Nothing like a little insomnia to make one watch some bad HR practices on TV. My new favorite show for this is Undercover Boss. Fortunately, reruns on the OWN network may let me review every single one here. The premise seems to be the same on each show: Boss encounters employee who does everything that the job asks for, but because of the shitty way they are treated by the company, they either want to leave, or can't make ends meet. Then, rather than thinking, "Hey! We have institutionalized problems within our HR policies that may need to be changed for the betterment of all workers!", the boss assumes this employee is an exception, plays Santa Claus, and fixes the problem for just the one employee by throwing cash or a unique opportunity their way.
I'm watching the most recent Undercover Boss, where the Chairman of Mohegan Sun Casino, sorry, Entertainment, goes undercover. Yes, the slot runner's job sucks (hire more? Perhaps if the marginal productivity of the next worker is offset by an increase in revenue), and there's a lawsuit waiting to happen forcing the female servers to wear skimpy dresses and not the men, but the biggest problem is with the Valet Shift Lead. At least she isn't designated a Shift Supervisor when she has no managerial authority, but there are still problems with her job.
Set aside the fact that the CEO of an organization just said that a job should not be performed by anyone over the age of 50, but the Valet Shift Lead mentioned that not only does she work part-time, but her hours are being cut. She's currently on state welfare to provide health insurance, and she's not sure if she can make ends meet if the situation continues. Bear in mind that this is the Pocono Casino. Not on tribal land. It's a commercial venture doing business in Pennsylvania, subject to Pennsylvania law, and using state subsidized healthcare to get workers for lower wages than they would otherwise be willing to work. It's likely that in order for these workers to get state healthcare, food stamps, or other forms of welfare, they must prove that they are employed - which creates a need to take these low-paid, low-hour jobs, distorting the labor market. It's also dickish on the part of the casino to hire someone for 20 hours per week, then only assign them for 10.
So, what's the solution? Walk away from generous state funds that heavily subsidize the labor costs of the casino? Unlikely. Continue to hire part-time, but with a set shift schedule so that an employee can better juggle multiple jobs? That would be nice, but, dagnabbit, the company loses flexibility! Flexibility is so much more important than providing employees with the ability to be self-sufficient. Undercover Boss' solution was to give this employee EVEN MORE TIME OFF to take her GED, and hire a babysitter. Okay, and $10K for her wedding, $10K for health care (that's, like, a year for a family of three), and a $15K college fund for her daughter. See - throwing $35K at one employee just totally solved the problem! And, isn't the Mohegan Sun Casino Entertainment Basketball Hotel Conglomerate just awesome for doing this!
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Wednesday, January 22, 2014
Sunday, January 12, 2014
Sunday Morning Talk: Chris Christie's Culture Problem
Since I don't have anything better to do than to watch TV all day, I managed to catch Chris Christie's entire press conference where he admitted that the slowdown of traffic in Fort Lee, New Jersey, was caused by people in his office as political retribution. Then, he went through an hour-long wiggle where he stated that he is ultimately is responsible because the buck stops with him (not here? No Truman?), but that he didn't really know, so how can you hold this against him?
The wiggle highlights a problem which I assume is larger than the New Jersey governor's office, and is probably common in politics. How does one distance oneself from scandal, but still try to claim credit for the successes of the office isn't really what I'm thinking about. It's the disconnect between what you say, and what is rewarded. Sure, Christie says that he's responsible, but it's obvious that he doesn't believe that he has real responsibility for the scandal - it's someone else's fault who lied to him. If you worked for the Christie administration, what would you take away from this? How would this guide your actions? It probably would lead you to believe that if you do something unethical, don't get caught. It wasn't until the emails came to light that any punishment was meted out, as Christie wasn't really interested in what was being done.
What this means is that there is institutional dissonance. Christie says that people should act in one way, but punishments and rewards are not given out accordingly (I'm responsible, but don't punish me for it is a prime example of this). I don't want to be too hard on Christie, as many organizations, political, social, and businesses alike, have these problems. The problem stems from when people see what is truly valued in the organization, and tries to mimic these behaviors, even when they contradict the explicit wishes and statements of what one should do to get ahead. It tends to drive these behaviors underground and into the shadows. Is BridgeGate the first time that such unethical retaliatory behaviors have occurred in New Jersey? I'd venture to say no. Bridget (what a perfect name!) Kelly probably had done something similar in the past, or, someone else had been promoted for something similar. The culture of the organization implied that such tactics would be rewarded, and while not an explicit okay was given, Christie's staffers assumed that he would approve of the outcomes and reward them. The ends would justify the means, so long as Christie didn't find out exactly how things were accomplished. Christie didn't probe his office too deeply, and the ease of hiding these tactics was easy... with the payoff of working as Senior staff on a Presidential campaign or administration making the decision pretty easy for the ambitious and morally ambiguous.
Christie is in a pickle now. (Only 5 calories, and satisfies your cravings for salty food while dieting...) He probably has a larger problem on his hands. It's not about containment, which is what the political pundits focus on, but on culture shift. Who has he promoted in the past for doing underhanded and unethical actions in the past? What needs to be done to fix this? How do you shift the culture so that people don't make the calculus of being caught vs. getting ahead in a toxic political climate? It's not easy - he has a Machiavellian staff on his hands who assume that the results speak for themselves, regardless of the way that they were produced. The answer may also rest with Machiavelli. One reading of the "It is better to be feared than loved." is that instilling fear in those you rule is okay. But in the larger context of the passage, a better path is proposed. Rather than trying to manipulate the emotions of those you rule by trying to make them like you, why not try competence? Machiavelli tries to convince The Prince that being an effective ruler is better than being a fool looking for emotional validation. So for Christie, he just needs to focus on creating an environment where New Jersey just runs well, runs ethically, and runs efficiently. People might not like him as a person, but they would respect him as a governor. That might be enough to be elected President. Or, it should be.
The wiggle highlights a problem which I assume is larger than the New Jersey governor's office, and is probably common in politics. How does one distance oneself from scandal, but still try to claim credit for the successes of the office isn't really what I'm thinking about. It's the disconnect between what you say, and what is rewarded. Sure, Christie says that he's responsible, but it's obvious that he doesn't believe that he has real responsibility for the scandal - it's someone else's fault who lied to him. If you worked for the Christie administration, what would you take away from this? How would this guide your actions? It probably would lead you to believe that if you do something unethical, don't get caught. It wasn't until the emails came to light that any punishment was meted out, as Christie wasn't really interested in what was being done.
What this means is that there is institutional dissonance. Christie says that people should act in one way, but punishments and rewards are not given out accordingly (I'm responsible, but don't punish me for it is a prime example of this). I don't want to be too hard on Christie, as many organizations, political, social, and businesses alike, have these problems. The problem stems from when people see what is truly valued in the organization, and tries to mimic these behaviors, even when they contradict the explicit wishes and statements of what one should do to get ahead. It tends to drive these behaviors underground and into the shadows. Is BridgeGate the first time that such unethical retaliatory behaviors have occurred in New Jersey? I'd venture to say no. Bridget (what a perfect name!) Kelly probably had done something similar in the past, or, someone else had been promoted for something similar. The culture of the organization implied that such tactics would be rewarded, and while not an explicit okay was given, Christie's staffers assumed that he would approve of the outcomes and reward them. The ends would justify the means, so long as Christie didn't find out exactly how things were accomplished. Christie didn't probe his office too deeply, and the ease of hiding these tactics was easy... with the payoff of working as Senior staff on a Presidential campaign or administration making the decision pretty easy for the ambitious and morally ambiguous.
Christie is in a pickle now. (Only 5 calories, and satisfies your cravings for salty food while dieting...) He probably has a larger problem on his hands. It's not about containment, which is what the political pundits focus on, but on culture shift. Who has he promoted in the past for doing underhanded and unethical actions in the past? What needs to be done to fix this? How do you shift the culture so that people don't make the calculus of being caught vs. getting ahead in a toxic political climate? It's not easy - he has a Machiavellian staff on his hands who assume that the results speak for themselves, regardless of the way that they were produced. The answer may also rest with Machiavelli. One reading of the "It is better to be feared than loved." is that instilling fear in those you rule is okay. But in the larger context of the passage, a better path is proposed. Rather than trying to manipulate the emotions of those you rule by trying to make them like you, why not try competence? Machiavelli tries to convince The Prince that being an effective ruler is better than being a fool looking for emotional validation. So for Christie, he just needs to focus on creating an environment where New Jersey just runs well, runs ethically, and runs efficiently. People might not like him as a person, but they would respect him as a governor. That might be enough to be elected President. Or, it should be.
Tuesday, January 7, 2014
Frontline: To Catch a Trader
Trying something new... I'm watching PBS, writing as I watch, and hoping to have something publishable shortly afterwards. I'll see what happens.
FRONTLINE is back with a look at insider trading with "To Catch a Trader." This time, we're looking at hedge funds, specifically SAC Capital. I'm personally skeptical of hedge funds in general - they appear to be fee structures that if they do make real money, there is so much trading involved that the actual assets one owns at any point is not entirely clear. In general, I worry about anything that's a black box. I like to know how my money is making more money.
With Wall Street, the question is not just about transparency, but legality. We'll put the ethics on the side for now. If you want to move first, then you need information about what move to make, and you need to move before everyone else in order to make the most money. If you make the most money, then you get the largest clients, as people want their money to make the most money possible. All incentives are to get this information fast, and to act on it, even if doing so is illegal. Insider trading is not just unethical, or bad manners, but is flat-out illegal. But if your incentives are contrary to legal compliance, and you perceive that you chance of getting caught is low, then the choice that is most advantageous to a fund is to do that which is illegal.
This isn't about morals. Companies are amoral. Not immoral, but without morals. If your firm's goal is to maximize profits, then the expected benefits should outweigh the expected costs (chance of getting caught * expected fine), and the firm does it. Possible ways around it are to increase the fines that are collected (unpopular politically, as this gets rolled into your 401(k) management fees) or to increase the likelihood of getting caught (which increases payroll... increasing government expenditures... also unpopular politically). The business isn't going to police this activity.
Instead, it may come down to the individual trader. (S)He will be the one on the line for illegal behavior. At this point, one's salary vs the fine may be more likely to spur legal behavior. Actual jail time might also incentivize correct behavior in the individual. But, this only works if you believe that you will get caught. The last piece of the pie is whether illegal behavior is socially acceptable. So, if you go to Wharton, do your classmates assume that you will be making money while keeping to the straight and narrow? Probably not. FRONTLINE mentioned that one hedge fund relied on their Wharton network to get the insider tips on which the hedge fund business model relied.
So, how does one fix this? How do you design a system that incentivizes proper behavior? Is it socialization in business school? Stricter oversight? More scrutiny of actual trades? Or do you expect investors to somehow know that huge returns above market may indicate some funny business on the part of the person you've entrusted with your money? Considering how pervasive the culture on Wall Street is to make money, it's hard to see how any one fix can overturn an entire system that appears to be corrupt.
FRONTLINE is back with a look at insider trading with "To Catch a Trader." This time, we're looking at hedge funds, specifically SAC Capital. I'm personally skeptical of hedge funds in general - they appear to be fee structures that if they do make real money, there is so much trading involved that the actual assets one owns at any point is not entirely clear. In general, I worry about anything that's a black box. I like to know how my money is making more money.
With Wall Street, the question is not just about transparency, but legality. We'll put the ethics on the side for now. If you want to move first, then you need information about what move to make, and you need to move before everyone else in order to make the most money. If you make the most money, then you get the largest clients, as people want their money to make the most money possible. All incentives are to get this information fast, and to act on it, even if doing so is illegal. Insider trading is not just unethical, or bad manners, but is flat-out illegal. But if your incentives are contrary to legal compliance, and you perceive that you chance of getting caught is low, then the choice that is most advantageous to a fund is to do that which is illegal.
This isn't about morals. Companies are amoral. Not immoral, but without morals. If your firm's goal is to maximize profits, then the expected benefits should outweigh the expected costs (chance of getting caught * expected fine), and the firm does it. Possible ways around it are to increase the fines that are collected (unpopular politically, as this gets rolled into your 401(k) management fees) or to increase the likelihood of getting caught (which increases payroll... increasing government expenditures... also unpopular politically). The business isn't going to police this activity.
Instead, it may come down to the individual trader. (S)He will be the one on the line for illegal behavior. At this point, one's salary vs the fine may be more likely to spur legal behavior. Actual jail time might also incentivize correct behavior in the individual. But, this only works if you believe that you will get caught. The last piece of the pie is whether illegal behavior is socially acceptable. So, if you go to Wharton, do your classmates assume that you will be making money while keeping to the straight and narrow? Probably not. FRONTLINE mentioned that one hedge fund relied on their Wharton network to get the insider tips on which the hedge fund business model relied.
So, how does one fix this? How do you design a system that incentivizes proper behavior? Is it socialization in business school? Stricter oversight? More scrutiny of actual trades? Or do you expect investors to somehow know that huge returns above market may indicate some funny business on the part of the person you've entrusted with your money? Considering how pervasive the culture on Wall Street is to make money, it's hard to see how any one fix can overturn an entire system that appears to be corrupt.
Sunday, January 5, 2014
Money Porn
Enjoying my winter break with a couple movies. Saw "The Wolf of Wall Street" this afternoon. While I was hoping to see a movie on the evils of Wall Street excesses, equating bad boy stockbrokers to the mafia thugs that Scorsese normally portrays, I think I may have wandered into a soft-core porn screening. At no point did I find any of these characters compelling or likeable, but I feel that the treatment of the subjects was stilted... like they were holding back from showing these people as they deserved to be treated. I can only think that the protagonist being the writer of the story clouded the way in which he was portrayed - as if that last knock-out punch was withheld.
There's a moment when you meet someone, and your spidey-sense starts tingling that this person is bringing trouble and misery into the world. It makes you skeptical of what that person says, and puts you on guard for the future. It's a very handy voice to have in your head when you sit through a time-share pitch in exchange for attraction tickets. The movie spends three hours looking at those who would take advantage of those who do not have this voice guiding them through financial decisions. In short, it's exploiting a market failure of two parties with equal information making a market transaction that is advantageous to both, and replacing it with a system that destroys American Capitalism. It's abhorrent. The glorification of sex, and drugs, and money (seriously, does anyone go around talking about how much their suits cost? How gauche!) leaves one thinking that Wall Street may be a pretty nifty place - martinis with Matthew McConnaghey, hookers on the office expense account, fast cars and yachts - no talk about the people who are losing everything. Instead, because postmen and garbage collectors want to make money in the stock market, they deserve to be taken advantage of. Their greed gives Stratton Oakmount the ethical right to take all of their money. Pushing penny stocks off pink sheets might be one issue, but the full-out stock price manipulation that undoes the firm is pushed to the side and not treated with the same amount of time as the "Look at these poor people who want to be rich, the shmucks!" story-line. It trivializes their pain in order to tell the story of money laundering and Quaaludes.
But, this is something to consider - why DOESN'T Hollywood look at the way that the middle income household is impacted by such things? Why do you only see the 1% on screen? Or, if it is a "middle class" family, then the top 15%? I'd love to see a serious turn towards showing families who earn ~ $52,000 per year in the U.S. It would be a jar to see how the median household actually lives, and more pressing to see how such families are impacted by asshats like Jordan Balfort.
There's a moment when you meet someone, and your spidey-sense starts tingling that this person is bringing trouble and misery into the world. It makes you skeptical of what that person says, and puts you on guard for the future. It's a very handy voice to have in your head when you sit through a time-share pitch in exchange for attraction tickets. The movie spends three hours looking at those who would take advantage of those who do not have this voice guiding them through financial decisions. In short, it's exploiting a market failure of two parties with equal information making a market transaction that is advantageous to both, and replacing it with a system that destroys American Capitalism. It's abhorrent. The glorification of sex, and drugs, and money (seriously, does anyone go around talking about how much their suits cost? How gauche!) leaves one thinking that Wall Street may be a pretty nifty place - martinis with Matthew McConnaghey, hookers on the office expense account, fast cars and yachts - no talk about the people who are losing everything. Instead, because postmen and garbage collectors want to make money in the stock market, they deserve to be taken advantage of. Their greed gives Stratton Oakmount the ethical right to take all of their money. Pushing penny stocks off pink sheets might be one issue, but the full-out stock price manipulation that undoes the firm is pushed to the side and not treated with the same amount of time as the "Look at these poor people who want to be rich, the shmucks!" story-line. It trivializes their pain in order to tell the story of money laundering and Quaaludes.
But, this is something to consider - why DOESN'T Hollywood look at the way that the middle income household is impacted by such things? Why do you only see the 1% on screen? Or, if it is a "middle class" family, then the top 15%? I'd love to see a serious turn towards showing families who earn ~ $52,000 per year in the U.S. It would be a jar to see how the median household actually lives, and more pressing to see how such families are impacted by asshats like Jordan Balfort.
Friday, January 3, 2014
Bad HR on TV: Mystery Diners
This may be a well documented phenomenon, but with winter break and no internship or work for the first time in 9 years, I have nothing to do all day. So, I'm watching a bunch of bad reality TV shows. Food Network has a show called Mystery Diners. Not only is it highly unlikely that this is a real show, but my fear is that people may watch these shows and assume that what is happening is legal, ethical, and more than a marketing ploy.
Case in point is the Cheeseburger Baby episode that aired at 3:30 this afternoon that has me a bit riled up. Owners suspect that the ex-con that they hired has been stealing, try to entrap him, but while monitoring him, discovers that a waitress has been the one stealing from the till. Ooh... what will Charles Stiles (whoever that is) and the owners do? It almost makes for compelling TV, but not entirely.
First of all, the easiest way for the owners to stop theft is to lock the cash office (seriously? It's in an open cabinet?), restricting access to the manager, and giving each cashier a till. This state-of-the-art system has been standard practice since the mid-1990s, when I had the crappy retail job in high school that encourages all to never work retail again. Maybe a security camera in the cash office, too, especially if you are located in a city like Miami. Yeah, it might be problematic to have security cameras all over the place, but it's not illegal. These are areas where employees do not have a reasonable expectation to privacy like a bathroom or locker room. It is concerning that employees are under video monitoring without notification. However, to fix the problem, a notice that the cash office is under surveillance (or a camera in plain sight with a red blinking light) gets around most privacy laws for most states. That the sting relied on manufactured situations that boarder on entrapment leads one to question the ethics f the situation. Sure, not illegal. But, if Guillermo the Ex-Con had fallen for one of these ploys and this led the owners to state that he was probably behind the other thefts, then there would be a huge-ass defamation lawsuit in the works. Fortunately, this didn't happen. It would have made for bad TV.
At the end, there is a major violation of privacy when the owner rips the fanny pack off "Christia"'s body and examines the contents. Here, the employee DOES have a reasonable expectation of privacy. It's tantamount to looking through the employee's clothing. THAT is not allowable. If there was evidence, and this had been a real situation, then the police should have been called and an investigation ensued. Otherwise, huge-ass lawsuit. Oh, none was filed? Yeah, there's a reason for that. Worse, even if you think this is fake, you may believe that employees have the right to frisk employees and seize property.
So, no, the ex-con is not responsible. Aren't the owners wonderful for giving this guy a second chance? Aw. What wonderful employers! In fact, that's what this show is trying to do: it reinforces that small businessmen are tiny gods, whose failure at business could only be because of the bad, no good, evil low-wage employees who thwart their boss' God-given right to a profitable business. It's BS. But it's not the only show that reinforces these stereotypes.
Case in point is the Cheeseburger Baby episode that aired at 3:30 this afternoon that has me a bit riled up. Owners suspect that the ex-con that they hired has been stealing, try to entrap him, but while monitoring him, discovers that a waitress has been the one stealing from the till. Ooh... what will Charles Stiles (whoever that is) and the owners do? It almost makes for compelling TV, but not entirely.
First of all, the easiest way for the owners to stop theft is to lock the cash office (seriously? It's in an open cabinet?), restricting access to the manager, and giving each cashier a till. This state-of-the-art system has been standard practice since the mid-1990s, when I had the crappy retail job in high school that encourages all to never work retail again. Maybe a security camera in the cash office, too, especially if you are located in a city like Miami. Yeah, it might be problematic to have security cameras all over the place, but it's not illegal. These are areas where employees do not have a reasonable expectation to privacy like a bathroom or locker room. It is concerning that employees are under video monitoring without notification. However, to fix the problem, a notice that the cash office is under surveillance (or a camera in plain sight with a red blinking light) gets around most privacy laws for most states. That the sting relied on manufactured situations that boarder on entrapment leads one to question the ethics f the situation. Sure, not illegal. But, if Guillermo the Ex-Con had fallen for one of these ploys and this led the owners to state that he was probably behind the other thefts, then there would be a huge-ass defamation lawsuit in the works. Fortunately, this didn't happen. It would have made for bad TV.
At the end, there is a major violation of privacy when the owner rips the fanny pack off "Christia"'s body and examines the contents. Here, the employee DOES have a reasonable expectation of privacy. It's tantamount to looking through the employee's clothing. THAT is not allowable. If there was evidence, and this had been a real situation, then the police should have been called and an investigation ensued. Otherwise, huge-ass lawsuit. Oh, none was filed? Yeah, there's a reason for that. Worse, even if you think this is fake, you may believe that employees have the right to frisk employees and seize property.
So, no, the ex-con is not responsible. Aren't the owners wonderful for giving this guy a second chance? Aw. What wonderful employers! In fact, that's what this show is trying to do: it reinforces that small businessmen are tiny gods, whose failure at business could only be because of the bad, no good, evil low-wage employees who thwart their boss' God-given right to a profitable business. It's BS. But it's not the only show that reinforces these stereotypes.
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