Hot Topics - July 14, 2008

Creativity, Humor and Leadership: Being the boss can be funny business

Humor professionals have emerged in the last couple of decades, encouraging workplace humor as a means of generating new ideas and providing intellectual stimulation (see, www.humorconsultants.com). According to Joel Goodman, "Employers have come to recognize that humor isn't kid stuff, that having a good time and enhancing productivity aren't mutually exclusive. Paul McGhee, president of The Laughter Remedy, provides another example of the re-evaluation of humor as a positive influence in the workplace: "Humor is related to flexibility - it's intellectual play with ideas. Organizations that are flexible are capable of creative and innovative thinking." There have been other articles and studies that have described how some workplaces have established "humor rooms", places for employees to take time out to play and have fun. The belief is that this "play" space will raise their creativity and productivity. The Kodak Humor Room, for example, offers joke books, cartoons, videotapes of comedians, stress reducing toys, and software for creative problem solving. Research into the history of Kodak and its leaders' decisions to provide these "humor rooms" reveals that for years, the unwritten rule there was that work is not supposed to be fun. If employees were having a good time, they obviously were not being serious about their work. In other words, work and play were mutually exclusive ideas. But now companies in addition to Kodak (e.g., Google) are discovering that humor is an effective way of increasing productivity and assisting with stress, as well as promoting teamwork and creativity.

The ability to use humor effectively has been identified both in popular and academic literature as one, not the only, important aspect of ''good'' leadership. Successful leaders have been typically described as inspirational and motivational (among other descriptions), or what has been termed, ''transformational.'' From the point of view of the workplace leader, humor is a valuable resource, which can be drawn on to assist in achieving workplace goals, since it makes it possible to demonstrate both authority and authenticity, often simultaneously. It has been argued that humor, a characteristic of the transformational leader, can inherently be a creative component, and this accounts for the value of humor as a resource for enhancing a transformational approach to leadership. Humor provides a vehicle for creative thinking and diverse responses to problems, and encourages innovative and ''off-the-wall'' suggestions. A transformational style of leadership encourages creativity and innovation, the contesting of old assumptions, and questioning of established ways of doing things, which can engender a more creative workforce.

Innovation in the Workplace: The damaging impact of change and job insecurity on creative thinking

Commercial rivalries around the globe, government deregulation of industry, and the increasing pace of organizational technology change have led organizations worldwide to take extreme measures in order to remain competitive. Organizational restructuring, corporate downsizing, mergers and acquisitions, plant closings, and workforce reorganizations affect millions of workers each year. Not to mention the high percentage of "baby boomers" who are predicted to retire by 2010. According to a 2001 study from the Society for Human Resource Management, 43% of US organizations conducted employee lay-offs in 2000 and 2001, with corporate reductions averaging 10 13% of the workforce.

A team of researchers from Washington State University Vancouver looked at the trend of companies downsizing and the effect that insecurity, from such change as those mentioned above, had on employees' performance. Research was conducted in both lab and real-life settings. 104 undergraduate students took part in a lab experiment in a simulated organizational environment, which measured changes in creativity and performance after the threat of layoffs was introduced. Similar data was also gathered from surveys of 144 staff in five organizations in which employees answered questions measuring their job insecurity and creative problem-solving ability. Results showed that both real or perceived job insecurity led to decreased creativity, increased productivity, and a reduction in absenteeism. In addition, hostile behavior and lateness also occurred. These performance improvements might be due to the employees' awareness that they are under increased scrutiny during the period of organizational uncertainty. Research findings show that such improvements are likely to diminish over time if the stress of job uncertainty continues.

One of the scientists, Dr Tahira Probst, explained, "Our research suggests that although productivity does increase, employees' creative problem-solving skills are also hampered. This might mean that the very creativity and flexibility that is hoped for as a goal of downsizing might not materialize." Similarly, researchers have argued that innovation is likely to suffer as a result of downsizing due to an increase in risk-averse thinking and rigidity. Another possibility is that this increased rigidity is not intentional, but rather reflects an underlying loss of cognitive flexibility. It is essential, if organizations desire a more innovative workforce, to take the necessary steps and actions to support employees in understanding and managing change and their fears around job insecurity.

Caution to Employers When Using Flex Schedules and 9/80 Compressed Workweeks

Alternative work arrangements have been increasing in popularity, and with summer here employers are finding it a good time to try some different options for their employees. Some employers are letting employees flex their schedule, others are moving to a 9/80 compressed workweek and some are even offering both options. If you are an employer offering both options, there is one very important item to think about.

Allowing employees to have a flexible schedule can be a problem for the 8 hour day in the 9/80 arrangement with the work week being defined, for example, as beginning Friday at noon and ending Friday at 11:59 the following Friday. The Friday is split into 4 hours before noon and 4 hours after noon in order to make each work week 40 hours. The problem occurs if an employee works a different schedule than 8-5 because this changes the time before and after lunch. For example, if an employee normally works 7:00 - 4:00 and takes lunch at noon, the employee would work 5 hours before noon and 3 hours after. This would add an hour of overtime to one week and cut the next week short an hour. One way to avoid this problem is to change the policy to show that the 8 hour day would not be a flexible schedule day. This is the easiest to administer and follow. Otherwise, employers would have to designate a different work week for each flexible schedule (e.g. Friday at 11:00 to the following Friday at 10:59). For more information regarding alternative work arrangements, contact MSEC'S Human Resource Services department.

Question of the Month - July 2008

Is There Any Risk In Reissuing Lost Payroll Checks?

Yes, there may be. The following situation has been occurring on a more frequent basis:

An employee is issued a payroll check. A couple of weeks later, the employee informs the employer that the check has been lost and asks for another to be issued. The employer contacts its bank and places a stop payment order and then reissues the paycheck. Then, the employee quits. Several weeks later, the employer receives a call from a check cashing company indicating that it cashed the original payroll check and demanding payment from the employer since the employer's bank refused to honor the check under the stop payment order.

Do you have to pay the check cashing company for the original payroll check it cashed?
Many employers falsely assume that since they issued a stop payment order, they have no further liability for the original payroll check. Under the Uniform Commercial Code, however, the check cashing company may be a "holder in due course" and therefore an innocent party entitled to payment. The Uniform Commercial Code applies to negotiable instruments such as paychecks.

To establish that it is a holder in due course, the check cashing company must show that the check does not bear any indication of apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity. This requirement will be satisfied if the former employee simply presents the original check in the condition in which it was issued. Generally, the company also needs to show that it took the instrument (the payroll check): (i) for value, (ii) in good faith, and (iii) without notice that the instrument is overdue or has been dishonored. Check cashing companies do not have access to stop payment orders employers put in place. Therefore, if the company obtained proper identification and cashed the check, they will have generally satisfied the requirement to be a holder in due course and be entitled to payment.

Of course, the former employee may have committed a crime if his intent was to obtain double payment, but it is left to the employer to locate that individual to obtain repayment or file criminal charges to pursue the matter. That may present more of a burden than it is worth.

Employers can takes steps to prevent this. If it is a current employee, the employer can require the employee to sign a statement stating that they have lost or misplaced the check, that they will return it if they find it, and that they agree to repay the employer if it is forced to honor both checks. Employers can also add prominent notices to their payroll checks indicating that the check is only valid for a certain time after issuance. A company that cashes the check outside that time period is unlikely to be considered a holder in due course.