The Art of Persuasion

It's always a little strange to see your thoughts in writing - especially if they're being written by someone else.

I was recently interviewed by students at the USC Marshall School of Business - they are candidates for Master's degrees in Leadership and Management.  The focus of the interview was how to persuade employees to see your point of view.

Here's the paper (and I didn't edit at all!)

Background:  Eric Swenson has over 20 years of experience in management, sales, training and marketing. He has managed hundreds of employees and interviewed over 2,000 people in his career. RSJ/Swenson LLC is a management and human resources consulting firm with offices in California and Nevada.

Interview Summary: Eric shared his insightful thoughts about the leadership and persuasion. For Eric, persuasion is a natural process and he prefers soft tactics. He is always honest to his superiors and subordinates. Eric believes that effective leaders are very expressive when they come to everybody. They are very candid and direct and these personal traits play a key role for persuasion process. According to Eric, the three most important aspects for managing up and down are communication, openness, and setting a positive tone that focuses on the end result.

Persuasion Strategies:

• Self Persuasion: “If you were in my position, how would you handle my problem?”
• You should let team members identify the solutions on their own. You also remind them why they live in the same organization. This especially helps you deal with some conflicts with your members.
• Logical reasoning: 
• You use facts, figures, and belief that your idea is correct. You also consider the goals, needs, and interests of your subordinates/superiors you’re trying to persuade. The more they see an idea can help them, the more likely they are to help you.
• Persuasion Tactics: 
• Collaboration: You need to work with your subordinates, not at them, in order to get them to enthusiastically support your requests. You collaborate with team members, rather than using authority. You don’t need to overuse that power. The relationship based on the trust is a key for the collaboration.
• Communication/Honesty: You should facilitate communication and be very honest to your people.
• Improving Persuasive Skills: Appeal to the subject’s self-interest: You make it sure that what you need align with their best interests.
• Present strong evidence to support your views/positions: You do intensive research and show the team members an idea that will likely work.
• Establish credibility: You’re more likely to persuade your subordinates when trust and respect you. You promise to take the blame if it does not go well. This leads you to build up the trust and respect you’re your subordinates.
• Make your objectives clear: You should get your team understand what you are doing and why are why you are doing that.

Other key factors:
Decision making is a collective effort: As a leader, you have to be honest to your team members. If you found you made a wrong decision, you would change the decision. There is nothing wrong with admitting a mistake.

Retaliation Claims on the Rise

It's always been easier for lawyers to prove retaliation in the workplace than harassment, discrimination, or even wrongful termination.

With so many people now out of work, it's natural that retaliation claims against employers is now on the rise - 23% this year over last.

The classic example of retaliation comes from an employee who did the right thing - a whistleblower notification, a complaint against a supervisor or fellow employee - and that was terminated, transferred or had other repercussions from their employer.

A good article on this trend is from the Wall Street Journal.

Credit Reports for Hiring? Still A Bad Idea!

Using a credit report is becoming more popular for businesses hiring employees.  We've always felt this was an unnecessary risk to employers because:

1. What is the business justification?  If a job requires an employee to handle large amounts of cash, or have access to the same, that's good justification.
2. If someone has a bad credit report - especially in these economic times - does that make them a poor candidate for a job?  Not necessarily.
3. There is a risk that women and minorities may be disproportionately affected, and that could cause big problems.

So unless you have a good reason to do it, don't!

Nevada Wage & Hour Lawsuits

We've been warning employers for several months that wage & hour compliance issues will result in numerous lawsuits this year - especially in Nevada.

It's starting to happen.

Wells Fargo & AutoZone have been sued (class-action status is currently pending) for mis-classifying employees.

With Wells Fargo, business banking specialists were allegedly mis-classified as exempt (from overtime, meal and rest breaks) when they were required to be 'on-call' on certain evenings.

In AutoZone's case, Assistant Managers were not compensated for working overtime (this is a case very reminiscent of the Long's Drugstore case in 2004).

The federal government is taking Wage & Hour violations seriously: Labor Secretary Hilda Solis recently announced plans to add 250 field investigators, increasing staff by 33%. The DOL believes 7 out of 10 businesses are not in compliance with Wage & Hour laws.

Garry Mathiason of Littler recently wrote:

No employment-law trend is more certain, universal or important than the total wage-and-hour compliance initiative and stopping the epidemic of wage-and-hour class-action (lawsuits)...

More ominous and prescient are these words from Mathiason (and, I believe, completely true):

With thousands of plaintiffs' attorneys examining every aspect of the payroll process, employers must expect maximum scrutiny..."Every employee who is terminated or demoted, or who experiences an unpleasant workplace event, is encouraged by Internet and television advertising to seek the advice of counsel. In almost every intake interview, the attorney's questioning turns to wage-and-hour issues in an attempt to find additional claims. Inspired by the prospect of turning a small individual claim into a multimillion-dollar class-action, the organization's wage-and-hour compliance goes under the microscope."

Thanks to Las Vegas Sun.

Why Health Care Reform Is Necessary

It's a deliberately provocative title. And this is not an article about which reform is best for our country.

But...

The Department of Labor just came out with their statistics regarding benefits paid by employers.

The cost of medical benefits to private employers has doubled in the past 10 years.

In March 1999, employers paid an average of $1.03 per employee per hour for medical benefits (about 5.4% of total compensation)

In March 2009, employers paid an average of $2.00 per employee per hour for medical (about 7.3% of total comp).

And based on my work with small and medium-sized businesses, the quality of those benefits has declined dramatically in the past 10 years (along with huge increases in deductibles, co-pays, etc.).

Twice the cost with half the benefits. All underwritten by private businesses.

Something must be done.

To Severance Or Not?

When laying off, or even terminating employees, the inevitable thought and process of offering a severance package comes up. Most businesses - especially small businesses, don't have an existing written policy on severance packages. Therefore, a severance offer is not completely thought through.

I've had two clients in the last few weeks who needed to layoff employees and they had no existing policy. Suddenly, an issue which requires a great deal of thought had to be made immediately. There was even an article in the Wall Street Journal which addressed this.

Some thoughts on offering severance:

1. Get a policy in writing now. This helps greatly with consistency and avoids any claim of favoritism or discrimination. Even if you don't contemplate layoffs, it's still an important item to have in place.
2. When you offer a severance package for laid off employees, be consistent. An example would be two weeks of pay for each completed year of service. You can't show better programs for more favorite employees.
3. Every employment attorney I've worked with says the same thing - never offer money without getting a 'hold harmless' agreement signed by that employee. Consult your labor attorney - it's worth the cost.
4. Consider paying medical insurance for several months. COBRA now requires employers to pay 65% of existing benefits; but offering to pay all of the premiums for longer is a small cost but shows you - the employer - are trying to do the right thing.
5. If you're terminating an 'older worker' (someone over the age of 40), make sure the agreement contains provision required by the Older Workers Benefit Protection Act.

EFCA: What Employers Can Do

The Employee Free Choice Act has been introduced in Congress, with plenty of vocal proponents and opponents.

The bill has two main elements:

1. It would give workers the option of forming unions by getting a majority of workers to sign cards to join without having to hold a secret ballot election. (Current law leaves it up to employers to decide whether workers must hold an election or can organize via "card check.")
   
2. If employers and workers cannot reach a contract within 120 days, a government arbitrator intervenes and sets terms.

The possibility of many non-union businesses becoming unionized is real. So what can employer do? The best advice I've seen yet comes from Mark Mathison and Abigail Crouse of Gray Plant Moody in this article here. I've summarized their excellent suggestions:

1. Adopt an Internal Position Statement on Unions and Labor Relations
2. Conduct An Employee Issue and Satisfaction Audit
3. Ensure that Communication Lines are Open and that Managers are Responsive to Employee Issues
4. Review Employment Policies and Practices

Further, say Mathison & Crouse, it is important to audit for actual employment practice and policy enforcement within the organization because disparate enforcement adversely affecting unions or employees’ labor law rights can also be unfair labor practices with substantial negative impact in critical situations.

Five Most Read Articles

The five most read articles on our blog since October 1, 2008:

1. Leading In Difficult Times
2. Violence in the Workplace
3. Nine Great Questions To Ask Your Boss
4. Stopping Gossip in the Workplace
5. Pay Raises in a Bad Economy
   

Communicating in a Recession

The most important thing an employer can do in this economic downtown/recession/potential depression is communicate with employees. It's one of the cornerstones of my trends for business leaders in 2009.

Because your employees have a vested (albeit self) interest in your success, they deserve to know what's happening and what you're doing about it.

In fact, one of the best things you can do is survey your employees and find out what they'd do to cut costs and improve performance in the short- and long-term.

Note - I said communicate 'with' employees, and not just 'to' employees.

This article in cnnmoney.com offers more advice.

Tardiness on the Rise

So 20% of American workers are late to work at least once a week.

In an era where jobs are becoming more and more precious (and conversely, layoffs are becoming more common) - it's disturbing to think that 1 in 5 workers think so little of their jobs that they're willing to gamble on being late once a week.

The usual culprits are excuses: traffic, dealing with children or pets, etc.

I am beginning to advise employers of the benefits of a high employment rate - that is, you can get a much more qualified worker now than ever before. And if that worker has been out of a job, they will be more loyal, work harder, and improve your productivity.

Jobs are scarce. Workers had better value their job (and show up on time), because there are many people out there who would take that job more seriously.

Management & Leadership Trends 2009

My recent article generated enough interest that I recently turned it into a presentation. Here it is in PowerPoint format.

Management & Leadership Trends 2009

View more presentations from Eric Swenson.

Management and Business Trends For 2009

2009 is shaping up to be a challenging year for small businesses with a world full of unknowns. The businesses that succeed will be those who can quickly adapt to change; embrace unknowns; and innovate.

Successful small business owners don’t look at this recession as a challenge – they look at it as an opportunity. Your competition is going to struggle, but that doesn’t mean you have to.

For the purposes of this article, we’re defining a small business as one who employs between 1 and 500 people. Here are our predicted employment trends for 2009, and ways you can use these trends to sustain and improve your business for the long term.

1. Employees have transformed from an ‘entitlement’ mentality into a ‘privilege’ mentality.

We’ve observed over the past several years that employees have generally viewed their employment as that of entitlement – they are owed by their employers for the work they do. With a robust, growing economy, that means they can pick up and leave for a better opportunity at the first sign of disappointment. It also means their attitude is generally not that of a team player – but as an individual who deserves promotion, salary increases and more attention. This is no longer the case. Everyone knows that layoffs have been pervasive, and they could be the next to go. This will result – if managed properly – in employees who will complain less, work harder, and become more appreciative of the job they have.

2. Adapting to change is key to success.

Change is one of the most misunderstood and feared actions in business. No one knows how to deal with it well. When things are going well, you don't want change. When things are going badly, change can't happen fast enough. To employees the fear relating to change is simply the fear of the unknown. People get into comfort levels and resist mightily when someone or something attempts to break that comfort zone.

Regardless of whether it's good or bad change, it rests upon management's shoulders to incorporate the changes with a minimum of difficultly. The first thing to do is find a way to make the change work for you and your employees. What can you do within your power to mitigate the negative aspects of the change? How can you emphasize the positive aspects of change, if any?

Next, realize that you're a leader. You are on stage. Your team will know your nuances, so you're not allowed to show frustration or weakness in front of them. Leaders lead - they say "here is the way I believe we need to go," and then go. This is the attitude you must take when managing change.

Some people never accept change. They are the ones who have to leave or they become so jaded and negative they no longer are functioning members of your team. When change happens, it happens. End of story.

Virtually any change breeds opportunity - the key is finding the opportunity and acting on it. Focus on the positive.

3. Wage & Hour lawsuits will become even more prevalent.

Your house needs to be in order before you take action. Labor lawyers are changing their practices to focus solely on wage and hour lawsuits, which are easy to prove and violations are myriad in businesses throughout the United States.

Employees everywhere are reading about the huge sums of money ‘won’ by disgruntled ex-employees filing lawsuits against their employers. The major focus will be on exempt or non-exempt status, meal and break periods and whether an ‘independent contractor’ should properly have been classified as an employee.

Think it can’t happen to you? Or is your excuse that you’ve never had it happen to you before?

All it takes is one employee to talk to an attorney. Ask Wal-Mart, Starbucks, Electronic Arts, and the thousands of small businesses that have paid hundreds of millions of dollars in the past year. If you’re going to terminate or reduce an employee, they’re going to look for a way to get money – especially in a dismal job marketplace.

4. The opportunity is now to do more with less.

If you're maximizing the people you have, you won't need so many people. You can get more done with fewer people. How? By knowing what your people do best. Evaluate your talent. Carefully consider your need for every one of your employees. Most businesses are not maximizing each and every employee they have. There are techniques available to ensure talent maximization. Find your best performers. Decide you can best support you and your efforts both over the next year and the next few years.

5. Businesses that communicate effectively are those who will succeed.

There is fear in the marketplace. Employees are wondering if you’re going to cut staff, perquisites, and their free coffee. They’re wondering what you are doing to sustain your business this year. It is imperative that frequent and clear communication lead the way to your success. Your employees are heavily invested in the success of their business, and they have a right to know what you’re doing. Even saying, “I don’t know” is preferable to not communicating. And you need to do more than put out a memo or company-wide e-mail. Your managers and supervisors must be empowered to candidly talk with their staffs as well. The last thing you need is to lose a great employee simply because they didn’t know what was happening in your business.

Before you consider cuts, survey your employees: What benefits would you cut if we needed to? You will be surprised that the suggestions you get. The things you think employees hold dear are not necessarily the ones they believe are important.

6. Adversity breeds innovation.

Too many businesses over the past several years have become complacent. And that complacency (“we’ve always done it this way”) has failed both businesses and employees. When times become difficult is the exact moment to innovate. I never saw a successful manager who didn't take a calculated risk now and again, or who was not considered an innovator. On the other hand, I've seen many average managers miss becoming great because they were afraid to make a mistake. Great leaders do not avoid or fear trouble: they embrace it.

Put together groups of your employees into focus sessions. Ask them what they would do if they were in your shoes. Encourage participation and never denigrate an idea. At this time – any idea is worthy of exploration.

Your competition will be inert this year. The best way to excel over your competitors is to honestly re-evaluate your business. Solicit the advice of your employees and make no pre-conceived notions of them.

For my book, I developed a list of hallmarks of great managers of people. Several years later, they are even more appropriate for business owners and leaders:

• Vision. They know where they want to go and, equally important - they know how to get there.
• Communication. They are world class communicators.
• Equality. They treat employees the way they want to be treated and they are no more demanding of others than they are of themselves.
• Decisiveness. They can make decisions quickly, are accountable for those decisions but are never so rigid they are wed to those decisions.
• Leadership. People want to work for them. (There's a big difference between liking someone and wanting to work for someone).
• Knowledge. They know their position, their industry and what their employees do better than anyone else.
• Accomplishment. They get things done.
• Style. They are not so entrenched with their professional lives they forget that a quality personal life is the most important thing to most people.
• Commitment. They are committed to the success of their business unit, of the people who work for him, and to the company they work for.
• Temperament. Employees want to work for a person who has a great temperament – someone who isn’t moody or subject to numerous highs and lows, but one who has an understanding that he or she is always on stage, because employees are always looking at their leaders to set high standards of both temperament and judgment.

In 2009, the business owner and leader who has the ability to honestly evaluate talent, performance and make the decisions necessary to sustain the business not just in the short term, but for the long term, is the leader who will be highly successful both this year and beyond.