Man’s Inhumanity Towards Man: Shifting the Leadership and Customer Service Paradigm

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Recently, I was asked, “What does customer service mean to you?” The question continues to reverberate in my mind. Drawing upon several recent experiences, let’s discuss why customer service continues to be useless, debilitating, and demeaning. Finally, let’s imagine a way forward, a new paradigm for understanding the relationship between people as human beings, customers, and employees, who all deserve the best customer experience we, the professional customer-facers, can provide.

For the record, my wife considers the first example a genuine customer service success and remains a pleased customer. Since the first example concerns both of us, I see the customer service provided as a fail and will explain in greater detail below. According to my wife, this example is a win because of the treatment and ease of concluding her part in the customer service example. This separation of beliefs highlights another reason why voice-of-the-customer surveys (VoC) should not be a knowledge performance indicator (KPI) for service professionals. Service delivery is ambiguous, and as the disconnection between my wife and I represents, service value is in the eye of the beholder.

The first example begins with Amazon.com. The end user received their order for a product (the customer was served), which also contained two items not requested, not ordered, and not paid for (an additional hassle for the customer). The customer service department, at Amazon.com, was consulted and the agent informed the customer, “Since the cost to return the products did not justify shipping the products back to Amazon, the customer could keep the products” with Amazon’s blessing. This is not a good customer service experience for several reasons:

  1. The customer now has to dispose of new products not needed or wanted.
  2. The only justification for not returning the products was the cost, e.g. inconvenience, to Amazon.
  3. The underlying problem, receiving parts not requested, did not come with a solution that served the customer; nor, did the option to keep the parts improve the customer experience.

While the customer-facing agent was kind, considerate, and per the company guidelines acting in all good faith to the customer, in the interests of the company the customer was not served even though a solution was generated and the customer went away. Consider the person who was supposed to receive these parts. They will have to call and either receive a bill credit or the parts need to be shipped, thus delaying the other customer as well as not serving that customer by respecting their time, resources, and honoring the customer’s commitment to using the retailer Amazon.com. With both customers not being served, how can Amazon.com, or any business organization, dare refer to these customer interactions as “service.”

Regarding the next two examples, I am purposefully vague about the entities committing the customer “dis-service” at this moment, for a reason. I do not want distractions, e.g. reader bias, to interrupt or interfere with the focus upon the incidents by naming the organizations. The second example comes from an infamously poor government office that has a reputation for providing poor service to their customer base. The third example comes from a truly infamous retailer who is already struggling but generally has much better customer interactions. The second and third examples’ names will be provided later in this article.

While dealing with a large government entity, both in person and over the phone, three separate and divergent answers to the same problem were received over the period of five different opportunities to assist the customer. By stating this experience happened with a government entity, many people already are presuming the experience was bad. It was, and this is an acceptable and reasonable policy for bureaucrats to exemplify. I disagree most heartily that any government office can produce poor customer interactions and skate by blithely. Since all governments cannot operate without forced taxation, the government entity should be providing better, not worse, customer interactions than those found in the private sector and the need to hold the government to a higher standard is sorely lacking. More to the point, the original problem remains unresolved more than 15-days after the problem was promised a solution within 5-business days. What amazes me the most in this affair is the nonchalance, non-interest, and forthright noncommittal that government employees are allowed, nay encouraged, to get away with in customer interactions with those same taxpayers, who both need help and pay the taxes to keep the government employee employed.

Third, a recent example occurred during this now past holiday season; a customer approached a company representative for directions; the company representative did not have any pressing duties to occupy his/her time and can leave his/her assigned post to aid customers in improving the customer experience. I know this, as I checked with the manager and witnessed the customer service provider playing on a cell phone moments before being asked a question. The company representative gave a broad hand, and arm gestures yelled at the customer and appeared in all appearances to be inconvenienced by the customer’s request for directions. The company’s policy states the company representative is to walk the customer directly to their desired destination and await the customer’s pleasure to return to their original post as the only method to handle this type of service request. When this was brought to the manager’s attention, the manager acted shocked in front of the customer raising the complaint, and then took no action, as the additional action was deemed “not warranted” per the manager’s murmured comments to other employee’s in the vicinity. More to the point, the manager took the opportunity to bad mouth the customer raising the complaint and presented the complaint to other employees, who “snickered” at the language the manager used to describe those making complaints, while falsely thinking the customer who is raising the concerns was not paying attention.

Finally, a recent example from a major fast food franchise, while Burger King as a corporation should not be held accountable for the work the franchise performed, the customer service example remains priceless in showcasing the uselessness of serving the customer and the need for training customer interaction professionals. While using coupons, the customer became confused in the “legal print, ” and the order took longer to place and pay for than normal. The cashier at this point does three things: 1. Assumes the confused customer cannot hear; 2. Bad mouth the confused customer to the next three customers who were waiting patiently; and 3. Blames the customer for taking too long to order their food. Later, the cashier approached the confused customer, blamed the incident on him, offered a faux apology, and walked off muttering about stupid customers not understanding the reality of fast food restaurants.

In the third example, do not be distracted by the poor leadership being presented by the manager. Focus instead on the customer interactions: two different customer experiences, both deemed “acceptable customer service” by the powers that control the experiences. Neither customer was served nor was the problems solved. The first customer found a more helpful company representative who followed the company policy, and the second customer interaction with the manager only strengthened the customer’s resolve to continue to avoid the retailer. Two opportunities to grow a new relationship, enhance a new paradigm upon the customer, and promote goodwill and loyalty with the local customer base were missed. Customer interactions can and should be held to a higher standard, and the following defines my position that focusing solely on customer service is useless along with steps to improve.

Focusing solely on “serving the customer” is useless as all the customer receives is a meeting of their stated needs. In the third example, the customer received directions; thus, the customer’s need was met, and service was provided. In the first and second examples, the customer needed information and a plan of action to overcome the situation experienced. Even if the work resulted in the customer needing to take more action, the customer was “technically” served. In the fourth example, the confused customer received his food, was able to use a coupon, and was thus “served.” Is it apparent that merely serving the customer is useless?

The service to the customer, while technically meeting the customer’s needs, remains not just poor but pointless; all because the focus of the organization is honed to simply provide “service” or meet the customer’s stated need at the lowest cost, the fastest interaction, and the least amount of effort for the company and those employed to provide customer service. Sometimes all that is wanted by the customer is to resolve the problem quickly and efficiently and courteously and move forward with their lives. This is yet another reason why freedom is needed in customer interactions to serve as needed for each customer making contact. Customer facing professionals deserve better from their leadership than simply “providing service to customers.” Customer facing professionals need leadership, guidance, and freedom to develop the rapport necessary to shine their personal, professional pride into the customer interaction, all with the intent of not merely “serving a customer’s needs,” but providing opportunities for the customer to be motivated to brag about their unique customer experience.

In practice, the following steps should be the underlying governing principles to move from service to professional pride.

  1. No matter the method for customer interaction, make the time to show genuine interest in the customer. This will require making conversation, employing reflective listening techniques to ensure mutual understanding of the customer’s position, and representing the company with professional pride. For the customer-facing employees to show pride in the company the company leaders need to ensure the “What” and the “Why” is known to the employees’ so the employee can exemplify the “What” and the “Why” to customers. Leadership is key to communicating with a purpose and promoting the spirit of reflective listening in an organization. Make the connection of mutual understanding and most of the customer problems shrink in size.
    1. Active listening is good, but it doesn’t make the grade anymore.
    2. Reflective listening is all about making sure mutual understanding has been achieved.
    3. Mutual understanding provides one interaction resolution, goes beyond simple servicing needs, and displays the pride and professionalism of the company’s commitment to customer interactions.
    4. Reflective listening can be employed in voice, email, instant message, and face-to-face customer interactions and reflects an easily attained step up from only actively listening.
  2. Promote the customer experience by not differentiating between external and internal customers, treat them all as valuable customers deserving attention, focus, eye contact, and validation that their concern is justified and worthy of attention. Act in a manner that the customer deserves the best, and the spirit of customer interactions will infuse all the customers with a commonality of desire, hope, and professionalism. As a customer interaction professional, how much better do you offer superior interactions with customers when you, receive excellent customer interactions from the company you spend time representing?
  3. Remember to make the human connection in human interactions. Using reflective listening, focus on the clues, the body language, the tone of voice, and acknowledge these communication streams through competent action. For example, if the customer is perceived as stressed and is speaking in a clipped and hurried manner, respond kindly, but through accurate and speedy action acknowledging the customer’s stress and meeting the customer’s need by respecting their time. Human interactions are improved through human connections that reflect respect and that embody this principle in every human interaction, and the customer-facing employee becomes a customer’s hero. Using the information above, are we not all customer-facing employees; yes, we certainly are!
  4. Freedom to think and act in the interest of the customer, based upon sound critical thinking skills, is exemplified at the time of the interaction without second-guessing after the interaction. This happens more often in call centers, but every customer-facing employee has had this occur to them. At the moment, the decision appeared the best course of action, but after the interaction/interference of a manager or a quality assurance (QA) employee has second-guessed and provided “advice” that does not provide value to future customer interactions, doubt is planted removing confidence in acting appropriately in the future. Does this mean allowing poor judgment to survive? Absolutely not; it does mean that the “advice” needs to model and reflect value for future decisions, not cast aspersions upon the previous decisions.
  5. SMART Training. Everyone knows the axiom for SMART Goals; training should also embody the principles of and reflect SMART, “Specific, Measurable, Applicable, Realistic, and Timely.” If the training does not meet SMART levels, the training is not valuable to the persons receiving the training. Make the training SMART, and the potential for improving professionalism in customer interactions grows exponentially.
  6. Never stop learning, never stop reaching, and never stop growing. How often does training cease for employees after the new hire training concludes? How is a new employee supposed to meet the demands of a constantly changing customer population without ongoing training? More specifically, should managers, team leaders, directors, VP’s, and the C-Level leaders also continue to learn and receive training in their positions, roles, and company? If the front-line customer-facing employees need constant refresher training, then every customer-facing employee needs constant refresher training that meets the SMART training guidelines and provides value to the individual using that training.
  7. Stop wasting resources on unproductive goals, e.g., serving customers with excellence. Serving customers, even with “excellence,” remains a useless and wasteful activity; eradicate the term “customer service” from the company vernacular and memory. Begin by realizing the opportunity provided in customer interactions to grow the business, supporting customer interactions through reflective listening where mutual understanding is the goal, and by acting upon the mutual understanding achieved.

We, the professional customer-facing providers, can and should be able to onboard these principles and lead the eradication efforts to remove customer service from our focus and professional labels. The importance of not serving the customer, but elevating the customer interaction, cannot be understated. The customer experience needs to be elevated with reflective listening and prompt action to mutual understanding and a sense of mutual growth as partners in using the company’s products and services. The customer is too important to continue to waste resources only to serve. Make the opportunity to deliver and elevate, and the bottom-line will take care of itself abundantly. The organization in the second example is the Department of Veteran Affairs. The organization in the third example is Target.

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© 2017 M. Dave Salisbury
All Rights Reserved – Image Copyrights used under Fair Use and are not included in the authors copyrighted materials.  AZ Quotes retains image copyrights.

Leadership is Teaching: The Corporate Training Paradox

Training in Corporate America is at a crossroads; due to the pressures of training adults who have been failed by public education (Badke, 2009), the costs of training are skyrocketing, even as technology investments are paying huge dividends. Informational illiteracy is hampering training initiatives, slowing productivity, and decreasing returns on human capital development. Not knowing how to find data, use data, and evaluate data, is frustrating the learning processes and is hidden from view in our current corporate societies. This paper is going to briefly discuss the parameters of the problem and outline a simple solution.

Leadership Means Teaching

Every organization has a problem similar to this scenario. Employee A has been through corporate training for their job. They complete their job with very little supervision and are known as resident subject matter experts. Employee B has also completed corporate training and has tasks similar to Employee A, but Employee B uses Employee A for answers to all questions and concerns while performing their daily tasks. Employee B and A have both received the same training, have access to the same sources for information, but what is the difference and why the disparity. The disparity is found in information literacy and can be answered with a simple question: “Is Employee B informationally literate and comfortable using the resources provided?” Why the disparity if the answer is yes? If the answer is no, what training program is capable or available for teaching information literacy? If Employee A and B have been employed for the same amount of time, the productivity lost by both employees has burned through tremendous amounts of potential money or ‘blue money’ and the organization is not seeing a return on investment (ROI) for either employee.

Information Literacy, as defined by Plattsburgh State University of New York (P-SUNY), Plattsburgh State Information and Computer Literacy Task Force, (2001), is “… the ability to recognize the extent and nature of an information need, then to locate, evaluate, and effectively use the needed information (Heller-Ross, 2012, Para 1).” As the supervisor, team leader, organizational leadership, evaluating sources and training others are inseparably connected to ROI and human capital development. The problem is many people are missing these skills, and corporate training is not covering how to adapt to the knowledge dearth.

Russell (2009) proclaims that even at the secondary school level it is to late to teach this skill set, except corporate training has never even addressed the problem and the same age as entrance into college is the same age as new hires in corporate entry-level positions. While Russell claims this skill set must be taught in lower grade educational settings, this does not address the current educational lack. If P-SUNY is correct that this skill set is “needed information,” and Ms. Russell is also correct that by the time the individual reaches college age it is too late to teach this skill set, where and how does corporate training meet the needs of the organization to train employees on information literacy?

The current corporate culture is defined by Myron Tribus (2008) as a “Knowing Society.” This means it is not acceptable to not know something or the person caught not being fully informed is perceived as less than useful and will be terminated. Tribus talks about changing into a “Learning Society” where it is acceptable and encouraged to not know everything and ask questions. This ‘learning society’ would foster training as a leadership function, and the solution for information illiteracy would be to train with supervisors instead of resident knowledge experts. Burpitt (2009) talks about this occurrence as exploiting the effectiveness of transformational leadership, or as Tribus puts it, “… [Leaders] must practice what they preach. ‘Don’t say “follow me, I ‘m behind you all the way.” It makes everyone go in circles’ (Tribus, 2008, pg 3).”

Corporate Training Requires Knowing

            Badke (2009) mentions three steps to begin visualizing the problem and through visualizing the problem, individual solutions reach achievability. These steps are “1. Rethink everything, 2. Stop making informational literacy remedial, and 3. Conquer the blindness (Badke, 2009, pg 49).” Instead of re-inventing the wheel, Turusheva (2009) has provided a framework to utilize. The framework rests inside the already developed and tested ‘Information Literacy Competency Standards for Higher Education’ published by the Association of College and Research Libraries (ACRL). These standards can form a basic test for corporate trainers to deliver. If an employee meets the proficient level, they do not need more formal information literacy training, although they can take a course if the space is available and the needs of the company dictate. If the employee does not meet the proficient level, organize these employees into a class and offer official training in informational literacy. The ACRL standards include efficiency and effectiveness in finding data and then using that data, thus making these standards applicable for corporate organizations to incorporate into their training regimes. Since data use contains legal, ethical, and social dimensions, the ACRL includes this as a standard, thus adding a level of protection to the corporation when many employees have Internet access for company business. Corporate training requires knowing how to address problems, seeing deficiencies, and meeting those deficiencies with sound training and inspiring learners to learn the needed skills to be successful.

Conclusion

            The ideas outlined above should not be considered remedial, in “rethinking everything” and “conquering the blindness (Badke, 2009, pg 49).” The number one factor must be stressed; this is a needed skill set for the position. Stress the need for the corporate society to always be one where being willing to learn is honored and not knowing means a learning opportunity. Informational illiteracy is almost as bad as illiteracy or not knowing how to read. If a person cannot evaluate data in our current technological society, that person is handicapped and the restrictions have been placed upon that person by their education. An employee who knows how to think, find answers, and solve problems is an employee like Employee A from the scenario and one that needs to be incentivized to remain employed. Knowing how to find data, evaluate that data, and then apply that data is a skill set which can be taught, learned, and fostered in an organization which values their employees.

References

Badke, W. (2009, Jul/Aug). How we failed the NET generation. Online, 47-49.

Burpitt, W. (2009). Exploration versus exploitation: Leadership and the paradox of administration. Institute of Behavioral and Applied Management, 227 – 245.

Heller-Ross, H. (2012). Information literacy: a critical skill and a strategic commitment. Retrieved from http://www.plattsburgh.edu/library/instruction/informationliteracydefinition.php

Russell, P. (2009). Why universities need information literacy now more than ever. Feliciter, 55(3), 92-94.

Tribus, M. (2008). Changing the Corporate Culture Some Rules and Tools. Retrieved March 16, 2009 from: Changing the Corporate Culture Some Rules and Tools Web site: http://deming.eng.clemson.edu/den/change_cult.pdf

Turusheva, L. (2009). Students’ information competence and its importance for life-long education. Problems of Education in the 21st Century, 12, 126-132.

© 2015 M. Dave Salisbury

All Rights Reserved

Collective Leadership Practices – Understanding The Leadership Dillemma

Please note:  The following was posted at UoPX as an assignment.  While written for an academic audience, this is information many business leaders need right now.  Future business leaders need to understand the core principles to shift out of this academic view of leadership and into a functional and practical role.

The following article will, quite frankly, not be popular.  Many in the “leadership author” business hold the principles of ‘Collective Leadership’ as a guiding star, when quite frankly the practice is anything but practical and everything but useful.  The entire Hickman (2010) article [Ch 18] quoting Allen et al., reads like the Communist Manifesto by Mark and Engels (2013). Including balderdash, academic nuance, and hyperbole wrapped in a shiny wrapper and presenting a chimerical and illusory outlook without any type of practical substance.  Yet, those espousing ‘collective leadership’ refuse to understand the core doctrine and recognize it was wrong.

Nowhere in the entire article are the principles of responsibility and accountability mentioned, discussed, or broached. Yet Robinson (1999) makes clear the principles of accountability and responsibility must be honored and, from a bottom-up perspective, the front-line employees need to know who is ultimately in charge, responsible, and will be held accountable. A committee shirks responsibility and accountability, thus collective leadership never works.  Consider ENRON, WorldComm, or Solyndra, all of these fantastic failures were caused by committees shirking responsibility, accountability, and this led to fraud, criminal actions, and a workforce in confusion. While facilitating learning and fostering growth are good, they cannot be honored fully without the principles of individual freedom and agency, both of these principles cannot be employed unless accountability and responsibility are honored. Preservation of nature and caring communities remain idealistic and utopian, both are not principles that provide bottom-line performance, the primary role of the senior management team.

Courage, integrity, and authenticity are all excellent attributes to possess, but alone they cannot and should not be a solution. The reason is simple; these are actions, principles, and ideals to be worked towards. But they can never work in a vacuum. Rao (2013) discusses ‘Soft Leadership’ and touches lightly upon people needing others like them to combine to live, elevate, challenge, and change. Kuczmarski (1996 & 2003) combine with Kuhn (1996) and Nibley (1987) to seal the thought patterns here by describing the risk inherent in standing for principles and why less risk taking is being engaged upon and the paradigm adopted by organizational managers to stifle competition and remove opportunities to change.

Taken in proportion, all of the items mentioned in Hickman (2010) article [Ch. 18], can be combined to bring a principled stand and improve an organization, but separate these items and they do not and cannot stand independently. Combined into a strategy that is adopted, supported, and lived by the entire organizational structure, including all members of the organization, the organization can change. Separate these items or combine them in such a manner that one is more relied upon, honored, or held more precious than the others, and disaster, chaos, and destruction are not powerful enough words to describe what the ultimate end product will become. A perfect example of the unfeasible nature of these items when separated can be discovered in the current problems being suffered in the US Department of Veteran Affairs, the US Department of the Treasury, specifically the Internal Revenue Service, and the US Department of Homeland Security. The management styles embraced by these organizations are remarkably similar and can almost be lifted verbatim from the pages of the Hickman (2010) article [Ch. 18]. The impossibly idealist attitudes do not work in reality and the result becomes organizations that fail to do their job, are easily manipulated into the designs of conspiring people, and in the process do more harm than good while costing more money than budgeted.

References

Hickman, G. (2010). Chapter 18: Leadership in the 21st Century. In Leading organizations: Perspectives for a new era (Second ed.). Thousand Oaks, Calif.: Sage Publications.

Kuczmarski, T. (1996). What is innovation? The art of welcoming risk. Journal of Consumer Marketing, 13(5), 7-11.

Kuczmarski, T. (2003). What is innovation? And why aren’t companies doing more of it? What Is Innovation? And Why Aren’t Companies Doing More of It?” 20(6), 536-541.

Kuhn, T. S. (1996). The structure of scientific revolutions. (Third ed., Vol. VIII). Chicago, ILL: The University of Chicago Press.

Marx, K., & Engels, F. (2013). The Communist Manifesto (eBook ed.). USA: Start Publishing.

Rao, M. S. (2013). Soft leadership: a new direction to leadership. Industrial and Commercial Training, 45(3), 143-149. doi: 10.1108/00197851311320559

Robinson, G. (1999). Leadership vs management. The British Journal of Administrative Management, 20-21. Retrieved from http://search.proquest.com/docview/224620071?accountid=458

© 2014 M. Dave Salisbury

All Rights Reserved

Shifting the Employment Paradigm – Or, ‘Organizational Psychology to the Rescue’

Before reading further, please follow this link:  Sir Ken Robinson – Changing Education Paradigms.  Sir Ken Robinson discusses changing the education paradigms and lays out a genetic heritage in modern schools.  This same model applies to modern business and the discussion here is to shift the business employment paradigm.  The reason is simple; Dauten (2003) discusses it and makes this proclamation, “Accept that organizations call to the worst in human nature, and be LIBERATED by that knowledge.”  [Emphasis mine]  Happiness is a choice.

As happiness is a choice, all emotion is a choice.  The choice is individual in nature and comes as a response to external stimuli in the environment.  Emotional choices build upon previous choices, snowballing into consequences affecting more than the individual and current environment.  Like ripples on a pond, enough ripples and waves appear; enough waves and danger to small craft can occur.  Emotional choices are similar to ripples on a pond increasing in size and frequency until damage occurs.

Dauten (2003) goes on to describe some interesting points in his book, ‘The Laughing Warriors: How to Enjoy Killing the Status Quo,’ namely, the genetics of why organizations continue to experience the same problems, the same genetics mentioned by Sir Ken Robinson.  These genetic problems are historical in nature, aggravated by government influence, multiplied by labor unions, and are 100% correctable through simplification and shifting the paradigm.

America learned early in the Industrial Revolution from those who considered themselves “enlightened” how to form organizational cultures.  Although the process was de-humanizing, the culture worked, to some extent, early in the Industrial Revolution, but the core problems in the genetic make up had not been addressed.  These enlightened founders of organizations knew the process was incomplete, stated their perceptions were not the full answer, and hoped those following would take the beginning they established and improve upon the design.  Dauten (2003) declares, rightly, “… People are hardwired for mediocrity and conformity.”  From this genetic make up comes bureaucracy, which supports more fear, and more conformity promotes mediocrity shunning change and learning in an attempt to cling bitterly to that which vexes all men, bureaucracy.

Consider the functioning culture of the Department of Motor Vehicles, Veteran’s Administration, Environmental Protection Agency, or any other behemoth bureaucratic organization that exhibits an organizational culture born from inefficiency, duplicity of work, lack of interest and enthusiasm, lack of desire to please, lack of accountability and responsibility, and much more, which causes impediment of work accomplishment, slow service, and often outright aggravation.  The example is clear; Dauten (2003) is correct; there is a genetic code calling for people to build inadequately designed organizations that down trod and digress rather than uplift and progress.  The functioning of such monolithic, controlling, inadequately structured organizations absorbs resources, devalues people, and almost repels change.  Change is feared; thus the tool of free people everywhere remains, initiate, demand, and force change.

The answer to resolving organizationally fed genetic bureaucracy is shifting the paradigms.  Paradigm is defined as a model or pattern.  One example of a paradigm is hierarchy, or work flow and command structure in a business organization.  Often linear hierarchy is the only method of describing this structure.  Shifting from a linear hierarchical structure to a circle hierarchy, parallel hierarchy, or eliminating hierarchy all together is, more often than not, unfathomable.  Thus, organizational psychology holds the answer to improving organizational dilemmas in shifting the hierarchy paradigm.  The topics of “Change Management,” “Organizational Communication,” or “Hierarchical Structure” fall into a simple paradigm in the purview of organizational psychologists intent on improving people to improve performance in business organizations.  More simply put, organizational psychologists review the genetic bureaucracy and help people rewire their individual response to environmental stimuli.  Dauten (2003) calls this the process of becoming a “Happy Warrior” “… intent on killing the status quo.”

Shifting the employment paradigm requires business leaders to consider letting go of the outdated term and perception of employee to focusing on people and their crafts.  At the same time, employees must let go of the genetic assumption that they are incapable of being a boss, being creative, or improving the job while working at the job. Letting go of these thoughts and gaining control of their rights to control their own destiny is essential to the success of the individual as well as the organization.  The Federal Government took the ‘Right to Control’ away from individuals, making them subservient to employers, and shifted the paradigm of control into an unnatural environment.  This single action has caused myriad problems, which bear fruit in the organizational culture, hierarchy, and societal problems in our modern world.

The natural order, provided to man from a higher being, is the individual right to control one’s own destiny.  The Declaration of Independence clearly delineates this natural order and describes man’s ‘pursuit of happiness.’  Once the ‘Right to Control’ was removed from the individual, the unforeseen consequences included groupthink, box thinking, drones forming larger bureaucracies, run-away mediocrity, unbridled conformity, and stifled creativity.

Shifting the employment paradigm should not need a ‘Declaration of Independence’ to bring attention to the need for change, but, if proclaiming independence through a declaration raises awareness to the problem and success is achieved, then employees the world over should ascribe.  The basic tenets of a declaration of employee independence should include:

  • The ‘Right to Control’ – Individuals want it back from their employers, unions, and government.  This ‘Right to Control’ comes with the following:
    • Schedule freedom
    • Remuneration for knowledge attainment
    • Control of the working environment
    • The power to affect change
    • Hierarchical Organization
    • Benefits that possess value – Cost and value are not the same and the new knowledge worker recognizes this fact.
    • Win-Win – Providing services in exchange for money requires a “Win-Win” scenario.  Thus, the organization wins workers, the workers win an organization to serve, both parties remain independent, and both parties can negotiate changes to improve.
    • Responsibility to:
      • Be treated as a knowledge worker
      • Treat others as knowledge workers
      • Level the knowledge playing field through acquiring new knowledge
      • Experimenting to drive value
      • Valuing experimentation in others’ performances
      • Honor – Work is honorable.

It remains imperative of the worker to take what is valuable to him/her and add these points into the conversation.  The business organization also must present that which they value and bring their points, ideas, requirements, into the conversation.  Thus, through the power of negotiation and debate, the employment paradigm is shifted.

Reference

Dauten, D. (2003). The Laughing Warriors: How to enjoy killing the status quo. Richmond, CA: Lumina Media.

© 2012 M. Dave Salisbury

All Rights Reserved

A Contradiction – ‘Or, An Exercise in Restoration.’

Shifting the business paradigm is comparable to shifting the December-placed holiday of Christmas to its rightful place in April.  The enlightenment is a bit distorted at first because of tradition, familial activities, and misguided Christian beliefs.  The enlightenment of shifting the business paradigm is a bit distorted at first because of similar reasons of tradition, company decisions and procedures, Federal and State Government intervention, the de-humanization of business organizations, and misguided employer/employee beliefs.

The history of Christmas is a complex accumulation of events over time originally precipitated by early religious leaders to direct the energies of early Christians away from holidays previously celebrated, specifically, the Roman Holiday of Saturnalia and the Scandinavian holiday, Yuletide.  Thus, a new holiday was created.  The history of business is a complex accumulation of events over time originally precipitated by financial leaders to direct individual craftsmen into organized activities for power with government and other business organizations.  Thus, modern business organizations were created.  Just as the symbols of Christmas stem from the holidays mentioned and were given an acceptable ‘Christ-like’ connection, so did business practices stem from corrupt political practices and were given an acceptable name of democratic enterprise.

Just as Christmas has become a secular as well as Christian potpourri of love, family, religion, greed, frustration, envy, strife, even violence, and other desirable and undesirable characteristics, business practices have evolved into similar characteristics.  Just as craftsmen worked initially because of their love of family, to provide for them in adequate provision, and for their love for their craft, business organizations have morphed into a desire for gain and greed and control.  While de-humanizing, this morph is not bad, simply misguided and easily corrected by returning the ‘Right to Control’ back to the individual employee.

Through the charitable feelings of a person’s heart to “Give good gifts,” the current celebration of Christmas often loses the main component of the professed holiday, Christ.  Well-intentioned people have vainly fought for the rights of the worker with the energies of their hearts only to result in further captivity, the fundamental flaw in the unrecognized logic being not ‘rights’ but individual freedom.  Rights cannot be given by man to man; rights come from a supreme being to man.  Individual freedom can be given from man to man, from business to man, and from government to man.  Since the mid-1600’s, professors of religion and well-intentioned people have been trying to “Put Christ in Christmas” or “Keep Christ in Christmas.”  The problem is a fundamental flaw in the logic of the holiday; Christ does not belong in Christmas.  By celebrating Christmas in a time and season where Christ does not belong, we perpetuate a myth, a sham, and a lie.  Does this mean we should not celebrate Christ’s birth date?  The answer is unequivocally NO!  Labor unions are a lot like Christmas celebrations.  Should we abolish labor unions?  The answer is NO!  Should we condone the violence unleashed when unions are angry, the constant theft of resources, the preparations for something good which ends with legal battles?  NO!  Mixed logic, moral decay, and those who preach ‘Power to the worker,’ and steal that power for personal gain are enemies of individual freedom.

I am not proposing the elimination of Christmas but rather for placing it where it belongs in the month of April when Christ was born, just as I am not proposing the elimination of correct and right business practices but placing it where it belongs in the negotiable hands of free individuals to negotiate a win-win scenario where work is concerned. Moving Christmas does not destroy Christmas, but places the celebration into its proper place and leaves December open for a different holiday.  Mainly, we must choose to celebrate Santa Claus or Jesus Christ.  These are not one and the same; these two people are not and cannot exist in the same holiday without creating confusion, perpetuating lies and deceit.  Power for personal gain and individual freedom cannot exist at the same time without creating captivity, confusion, and the perpetuation of lies and deceit.  An old mentor constantly quoted this axiom, “If the solution is not ‘Win-Win,’ it is a straight loss.”

While St. Nicholas is reported to have been a person or monk who traveled around doing good, he never had a sleigh, reindeer, and magical abilities.  The man celebrated at Christmas as Santa Claus is a myth, and in the same breath as singing ‘Here Comes Santa Claus,’ we want to honor Jesus Christ as the “Reason for the Season.”  The duplicity is a struggle for the conscience and the heart. Just as we inherited and sustained this struggle from the captivity of our fathers, we inherited and sustain a mode of earning a living from our fathers that tries our conscience, our hearts, and wallets.  Consider the problems with being a customer, the dehumanizing influence of the business organization, labor unions, etc.  Many of the problems in business stem from inherited tradition that did not work in times past and continue to not work now, but remain supported simply due to fear of change or because, “That’s now how it is done.”  Holiday celebration and employment conditions are linked in a myopic cycle that is anathema to anything different.  Dauten (2003) talks about this problem extensively and his suggestion of “Killing the status Quo” is excellent.

Tolkien offers wisdom very applicable to our modern world.  “If more of us valued food and cheer and song above hoarded gold, it would be a merrier world.” Along with, “It’s no bad thing to celebrate a simple Life.”  Ask yourself some questions such as “Do I honor a “Simple Life?”  “Has my holiday celebrations become more about outdoing last year’s celebrations and gift giving for personal achievement?”  “What is the aim of my holidays?”  “Why am I celebrating, what am I celebrating, and/or do I enjoy celebrating?”  If you do not like these answers, change.  Shift the paradigm where holidays are concerned.  The same argument holds for working, ask, “Do I enjoy what I do?”  If yes, “Do I enjoy those I work for?”  If the answer remains yes, consider job security, personal/professional growth, and long-term prospects.  Yet, if at anytime the answer is no, shift the paradigm, consider becoming an independent contractor selling your knowledge and experience.

Just as the Roman calendar and Jewish calendar place the actual birth of Christ in April, the same calendars place the death of Christ in April.  The bible records Christ’s celebrating the Passover before His death.  The Passover was also recorded as occurring during His birth. We can certainly celebrate Christ on His actual birthday, celebrate His death and resurrection more circumspectly, and change how we worship the Savior of the world.  Just as these facts substantiate the birth of Christ, facts of business corruption and coercion substantiate the plight of the individual worker as a craftsman.  We can change that just as we can change when we celebrate the birth of Christ.

With the bustle of Christmas 2012 in the rear-view mirror, with 2013 fast approaching and before the “bills of Christmas” come due, consider the holiday paradigm.  Ponder the feelings of joy, life renewal, and hope that fills the breast in the early days of April.  With the bustle of day-to-day stress, tax seasons approaching, and bills for overextending finances, consider shifting the business paradigm.  Ponder the freedom of negotiating your business life and regaining the control that has been relinquished.

References

Dauten, D. (2003). The laughing warriors: How to enjoy killing the status quo. Richmond, CA: Lumina Media.

© 2012 M. Dave Salisbury

All Rights Reserved

Employee Practices – Or the Trouble Labor Unions Cause Part 1

Disclaimer:  For the record, this author is not anti-union.  I am anti-violence when used as the tool of ideological individuals to destroy private property, intimidate, threaten, and pressure as negotiating tactics.  I do not support individuals who intentionally work slow or damage machinery as a labor-negotiating ploy.  I do support accountability, responsibility, and reasoned negotiation by impassioned people to correct faults, improve safety, and raise the bar of excellence.  I fully support groups of people combining together to focus effort upon a problem and raise awareness in the public eye.  The moment this group of people become violent, raise their voices or fists in anger, and try to force someone else to do what they want or steal money or other resources for personal gain, the group of people have crossed the line and become a force not supported or worthy continued sustenance.  Thus, I am not anti-union; it is important to note this clearly in the beginning as many people have mistaken my stand on unions to be anti-union when this is inherently false.

To understand unions in the modern world of labor relations, solid historical perspective is required.  With the beginning of the industrial revolution, labor unions began forming.  The intent was to improve working conditions, standardize working hours, and reduce accidents.  With technology advances in the beginning of the industrial revolution, maiming, blindness, lung conditions, and many other machinery caused problems were horrific.  The use of children in labor camps, on-board ships, and in mills was a horrendous injustice, completely wrong, and desperately needed correction.

Some small local or geographically/industrially specific unions had organized prior to the 1880’s.  These unions were violent in nature, full of angry people, who felt justified in harming those running the large manufacturing plants where horrific injuries occurred with no chance for the common worker to improve working conditions.  While raising awareness, these violent unions also harmed their cause with violence thus defeating their purpose without changing anything.

Unions have been steeped in communism theology and continue this theology to this day.  The principles of labor for the worker come directly from the writings of Karl Marx and the ‘Communist Manifesto.’  The first large-scale attempt at unionizing workers to improve conditions on a national scale in America is found in the Knights of Labor.  .  The Knights of Labor rejected socialism, communism, and radicalism.  This attempt fails for a lot of reasons, mainly the lack of unified structure and political pressures.  Society was not ready to change in the 1880’s; so labor unions in the US changed tactics, leaders, and aims; many of the Knights of Labor who eschewed American ideals are found in and form the bulwark of the change in unionism tactics..

From this rebirth come the first recognized labor unions formed by Samuel Gompers.  Samuel Gompers is the titleholder for longest serving president in the American Federation of Labor (AFL) now known as the AFL-CIO.  Samuel Gompers is a radical socialist bent on forcing through an ideological agenda.  Between 1880 and 1940, several things occurred:  society shifts where child labor is concerned, violence in union strikes and boycotts catches national attention, and Gompers concludes a national organization of labor into small local bodies electing labor friendly politicians into the political landscape.  With the election of President Wilson, Gompers becomes a household name outside of union families, and WWI sees a growth in both union membership and union influence in all political forums throughout the US.

Another aspect to the emergence of labor unions and power was found in their cozy relationship with organized crime.  Prohibition brought to the US powerful families of criminals dedicated to smuggling alcohol and other illegal products.  These families brought organization, power, and violence.  The unions brought forced labor dues, manpower, and energy; and the meeting of money and organization fostered a relationship of blood, violence, and scare tactics that continue unabated today.  It is important to note that violence, strikes, boycotts, and the friendly relationship between labor unions and organized crime has only increased with time, not decreased.  FBI reports continue to document the connection between organized crime, mafia, and labor unions.  From Samuel Gompers to Richard Trumka, current president of the AFL-CIO, violently settling grudges, attacking innocent people to force union membership, and threatening business owners and destroying business property to force the adoption of a union or remain union continues.

Gompers set the standard for a two-pronged attack on business: (1) violently striking employees limiting production and breaking equipment and (2) employing the courts to harass, intimidate, and harangue business owners and individual employees.  The reason for the attack mattered not and someone else always paid the cost.  The attacks worked due to a mixture of empathy and sympathy combined with a desire for power and future election possibilities.  This pattern of attacking remains effective for the same reasons.  Politicians, hell bent on personal power with a desire to reign as an American king, cozy up to the union plate of money and political favors.

The IRS granted employers the ‘Right to Control.’  Labor unions stepped in and demanded the ‘Right to Control,’ and the employee was left in the lurch with no rights, no liberty, and no way out.  A simple process exists when employees desire union membership, while complicated in legal maneuvering; the process is fairly straightforward and simple. When labor union members wish to end their union membership, the process is through a court system of union-biased laws and union inflicted violence.  Federal Law becomes convoluted and myopic regarding union labor laws.  For example, “Closed Shops” might be against the law, but the practice remains strong.  In a “Closed Shop,” every job must be a union job and membership is prerequisite to employment.  If a union member should discontinue his membership in the union, the union member loses his job, “Closed Shop.”  Officially, this is a practice that has been stopped, but state and federal law is union-biased, so the practice simply shifts to under the table.  “Open Shops” come in two varieties, “Agency” and “Free Rider.”  These shops are anything but “Open.”

“Agency Shops” are businesses where a majority of the employees have elected for union membership and even non-union members are forced to pay union dues.  These non-union dues payers have no voice in the union, no rights in the union, but have forced union representation, supposedly, if trouble arises.  In theory this works; in action many non-union forced dues payers are second-class citizens in these “Open Shops,” and the union could care less provided the money continues to roll in from forced dues.  “Free Rider Shops,” are exactly the same thing, only, the labor union cannot force non-union members to pay dues for union coverage.  The union coercion of the decision makers and of other employees to entice them into a union in “Free Rider Shops” is well documented.  Tire slashing, late-night threatening phone calls, intimidation, and threats of physical harm are also well-documented problems in “Free Rider Shops.”

The problem inevitably is money.  According to the union, if the employee wants union protection, the employee will pay for it.  The average union labor dues is around $400 annually, this is before the forced payment of healthcare cost, retirement, etc.  This number does not include the cost of operation the employer must pay to support the union.  Training costs are not included in the operating cost nor reflected in the dues cost.  All these variables are not fixed and add to the overall cost of unions. Adding in the intimidation factor, loss due to theft and breakage, loss due to strikes, etc., the difficulties unions cause and the overall cost to society to support unions is well past the unsustainable point.  More on the general overall costs of unions can be found here.

The fees involved in discontinuing membership in a union are hidden deep in the miasmic swamp of mouse print, but since the union member is technically given this information, the fees are legal.  The process usually requires the employee to hire a lawyer who specializes in contracts.  The union, who will employ contract and litigation lawyers, does not cover their own legal fees and passes them on to the union member in an effort to keep the dues money coming in.  Many people with similar horror stories, who relate the process of discontinuing membership in a union, can be located through an easy Google Search.  Discontinuing a union membership can become more difficult than a space shuttle launch, and the costs are always borne by the individual wanting to leave the labor union.

This remains America, the land of the longest living constitution in recorded history, yet the freedom ending labor unions are allowed to thrive due to the power of money in politics, the power of organized crime, and the thrust and parry of politicians and judges too concerned with continuing power perks to right the wrong.

Fear keeps unions living, fear of being a victim and fear of becoming a victim.  Fear of loss, fear of failure, fear to risk, all these and more drive the union machine.  Yet, the birth of freedom in a worker’s heart makes courage overpower fear.  The ability to work in partnership with a company breeds new freedoms, powers, and strength.  Fear is destroyed courage, confidence, and freedom.

The problems with unions can be eradicated by freeing the worker, by placing the ‘Right to Control’ back into the hands of the individual worker.  The saying went abroad that Michigan would become a ‘Right to Work State’ only when the fires of the sun cooled.  Yet, the impossible has occurred and Michigan is now a ‘Right to Work State.’  The impossible does occur.  Free the worker.  Shift the employment paradigm.  Let this process to truly ‘Free the Worker’ begin by removing the chains of forced ‘employee’ by allowing these workers to be contractors, consultants, and controllers of their own individual destinies.

© 2012 M. Dave Salisbury

All Rights Reserved

Employee Organization – Or “A Referendum on Knowing Societ[ies]”

Tribus (n.d.) discusses organizational change, the need for education, and the power of learning.  In ‘Changing the Corporate Culture: Some Rules and Tools,’ a principle relating to unintended consequences is discussed herein.  The principle is the difference between a ‘Learning Society’ and a ‘Knowing Society’ as discussed by Tribus (n.d.).  With the ‘Right to Control’ firmly embedded in an employer’s pocket of control, the unintended consequence is that every employee becomes a heavily guarded fortress of knowledge as a means to survive in a corporate organization.  Every employee must ‘know’ his job or risk losing that job.  This mindset has lead to terms like, ‘Group Think,’ ‘Knowledge Management,’ etc., and creates the legal arguments and problems swirling around ‘Intellectual Property.’

One term not found in Tribus (n.d.) is that which I have labeled as ‘Keystone Mentality.’  A keystone is found in architecture when building an arch.  The keystone is the center stone in an arch that provides the balance upon which the entire arch hinges.  A ‘Keystone Mentality’ is found in every business in the world where a single employee hoards knowledge, considers hoarding knowledge appropriate to ensure job security, and never gets sick or takes vacation, as they (the Keystone Mentality) erroneously perceive that the business will suddenly stop if they take a break.  ‘Keystone Mentalities’ gossip, rumormonger, betray fellow employees, and generally take ‘any means necessary’ to protect their position from intruders.  The ‘Keystone Mentality’ is the hallmark of a ‘Knowing Society’ created through employee churn, developed in the fires of adversity, and held in positions of power by those who refuse to learn because there is a ‘Keystone Mentality’ to take the slack or rely upon.  Quid pro quo is the least of the unethical behavior allowed when managers rely upon a ‘Keystone Mentality.’

Another aspect of a ‘Knowing Society’ is nobody learns anything.  Since the expectation is that everyone already knows, why share knowledge.  Where is the incentive to not be a ‘Keystone Mentality?’  Where is the incentive that encourages a person to bend, to be humble, teachable, or to learn?  Learning requires humility, compassion, empathy, and leadership of people.  A consequence from many “Knowing Societ[ies]” not mentioned by Tribus (n.d.) is that ‘Knowing Societ[ies]’ build psychopaths, sycophants, and pathological liars.  ‘Knowing Societ[ies]’ are managed by people, who, if they do not know something, bluff, ‘fake it until they make it,’ and the cloning of Neanderthals becomes accepted practice, this is often referred to as, ‘good corporate politics.’

Young students are instructed to never stop learning.  Why do graduates of high school, college, advanced degrees in business choose to stop learning every facet of the organization to which they are employed; the answer lies in the ‘Right to Control’ and the demands for ‘Knowing Societ[ies] in the places of employment.  Corporate training for a new position mostly entails discovering whom to turn to for answers.  It becomes a game of who do you know, that I know, that they do not know, so we can look good for another boss, who is pulling the same game in the chess match of corporate politics.  The larger the organization, the more frustrating this problem becomes.  Small business and even some mid-size businesses have one or two people, who have been with the company since inception, know everybody, have their fingers in all the pies, and feel all the pulses. Gossip from these people can make and break careers.  Being anathema to change, ‘Keystone Mentalities’ will always act first from a position of corporate survival, then from a position of power to receive quid pro quo, and then, maybe, for the good of the company.  The issues caused by and demonstrated as a result of current principles utilized by ‘Knowing Societ[ies]’ are unquestionably clear.

‘Learning Societ[ies]’ require leaders who know people and are humble enough to teach and be taught.  Learning remains a two-way street with responsibility and accountability flowing from teacher to student and back to teacher in a never-ending circle.  Leaders in a ‘Learning Society’ will ask questions, employees will ask question, the answers come from other leaders and employees, knowledge is shared so everyone wins.  The organizational health is sacrosanct, and when everyone wins, everyone prospers.

Shifting the employment paradigm requires organizations to embrace learning, encourage experimenting, and demand accountability for new learning being applied.  Until the ‘Right to Control’ resides in the individual’s power and not in the organization’s, a true shift from a ‘Knowing Society’ cannot occur.  Some organizations provide lip service to learning being key and crucial to success.  The Federal Government does lip service to reduce spending with the same affect.  Until the individual is free, accountability and responsibility in the workplace, in a society of professionals, and in our communities will continue to diminish.  These principles are not new; Tribus (n.d.) speaks of them, talks about them, and has been insisting this is the path to tread.  Nothing changes until the basic equation shifts.

The time is now for business leaders to encourage employees to become knowledge workers, contractors, and freelance consultants.  The time is now to begin and to embrace the path outlined by Tribus (n.d.); shift the paradigm in employment; and change, lead, and re-discover the power of education.

© 2012 M. Dave Salisbury

All Rights Reserved

Additional Reading:

Tribus, M. (n.d.). Changing the Corporate Culture Some Rules and Tools. Retrieved from: Changing the Corporate Culture Some Rules and Tools Web site: http://deming.eng.clemson.edu/den/change_cult.pdf

Employee Benefits – A History of Corruption and Coercion

From humble beginnings atrocities begin.  Every action must follow immutable and unalterable laws, consequences follow choices; this article follows the influence of choice pieces of legislation from impetus to current event entanglements.  Only through learning history can proper change produce preferred results.

Modern employment, as we know it, began with a small change from the republic principles of free enterprise morphing into the democratic philosophies of top-down government control.  Soldiers, sailors, marines, and airmen coming home from WWII had left jobs and wanted those jobs back; so, the Federal Government changed policies, wrote legislation, and veteran preference in hiring began.  Sounds good, right?  But by carving out exclusions for veterans, other people wanted to possess special treatment.

What occurred in Federal Legislation has caused some serious problems; the first of these problems began with the altruistic ideal of full employment.  Full employment refers to  “the continuing policy and responsibility of the Federal Government . . . to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining . . . conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production, and purchasing power.”  (Scitovszky, 1946)

The Federal Government in 1945, with enough good intentions to pave a super-highway from New York to Beijing, sought to avoid the natural swings which occur in finance and wrote a bill, eventually entitled the ‘Employment Act of 1946’ to avoid future problems experienced between the prosperous 1920’s and the depression of the 1930’s.   To try to improve financial situations for the Federal Government, employment was considered and tied to economic indicators, suggesting low unemployment equates to higher tax revenues and dollar strength.  This reasoning is valid; however, the consequences spinning off these legislative nightmares are self-defeating.

The next time these economic indicators were reviewed was in 1976 with the ‘Full Employment and Balanced Growth Bill.’  Both of these bills, 1946 and 1976, show tremendous influence from Keynes and his theories of being able to spin into prosperity by incurring unsustainable debt.  Sections 2b and 2c of the original bill from 1945 are crucial to understanding the nightmare problem.  In 1945 the legislators declared full employment is possible for all those who desire it, and proposed full employment through federal government spending.  See the problem, especially in the current fiscal cliff negotiations; the Federal Government has become a consumer of goods and exercises a little known principle “Those who pay, control.”  By becoming a consumer of goods and spending money as a customer, the Federal Government can now demand private enterprise obeisance.

Section 3 of the 1945 version of this legislation requires that the president forecasts and writes a budget to increase or decrease spending based upon unemployment numbers and percentages.  The president must forecast spending on a yearly basis to which Congress must then write the underlying legislation as part of the budgeting process.  The president was made directly responsible for the employment of every person in the US who wanted to work, desired to work, was healthy enough to work, and the legislative bodies would produce the needed bills to make it happen.

Flash forward from 1945 to 2012 and the problem is glaringly obvious.  With a disinterested president failing in his legal duties to propose legislation and forecast employment and spending to the House of Representatives and the Senate, a contentious House and Senate that is more interested in internal politics, divisive sound-bites, class warfare and race games, and world economy fluctuating between dead and dying, the problem with this legislation becomes clear.  There is no control mechanism that compensates for the above.  Dictating through top-down government what businesses need to produce and still call it free enterprise is not possible.  The principle of full employment limits choices by forcing people to become employees through inflation, limiting markets, and the over regulation of enterprise.  These laws do not treat people equally because of the definition of employee, which feeds into the description of full employment.  Ranchers, farmers, and other independents suffer because of these laws and the definitions and classifications of the term ‘employee’ and ‘employment’ including ‘self-employment.’  Making the Federal Government a consumer has failed to provide true economic freedom and prosperity.

The nightmare of compensatory finance, as established by Keynes, is the main problem facing America today.  These two little known bills continue to rob America of greatness, steal future generations of prosperity through debt, and keep the Federal Government wasting tax dollars on frivolous projects.  Full employment is a worthy goal, but it is not obtainable due to the following reasons:  Federal Government spending into debt just to buy goods not used; Federal Government spending simply to keep unemployment numbers low; or Federal Government spending to soften financial cycles, all of which are unerringly wrong.

© 2012 M. Dave Salisbury

All Rights Reserved

References

Barro, R. J. (2011, August 24). Keynesian economics vs. regular economics. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424053111903596904576516412073445854.html

Sanotini, G. J. (1986). The employment act of 1946: Some history notes. Federal Reserve Bank of St. Louis.

Scitovszky, A. (1946). The employment act of 1946. Social Security Bulletin,

Independent Contractor vs. Employee – Or, The Structure Wars Continue via ‘The Right to Control’

Employee is a catchall term and includes the following three distinctions:  common-law employees, statutory employees, and non-statutory employees; hereafter referred collectively as employee.    The basics covered in this writing discuss the IRS view of ‘Right to Control’ between the three classes of employee and independent contractor (IC).

The ‘Right to Control’ was discussed previously and remains the central component upon which all employer/employee and employer/independent contractor relationships hinge.  The IRS makes this clear in Topic 762 – Independent Contractor vs. Employee.  The IRS breaks into three categories the essential components where the ‘Right to Control’ hinges, namely, Behavioral Control, Financial Control, and Type of Relationship.

Behavioral Control relates to the questions, what, where, and how work is to be completed.  Employees have set schedules, tight restrictions about how to think, where to sit, etc., dictated by the employer.  Independent contractors (IC) answer the ‘what’ and ‘how’ questions themselves, negotiate times and schedules, and possess the freedom to perform the work in a cost effective manner, judged by themselves and the pleasure of the contracting authority.

Financial Control relates to all things money.  The employee is forced to accept all terms of the employer without negotiation, from business expenses to taxes, whereas the employer and contractor negotiate all terms.  Where financial control is, risk shortly follows; where risk is, the threat of litigation follows.  Therefore, when the employer has financial control, risk follows the employer, not the employee.  When the contractor has financial control, risk is shared between the contractor and the employer.   Profit and loss, tools of the trade, and the freedom to offer services to other organizations are all part of the financial controls that are relinquished by the employee to the employer, or negotiated with the employer and the independent contractor.

Type of Relationship relates to all things in the interaction of the two independent parties, which includes written contracts dictating the interaction, risks, penalties, etc.  Extent of the relationship is a major point and colludes with permanency and benefits to form the marriage between two independent entities.  The employee forfeits control in this arena to the employer who automatically sets the terms, demands compliance, and exerts totalitarian control.  The contractor negotiates terms of interaction with the employer, thus the contractor has a constructive voice in the outcome of the contract.

Currently, Publication 15-A governs employee vs. contractor labels and is the authority to refer to when contemplating the differences among employees, all three classifications, and independent contractors.  Several examples are included in the publication and the legalese is sufficiently straightforward.  The publication can be accessed using the link for Topic 762 above.

Several cautions must be included here:

  • I am not a tax attorney; this is not counsel, simply a discussion of changing perspectives.
  • No single criterion defines the legal separation between an employee and an independent contractor.  The IRS is the decision maker and their publications help define the guidelines.
  • It is extremely important to adhere strictly to tax guidelines in determining the differences between contractors and employees.  The saying in Vegas is, “The house ALWAYS wins.”  This is true of the IRS; the rules continue to change in complexity, increasing volume, and application.

Contained below are the 20-points, commonly referred to as the IRS 20 Factor Test, for determining the differences between employees and independent contractors:

  1. Level of instruction
  2. Amount of training
  3. Degree of business integration
  4. Extent of personal services
  5. Control of assistants
  6. Continuity of relationships
  7. Flexibility of schedule
  8. Demands for work – Referring to the percentage of time demanded by a business organization.
  9. Need for on-site services
  10. Sequence of work
  11. Requirements of reports
  12. Method of payment
  13. Reimbursement of business expenses
  14. Tool and material provision
  15. Investment in facilities
  16. Profit & Loss – Risk should also be considered specifically here.
  17. Freedom to contract with other organizations
  18. Availability to the public
  19. Control over discharge
  20. Right of termination

A brief review of these items makes it clear the three main categories of control currently remain.  These 20 points label and describe as well as define, classify and spell out succinctly for tax purposes financial control, behavioral control, and type of relationship that separates and identifies the employee and the independent contractor.

Important to note, these same 20-points form the main topics of discussion when writing out the contract for services and provide the perfect starting point for changing the employee-contingent society in the business world today.  According to these points and the IRS publications, freeing the American worker is possible, obtainable, and provides the possibility to forever change America for the better through ending the label, “employee”.  When everyone is an independent contractor, opportunities abound as the ‘Right to Control’ rests where it should always have been, in the individual hands of free people.

Currently, as of this writing, fiscal cliff negotiations are ongoing. There is talk of increasing tax revenues from small businesses.  There is talk of raising taxes on all people.  There is talk of everything but drastic, immediate, necessary cuts to spending that is non-military and no one is discussing entitlement reforms with any type of seriousness.  This simple movement of employees to independent contractors immediately forces the spending valve closed that allows the government to spend freely by directly placing every citizen as a taxpayer at the higher small business rates.  Tax reform will be swift when everybody feels the pain of the taxman at the small business rate.  The entire intent of moving the ‘Right to Control’ from employers and business organizations into the hands of regular people is to produce more freedom, to allow knowledge to be valued, enhance the dignity of the individual, and to improve individual working conditions all without forced union participation or giving up rights and liberties to control individual destiny.  It cannot be stressed enough that freedom often requires sharing in and overcoming distressful circumstances to accomplish a greater good. Whether those circumstances are experienced in money, time, taxes, etc., everyone must make an investment in freedom.

© 2012 M. Dave Salisbury

All Rights Reserved

Freelance or Consultant vs. Employee: Or, The Structure Wars

Labels, like manners, matter.  Social researchers are always resurrecting or creating new labels, classifications, and divisions to increase variable control.  Through variable naming and onto controlling, social researchers slip bias for particular variables into research reports, slanting conclusions, creating disharmony in the population, and destroying unity.  The results can be seen and witnessed in every facet of American Life.  Republicans are constantly pitted against Democrats, both are pitted against Independents, and inside these general classifications are heaps of additional labels, splitting the general classifier into ever smaller and more easily controlled sub-groups such as Constitutional, Conservative, Progressive, etc.  From this disharmonious adventure in social research has come a plethora of laws benefitting one sub-group against other sub-groups, upholding gender against gender, religion against religion, culture against culture, and forcing courts to choose.  The end result, everyone loses.

This same division has caused business organizations problems aplenty since the WWI era.  Government has forced business to uphold cultures, genders, and personal choice over what is best for the organization.  The relationship between law and the organization is going to be reviewed in future writings.  This first review assesses the definitions for freelance or consultant and employee as well as the relationship behind labels, and the dilemma and burden of the hierarchy of business organizations.

Freelance

According to UseLegal.com (2012) freelance workers are self-employed; work for their selves, bid for open work, and are independent of the business hierarchy.  Contractors and Consultants are considered in this category.  Freelance employees possess some tax benefits, risk problems, and American Business has embraced these classifications for filling work in times past to reduce payroll expenses.  Freelance workers must justify their work, intentions, and pass a 20-point test from the IRS to qualify as a freelance worker.

Employee

Again from UseLegal.com (2012) the actual definition of an employee is quoted herein, “An “employee” is defined as “a preference eligible in the excepted service who has completed 1 year of current continuous service in the same or similar positions” or “an individual in the excepted service (other than a preference eligible) . . . who is not serving a probationary or trial period under an initial appointment pending conversion to the competitive service.” Ramos v. Merit Sys. Prot. Bd., 2009 U.S. App. LEXIS 24378 (Fed. Cir. Nov. 6, 2009)”  Essentially, a person can be hired by an employer, but does not attain employee status and protection until that person has been hired for a continual year by the same employer, is not under a ‘probationary period,’ and or appointment.

An employee agrees to be controlled by an employer; the production of that person is only one of the controls granted to an employer; conduct both on and off the job can be controlled, along with the means and manner of producing the work specified.  The right to control is the primary determining factor in this relationship.  The right to control is also the deciding line between freelance workers and employees.  Upon this single imperative hang tax law, responsibility of parties, risk, and every item in employee/employer relationships, hierarchical structures, and will ultimately decide who or which party is in charge.

Fancy axioms have been created to express a need to become more creative in thinking, to break the model of dependency, and drive ingenuity and creativity back into the workplace, but these axioms do not reduce control and their purpose is immediately lost when applied to restoring workforce employee choices.  To change the paradigm, business organizations must evaluate their ultimate motivation with regard to employee relationships, and employees must decide as individuals how they can best foster their knowledge, experience, talents, and skills whether in a climate of self-control or company control.

Long has it been claimed that, “Those who pay, rule.”  By choosing to be an employee, the rights of the employee to control his responsibilities are surrendered to the employer in exchange for less tax burden, regular paychecks, and a continuity producing security.  Supervision, management, or control is placed upon an individual’s agency in exchange for less risk.  Less risk breed’s complacency, complacency breed’s compliance, compliance breed’s servitude, and thus the individual is captured in a system of control producing a menial mindset.  This menial mindset is expressed by phrases like, “Captured by the system,” Taken over by the man,” “Brainwashed,” etc., and has created a dilemma in every business organization.  The dilemma is this:  although business organizations have control over processes and individuals, this control restricts or prevents employees from doing exactly what business organizations desire in an employee, which is the ability to use ingenuity, logical thinking, and freedom of action so necessary in business interactions and transactions between employee and customer.

The epitome of this dilemma is that the federal government has consistently made having control more expensive through taxation, mandating benefits, and increasing controls thus forcing businesses to choose to either exert more controls upon employees or go out of business.  This simple fact is the driving force behind shifting the employment paradigm.  It is past time for freedom in employment to break out, to return to valuing knowledge acquisition in business transactions, and to enhance freedom in all aspects of individual lives and livelihoods.

© 2012 M. Dave Salisbury

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