Bonus or no bonus at the end of a tough year?

In a February 2007 e-glass poll, 83 percent of industry representatives reported they offer employee incentives such as bonuses. Almost two years later, the U.S. is up to its eyeballs in a recession, with a bleak forecast on the horizon. What can glass companies do to motivate employees when bonuses just aren’t in the budget?

In my elementary school days, my slim allowance money couldn’t quite get me through the holiday shopping season. Macaroni-cover tin cans, and homemade coupon books with promises of hugs and car washes, however, served as cost-free and greatly appreciated gifts. But for cash-strapped companies looking to provide holiday incentives to employees, macaroni art likely won’t cut it.

In its November issue, Fortune magazine asked three business leaders what they do for employees when times are tight.

Laura Sejen, global director, strategic awards for Watson Wyatt, an HR consultancy out of Arlington, Va., said employers should strive to cut back bonuses rather than eliminating them completely. “Start a recognition program that gives spot bonuses based on performance. It’s a low-cost way to reward employees and allows you to be selective in granting awards,” Sejen said.
Jim Weddle, CEO and managing partner of Edward Jones, a brokerage firm out of St. Louis, said his company cuts bonuses when the alternative is layoffs. “I’ve been asking managers to simply tell folks that they’re appreciated,” Weddle said.

Weddle said being upfront and honest about the situation eliminates the surprise. “Explain how they system works, and they’ll get it. Revenues are down, so variable compensation is down too.”

Paul Amos II, president and COO of Aflac, Columbus, Ga., agreed that honesty is the best policy when cutting bonuses. “Tell [employees] via every means possible. First, look them in the eye and tell them. They may not fully absorb the changes, so you need to follow up in writing. And then third, make sure to give employees a forum to ask you questions about the change,” Amos said.

Weddle and Amos said they also get creative with their incentives. “We do little things like add casual days. We hired the Ringling Bros. circus to perform for our associates,” Weddle said. “We also recognize folks by giving them a day off to volunteer for causes like Habitat for Humanity,” Amos said.

Glass Magazine publisher Nicole Harris asked glass business owners what they were doing about end-of-year and holiday bonuses in her January 2009 Publisher’s Notes. She received varied responses, including one from an owner who was still undecided about 2008 bonuses. “We stopped doing a Christmas bonus and are doing—or were doing—a bonus on profit. I am considering eliminating that this year in an effort to conserve cash. We are fortunate that we still have work and have only reduced our staff by one. In an environment where many people are losing their jobs, I think my employees will be understanding.”

So, what are your bonus plans for employees? Hopefully nothing with macaroni.


—Katy Devlin, commercial glass & metals editor, fabrication co-editor, Glass Magazine

Card Check Bill must be stopped

With Democrats soon to be in control of both houses of Congress and the White House, organized labor has begun to flex its muscles.

At the top of their legislative priority list is the Employee Free Choice Act, better known as the Card Check Bill. This bill could have devastating consequences for glass shops nationwide. Even the smallest shops could be affected.

The bill (H.R. 800, S. 1041) is designed to simplify and short-circuit the long-established union-organizing process. Blocked in the Senate in 2007, labor made support of the bill a litmus test for candidates it backed in the recent elections. You can be sure those elected officials will now be called upon to make good on their pledges of support.

The Card Check Bill will substantially change the process for union organizing, giving organized labor an unfair advantage. Currently, if organizers collect signatures from at least 30 percent of employees in a given bargaining unit, an election by secret ballot is held by the National Labor Relations Board to determine whether to certify the union. The secret ballot ensures that workers will not be intimidated into voting one way or the other, either by management or labor.
The new bill would shortcut the process by certifying the union as soon as a majority of signed authorization cards is collected. No secret ballot. No organizing campaign during which employees can weigh all sides of the issue and make an informed decision. Instead, union organizers would be in a position to potentially bully and coerce employees into signing the card on-site.

That’s hardly what we call “free choice,” as the bill’s formal title would have you believe.

Among other objectionable provisions, the bill would increase penalties for employers who violate union organizing laws. Curiously, penalties on unions would not be increased.

Even companies in Right to Work states will be affected by this law, as organizing campaigns would become cheaper and easier to wage.

The NGA strongly opposes the Employee Free Choice Act, and encourages our members to get informed on the issue and its implications for their business. At a time when some of the finest firms are teetering on the brink of insolvency, largely due to the burdensome provisions of their outdated and uncompetitive labor agreements, this is no time for organized labor to expand its reach.

It’s never too early to write your congressmen, asking that they oppose the bill when it is brought forward. You may also wish to write the editor of your local paper to express your concerns with this ill-advised bill that would unfairly tilt the playing field toward organized labor to the detriment of your business and your local economy.

Most importantly, we encourage our members to keep an open line of communication with their employees, listening to their concerns and addressing them promptly and thoroughly. After all, the best way to avoid a successful organizing campaign is to maintain a positive relationship with your workers.

—David Walker, Vice President of Association Services, National Glass Association

What would you do with the Big Three?

A day after a CNN poll revealed that 61 percent of Americans oppose bailing out the Big Three automakers, executives of General Motors, Ford Motor Co. and Chrysler LLC appeared for a second consecutive day of hearings, Dec. 5, before the House Financial Services Committee. The executives testified before the Senate Banking Committee Dec. 4.

The members of the House committee, unwilling to approve taxpayer money to bail out the three, suggested alternatives, including a much smaller emergency transitional amount or a "protected restructuring" under government auspices, according to a Dec. 5 article in The Washington Post.

According to The Post article, in the hearings, Rep. Barney Frank (D-Mass.), the committee chairman, said “a lot of mistakes were made," referring to what he described as poor decisions by the auto industry in the past. "The consequence of all those mistakes is that the country is to some extent held hostage.”

One among those mistakes particularly stands out: GM mocking global warming and stubbornly cranking out SUVs. Should Darwinism prevail: Adapt or die?

The “mistakes” continued even up until a couple of weeks ago. During their first unsuccessful appearance on Capitol Hill, the Big Three head honchos flew in on their corporate jets. In stark contrast, Richard Wagoner, chairman and CEO of General Motors, Alan Mulally, president and CEO of Ford, and Robert Nardelli, chairman and CEO of Chrysler, drove or carpooled hybrid or fuel-cell vehicles from Detroit to the December hearings.

On the same note, Chrysler's corporate Web site now touts the following sentence in large type, in the color--you guessed it--green: "It's not a bailout to keep us from failing. It's a loan to help us succeed."

All said and done, Congressional Democrats and the White House still couldn't reach a consensus on how to handle the urgent request for $34 billion in bridge loans—$7 billion for Chrysler, $9 billion for Ford and $18 billion for GM. Democrats and Republicans continued to disagree on where the money should come from, how much should be paid upfront and what kind of conditions to impose. And even though the news of the worst job losses in the U.S. in 30 years--533,000 in November--added urgency to the Big Three's appeal, it still was not good enough for Congress to reach a decision.

Now, I am not saying that the Big Three should not get any loans; given the job losses and the state of the economy, it's a no-brainer that something needs to be done to help the companies stay afloat. But should they get the money without any strings attached? I'm curious to know your thoughts, especially the auto glass repair and replacement folks out there, whose businesses could be directly/indirectly affected by this decision: What would you do with the Big Three? Would you give them the money unconditionally? Not give them a dime? Or give them a lesser amount with conditions, such as producing fuel-efficient cars and serious restructuring within the companies?

By Sahely Mukerji, news editor/managing editor, Glass Magazine

How are you coping?

Black Friday provided some surprising and much needed good news for the U.S. economy—retail sales went up! According to a Dec. 1 Washington Post article, Black Friday sales grew 3 percent to $10.6 billion, and online shopping sales for the long Thanksgiving weekend reached $41 million, or about $372.57 per person, up 7.2 percent from the same period last year.

Despite the weekend’s good news, economists forecast tough overall market conditions for 2009. According to a Nov. 4 forecast from CNN economists, the recession will continue through the first three months of 2009; the overall economy will shrink about 0.1 percent in the first quarter and then begin to rebound slightly; and unemployment could climb to 7 percent or 8 percent by the end of the year.

How is your company coping with the tough economic environment? Has business slowed? What are you doing to stay on top?

Respond—anonymously, if you prefer—in the comment section of this blog, or e-mail me at kdevlin@glass.org, or Jenni Chase at jchase@glass.org.

—Katy Devlin, commercial glass & metals editor, retail glass co-editor, Glass Magazine