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Iron Fist Change Management is Still Sinking! Jan 15

Those of us who have kids have all had the time come along where the kids seem like they don’t hear a word you say.  As parents we have their best interests in mind and attempt to guide and teach them to make the right decisions so they can lead a full, productive life and have as much knowledge as they can at their fingertips to make informed decisions.  When our children make poor decisions or behave in an undesired manner, we try to deter them from that behavior in any way we think that will be effective.  The key word here being “effective”.   In return our children expect us to make decisions as well to better help them adapt and learn in this world.  Even thought they often don’t verbally express it through any kind of gratitude or appreciation.  Can this same principal not also hold true with the views that managers have over their businesses?

Many businesses I have worked either with or for have high hopes in leading their organizations into a better culture.  They genuinely want to change the culture to not only improve morale, but improve the quality of their employees (among other things).  These companies have high hopes, high expectations, and high projections of timelines for success but all lack one simple item; knowledge of how to effectively change the culture that they have created.  In conversation with many of these company leaders, the goals are realistic and they are often well aware of the problems that have cultivated by lack of accountability, lack of recognition, lack of clear expectations, and lack of incentive (just to name a few of the big ones).  However, they think they have all the steps figured out but when it comes time for execution, there is simply no follow through and the plans and implementations become just another “flavor of the month” to the company employees.  No company will ever change a culture with “flavor of the month” programs or initiatives.  Period.

What most companies don’t realize is that appealing to people’s basic needs will win you over the employee’s morale and help build ownership.  Building employee ownership and appealing to their basic needs as people  are two of the main ingredients to truly change a culture.  This can only be done with consistency and sincerity.  A recent boss of mine sat me down and told me he wanted me to instill fear of losing their jobs in my subordinates in order to increase productivity and reduce scrap due to operator errors.  Same old song and dance; increase output, while decreasing scrap.  This is the formula for better profits, is it not?  Ok, well that sounds good at the bottom line, but what about what comes in between? Understandably, the goodwill of the company takes precedence over that of it’s employees, but to what degree?  After all, many company’s claim that “employees are their #1 asset.”  I for one find it morally and ethically wrong for business to treat people the way they do.  Instilling fear will not change people, it will turn them away.  Fear promotes disdain, dishonesty, and disloyalty.   But give an employee incentive, create ownership and you will foster that employees true talents.

Many employers turn to what I call the “Iron Fist” approach of change management.  Basically, do what I say or I will fire you.  Zero tolerance for everything and everyone gains the feeling that Big Brother is watching you constantly and waiting for you to slip up so he can fire you.  The management group gets the entire workforce together and goes over behaviors and procedures that are undesired.  At that point they say, “This is where we are and this is where we are going to be.”  I have yet to see a clear explanation of HOW this is going to be accomplished.  It is as management wants every person in the workforce to flip a switch and forget everything they once knew and become perfect little robots on the drop of a dime.  “My way or the highway” has become too common of a phrase this day in age.  Where are the ethical companies who truly give a damn about their so-called number one assets?  I have personally seen four mid-sized companies attempt to change a culture in the Iron Fist manner and each has failed miserably.  What ended up happening was extremely high turnover rates (most self inflicted), decreased productivity, increased waste or scrap (mainly due to new, inexperienced talent), decreased morale, vandalism, and a general sense of people not giving a shit if the company survives or not.

 

I, for one, am tired of the hypocrisy of the bosses that say one thing but do another.  I sat idly by as two managers spoke about moving an employee to their departments so they could watch him and catch him doing anything so they could fire him.  The senior manager did not mention trying to coach the employee or counseling them.

 

It also seems like every time I go on an interview I am asked how I deal with unwanted employees.   What kind of question is that?  If they are insubordinate and unruly, they eventually work themselves out of a job.  I do nothing to get people fired, they do it to themselves.  Then I am asked again, what do you do to get them fired.  I find it disturbing that employers are actively looking for people to hire that support Iron Fist methodology.  There is a completely different dynamic from an employee that has ownership in what they do and genuinely cares about the company vs that of an employee who is forced into a corner and is constantly looking over their shoulder in fear of losing their job.  These people that believe in Iron Fist management will never experience what it is like to have an employee that wants to work for them. Never.  So why does this methodology still exist?

“For YOUR Security” Oct 28

It continues to happen more and more often.  Nearly every time we (as the people) do things to get back on track.  We are barricaded with red tape and policies whether they be from the government or the companies in which we do business.  When we complain to the company about these red tape policies I get told, “its for YOUR security.”  Now, as a realist, I completely understand that precautions need to be made in order to prevent identity theft and laws and regulations are made in order to enforce those precautions.  But why do these policies have to hinder our daily lives in such a way?

I am not referring to the dreadful 1-800 numbers where you get bounced around from person to person, none of which are the “right” person.  Or even when you call in an ask questions but are told completely the opposite when you arrive and inquire in person.  I am referring to the re-actions from people whether they are in person or on the phone when you tell them their policy sucks.  I have been making payments on an old Student Loan account for some time now.  I have always paid my agreed upon amount in full and on time for over three years.  My status with the University has been reported to the credit bureaus as “Pays As Agreed” and shows no negative marks at all.  I recently inquired about obtaining a copy of my transcripts from this University as I am looking to take a few more classes.  I have ordered transcripts in the past with no issues and they were sent to the destinations I had asked (they were sent very slowly, but sent nonetheless).  I was shocked with I received an email saying that my transcripts were being held due to a financial hold.

I called the University to see what the problem was after checking my records to ensure all payments had gone through.  To my dismay, I was transferred three time to a different department each time.  Apparently, no one who works there knows where to send callers to dispute an account hold.  I finally get to an older woman who begins to speak to me as if I were a child not understanding a word she was saying.  I was told several times that over the summer the University had changed their “system” and that any account that was not paid in full was put on financial hold.  When I asked her about the accounts that were in good standing that had originated before the “system” change, she repeated the same line again but more monotone and more slowly this time.  I began to explain the situation in more detail and she rambled out the same words yet again but with a more pissed off tone to it.  I tried to level with her and said again that I understood, but why should an account in good standing be penalized by changes in their system?  She repeated her phrase and asked if I wanted it in writing sounding like a broken recorded message.

Finally, I hung up on her and called back to speak with someone else.  The next person was more …personable.  This time around I got this great explanation of how the new system was implemented across the board so all accounts were subject to it and there was no authority to override it.  She continued to go on about how this system was put in place to protect my account and was a great improvement for my security.  Every time I hear someone say that phrase, the hair on my neck stands up.  What the hell do they know about my security and how the hell does hinder my academic progress ensure the future of my security?  Dumbasses is what I call them.

Again as a realist, I see there are two parts to this argument.  I tend to disagree with the more positive side of it though… I see the security issues we face and the link between customer service as a complete disconnect.  We need to find a way to ensure out security without hindering the every day events that people go through, even sometimes routine events that we go through.  There has to be some way for both sides to come to a happy median.  No one has really gotten this part of it figured out yet.  I believe that we should develop systems or a CRM system that can operate in the background and keep the customers actions from being hindered.  Time is money and time is becoming more and more scarce for the working family person.  I for one, don’t have time nor patience to find documents from 5 years ago so I can pay a bill that is due today.  I don’t have the time to drive to another state and get a paper copy of my vehicle title because the state I moved to doesn’t “do digital copies of titles.”  I find the whole situation as very frustrating and disappointing.

Do People Still Use Traditional IRAs? Sep 06

More than 70 million Americans do not have sufficient retirement funds when they reach the age of 65.  Much of the 70 million do not have enough to last the entire duration of their retirement (Scott, 2010).  There are many confusing types of retirement plans available for those who wish to begin saving early and do not wish to be part of the 70 million whom fall short.  There is a plethora of information on the web and several reputable investment firms available to the public, but most come up short in letting the general public know the true value (and potentially loss) of what is really happening with their money.  One of the most confusing retirement plans are Individual Retirement Accounts (IRAs).

There are two types of IRAs that can be chosen, Traditional IRAs and the newer Roth IRAs.  While the two have similar foundations when opening an account the distribution laws are much different.  The Internal Revenue Service (IRS) has different laws for each type of account.  The major difference between the two is that Traditional IRAs are funded by tax payer’s pre-tax dollars.  This means that the account can be funded automatically from your paycheck before taxes or other deductions are withheld.  A Roth IRA can only be funded by post-tax dollars or after taxes or other deductions have been withheld.  The methods in which the two accounts are funded are the discerning reason why the IRS has such different laws for the distributions from each account (Retirement Online RO, 2010).

In a Traditional IRA, the IRS has income restrictions in order to open or use an IRA.  If working, there are no restrictions if the employer offers a company funded account for its employees.  Workers who are employed by companies that sponsor an IRA account are limited to single individuals who make less than $53,000 annually or married individuals who make less than $85,000 combined annual income.  Any funds in the account are subject to a minimum 10% early withdrawal penalty if funds are removed before the age of 59 1/2.  In addition, all funds must be distributed by age 70 or further IRS tax penalties can be applied to any remaining balance. Along with income restrictions there are contribution limits.  For account holders under the age 50, the limit is $5,000 annually.  For those 50 and over, the IRS allows a “catch up” period where contributions cannot exceed $6,000 annually.  Contributions of greater amounts are allowed, but only with an IRS penalty, of course (Ohio Life Insurance License Exam Manual Ohio Life, 2008).

Distributions of funds from a Traditional IRA are taxed based upon standard IRS taxation provided the distribution is within the acceptable period, age 59 1/2 thru 70.  For example, Gene has $750,000 in his Traditional IRA.  In the current tax year he withdrawals $60,000 and is age 60.  Gene’s distribution will be counted as income for that tax year and will be taxed according to the normal IRS guidelines.  If Gene was only 58 and had withdrawn $60,000, he would have charged a 10% penalty of $6,000 and be required to claim the full $60,000 in income on his taxes.  In addition to income taxes, account holders are required to pay taxes on any interest and dividends that the account gained.  There is no tax credit for accounts that have significant losses.  There are tax credits available for contributions.  Since the Traditional IRA is funded by pre-tax dollars, the distribution is taxable and we all know the IRS will get their money (Edward Jones EJ, 2010).

A Roth IRA is similar to a Traditional IRA in respects that it shares the same income restrictions and an IRS tax penalty of 10% is applicable if funds are withdrawn before age 59 1/2.  However, there is no requirement to deplete funds by a certain age and no penalties for distributions after the age of 70.  Any distribution from a Roth IRA is non-taxable income (EJ, 2010).  If Gene withdrew $60,000 in a tax year from a Roth IRA, he would pay no taxes on his distribution and no penalties provided he is at least 59 1/2. The IRS does not offer a tax break on any funds contributed into a Roth; there are no taxes on contributions and no taxes on interest and dividends (EJ, 2010).  Once the truth behind a Roth is explained, it seems like a no contest decision to fund retirement with a Roth!

We must understand that both IRAs are funded by an individual’s contribution but can only perform well based on the stock market.  In a down economy as we are currently experiencing, many have lost thousands in their retirement funds.  For account holders in their late 50s and are approaching retirement, this can be problematic.  Young investors in their 20s and 30s need not to worry.  The US economy has experienced several major stock market crashes since 1929.  The running average of stock market values over the past 30 years is 11% (Ohio Life, 2008).  Retirement investments are meant to perform best when they are left alone for the long term and only receive steady, annual contributions.  The sooner an individual can start an account, the better.  Compounding interest can be young person’s best friend for long term commitment.  Stocks are low and the bull market has yet to begin, now is the time to invest in your future and a Roth IRA is the best choice to ensure more money in your retirement.

 

References

Edward Jones.  2010.  Individual Plan Comparison Chart.  Retrieved on March 5, 2010

From http://www.edwardjones.com/en_US/products/retire/individual_plans/plan

comparison/individual_plan_comparison_chart/index.html

 

Ohio Life Insurance License Exam Manual, 1st Edition.  2008.  United States of America:

DF Institute, Inc.

 

Retirement Online, LLC.  2010.  Roth IRA Home Page.  Retrieved on March 7, 2010,

from http://www.rothira.com/

 

Scott, M. (2010, January 9).  Guaranteed Retirement Income Bill Legislation Likely in

2010.  Daily Finance.  Retrieved from http://www.dailyfinance.com/story/ investing

/guaranteed-retirement-income-legislation-likely-in-2011/19306204/