of all the retired policemen in Washington D.C. were on disability pensions.</p>
<p>With the amount of overtime being reported increasing dramatically, the number of job injuries during the last five years of employment age increasing and the fear that in a few years the pension accounts may be bankrupt the signs may be right.</p>
<p>And if you want to add another complication, consider that in some cases, the union continues to negotiate pension increases after the employee has retired. As long as the employee keeps paying the union dues, he will be represented at the bargaining table for increases in pay and benefits. (That's another way pensions can pay more than the employee earned while he was working and in some cases more than the employee currently doing that same job.)</p>
<p class="quote">“Wherefore, being all of one mind,<br />
we do highly resolve that government of the grafted, by the grafter for the grafter<br />
shall not perish from the earth”<br />
- Mark Twain</p>
<p class="section">Is It Time For My Retirement Yet?</p>
<p>An employee named Jill McGlone worked at the Norfolk Community Services Board in Norfolk, Virginia. That is she did until 1998 when she was fired for allegedly bringing a weapon to work. Then it seems that the top brass just forgot about her. She was never fired, but then again, she never did another day's work. Yet she has been getting those paychecks every payday! For 12 years she's been getting them while sitting at home.</p>
<p>Last year a new executive director realized the mistake and stopped the payments. The HR director has been fired and the FBI is involved. After all, there may be others on that phantom payroll. But as you have probably guessed by now, McGlone has sued her former employer for wrongful termination! Oh, and she wants unemployment benefits too. You can't make this stuff up.</p>
<p class="quote">“The buck stops with the guy who signs the checks”<br />
- Rupert Murdoch</p>
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<p style="text-align: center"><sub>© William J. Cook</sub></p>
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<span class="heading">Labor Stats</span>
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<b>Federal Minimum Wage</b>
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<p align="center">
<b>$7.25</b>/hour<br />
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<b>Average Income</b>
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<table>
<tr><td /><td class="u">April 2011</td><td class="u">April 2010<td></tr>
<tr><td class="i">Hourly</td><td class="b">$22.11</td><td class="b">$22.52</td></tr>
<tr><td class="i">Weekly</td><td class="b">$787.19</td><td class="b">$786.19</td></tr>
</table>
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<b>Federal Povery Level</b>
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<table>
<tr><td class="i">one person</td><td class="b">$10,956</td></tr>
<tr><td class="i">family of four</td><td class="b">$21,954</td></tr>
</table>
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<b>IRS Mileage Allowance</b>
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<p>As of January 1, 2011</p>
<table>
<tr><td class="i">business</td><td><b>51</b> cents/mile</td></tr>
<tr><td class="i">medical or moving</td><td class="b">19</b></td></tr>
<tr><td class="i">charitable</td><td class="b">14</td></tr>
</table>
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<b>Postage</b>
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<table>
<tr><td class="i">1 oz</td><td><b>44</b> cents</td></tr>
<tr><td class="i">postcard</td><td class="b">28</td></tr>
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<b>Population</b>
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<table>
<tr><td class="i">world</td><td class="b">6.9 billion</td></tr>
<tr><td class="i">U.S.</td><td class="b">311.9 million</td></tr>
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<p align="center">
<i>one birth every </i><b>8</b><i> seconds;</i><br />
<i>one death every </i><b>11</b><i> seconds;</i><br />
<i>one new immigrant every </i><b>45</b><i> seconds;</i><br />
<i>net gain of one person every </i><b>15</b><i> seconds.</i>
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<b>U.S. Civilian Workforce</b>
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<table>
<tr><td /><td class="u">April 2011</td><td class="u">April 2010</td></tr>
<tr><td class="i">Total</td><td class="b">153,421,000</td><td class="b">154,520,000</td></tr>
<tr><td class="i">Employed</td><td class="b">139,674,000</td><td class="b">139,382,000</td></tr>
<tr><td class="i">Unemployed</td><td class="b">13,747,000</td><td class="b">15,138,000</td></tr>
<tr><td class="i">Want A Job</td><td class="b">6,539,000</td><td class="b">5,928,000</td></tr>
<tr><td class="i">Unemployment Rate</td><td class="b">9.0%</td><td class="b">9.8%</td></tr>
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<br /><hr />
<b>U.S. Workforce Productivity</b><br />
<sub><i>(The amount of goods produced, divided by the number of work hours it took to produce it)</i></sub>
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<table>
<tr><td class="i">1992</td><td class="b">3.7%</td></tr>
<tr><td class="i">1993</td><td class="b">0.5%</td></tr>
<tr><td class="i">1994</td><td class="b">1.3%</td></tr>
<tr><td class="i">1995</td><td class="b">0.9%</td></tr>
<tr><td class="i">1996</td><td class="b">2.5%</td></tr>
<tr><td class="i">1997</td><td class="b">2.0%</td></tr>
<tr><td class="i">1998</td><td class="b">2.6%</td></tr>
<tr><td class="i">1999</td><td class="b">3.3%</td></tr>
<tr><td class="i">2000</td><td class="b">3.4%</td></tr>
<tr><td class="i">2001</td><td class="b">2.9%</td></tr>
<tr><td class="i">2002</td><td class="b">4.6%</td></tr>
<tr><td class="i">2003</td><td class="b">3.7%</td></tr>
<tr><td class="i">2004</td><td class="b">2.8%</td></tr>
<tr><td class="i">2005</td><td class="b">1.7%</td></tr>
<tr><td class="i">2006</td><td class="b">0.9%</td></tr>
<tr><td class="i">2007</td><td class="b">1.9%</td></tr>
<tr><td class="i">2008</td><td class="b">1.8%</td></tr>
<tr><td class="i">2009</td><td class="b">+5.8%</td></tr>
<tr><td class="i">2010</td><td class="b">+3.6%</td></tr>
<tr><td class="i">2011 1<sup>st</sup> quarter</td><td class="b">+1.68</td></tr>
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