Given the recent attention to “millionaire’s tax” proposals, I have been asked about higher tax rates on high-income individuals.  Whether I support paying higher taxes depends on whether government is spending those tax revenues wisely.

We have many unmet societal needs for which increased government spending could be helpful.  In fact, we spend too little on public transportation, supportive housing for people ready to leave homeless shelters, but not ready to pay for market-rate housing, and cutting-edge medical diagnostic tests. 

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Last week, I was at a series of meetings in Washington, D.C. talking with members of Congress and their staffs about the recommendations of a coalition of which I am a member called the CEO Health Transformation Community.  One of the other members is Dr. Ray Zastrow of Quad Med, a provider of onsite corporate clinics based in Milwaukee.

Dr. Zastrow made a memorable comment many times during the day.  He said that Quad Med increased the quality of care, and significantly reduced its cost, by “slowing down the practice of medicine.” He said that Quad Med health care professionals are expected to spend 30 minutes with each patient even if they diagnose the problem in the first five minutes. He said that every visit to the clinic is a “teachable moment,” and the health care professional must take the opportunity to learn more about how the patient is feeling overall. (more…)

One of the deepest potential conflicts in every society is the conflict between the roles we have as workers versus consumers.  As a consumer, we want the best product or service at the lowest cost, and, if we have unique needs, we want those unique needs addressed at no additional cost.  We want the worker who is serving us to go the extra mile, and we only want to pay top dollar for exceptional service.

The worker role can be made consistent with our consumer role with exceptional management by those who lead the workers providing us with the products and services, whether those leaders are managers or, in the case of a unionized work force, union leaders.  Too often, however, the path of least resistance for a product or service provider is to design or allow the design of their processes for the convenience of the worker at the expense of the consumer. 

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In the Sunday, December 28, 2008, New York Times, professor Alain Enthoven has a cogent op-ed piece entitled “Health Care With a Few Bucks Left Over.”

In his piece is a compelling argument that our current health care system, neither the patients nor the providers are rewarded for cost-effective, high-quality health care.  He believes strongly that giving more provider choices to health insurance plan participants, particularly large, efficient multispecialty group practices, would significantly reduce health care costs. (more…)

As I have transitioned toward retirement from Pitney Bowes, I am gratified by the many letters and calls I have received from present and former employees.  What has been striking is the degree to which people valued the small favors I did for them.

One executive remembered that I had increased the employee benefit for adoptions from $800 to $2,000, which helped him and his wife adopt two children.  Another remembered a small contribution I made to an MS fund-raising drive for multiple sclerosis.  Still another remembered help I gave her to get the company to make it easier to get support for hearing-impaired employees.  Many remembered condolence, congratulations, or recognition letters I sent, or even a conversation in which I told an individual that he or she was highly valued.

Probably one of the most heartfelt expressions of gratitude I receive year after year was from parents whose children had received college scholarships or other support from the Company. What these stories and others tell me is that, for all the attention organizations pay to compensation and major benefits, leaders underestimate the role small favors play in driving organizational loyalty, engagement, and performance.

As we move into more difficult economic times, we will not have as much money to pay as much as we used to pay.  What we need to do better is to match our total reward and remuneration system with what people value.  Very often, executive compensation committees agonize over making sure companies pay competitively, and overpay executives in the process, without really achieving the loyalty and retention they hope to get.

Having talked to many executives who have left Pitney Bowes, their initial explanation is that they received a better offer and, sometimes, they have gotten a promotion in the process.  However, after we talked for a while, I usually learned that they just did not feel adequately valued by the Company, and that their feeling of being undervalued caused them to take the call from the outside recruiter.

While there are some mercenaries out there, there are far fewer than organizations believe, and we need to figure out how to make remuneration more flexible and less standardized to meet individual needs.  In 1993, I drove the introduction of flexible benefits at Pitney Bowes, but I believe that we have more opportunity than ever to add highly-valued, but low cost, benefits for people.

If an organization does a great job delivering customized benefits valued by the largest numbers of their employees, the organization generally has lower, not higher, labor costs.

Those who oppose these programs often point out the risk of recognizing an employee that others believe is not deserving of recognition.  For example, see the Employee Recognition, Rewards, Awards, and Thank You Ideas article from the Human Resources section of About.com.

Clearly, good recognition processes cannot overcome poor performance management, particularly if the leader supports the wrong people and undervalues the right ones.  My point is that, once a leader is able to figure out who needs to be rewarded and recognized, there is a much wider range of tools available than are used today.

Some people to whom I have made this point respond that individuals still value W-2 income because they cannot pay the rent or the mortgage with the kinds of benefits I have described.  I reply to these people as follows:

• People who are living paycheck to paycheck will generally not get out of a big financial hole by getting an extra percentage point of pay increase. If they want to improve their lot in life significantly, they need to get skills development that enables them to qualify for promotions.
• There are benefits that work to reduce the cost of living for people. For example, our credit union is a wonderful tool for helping employees and their families get more affordable mortgages.
• People have varying levels of need. For someone who is a second income in a family, their reason for working at a company may be the medical plan, rather than the salary they receive. Finding a way to give the person a better medical benefit might actually be more valuable than a salary increase.

We need to be far more resourceful in thinking about rewards and recognition to stretch organizational resources further and deliver more value to people in the process.