Billy Ansoff Buchs, CEO of the famed Acme conglomerate, has been quite successful in getting everyone -- even the union employees -- to focus on the big picture. At the beginning of each month, Buchs presents his video-format "State of the Meal Ticket" report to employees. Every worker worldwide receives an e-mail announcing that the latest five-minute movie has been posted to the company intranet. In addition to desktop PC viewing, the film clip is looping continuously at every plant during the lunch period the day it's released.
Meanwhile, at the local Acme plant down by the river, employees follow the metrics the way investors follow the Dow Jones Industrial Average. In fact, an active underground wagering system as complex as any on Wall Street has evolved around the changes and directions in the key performance indicators Buchs highlights in his talks. Nevertheless, the plant's high productivity rate and historical low staff turnover are sufficient evidence of employee self-interest in the plant's welfare.
Marsha Malowe, the secretary in the maintenance department, is a case in point. Regardless of the dour tone of most of the videos released during the past few years, it's her nature to organize her environment, keep her head down, work hard and actually try to make a difference. Although she doesn't need to, Marsha regularly eats lunch at her desk while keying the department's data into the maintenance software package and cranking out reports. She serves as the resident techno-geek when the IT department can't respond to computer problems in a timely manner. She's a stickler for detail and keeps the maintenance records internally consistent. As Marsha sees it, her goal is to do more than merely pull her own weight.
Although employees in the plant use touchscreens and other high-tech ways to report their activities in real time, Acme's non-exempt office-based employees submit paper timesheets for each two-week pay period.
Acme's maintenance manager, Don Kashane, at least as busy as Marsha, has bigger fish to fry and generally gives the timesheets only a perfunctory review before approving and forwarding them to accounting for processing. Until, that is, the HR department informed him of some irregularities in Marsha's sheets. After doing some investigation, Don called Marsha into his office and closed the door behind her as she entered.
"What's up, Mr. Kashane?" she asked, feeling somewhat trapped.
"There's a problem with your latest timesheet, Marsha," he replied. "And I feel there may be problems with some of the earlier ones, as well."
"What kind of problem? Am I being fired?" Marsha asked.
"No, no, nothing like that," Said Don. "But you've got to account for the actual number of hours you work here. You can't simply put down some number you think we want to see. You know what I'm talking about, don't you?"
"I'm not sure I do," she replied.
"You've got to stop this, Marsha," said Don. "I know you worked way more than 40 hours the middle two weeks of December. I was here. I saw. We were all working like lunatics executing the year-end shutdown and handling the contractors to relocate Line 7 during the holidays. Dozens of people saw you working here until 8 P.M. every night. Yet, your timesheets show only 40 hours for each week. Why is that?"
"But Mr. Buchs keeps telling us that Acme is having a hard time right now," she countered, "and that we've all got to pitch in to get through the rough spots."
"In fact, Marsha," Don said, "I've asked around, and people told me that you regularly work late. So, I checked with Payroll, and they told me that none of your timesheets for the past year show more than 41 hours in any week. Am I wrong? Why are you doing this?"
Marsha offered her reply through teary eyes. "The maintenance technicians haven't gotten any overtime pay for the past 12 months. I know that's true because I enter the data. It's not fair that they struggle to pay holiday bills while the people in the office don't."
"Look, Marsha," said the exasperated boss, "I'm taking some heat over this matter. You're messing up the activity-based costing system. You're cheating yourself. You're also putting the department in a bad position. You've got to report your time truthfully. And if you don't, I'm going to have to write you up."
"But, Mr. Kashane," said the weepy Marsha.
"There's no buts about it. Just do what I told you," sighed Don as he dismissed Marsha and returned to the mountain of paperwork that characterizes the life of a supervisor.
What's the beef here? Why beat up on a good thing? What would you have done differently?
An academician says:
I'm 100% in Don Kashane's corner on this one, although maybe not for the same reasons as he. Acme's open-book management is laudatory and it has worked well in many companies, but that's not the issue here. Something is wrong with the basic business model. If they are making the financial numbers, they are doing so with a lot of free labor and thus are deceiving themselves. This is basically just another way of "cooking the books." The books may be "open" but they also are "cooked." Acme needs to get a handle on the actual costs of running that operation and figure out how to make it a viable operation based on the real numbers.
There's also both an ethical and legal question here. Employees should get paid for the hours they put in and it's management's obligation to see that they do. To encourage, or even look the other way, on unpaid labor is both unethical and most probably illegal.
Finally, Marsha Malowe appears to be the type of employee most of us would love to have working for us -- dedicated, hard-working, loyal and competent. So, if I were Don, I'd let Marsha know how much she is appreciated. But I'd also explain that one of the purposes of open-book management is to let everyone see how the company is doing -- no games, no hidden costs or payoffs -- just the unvarnished truth. So it's important that she be honest with her records. It's only when the employees and management are aware of real problems with truth that something can be done about it.
Prof. Homer H. Johnson, Ph.D.
Loyola University Chicago
An attorney says:
Don Kashane deserves 10 lashes with a wet noodle. As the maintenance manager, one of his duties is to supervise the employees who report to him, and that includes knowing what hours they work and ascertaining that the time they reflect on their time sheets represents the actual time worked before signing off on the time sheets.
Both under Federal wage hour law and under state laws, an employer must pay an employee for all hours in which the employee is "permitted" to work, regardless of whether or not the employer asked the employee to work those hours. In addition, of course, non-exempt employees must be paid time and one-half for hours over 40 worked in a work week. By allowing Marsha Malowe to work overtime hours and not paying her time and one-half for those hours, Acme is in violation of the law.
While it appears that Marsha is not likely to complain to the Department of Labor that she has not been paid for overtime, a complaint by any other Acme employee to the Department of Labor could well launch an investigation into all of Acme's pay practices. Almost always, irregularities appear in the course of an audit, and employers are required to give employees back pay to come into compliance with legal requirements. Don's lackadaisical attitude about time records has placed Acme in an unenviable position.
What about Marsha? Regardless of her lofty motives, she has falsified her time records. Although it's most unusual for an employee to falsify time records by under-recording the time worked, in the last analysis, Marsha is just as guilty of falsifying her hours as the employee who leaves at 3 p.m. and writes 5 p.m. on her time sheet. At many companies, falsification of time records carries an automatic penalty of immediate discharge without any prior warning.
While this may be extreme given the circumstances of Marsha's situation, Don should not have threatened her with a written warning the next time. He should have given her a written warning immediately, both to emphasize the seriousness of the infraction and to make a record to protect the company that she was told in no uncertain terms to accurately record her time. He also needs to monitor the time that she works and carefully review her time sheets in the future. In addition, if Acme can determine the time Marsha actually worked during the past year -- by examining the time she logged on and off her computer each day or swiped her card key pass to get into the building -- it should pay her the overtime that is due her.
But even if Marsha persists in her unorthodox time card practices and ultimately loses her job at Acme, she should have no difficulty finding employment elsewhere. Who wouldn't want such a dedicated, hard-working employee?
Julie Badel, Partner
Epstein Becker & Green, P.C.
A corporate consultant says:
There are three main components to this case: what Marsha did, why she did it and Don's management of the situation.
What Marsha did distorted necessary business analysis, creating the potential for conclusions derived from those analyses and actions based on those conclusions to be potentially hurtful to Acme.
Why Marsha did this was two-fold: to contribute, in her own small way, to Acme's financial recovery and to equalize, in her own small way, the seemingly uncompensated overtime for maintenance technicians.
Don's error was that he treated an act of devotion as though it were a transaction. It's not the absence of validation, but the presence of invalidation that constitutes the managerial failing in this case.
Regarding her effort to help Acme by not reporting her overtime, Don should actually have shown her how the costs of doing business are tracked, and how decisions are made based on these data. He should have revealed to her how her selflessness, heartwarming though it was, could distort conclusions derived from necessary business analysis, causing actions taken based on those conclusions to be potentially hurtful to Acme.
As regards her effort to be fair to the maintenance technicians, Don should have acknowledged the seeming unfairness of this, promising to get back to her after looking into it. For all she knows, there may be some form of agreement providing comp time rather than overtime for these workers.
Confronting Marsha about what she did without honoring why she did it will, at best, secure her compliance. What Acme needs to secure and preserve is her commitment. Doing so will require a little extra management time. Don's demonstrated expectation that managing people should be dispensed with as quickly and easily as managing paperwork is both unreasonable and ineffective.
Dalton Alliances, Inc.
Our "in the Trenches" stories are created as a learning tool; the names of the companies and the people described within them are fictional.