Settlements Down, Claims Up

Why Talent Management Is the Workplace Driver for Fairness, Inclusion, and Legality

Quick – name the largest employment discrimination settlements of 2009. Any of the top 10 will do. In past years, Denny’s, Texaco, Shoney’s, Coca-Cola, or Home Depot would have come to mind; not only were the top payouts in low nine figures, but stories about what spawned the claims covered the mainstream news and airways with the same kind of daily blasts as the Conan-Leno fiasco. My guess is that unless you read specialized human resource or legal publications, no 2009 case stands out.

Last year’s largest employment issue settlement involved Kodak’s resolution of a class action claim for approximately $24 million; the 10th largest settlement cost Lowe’s less than $2 million. The other eight top employment cases of 2009 also flew below the PR radar. These are hefty sums, but not compared to the $2 billion payout announced by a major pharmaceutical last year to settle a sales practices issue. For many firms, none of these claims would have presented a high-stakes financial or business risk. Instead, they represent the sorts of problems about which many leaders are inclined to say, “Let someone in Legal handle this and make it go away. We’ve got bigger problems to address now.”

However, business leaders need to have a stake in maintaining nondiscriminatory, civil, and inclusive workplaces, not only because EEOC claims are at a 10-year high or because President Obama has pledged greater enforcement of civil rights statutes or even because realizing such a commitment is in line with organizational values and “the right thing” to do. All of those are important, but let’s talk hardnosed business issues, the kind that many leaders say keep them up at night.

Workplaces riddled with discriminatory practices and uncivil, abusive leaders have more than their share of disengaged staff, people who are not fully committed to their work, who lack a willingness to propose new solutions or identify risks before they become catastrophes, and who are riding out each day waiting for the economy to turn when they can take their knowledge and skills to a better workplace. The problems caused by these conditions harm safety, quality, productivity, innovation, reputation, and staff loyalty. Qualitative business case “autopsies” and quantitative studies prove this. The prospect of disasters that can and have included criminal and civil penalties, product recalls, and like ills are “the hardnosed business issues” I mentioned above that cause business leaders daily angst.

A vital job of human resource leadership is to link talent management – how people are treated, utilized, rewarded, and motivated at work – to obtaining business results. While this may involve Legal Counsel’s advice and support, this is a message leaders need to set that must be uniquely driven by human resources management. Talking about legal exposure and lawsuit costs alone just won’t do it. Here are some practical tips to get leaders at all levels to recognize this in terms of what you communicate and how you educate them on this topic:

• Review your engagement surveys. Many responses will identify that how staff say they are treated affects their commitment and focus on the job.
• Ask your leaders – including executives, managers, and supervisors – what they worry about in terms of their teams and business. They’ll likely tell you that getting and keeping the best staff, motivating them, and finding out about opportunities and problems from them are key concerns.
• Link your firm’s surveys to their concerns. Help your leaders see the tie between their employees’ frustrations and their own worries about staff engagement and retention. This is a vital step. Ask, listen, and then connect their concerns to what your employees are saying.
• Show your leaders surveys in your industry that prove how workplace conduct can affect key concerns like safety and productivity. In healthcare, for example, studies have shown that how team members are treated can affect patient outcomes and quality.
• Continually remind leaders through anecdotal examples in your organization and elsewhere that how individuals are treated is perhaps the most important key element of talent management.