The Advantage

January 2001

New Affirmative Action Regulations Now Effective

December 13, 2000 was the magic day on which new federal Affirmative Action Regulations became effective. It was memorable for many reasons, not the least of which because it was the first major rewrite of compliance requirements in thirty years.

When the Department of Labor?s Office of Federal Contract Compliance Programs (OFCCP) first published its proposals in May 2000, employers were upset by several of the changes the OFCCP wanted to make. Civil rights groups, on the other hand, generally applauded the changes.

Well, it's all official now. And we want to share with you a summary of the changes you will have to adapt to if you are a federal contractor.

Good News for Employers

Here are a few things employers can be happy with in the new final regulations.

• Workforce Analysis remains as alternative to Organizational Profile: Originally designed to replace the old Workforce Analysis, OFCCP's new Organizational Profile requires contractors to create a graphic organizational chart showing all supervisory positions in the establishment. Of course, the very nature of an organizational chart reflects reporting relationships. For each of the titles on the chart, employers must show:
  • Job title
  • The race and sex of the position's supervisor
  • Total number of employees reporting to the position
  • The number of women by race and the number of men by race in the total employee count

  Software publishers are working hard to modify their AAP development programs to include the new Organizational Profile report. You can look forward to AAPlanner6 from PeopleClick to contain an option for either the current Workforce Analysis report or the new Organizational Profile graphic report. Users will have the opportunity to select which output they wish. It is expected the revised software will be available early in 2001. Until such computer tools have arrived, most contractors will be forced to continue using the existing report in their new AAPs.

  (If you would like to have notification when AAPlanner6 is available, please send us an email message asking to be placed on our notification list.)

• Functional Establishments remain an option: In its initial proposal, OFCCP eliminated the permissibility of functional establishments, insisting that the only acceptable AAPs would be based on street address or geographical establishments.

  Since that position ignored the reality of today's workplace trends, employers complained loudly in their feedback about how the Department of Labor seemed to be out of touch with what is actually happening in the private sector. Suffice it to say, the OFCCP capitulated and employers may choose between geographical and functional establishments.

  There is one caveat, however. The new regulations require the Deputy Assistant Secretary to approve such agreements. It is not clear whether this means "advance" approval, or something else. There is no provision for processing requests that the Deputy Assistant Secretary approve functional establishments. This remains a gray area at the moment, with OFCCP promising to issue more guidelines in the near future.

  Even though OFCCP has agreed to consider functional establishments valid, it has been careful to reserve the right to conduct its compliance evaluations based on a specific location. This is not good news for employers, but rather the opposite.

  Let?s assume that the HiTech Chip Company has a sales and marketing force scattered throughout the U.S. There are only one or two employees in any given city, and many of them work from their homes. There are three primary centers for the company. There is a research and manufacturing facility in San Jose, California, a small warehouse that handles shipping and receiving in Mountain View, California and the company headquarters office in Boston, Massachusetts. Half of the company's workforce is comprised of sales and marketing people and they are not concentrated at any location. How should the AAP establishment be configured? Here are the headcount figures:

  • Headquarters personnel: 23
    
  • Research & Manufacturing personnel: 51
    
  • Warehouse personnel: 4
    
  • Sales & Marketing personnel: 75
    

  If an argument can be made that Research and Manufacturing is managed by a single senior executive, it is likely the OFCCP would argue there should be a separate AAP establishment created for the address where Research and Manufacturing is located. There are over 50 people at that location, after all.

  What about the remaining groups?

  We would suggest the contractor request approval for a functional establishment that would cover all of the remaining people in one AAP. It is easy to create availability data by isolating duplicated job groups by geography. For example, Office & Clerical jobs can be divided into those in the San Francisco Bay Area and those in the Boston area. In that way, local recruiting areas can be identified so proper Census data can be used in computing availability of qualified workforce.

  The Sales and Marketing organization will have to be handled as a national organization in all likelihood. In such situations, it is unusual to find more that one or two people in any recruiting geography. Doing statistical comparisons on fewer than five people is fraught with error potential. So, one combined national job group is probably the answer.

  Those are the realities of today's workplace organizations. It remains to be seen if the OFCCP will actually deliver on their promise to allow reality to drive their approval process. They do seem to be strongly opposed to any business model that deviates from the rust belt version of manufacturing from the early 1920s.

• New 2-Factor Analysis: The old (and some said ?dreaded?) 8-Factor Availability Analysis process has finally seen its last days. Contractors have only used two or three of the factors in weighting their computations anyway, so it makes sense to officially end the charade.

  The two remaining factors are External Sources and Internal Sources. In reality there may be three or four or five sources that must be weighted into the final availability computation. So, "2-Factor Analysis" is a bit of a misnomer. The new regulations tell us we must consider employees who are trainable as well as those who are qualified now. That requirement is an easing of the original proposal that demanded contractors include demographic data for employees who could be trained for jobs in any given job group. Again, good news for employers.

• Job Group Definition: There is a specific provision for small employers (those with 50 to 150 employees) that permits use of EEO-1 categories as job groups.

Bad News for Employers

As it turns out, there are only a small number of issues employers will see as negative in the new regulations.

• Equal Opportunity Survey: This is a BIG problem for employers, for all of the reasons we have been telling our clients and subscribers about for the past nine months. It has now been "codified" and to be changed we must go through the same long process of rule-making that brought us to this point.

  OFCCP ignored every negative comment made about the EO Survey. While most of those negative comments came from employers, the agency has made it very clear that it intends to do what it wants regardless of the value or cost.

  There is even a "poison pill" in the new regulation that prohibits future OFCCP directors from changing the current EO Survey without meeting a test that was ignored in the creation of the new regulations. Specifically, any changes to data elements in the EO Survey can be made only after the Secretary of Labor has clearly "demonstrate(d) through statistical analyses of EO Survey submissions that the data element in question is no longer of value."

  Why the big fuss? Two reasons: Contractors will have to spend thousands of hours generating information on employee compensation, recombining it into the format desired by the EO Survey. Secondly, contractors have no use for the data in that format and will not use it in their compensation management program, and the OFCCP will be attempting to analyze consolidated data that is not representative of how contractors actually pay their employees. Other than that, this is a fine document.

  We suspect this issue of the EO Survey will only be resolved in the courts. OFCCP has already received permission from the Office of Management and Budget to send out 50,000 copies of the EO Survey in addition to the 7,000 they used as a "test run" earlier in 2000. Response is mandatory. The new regulations require contractors to complete a new EO Survey every other year.

  For a complete copy of the new regulations in PDF format, go to HR Web Store - What's New.

  And, remember, when you need help with your Affirmative Action Plan preparation, call us. We are the experts.

William H. Truesdell is president of The Management Advantage, Inc. He can be reached at billt@hrwebstore.com .

Management of Employee Conflict

With increased use of technology there has also been an increase in the differences among people. There is difference of thoughts and ideas. In short there are 'conflicts' among people.

'Conflict', has got all the possible negative meanings tagged with it. The very thought of it creates a fear among individuals. People try to avoid it. There is belief that a strong relation is made up of harmony and peace and relations are maintained by avoiding conflicts. So very unrealistic. Organizations are full of people. People have different priorities and work style, are different and unique, yet are dependent on one another to fulfill their goals and needs. The more people depend on one another, the more reason for conflicts.

So let us agree that conflicts cannot be eliminated. In fact, you should not even try to eliminate them. Why? Because conflicts can also be opportunities in work clothes. They:

• are critical for creative thinking and innovative ideas.
• are essential for organizational learning.
• lead to self-awareness and better understanding of others.
• bring out certain loopholes in the organization.
• act as signals showing that action is needed.
• shows us the importance of a relation.
• keeps us on an alert about the surrounding.

Managing organizational conflicts in a constructive way requires a Dispute Resolving Structure (DRS).

Conflict in the organizational context is an expression of dissatisfaction or disagreement. The reason for this may be disagreement on content of a performance appraisal, wrong communication, competing goals or differing objectives. Managing conflict requires timely action. If conflicts are unattended, they lead to major problems. Delays may results in a "volcanic eruption." With staff strength of seven hundred plus, in my experience as a manager cum counselor, I have found that "perception" is often the actual cause of dispute. There is a difference in the way disputants view or think about the source of conflict. They look at the same scene and they see different views.

When conflicts are not handled properly they can lead to any one or all of the following:

• People feel that their concerns are going unheard. This reduces their work drive.
• Individuals can be distracted from performing their duties and results in lower productivity and poor quality.
• Poor handling of conflicts leads employees to think that there is no one to hear their problems, care for them, and that they are mere commodities for the organization. Job depression follows.
• Poorly handled conflicts get buried for a while only to return with double force. Anger is elevated. This gives rise to added conflicts, even in trivial matters.

When you take timely action to resolve the conflict you demonstrate to the employees that you care. There is no one best method to solve all problems. Normally conflicts are resolved in one of two ways:

• USE OF AUTHORITY - used in authoritarian / dictatorial management. What it leads to is win / lose situation.
• RESOLVING THROUGH NEGOTIATIONS - conflicts are resolved by compromise. While better than the earlier way of resolving, still cannot be termed as best solution. You win some and you lose some.

This is where I put DRS back into picture. It offers structure to the problem-solving process. It requires someone to be a mediator in the truest sense of the word. Successful mediators allow the issue to be resolved by the disputants.

CONDUCTING A DISPUTE RESOLUTION SESSION

1. Do some groundwork: This is the basic and necessary step to conflict resolution. Do not jump into the matter prematurely. Remember timing is important. Acting too soon is as bad as not acting at all. Your major task is to gather information on the nature and scope of the problem. At this step the disputants may or may not be involved. Get all the facts and figures so you can access them easily in the future.
2. Bring the disputants head to head: Most of the supervisors separate the disputants. Apart, there can be no angry breakouts and verbal battles. But this can also act as an obstacle. The disputants may feel that you are biased in your decision if you don't agree with them. It's also time consuming and confusing. By bringing the disputants together and talking to them, the disputants can become clear about their desired outcomes. It can all happen in a single joint meeting.
3. Take charge: When the disputants are brought face to face for conflict resolution, maintaining control becomes of utmost importance. It definitely requires the right skill to have control over the situation.. Mediators are seen as having authority over the process. That perception can give you a high degree of control, without having to exercise blatant authority. What it requires is firmness. Let the disputants talk to you directly, one at a time. Use your body gestures to maintain peace and control.
4. Talk less, Listen more: Your aim should be to enable the disputants to come out with their views on the problem. This means 80% of the talking should be done by the disputants. You have to be a good listener. By your actions the disputants should feel that you are interested in listening to them and are making a sincere effort to understand their viewpoints. In this way you can encourage the disputants to vent their feelings.
5. Probe: Probe means to search or investigate. This is to be done by asking open-ended questions. These questions begin with 'what', 'why', 'when', 'how', 'where', 'why.' These questions cannot be answered by a mere yes or no. Avoid closed ended questions, particularly leading questions, which are easily answered by a mere yes or no. It leads the disputant to the answer what you have in mind. For example, a closed ended question: "Did he embarrass you in front of your colleagues?" An open ended question: "What did he do?"
6. Keep to the topic: It's very easy for the disputants to wander from the current topic. They start to talk about incidents that took place in the past which are not related to the matter under discussion. You have to assure that the disputants talk only on the current topic. Let the disputants talk only about their own viewpoints and not of what has been heard or said to them by others.

As a mediator you should be able to finely observe the disputant's body language or gestures. If the disputant:

• Does not look directly into your eyes -- he is likely hiding certain facts, is dishonest or shy.
• Crosses arms - might indicate disagreement or defensiveness.
• Shaking a fist - he might be in anger or opposition.
• Rapid eye blinking - he might be deceiving.
• Rubbing his hands together - he might be showing his eagerness.
• Hands completely in the pocket or does constant fidgeting -- he might be displaying a feeling of insecurity.
• Tightens his jaws or rubs the back of his neck -- he might be frustrated
• Hands in the pocket with thumb out -- he might be confidant
• Focuses his eyes directly on the speaker -- he might be a careful and interested listener.
• Smiles excessively -- he might be dishonest and eager.

Conflicts are to be expected in every organization. They cannot be eliminated. But they can be properly managed. This can be done easily if you:

1. Give a good hearing to your employees.
2. Monitor their work at regular intervals.
3. Encourage employees to talk with you about issues that trouble them.
4. Have regular meetings to discuss their complaints.
5. Provide a suggestion system.
6. Make them feel they have a say in organizational management.
7. Keep them informed about the changes in policies.
8. Maintain a healthy and family-like work atmosphere.
9. Give them emotional security by showing that they are cared for.
10. Allow them to vent their feelings in a calm manner.

So, next time when trying to solve a conflict, be a good listener and observer. Get into the role of a mediator, not a conflict re-solver who takes all responsibilities. Change your attitude towards conflict. Take it as a challenge that can improve employee relations and work atmosphere.

Payal A. Malkani is an HR consultant with Pearl Consultancy. The views expressed here are his and do not necessarily reflect the views of The Management Advantage, Inc. He can be reached at pearlconsult@usa.net.

First Quarter Diversity Planning

With many cultures and religions represented in our workforce these days, it is sometimes helpful to have a reminder about the celebrations that are important to people with backgrounds different from our own.

Following is a list of some dates you may find helpful in working with your employees to recognize important dates in their lives.

January 2001

• 1 - New Year's Day: Based on the solar calendar established by Pope Gregory XIII in 1582. A holiday in most countries.
• 1 - Emancipation Proclamation: Anniversary of proclamation issued by President Abraham Lincoln in 1863 freeing all slaves in territories of the Confederacy.
• 4 - Louis Braille: Honors the French educator (1809-1852) who invented the six-dot writing system for blind students in 1829.
• 5 - George Washington Carver: Anniversary of his death in 1943. An African American scientist who developed hundreds of new uses for common agricultural products and served as director of the department of agricultural research at Tuskegee Institute in Alabama from 1896.
• 5 - Guru Gobind Singh Ji's Birthday: Celebrates the birth of the Sikhs' tenth great master and teacher under the Gregorian calendar.
• 6 - Christmas: Armenian Apostolic Church, as part of the Orthodox Christian movement, celebrate Christmas according to a non-Gregorian calendar.
• 7 - Christmas: Coptic Orthodox Christians and Eastern Orthodox Christians celebrate according to the Julian calendar.
• 8 - Coming of Age Day (Seijin No Hi): Public Japanese holiday celebrating the coming of age of everyone who turned 20 in the past year.
• 11 - National Unity Day: Celebrates creation of a unified Nepal by King Prithvinarayan Shah (1723-1775).
• 14 - New Year: Eastern Orthodox Christian observance under the Julian calendar.
• 15 - Martin Luther King Jr.: National holiday in U.S. honoring the birth of this civil rights leader.
• 24 - Chinese New Year: Beginning of a three-day celebration of the Chinese New Year. Begins the year 4699, the year of the Snake. A day when all business accounts are settled and grudges forgotten. Traditional Chinese celebrate New Year's Day as a birthday and count themselves one year older.
• 24 - Korean New Year: Begins the traditional Korean New Year 4334, celebrated for two days.
• 24 - Tibetan New Year: Beginning of lunar year 2128.
• 24 - Vietnamese New Year: Most important holiday in Vietnam.
• 26 - Australia Day: Anniversary of the arrival of the first British prisoners in 1788.
• 26 - Republic Day in India: Celebrates the anniversary of independence from Great Britain in 1950.
• 30 - Osceola Day: Anniversary of the death of Osceola, American Indian (Seminole) who lead resistance against the U.S. government's seizing of their ancestral lands.

February 2001 African American History Month

• 2 - Treaty of Guadalupe Hidalgo in 1848: Anniversary of the treaty that ended the Mexican War with the U.S. and converted to U.S. control the areas represented by the current states of Texas, Arizona, California, Utah and parts of New Mexico, Colorado and Wyoming.
• 5 - Constitution Day: Mexican celebration of the first constitution in 1917.
• 7 - Lantern Festival in China: Celebrates the end of the New Year season.
• 8 - Constitution Day in the Philippines: Commemorates the adoption of the Constitution of the Philippines in 1935.
• 11 - National Foundation Day: Japanese holiday celebrating the ascension to the throne of the first Emperor, Jimmu.
• 14 - Valentine's Day: Traditional day of remembering loved ones.
• 19 - Japanese internment (1942): Anniversary of the executive order of President Franklin D. Roosevelt that resulted in the internment of 120,000 people, including 71,000 U.S. citizens.
• 19 - Presidents Day: U.S. national holiday honoring the birthdays of Presidents George Washington and Abraham Lincoln.
• 25 - National Day in Kuwait: Marks the successful expulsion of Iraqi troops from Kuwait during the Gulf War in 1991.
• 26 - Beginning of Lent: Beginning of Lent in the Eastern Orthodox Christian religion based on the Julian Calendar.
• 27 - Independence Day in the Dominican Republic: Commemorates victory over the Haitians in 1844.
• 27 - Mardi Gras: Shrove Tuesday celebrated by Christians as the final midwinter fling before Lent begins.
• 28 - Ash Wednesday: Beginning of Lent for Christians, a 40-day period of prayer and fasting preceding Easter Sunday.

March 2001 National Women's History Month

• 3 - Doll Festival in Japan: Hina Matsuri is one of the major social festivals in traditional Japan.
• 3 - National Day in Morocco: Marks the 1915 independence of Morocco from France and Spain.
• 5 - The Feast of Sacrifice: Islam?s Eid al-Adha. This religious observance commemorates the story of Abraham and Ishmail as told in the Qur'an.
• 6 - Independence Day in Ghana: Celebrates independence from British rule in 1957.
• 8 - Holi: Two-day Hindu celebration for the coming of spring throughout India.
• 8 - International Women's Day: Celebration of women?s lives and work.
• 9 - Feast of Lots: Jewish Purim holiday celebrating the rescue of the ancient Persian Jews from the plot to destroy them.
• 17 - St. Patrick's Day in Ireland: Celebrated by Irish as national pride, it originated on the death of St. Patrick in 493 A.D.
• 19 - Feast of St. Joseph: Roman Catholic feast day honoring St. Joseph, the husband of Mary.
• 20 - Independence Day in Tunisia: Commemorates the treaty of March 20, 1956, when France recognized Tunisia as a sovereign nation.
• 20 - Vernal Equinox Day in Japan: Shumbun No Hi celebrates the beginning of spring as a public holiday.
• 21 - Human Rights Day in South Africa: Commemorates those Blacks who were killed at Sharpeville in 1960 and those who lost their lives in the struggle against apartheid.
• 23 - Republic Day in Pakistan: Anniversary of 1940 adoption of resolution calling for a separate Muslim homeland. On this day in 1956, Pakistan declared itself a republic.
• 25 - Independence Day in Greece: Anniversary of the first uprising for Greek independence from Turkey in 1821.
• 26 - Islam New Year: Muharram, the beginning of the year 1422 based on the Islamic lunar calendar for Muslims.
• 30 - Cesar Chavez Day: California holiday honoring the labor leader and civil rights activist.

HR Requirements for Privacy in the EU

The European Commission's Directive on Data Privacy went into effect in October, 1998, and would prohibit the transfer of personal data to non-European Union nations that do not meet the European "adequacy" standard for privacy protection. While the United States and the European Union share the goal of enhancing privacy protection for their citizens, the United States takes a different approach to privacy from that taken by the European Union. The U.S. relies on a mix of legislation, regulation, and self-regulation. The EU relies on comprehensive legislation, government protection agencies and data base registration.

Any U.S. company wishing to conduct business in one of the EU countries, with staff members in Europe, must provide for meeting these privacy requirements or face financial and criminal penalties.

To help U.S. companies meet these requirements, the U.S. Department of Commerce in consultation with the European Commission developed a "safe harbor" framework. The safe harbor, approved by the EU this year, is an important way for U.S. companies to avoid experiencing interruptions in their business dealings with the EU or facing prosecution by European authorities under European privacy laws. Certifying to the safe harbor will assure that EU organizations know that your company provides ?adequate? privacy protection, as defined by the Directive.

In order to certify, a company must comply with all seven of the following principles:

1. Notice: Organizations must notify individuals about the purposes for which they collect and use information about them. They must provide information about how individuals can contact the organization with any inquiries or complaints, the types of third parties to which it discloses the information and the choices and means the organization offers for limiting its use and disclosure.
2. Choice: Organizations must give individuals the opportunity to choose (opt out) whether their personal information will be disclosed to a third party or used for a purpose incompatible with the purpose for which it was originally collected or subsequently authorized by the individual. Some requirements exist for opt in authorization.
3. Onward Transfer: (Transfers to Third Parties) To disclose information to a third party, organizations must apply the notice and choice principles. Where an organization wishes to transfer information to a third party that is acting as an agent, it may do so if it makes sure the third party subscribes to the safe harbor principles or is subject to the Directive or another adequacy finding.
4. Access: Individuals must have access to personal information about them that an organization holds and be able to correct, amend, or delete that information where it is inaccurate, except where the burden or expense of providing access would be disproportionate to the risks to the individual's privacy in the case in question, or where the rights of persons other than the individual would be violated.
5. Security: Organizations must take reasonable precautions to protect personal information from loss, misuse and unauthorized access, disclosure, alteration and destruction.
6. Data Integrity: Personal information must be relevant for the purposes for which it is to be used. An organization should take reasonable steps to ensure that data is reliable for its intended use, accurate, complete, and current.
7. Enforcement: In order to ensure compliance with the safe harbor principles, there must be (a) readily available and affordable independent recourse mechanisms so that each individual's complaints and disputes can be investigated and resolved and damages awarded where the applicable law or private sector initiatives so provide; (b) procedures for verifying that the commitments companies make to adhere to the safe harbor principles have been implemented; and (c) obligations to remedy problems arising out of a failure to comply with the principles. Sanctions must be sufficiently rigorous to ensure compliance by the organization. Organizations that fail to provide annual self-certification letters will no longer appear in the list of participants and safe harbor benefits will no longer be assured. (Bold emphasis added.)

Why is all this important to U.S. companies anyway?

Well, let's say you have employees stationed in one or more of the EU countries. You actively sell your products and/or services to customers in EU countries. In each instance, you will be collecting information about the employees and customers that will be subject to control under these EU laws. If you ever wish to move that information out of the EU you must be able to demonstrate you are complying with the safe harbor principles. If you report about race/sex representation of your workforce, or review performance appraisals in the U.S., you will find yourself subject to these rules. Including your ex-patriot employees in EEO-1 forms is only one. There are countless ways you can become obligated to abide by the safe harbor principles.

Where can we learn more and get some help?

The U.S. Department of Commerce, the Federal Trade Commission and the U.S. Department of Transportation are all involved in helping U.S. companies certify under the safe harbor principles. They also have authority to enforce compliance once a company enters the process. They can bring penalties to bear right here in the U.S. for those folks who play fast and lose with the rules.

To learn more about the safe harbor program, visit the U.S. Department of Commerce at: http://www.ita.doc.gov/KPIFrameset.html .

A Gentle Word on Behalf of Our Business

When you need help developing your affirmative action program, give us a call. We specialize in AAP development, implementation training and compliance review support for clients all over the country. Find out more about our AAP development service by looking at our sample agreement and other information. You will find it all at http://www.management-advantage.com.

You wouldn't go to an IRS audit alone. Why think about going into a Department of Labor compliance review without professional support? The stakes are just as high either way.

We are ready to give you the support you need.

And while you're at it, think about ordering a copy of our reference and training book on preparing affirmative action plans and managing compliance reviews. You will find it an invaluable resource at a price that just can't be beat.

Secrets of Affirmative Action Compliance, 4th edition, contains over 500 pages of the latest and current regulation requirements and practical suggestions for your organization. Includes new Federal Regulations. $99.95 plus $7. shipping/handling and CA sales tax for CA destinations. Credit Card Orders ... Call Toll Free:

We can help with your other human resource management needs as well. Think of us the next time you need:

• Employee Handbooks
• Management Training in Compliance Issues
• Affirmative Action Plan Development
• Affirmative Action Statistical Analysis
• Disparate Impact Testing for New Hires, Promotions, Transfers, Terminations
• Expert Witness
• Books, Software or Other Support Materials for HR Professionals

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