Category Archives: Human Resource Management

Does Your Employer Have The Right To Select Your Physician And Review The Results Of Your Annual Checkup?

Have you been following the recent debate over President Donald Trump’s health? His personal physician recently summarized his annual checkup by declaring that the President is in “excellent health,” and is “absolutely … fit for duty.”

But others who reviewed the President’s lab results assert that he must “ … increase the dose of his cholesterol-lowering medication and make necessary lifestyle changes … (to reduce his) moderate risk of having a heart attack in the next three to five years …”

Embedded in this debate is the natural awkwardness of revealing any individual’s private health information to others. After all, wouldn’t you feel uncomfortable if the results of your annual checkup were revealed to others and then openly debated by them?

Even federal Senators, state Governors, and other high-ranking elected officials are not subjected to such personal scrutiny. Only the President has been required to submit to it.

In the private sector, though, similar debates have simmered for years about whether publicly traded companies should monitor and disclose the health risks that are faced by their Chief Executive Officers. Apple, for instance, was sharply criticized for keeping many of the details regarding Steve Jobs’ mortal illness confidential. And its Board never insisted on selecting Jobs’ primary care physician.

In contrast, the railroad transportation firm CSX is now opting for a policy of full transparency. Its Board of Directors, responding to the sudden death of its recently deceased CEO, recently decided to “ … require the railroad’s chief executive to submit to an annual physical exam that will be reviewed by the board … (to be performed by) a medical provider chosen by the board …”

This policy inevitably raises an important governance concern. Namely, are companies entitled to select their CEOs’ physicians, and then to review their private health information? The need for such transparency may be understandable, but is the policy itself appropriate?

After all, CEOs are not the only key employees within firms. There are undoubtedly dozens, or even hundreds, of workers within each company who may be deemed key members of the work force.

Should companies have the right to monitor all of their private health information? Where does an employee’s right to privacy outweigh a company’s need for information? And which employees, if any, should be subjected to such scrutiny?

Today, this question may only affect the President of the United States, the incoming Chief Executive Officer of CSX, and a few other key employees of various firms. In the near future, though, it may affect all of us.

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.

American Capitalism

Remember Yahoo? Twenty years ago, it was a titan of the internet, with services that ranged from email to search to web hosting to video.

But it failed to maintain its competitive position against emerging firms like Google, Facebook, and Amazon. And although it hired Marissa Mayer away from Google in 2012 to become its new Chief Executive Officer, its market share continued to decline.

Even worse, the firm suffered multiple massive data breaches during Mayer’s reign. Hackers gained access to the personal information of (quite literally) billions of users, while Mayer arranged for the firm’s American assets to be sold to Verizon.

To be fair, one can certainly argue that Yahoo was beyond any chance of resuscitation when Mayer came aboard as its Chief Executive Officer. And yet one cannot deny that the firm clearly failed under her watch.

So what will happen to Mayer after Verizon acquires Yahoo? Apparently, she’ll receive a $23 million severance package. And earlier this month, the firm publicly clarified that she will earn these benefits on top of $56 million worth of previously earned stock options.

Ms. Mayer undeniably risked her career by moving from Google to Yahoo. And according to the principles of American capitalism, she should have expected to receive lavish economic rewards if she had succeeded at reviving the firm.

But according to those same principles, stakeholders in failed organizations should expect to share in the losses of their business entities. After all, if they are eager to share in the spoils of success, they should also be willing to bear the risks of failure.

But in Mayer’s case, and in many similar cases, the very corporate officers who preside over the failure of their firms are immensely (and perversely) rewarded for their outcomes. In other words, they receive the spoils of success, whether they actually succeed or fail.

That may simply represent an ingrained feature of American capitalism. But it cannot possibly be a productive condition for the long-term health of the American economy.