On May 12, 2015, the guidelines for those who want to be certified in the prevention of operations with resources of illicit origin and financing of terrorism were published in the Federal Official Gazette. The aim of this new certification is to demonstrate that in the country there are those who have the appropriate expertise in the area of “Prevention of Money Laundering and Financing of Terrorism.”

This seeks to contribute to a better and greater compliance in the preventive regime of money laundering and terrorist financing, in addition to generating greater confidence in professional skills.

Who can be certified? According to the publication, public accountants who work in the area of auditing as well as other professionals who are dedicated to the field can be certified. Their services can be provided to entities and persons subject to the supervision of the National Banking and Securities Commission (CNBV for its acronym in Spanish) to verify compliance in the aforementioned area.

The formal requirements, which in the judgment of the competent authorities who will distinguish those who will be the future experts in the field and differentiate them from other professionals are, to the letter, the following:

Have at least a level of studies equivalent to a BA degree;

Have at least one year of experience in the field of prevention, detection and reporting of acts. If participants do not have a degree or professional credentials, they must demonstrate that they have at least four years of experience in the field;

Not having been convicted of property offenses, or disabled to perform a job, position or commission in the public service, the Mexican financial system or in any other country, and

Not having a history of suspension, cancelation or revocation of a registry to serve as an independent external auditor, or having a certification previously revoked by the Commission.

The objective of the requirements is to establish a control mechanism to provide confidence and that will contribute to promoting the stability of the financial system. In addition, to comply with the foregoing, a committee of experts determined the knowledge that participants must have in the field of Prevention of Money Laundering and Financing of Terrorism to receive certification. Therefore, the CNBV entrusted the National Evaluation Center for Higher Education (CENEVAL, for its acronym in Spanish)1 to prepare an exam of valid and reliable knowledge, and with the characteristics of an equitable and ethical evaluation.

The characteristics that the authorities requested for the certification exam are the following:

The exam lasts four hours with 118 multiple-choice questions. Each question has four response options with one correct answer. To pass the exam, one must pass the three areas in which the exam is divided:

The first area refers to basic knowledge of Prevention of Money Laundering and Financing of Terrorism. This section assesses the knowledge of the concepts of money laundering, types and applicable penalties in accordance with the Mexican framework; knowledge of the integration, purpose and functions of the main forums and international and inter-governmental agencies in the field; knowledge of the content of the international conventions as well as the functions of the principal Mexican authorities.

The second area comprises the technical expertise of Prevention of Money Laundering and Financing of Terrorism in accordance with the Mexican legal regime. One must be aware of the laws relating to the Mexican financial system, the general provisions applicable to obligated parties, and the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin.

The last section includes knowledge of the methodology to conduct the audit, reports and the methodology for monitoring the CNBV, knowledge of the Basel Committee, the risk management model of the Wolfsberg Group, and the risk-based approach for the banking sector according to the International Financial Action Task Force on Money Laundering (FATF).

Once the exam is passed, the certification is valid for five years. When it expires, it can be renewed. To renew it, the certified professional must have completed at least 50 hours of training to demonstrate compliance with continuing professional education. If the applicant does not pass the certification exam, he/she will have up to two opportunities in the same calendar year to pass the exam.

A year after the publication of the call for certification of Prevention of Money Laundering and Financing of Terrorism, only three certification exams have been conducted. In these three exams, 1,961 application sites were opened, according to data from the calls for certification in the field of Prevention of Money Laundering and Financing of Terrorism  published in the Federal Official Gazette. For the fourth exam, which will take place in July 2016, there are 1,710 places.

According to a report in El Financiero, only 170 of the 503 who took the exam passed in the first evaluation. This represents a passing rate of 34%, which is an unsatisfactory result. Iván Alemán Loza, former vice president of Supervision of Preventive Processes of the CNBV, said that if someone fails the exam twice, “the financial institution will be notified of that fact and, therefore, the person may not be a valid interlocutor of the CNBV, and it will be the decision of the institution what it will do with that person.” 2

As can be seen in the list published by the CNBV, only 195 persons obtained the certification in the field of Prevention of Money Laundering and Financing of Terrorism in the first stage (June 1 to September 23 of 2015) and have given their consent for their personal data to be published. Of this figure, the area of compliance represents 37%, auditors 33%, lawyers 6%, inspectors of the CNBV 8% and the rest consists of consultants or advisors and others, according to the information provided by the certificates.

The certification is designed to ensure that people have the expertise in the prevention of operations with resources of illicit origin and financing of terrorism, in accordance with the highest international standards in the area, which will undoubtedly generate confidence in the future. The issue has acquired great importance, so it is an opportunity that public accountants must not miss.

1 It is a non-profit civil association that since 1994 designs and implements assessment of knowledge, skills and competencies of different levels of formal and informal education, and analyzes and disseminates the results of the exams.

2 http://capitalmexico.com.mx/index.php/principal-detalle/90992-esconde-cnbv-a-reprobados-en-certificacion-antilavado

Electronic references:

Diario Oficial de la Federación (Federal Official Gazette)  1. Agreement which disclosed the schedule to start the certification process of independent external auditors, compliance officers and other professionals in the prevention of operations with illicit proceeds and terrorist financing. [Online]  <http://www.dof.gob.mx/nota_detalle.php?codigo=5385412&fecha=13/03/2015> [Consulted: April 18, 2016].

Diario Oficial de la Federación (Federal Official Gazette) 2. General provisions for certification of independent external auditors, compliance offers and other professionals in the prevention of operations with illicit proceeds and terrorist financing. [Online] <http://www.dof.gob.mx/nota_detalle.php?codigo=5362353&fecha=02/10/2014> [Consulted: April 18, 2016].

Diario Oficial de la Federación (Federal Official Gazette) 3. Call for certification in prevention of operations with illicit proceeds and terrorist financing. [Online] <http://www.dof.gob.mx/nota_detalle.php?codigo=5392673&fecha=19/05/2015> <http://www.dof.gob.mx/nota_detalle.php?codigo=5404206&fecha=18/08/2015> <http://www.dof.gob.mx/nota_detalle.php?codigo=5435551&fecha=01/04/2016> [Consulted: April 18, 2016].

Comisión Nacional Bancaria de Valores (National Banking and Securities Commission), “Certificación en materia de prevención de lavado de dinero y financiamiento al terrorismo”.  [Online] <http://www.cnbv.gob.mx/PrevencionDeLavadoDeDinero/Documents/CertPLDFT-ListaCertificados.pdf> [Consulted:  April 18, 2016].

Comisión Nacional Bancaria de Valores (National Banking and Securities Commission), Centro Nacional de Evaluación para la Educación Superior (National Center for the Evaluation of Higher Education, “Guía para el participante: Proceso de certificación de auditores externos independientes, oficiales de cumplimiento y demás profesionales en materia de prevención de operaciones con recursos de procedencia ilícita y financiamiento al terrorismo”. [Online] <http://www.cnbv.gob.mx/PrevencionDeLavadoDeDinero/Documents/Guia-CENEVAL-20150612.pdf> [Consulted: April 18, 2016].

Leyva, Jeanette, “Instituciones financieras reprueban examen para prevenir lavado de dinero” [Online] <http://www.elfinanciero.com.mx/economia/instituciones-financieras-reprueban-examen-para-prevenir-lavado-de-dinero.html> [Consulted: April 18, 2016].

Mendoza P., Israel, “Esconde CNBV a reprobados en certificación antilavado” [Online] <http://capitalmexico.com.mx/index.php/principal-detalle/90992-esconde-cnbv-a-reprobados-en-certificacion-antilavado> [Consulted: April 18, 2016].

Secretaría de Hacienda y Crédito Público (Secretariat of Finance and Public Credit), Portal of Prevention of Money Laundering, [Online]  <https://sppld.sat.gob.mx/pld/index.html> [Consulted: April 18, 2016].

Until recently, it was widely believed that heading up industries with a high level of technical sophistication was complicated for lesser-developed economies. However, in recent years, companies from emerging economies have begun to gain ground on the multinationals of the traditional powers.

Today stories abound of companies that have established themselves as leaders in their respective markets despite the uncertain technical conditions in their countries of origin. China, India and Brazil are examples of countries with high rates of economic growth with high levels of poverty and inequality, but nevertheless they have begun to achieve notable business accomplishments, as seen in companies like Huawei Technologies, Tata Group or Embraer.

One of the industries of greater technological complexity – due to the rigor of their standards, requirements and international certifications for their products, processes and systems – is the aerospace industry. The demands posed for an emerging economy developing an industry of this magnitude are enormous. Some countries, such as Argentina and South Africa, have tried to develop it and failed. To design and manufacture a new airplane can take 5 to 10 years, during which time each component is subjected to rigorous testing. Millions of dollars are invested long before safety and quality certifications can be received. The financial risk is enormous and a single failed project can lead a company to bankruptcy.

Therefore, it is a sector that has been historically dominated by the United States and some European powers. It is characterized by its vertical integration and by being led by national champions such as Boeing and Airbus. However, increasing globalization has produced a radical change in the global value chain of the sector. Niosi and Xhegu (2010) have identified three major trends in the industry chain: 1) increasing concentration, 2) outsourcing or subcontracting, and 3) internationalization.

The first trend is the consolidation of competition in a few world producers in a natural oligopoly structure, which is necessary to achieve economies of scale, cover the high costs of development, and meet the reduced international demand facing manufacturers of original equipment. Companies have found great benefits in outsourcing, as they delegate certain production activities, particularly the secondary ones, to manufacturing companies in emerging countries. These tasks of sub-assembly and manufacture of subsystems allow them to reduce their costs, focus on the final assembly, marketing, and research and development (R&D) without losing control over their technology. Finally, with the latest trend – internationalization – de-verticalization and globalization of the production chain are favored. This trend is a result of the end of the Cold War and the reduction of government subsidies that has increased the cost of production and R&D, as well as the recent economic crises that have affected the demand for aircraft and have reduced sales volumes. Consequently, a phase of international cooperation for the development and assembly of aircraft has begun, as happened with the Boeing 787.

For emerging economies, these global trends present a great business opportunity and a means to increase their technological capacity. Among the commercial advantages, it should be noted that the incursion in the aeronautics chain generates an economic impact that is reflected in the contribution to the gross domestic product, in exports and in their value added, as well as in the increase in skilled employment (National Research Council, 1999). Second, according to Boeing (2015), the aviation and tourism industries are in full expansion, which will increase the demand for aircraft that businesses today do not have the capacity to meet completely. This opens a new market niche, especially for regional aircraft, that companies such as the Canadian Bombardier, the Chinese AVIC and COMAC, and the Brazilian Embraer are seeking to control.

On the other hand, there are also benefits to improving the technological capacity and levels of innovation. Emerging economies can participate in the waves of R&D, such as in the development of new composite materials, in the improvement of systems and security software or in the creation of biofuels. In addition, the high technological level of the industry and the multiplicity of contributing disciplines provide the beneficial effects of the technological spillover on other related industries, which increases their technological development, productivity and competitiveness.

According to data from ProMexico (2015), Mexico became the world’s largest recipient of foreign direct investment (FDI) in the aerospace industry between 1990 and 2010, with about 33 billion dollars, mainly from its principal trading partners, the United States and Canada, and to a lesser extent the European Union. In the last 10 years, the sector, which was almost nonexistent before, has grown at an average annual rate of 17% in terms of exports, and the number of companies has grown to more than 325. Among these are subsidiaries of companies of the stature of Bombardier Aerospace, Honeywell, GE, Safran and Airbus Helicopters.

The reason for this important inflow of FDI has to do with the competitive advantages that Mexico has and that make it a valuable ally for the original equipment manufacturers that want to internationalize their production.

First, Mexico went through an intense period of transformation of the industrial base beginning with the North American Free Trade Agreement (NAFTA), which allowed the installation of industries such as the metallurgical, automobile sector, electronics and chemical. These industries contributed to the formation of human capital with scientific and technological skills useful for the aeronautical sector and whose cost of labor is lower than in other attractive emerging economies. As if that were not enough, efforts have been made to create specialized institutions of higher education in the sector, such as the Aeronautical University of Querétaro (Villavicencio et al., 2013).

Second, the proximity to some of the world’s largest aerospace conglomerates, such as those of Seattle and Wichita in the United States, and Montreal in Canada, as well as the commercial benefits of NAFTA, reduce the costs of exportation and transportation, which places Mexico as a viable option to integrate into the U.S. aerospace chain.

Mexico also maintains relatively stable macroeconomic conditions in terms of inflation and economic growth and offers support and fiscal and economic incentives to firms so that they can install their operations in the country. In addition, Mexico provides security for industrial property, having adhered to international protection standards, and allows subsidiaries to maintain full control of the company, without having to resort to partnerships with Mexicans to be installed in the country, unlike other emerging economies (Brown-Grossman y Domínguez-Villalobos, 2013).

In summary, the competitive advantages offered by Mexico for the installation of large original equipment manufacturers and their suppliers of aircraft parts and subsystems are truly exceptional. However, serious challenges remain in order to take advantage of the technological and knowledge spillover and to scale steps in the aerospace value chain, especially in the training of skilled personnel and the integration of Mexican companies into the chain. Despite efforts to provide specialized educational programs, the lack of skilled labor remains the biggest barrier to taking advantage of these benefits, since it prevents original equipment manufacturers from relocating their R&D activities in the country. Similarly, the integration of Mexican companies to the value chain is still in its infancy and there are few success stories of Mexican companies that have achieved international certification as suppliers. The vast majority is dedicated to manufacturing, while only a small percentage performs engineering and design activities. This is cause for concern, because the specialization of low cost, low value added industrial activities could repeat the “maquila effect” observed in other Mexican industries, such as automobile, which took nearly two decades to incorporate itself as a link in the chain of high technological complexity. (Villavicencio et al., 2013).

The industry’s potential to increase the technological capability and economic growth of the emerging economies is indisputable. However, the perpetuation of Mexico as a low cost country rather than a center of aerospace innovation can lead it to missing the great benefits of the sector. The first steps in installing the appropriate companies were in the right direction. The following step is to acquire technological and innovation skills to be inserted into the chain and to develop products with greater value added so that the aerospace industry can contribute to the growth of innovation and the economy of the country.

References

Brown-Grossman, F. and L. Domínguez-Villalobos (2013), “¿Tiene la industria mexicana las condiciones para integrarse a la cadena de valor internacional de alto valor agregado?”, in La industria aeroespacial: Complejidad productiva e institucional, Mexico, FLACSO, 135-159.

National Research Council (1999), Recent Trends in U.S. Aeronautics Research and Technology. Washington D.C.: The National Academies Press.

Niosi, J. y M. Zhegu (2010), “Multinational Corporations, Value Chains and Knowledge Spillovers in the Global Aircraft Industry,” International Journal of Institutions and Economies, 2(2), 109-141.

ProMéxico, (2015). “Mexico’s Aerospace Industry Road Map: National Flight Plan 2015,” México: ProMéxico, 7-55.

Villavicencio, D., J. Hernández and L. Souza (2013). “Capacidades y oportunidades para el desarrollo de la industria aeronáutica en Querétaro,” in La industria aeroespacial: Complejidad productiva e institucional, Mexico: FLACSO, 49-86.

Instituto Tecnológico Autónomo de México

Internal Branding is an aspect of brand management that is particularly important for service companies. It may be defined as the transfer of knowledge and passion for the corporate brand from the leaders to all levels of the organization.

Especially critical are the contact employees who, for better or worse, act as the representatives of the brand for the customers. This is one of the more difficult strategic challenges for any service company: to turn its employees into true brand ambassadors.

Internal Branding is a process carried out by all service organizations with a strong internal culture, though perhaps they may not call it that. When it works well, employees develop skills and attitudes that drive them to embody the brand promise when performing service tasks for customers. It is easy to see the importance of this for service-intensive companies, such as airlines, hotels, restaurants, banks, insurance companies, etc. However, many service companies have a low success rate in fulfilling their brand promise. A recent study by the Gallupconsultancy asked a representative sample of U.S. employees if they knew what their organization represented and what made it different from other organizations. Only 42% of respondents were fully in agreement. And to the question if they worked for an organization that always keeps the promises it makes to its customers, the percentage of respondents who fully agreed was only 27%.

Managers of Internal Branding

By its very nature, Internal Branding has to do with employees and with the brand promise. But it would be a mistake to assign its management only to Human Resources or only to Marketing. In fact, close cooperation between both departments is required to develop true brand ambassadors.

Human Resources has the skills and technical tools to carry out the selection, induction, training and performance evaluation of employees. On the other hand, Marketing has the competence and tools for designing the value proposition, the brand promise, and its positioning. Likewise, Marketing defines the customer experience and service behaviors that build it, and carries out the systematic measurement of customer satisfaction. All of this is done with the aim of gradually building brand equity.

Internal Branding is usually delivered through the selection, induction and training programs. In fact, one of the training objectives is to transmit to the employees knowledge about the corporate brand, the brand promise and the role of the employee in its delivery, breaking down said delivery to the visible behaviors that customers have come to expect from the brand. For example, a loyal customer of Starbucks expects the barista to greet him/her by name, and a customer of Italiannis expects that the waiters will sing in chorus on the day of his/her birthday.

As a complement to training, an effective Internal Branding is also created when managers and supervisors remind their employees of the content of the brand promise, providing them with practical examples and anecdotes that ground and materialize its delivery.

While all of the above may seem the sole responsibility of Human Resources, it would be a mistake if Marketing were not involved, or if it only participated in creating the content of the training, and then turned all its attention to the outside of the organization “where the sales are.” For a Marketing executive who is truly persuaded by the value and proposition of the corporate brand, spreading his/her enthusiasm to all the employees is a direct way to build brand equity, and thereby encourage brand preference among consumers.

An illustrative example of the mechanisms of Internal Branding is the company Uber, which in Mexico City has built, in fairly short time, a good reputation for fulfilling its brand promise. Uber has deployed two tools to make each driver act as a brand ambassador. First, there is a rigorous selection, training and certification of the drivers. Training is provided through short videos that drivers can watch and review on their phone.The videos highlight the brand promise of Uber – which is well known by its customers – and explain in great detail the visible behaviors that drivers must display to deliver the promise, such as offering bottled water to the customer. The second tool is the evaluation of the service received, which the customer can provide quickly and easily through the Uber application. For the drivers, the evaluation average is key, because if it drops under a challenging 4.7 star threshold (out of a possible 5) they are penalized. The combination of a brand promise that is well described, plus selection, training, and rapid feedback has allowed Uber to quickly earn a remarkable brand loyalty.

Internal Branding in Franchises 

The success of a franchise is mainly based on a brand promise that is consistently delivered. Therefore, the principles and practices of Internal Branding are also important for franchise organizations,with the advantage that on these, the internal visibility of the brand is usually higher than on a conventional organization.

In a franchise, those responsible for delivering the brand promise in each establishment are the franchisees, who receive the technical support and brand leadership of the franchisor. Recent research has shown that the constant dissemination of brand knowledge by the franchisor positively influences the satisfaction of the franchisees, their perceptions of role clarity, and their commitment to the brand – all of which helps to turn them into brand champions.

Internal Branding is particularly important for young franchises that are still building their brand differentiation in saturated markets, such as hotels and restaurants. Consistency in the visible behaviors of employees can only be achieved through a planned and systematic effort, which will bear fruit in a gradual manner. Only in this way will the recurring customer find the same service in all branches and develop a loyalty to the brand.

Systematic Measurement of Internal Branding

Given its importance, it makes good sense to perform a rigorous measurement of the effectiveness of the Internal Branding process through a formal study or diagnostic. These studies are based on surveys of employees, supervisors and managers. In these surveys they are asked to indicate their degree of agreement or disagreement with a series of statements about the brand. A typical question of the employee questionnaire would be, I know how I should behave to ensure that our brand has a positive image with our customers, while a typical question for supervisors would be I frequently give my employees practical examples of behaviors that reflect our brand promise.

Nowadays, thanks to professional platforms for online surveys (such as Qualtrics or QuestionPro), surveys can be answered efficiently using a PC or a smartphone. This solves two major problems: first, the geographical dispersion of many companies, and second, the high cost of deploying and capturing paper and pencil surveys.

For a company with multiple branches, such as a hotel chain, the survey might reveal significant differences in the brand awareness of employees in two different cities, which is already an important finding that can generate corrective actions. But the main contribution of the study is to determine, through a sample of the entire chain, the systemic impact of the variables that management can change on the desired objectives of Internal Branding. Among the variables that management can change are brand training and the brand leadership exhibited by managers and supervisors. Also, through proper selection, the congruence between the personal values of the employees and the brand’s values can be increased. These variables will in turn have an impact on the desired objectives of Internal Branding, such as the brand awareness of employees, the commitment to the brand, and the display of behaviors that deliver the promise.

The core of the diagnostic study is the econometric model that measures the systemic relationship between all the variables. To correctly measure the impacts, it is necessary to formulate structural equation models, and estimate them using the statistical techniques required by the type of sample utilized.In this way, recent investigations have achieved very interesting results. For example, the congruence perceived by the employee between his/her personal values and the values of the brand has a positive impact on the employee’s motivation to display behaviors that benefit the brand.This has practical implications for refining the selection process.

In summary, a well-executed Internal Branding diagnostic study achieves substantial and practical benefits for the organization, such as: identifying gaps in the selection and/or training process; identifying brand promises that are insufficiently specified, communicated or grounded; demonstrating to managers and supervisors the impact they can have on employees through their brand leadership; demonstrating to employees how their service behaviors generate brand perceptions among customers; and triggering a fruitful dialogue about the corporate brand between the CEO, Marketing and Human Resources.

Notes

? O’Boyle, E. & Adkins, A. (2015) “Super Bowl Ads Don’t Make a Brand” Gallup Business Journal. http://www.gallup.com/businessjournal/181358/super-bowl-ads-don-brand.aspx

2 http://www.choferes-uber.com/capacita/

3 King, C., Grace, D., & Weaven, S. (2013) “Developing Brand Champions: A Franchisee Perspective.” Journal of Marketing Management, 29: 1308-1336

4 ibid.

5 Among the main estimation techniques are Partial Least Squares, Covariance- based Structural Equation Models and Hierarchical Linear Models (PLS, CB-SEM and HLM respectively)

6 Xiong, L. & King, C. (2015) “Motivational drivers that fuel employees to champion the hospitality brand.” International Journal of Hospitality Management, 44: 58-69.

In the minds of today’s managers, it’s common sense that an organization’s employees are its most valuable asset. Keeping a healthy and energetic manpower force may mean the difference between success and crisis, or even failure, in a business operation.

In practice, however, assessing employees’ overall wellbeing is poorly understood and rarely evaluated. Consequentially, it’s not strange to see high rates of absences, sick leave, low morale and even more terrible accidents in work places.

Between 2009 and 2010, the world was shaken by a wave of staff suicides in French Telecom: 20 workers took their lives within 18 months. At almost the same time, the suicides of at least 13 Chinese workers in its plants put Foxconn, which assembles products for Apple Inc. and Sony Corp, under fire. As recently as December 2015, Junming Li, a group leader at Tencent, the second largest internet company in China, died suddenly at home at the age of 30. The reasons for these employees’ death were similar: tough working conditions, high job stress, a sense of alienation and misery at work. These events made managers understand that human resource management should not simply focus on recruiting, training, compensating, evaluation and other traditional issues, but also the emotional and mental condition of employees.

Employees face economic problems in supporting their lives and physical problems in keeping healthy; they need time to relax, and be together with their family and friends. Their relationships with parents, wives, kids, and colleagues may cause emotional strain, and they may also be worried about the future of their careers.  Though most of these problems originate outside the workplace, they can impact work attendance or on-the-job performance negatively, or cause social problems.

Successful organizations tend to be those that are committed to helping their employees manage and deal with a range of issues they may face. Employee Assistance Programs (EAPs) are the most effective method for organizations to performance this function.

What are EAPs, and why are they used?

EAPs are series of workplace-based benefits or services designed to offer employees and their family members the emotional and practical support necessary to function optimally. EAPs started about six decades ago, as occupational alcohol and substances use programs. Since then, they have dramatically evolved into comprehensive managerial instruments that often combine work-life and other behavioral health services to address a host of mental health issues and workplace performance problems.

As a feature of HRM processes, EAPs have gathered greater prominence in recent years. Over 75% of U.S. employers and 67% of Canadian employers provide EAP services to their employees and family members. Although readily available at many workplaces in affluent countries, EAPs are still rare in other parts of the world, especially in emerging economics like Mexico and China. The reasons are twofold: firstly, employers know little about EAPs, and secondly, some managers consider EAP services investments which increases management costs but only benefit employees.

While it is true that EAPs cost money, those are costs that are returned exponentially by reducing absenteeism and employee turnover, maintaining a more harmonious workplace, minimizing plant accidents, and reducing managers’ daily workload. These are benefits that, in turn, decrease operating costs and increase productivity. According to the successful experience of MacDonald Douglas, the annual return of investment on an EAP project is at least 1:3. Such success can be duplicated, however, only by designing the right EAP for an organization–one that takes organizational culture and the specific purpose for having an EAP into account.

Service Contents of EAPs

EAPs cover a wide range of services from working environment design to personal issues affecting an employee’s job performance. Although the services differ from workplace to workplace, they tend to include the following:

• substance abuse or alcohol problems
• mental health
• emotional problems
• physical health
• marital problems
• parenting problems
• professional career development
• legal and financial problem
• crisis and workplace critical incidents intervention
• management and work team problems

Employees and their family members can get these services for free through the following channels:

• phone and web-based consulting
• face-to-face private consulting
• group guidance
• specific training
• executive coaching

In most cases, organizations combine several channels to fulfill EAP functions according to their culture and needs.

Operation Models of EAPs

Once the decision to implement EAPs has been made, the first question that comes to an employer is who will manage and provide the service? Three models are available: internal programs, external programs, and blended programs. Which to choose depends on whether or not the organization has dedicated EAP staff of its own to implement EAPs, and what sort of budget the organization has available.

Originally EAPs were staffed by individuals working directly for the host organization. These programs were typically referred to as internal EAPs. The host organization would have a full-time program director, one or more clinical professionals, and some administrative staff to coordinate the services. On-site contact between employees and counselors was possible, as well was 24-hour support and counseling services over the phone, especially for work locations without EAP staff counselors. The use of internal EAPs for management consultations and other organizational services is substantial compared to other program models. The overall level of EAP utilization for internal programs varies, as does the cost for the program.

Today, with the development of the EAP industry, the bulk of the EAP services are offered by vendors in the workplace. EAPs where all or most aspects of the services are primarily delivered by a vendor are considered external. An external EAP vendor that provides services to help organizations enhance the wellbeing of their employees may be a not-for-profit or for-profit enterprise. Depending on how they’re arranged, the degree of onsite presence for external EAPs varies, but is often less than with internal programs. The use of phone-based EAP counseling sessions and organization-wide training programs may be emphasized.

The blended model is the third way to implement EAPs. It features a small staff which is employed by the host organization, directs the EAP, and provides some onsite clinical and management related services. In the blended model, most of the clinical services are provided by affiliate counselors who work for an external EAP vendor but coordinate their activities through the internal EAP staff.

No matter which model is used, the services must be managed and delivered by trust-worthy professionals, so as to ensure the quality of EAPs. Within the past decades, there has been a movement to standardize the services. As a consequence, there are now two voluntary accreditation certifications specific to EAPs: the first is available from the Council on Accreditation (COA), a US-based international, independent, nonprofit, human service accrediting organization founded in 1977; the second is offered by the Commission on Accreditation of Rehabilitation Facilities, now known as CARF International, a group of companies composed of  CARF Canada and CARF Europe. Because some EAP venders are part of larger health care or social service agencies, they may also describe themselves as “accredited,” though the process through which they are certified are not specific to their EAP product. Also, there may be difference local certificate system in different countries. For example, a Chinese EAP counselor can get accreditation from Chinese Vocational Skills Identification Center of National Human Resources and Social Security Ministry.

EAP Initiation Process 

After selecting a proper EAP provider, the employer needs to develop a plan to get the program started. The initial EAPs process is normally composed of 5 steps:

Step 1: Establishing an EAPs Team

Right at the start, a team or committee, including members of the human resources department, must be established to lead and supervise the EAPs implementation. The team must then decide on which operational model should be used: internal, external, or blended.

Step 2: EAPs Need Data

The EAP team must next identify targeted stakeholders (i.e., employees) and the commonly existing issues among them, so as to determine what specific kinds of EAP services and topics are of most use to their needs. A database should be established. These data can be obtained by means of questionnaires, interviews, psychological test and organizational performance review.

Step 3: Developing and Publicizing an EAP Implementation Plan 

Based on the survey results of the former step, an EAP implementation plan should be designed. The plan should include areas covered by the EAP, techniques to be applied, implementation schedules, persons to be involved, and the budget. Specific goals and metrics should also be developed for each of the services.

The implementation of the program should be publicized via internal newsletters, the business’s internal website, and any other means of communication guaranteed to reach employees in every sector of the organization. The various services available through the program should be clearly listed, and the confidentiality of the services must be assured.

Step 4: Implementing EAPs

Implement the EAPs according to the plan. For example, set aside appointment times within the human resource department to speak individually with employees about their questions, and refer these individuals to the program so they may make any necessary appointments with specialists and begin accessing services.

Step 5: Follow Up and Evaluation

The results of each of the EAP services need to be measured and reported on, in order to evaluate the outcome. These results then become the basis for making improvements and changes in the program’s future operation.

Implications for Managers

Besides the five necessary steps listed above, managers should also take the following actions into consideration to assure the smooth implementation and fruitful outcome of EAPs:

1. Show Leadership Support of EAPs: Senior executives at the organization should announce the availability of EAP services, emphasizing the organization’s interest is maintaining a healthy workforce and outlining the steps the organization has taken in terms of offering those services. This will introduce the EAPs into the organization’s culture and encourages its use.
2. Provide Promotional Communications: Regular communication with employees and family members regarding the availability of the EAP and the importance of being proactive concerning its use is critical to program’s success. All of the staff in the organization should be encouraged to approach the EAP with an attitude that any one of them could one day need, and readily make use of, one of the provided services.
3. Encourage Manager Training: Managers should be trained to recognize changes in behavior or the presence of individual conflicts between colleagues or among subordinates. Supervisors can be taught to proactively identify personal and behavioral issues in employees, and take appropriate action to involve the EAP to get them the help they need.

Suggested readings:

Richmond MK, Pampel FC, Wood RC, Nunes AP. The Impact of Employee Assistance Services on Workplace Outcomes: Results of a Prospective, Quasi-Experimental Study. Journal of occupational health psychology. 2015 Dec.

Nobrega S, Champagne NJ, Azaroff LS, Shetty K, Punnett L. Barriers to workplace stress interventions in employee assistance practice: EAP perspectives. Journal of Workplace Behavioral Health. 2010 Oct 28;25(4):282-95.

Bhagat RS, Steverson PK, Segovis JC. International and Cultural Variations in Employee Assistance Programmes: Implications for Managerial Health and Effectiveness. Journal of Management Studies. 2007 Mar 1;44(2):222-42.

Csiernik R. Employee assistance program utilization: Developing a comprehensive scorecard. Employee Assistance Quarterly. 2003 Jun 1;18(3):45-60.

The last two decades have brought rapid and significant socio-demographic, economic and labor market transformations. Increased longevity and the combined decrease in the mortality and birth rate define the current demographic transition.

The global share of older people (aged 60 years or over) increased from 9.2% in 1990 to 11.7% in 2013, and it is estimated that by 2050 it will reach 21.1%. It is expected that by 2025 there will be just over 98 million persons older than 60 years of age in Latin America, and in 2050, one in four Latin Americans will be over 60 years old. However, it should be noted that there are important differences from one country to another. For example, the growth of the aging population in Bolivia, Guatemala and Nicaragua is not much, while in Brazil, Colombia, Costa Rica, Ecuador, Mexico, Peru and Venezuela it is moderate, and in Argentina and Chile, especially in Cuba and Uruguay, it is high. In 2050, the proportion of people older than 60 years will reach 25% in Latin America and the Caribbean, while in Europe and North America it will exceed 31%. In at least 64 countries, the population over 60 years will reach 30% in 2050. This list is made up of developed countries, but also of most countries of Latin America and many of Asia, including China. It is possible that in 2050 the older population (above 65 years old) in some Latin American countries, like Brazil, Chile and Mexico, will be greater than that of the United States.

One of the most important consequences of the progressive aging of the population are changes in orientation of the mid and late stages of the professional career and the need to prolong working life beyond the normal or official ages of retirement. This point raises an important debate for states, societies, organizations and individuals, since it has to do with the pension systems and social protection, the organization of work and the management of organizations, the health and well being of the elderly, and the cohesion and solidarity between generations. Human resources management in organizations must consider these changes and meet the challenges to motivate, lead, achieve the best performance and ensure a healthy environment for older workers. Are organizations prepared?

Opportunities for Organizations

Older workers can be a source of sustained competitive advantage provided they are managed correctly. Greater overall experience, possession of an implicit knowledge derived from practice and coping in very different situations and having higher levels of emotional stability (increasing their resilience in stressful situations and reducing social conflicts at work) are the most important assets of older workers. This resource of experience should be perceived, evaluated and optimized by the organization. What attitude do those responsible for human resources show toward their older workers? Studies have identified two approaches in practice.

First, the “depreciation” approach considers that people are more motivated and make their greatest contributions in the early and middle stages of their career, and decline as they mature and get older. The age at which obsolescence is manifested varies, but this approach considers that “the older worker” is a worker with “deficiencies.” This approach reinforces negative stereotypes and difficult intergenerational relations at work, favors the development of prejudice toward older workers and pushes them to leave the labor market. This view is based on four myths: the myth of age, which sustains that age is an infallible indicator of the state of the person, when in reality labor capacity is more situational than chronological; the myth of declining productivity, based on the belief that energy, interest and motivation inevitably diminish over time; the myth of the professional career, which assumes there is no reason or value to promoting and empowering older people; and the myth of retirement, which maintains that, because of all of the above, the only possibility for older workers is to retire, and that retirement is the final stage of a working life.

The second approach is that of “conservation,” which sees older workers as renewable assets that continue being valuable to the organization. Consequently, human resources managers include them in training and development programs, and give them a place in the promotion and design of the career. At the same time, measures are taken to address the personal and family needs of older workers. These measures include part-time work or a reduced workday, flexible hours, reduced workload, flexible benefits, voluntary sabbaticals, changes in professional roles or task adaptation and work redesign. Studies have shown that the implementation of these organizational practices and the possibility of choosing largely influence the decision to keep working or opting for retirement.

Organizations can also have highly motivated older workers. The myth that motivation decreases or disappears with age is false. In recent studies it has been found that motivation does not diminish in older workers, rather it is transformed. In the early and middle stages of the career, motivation is often dominated by extrinsic motives – achievement and professional development – while in the final stages it comes from intrinsic motives – security and social contact.

Challenges for Organizations

For organizations to maintain and convert their older workers into opportunities, they must face and give effective answers to a series of challenges.

First challenge: changing attitudes toward age. It is necessary to change stereotypes and reduce prejudice against older workers. Their abilities are not diminished or lost, but they change and must be adapted or updated. It is necessary to provide them development opportunities, ongoing training and retraining, especially skills that improve with age, such as the capacity for analysis, integration of knowledge and experience, and advice. To meet this challenge the organization should define a development goal.

Second challenge: assessments of objective and fair performance. The systems of assessment of productivity must conform to the age of employees. Productivity criteria should be variable; and human resources management that is sensitive to the diversity of people cannot set standards for everyone and consider them as identical replaceable parts. Older workers must be given respect and recognition. To meet this challenge the organization should define a goal of assessment and recognition.

Third challenge: to provide the opportunity for the development of new skills. The professional career involves transitions, which represent the possible change in the functions of each stage. Older workers may assume new skills, such as internal consultant, mentor, trainer, etc., with greater dedication and commitment. Offering these possibilities and defining them can help in career transitions. To meet this challenge, the organization should define a goal of negotiation of the professional career.

Fourth challenge: managing age diversity in the workforce. The company has to adapt working conditions and offer flexible schedules, horizontal position changes, task redesign, reduced hours or work periods, and changes of positions or tasks. Redistribution or redefinition of workloads can contribute to stress reduction and facilitate recovery. To meet this challenge, the organization should set a goal of flexibility and recovery.

Fifth challenge: promoting a culture of generational diversity. A cultural change is needed in organizations to recognize the value of each age group for achieving objectives. Fostering relationships and collaborations between younger and older workers and promoting the potential of knowledge can create synergies and increase interdependencies. These policies can be specified in the following message: “Being different is not a problem, the problem is to be perceived and treated as different.” All employees can learn from each other. To meet this challenge the organization should set a goal of fostering a culture of diversity.

The Choice of Bridge Employment 

In addition to the above, human resources management aimed at older adults also has a very attractive option: bridge employment. Bridge employment is the set of forms of work practices between the full-time professional career and permanent retirement. Bridge employment patterns can be considered as varieties of retirement that prolong working life, while the term “retirement” refers to the final departure from the workforce. The transitions that characterize bridge employment occur both in the same occupation and in different occupations, and may occur in forms of wage employment (part-time, fulltime or temporary) or in forms of self-employment or entrepreneurship.

Regarding the factors that foresee the acceptance of bridge employment are the perception of good health, an age around the late fifties or early sixties, greater organizational tenure,, high level of satisfaction and enjoyment of the job, a perception of being very competent or having great skills related to the career, a strong entrepreneur orientation, having a partner who also works and children or dependent relatives in the family (environment), having the need to maintain a level of income after retirement age or to ensure the necessary contributions to receive a pension, lack of compensation and benefits systems or defined pension plans, and the desire to reduce levels of stress and excessive workload of a fulltime job.

In the last 20 years, the modalities of bridge employment in different countries have shown the following benefits to individuals and organizations: improvements in the psychosocial quality of life and life satisfaction during, before and after retirement; increased well being and occupational health; reduction of serious diseases and functional limitations and improvement in the mental health of older workers; increased satisfaction and adjustment to retirement; strengthening the autonomy and financial security and economic well being after retirement; decreasing the experiences of age discrimination in older workers, and promoting flexible employment agreements that allow organizations to retain (and even attract) experienced and skilled workers when they reach retirement age. Finally, although the evidence of the effect of gradual retirement on productivity is still scarce, qualitative data indicates that older workers who hold positions after retirement age are motivated and competent and productive.

In summary, organizations have great opportunities to optimize the contributions of older workers to achieve their goals. There are challenges to face and resolve, but the experiences of success by implementing policies and human resources practices are a guarantee of achieving the desired goals. The challenge of the current and future demographic changes requires organizations to be up to task: We must treat and assess older workers as we would want to be treated when we reach that age.

References

Alcover, C. M., Topa, G., Parry, E., Fraccaroli, F. and Depolo, M. (eds.) (2014). Bridge Employment: A Research Handbook. London and New York: Routledge.

Alcover, C. M., Topa, G. and Fernández, J. J. (2014). La gestión organizacional de los trabajadores mayores y los procesos de mantenimiento, prolongación y salida de la vida laboral. Papeles del Psicólogo, 35, 2, 91-98. http://www.papelesdelpsicologo.es/pdf/2359.pdf

Bal, P. M., Kooij, D. T. A. M. and Rousseau, D. M. (eds.) (2015). Aging Workers and the Employee-Employer Relationship. London: Springer.

Wang, M., Olson, D. A. and Shultz, K. S. (2013). Mid and Late Career. An Integrative Perspective. London and New York: Routledge.

Yeatts, D., Folts, E., and Knapp, J. (2000). Older workers adaption to a changing workplace: employment issues for the 21st century. Educational Gerontology, 26, 565-582.

]]> http://direccionestrategica.itam.mx/el-envejecimiento-de-la-poblacion-y-la-gestion-de-recursos-humanos-oportunidades-y-desafios/feed/ 0 http://direccionestrategica.itam.mx/how-to-communicate-results-from-an-employee-survey/ http://direccionestrategica.itam.mx/how-to-communicate-results-from-an-employee-survey/#comments Mon, 27 Jun 2016 21:42:13 +0000 http://direccionestrategica.itam.mx/?p=8133 By: Ingwer Borg
WWU Münster
Germany

Employee surveys can have many positive effects, but they unfold their full potential only if they are communicated effectively. In practice, communication is often done by distributing thousands of computer-generated reports more or less simultaneously to all managers.

Each report focusses on a manager’s organizational unit, showing what his/her subordinates said in the survey, typically in comparison to the results of higher-order units. This approach has the disadvantage that it leaves many managers and employees in a limbo, wondering what “they” (i.e., executives, top managers) think about the survey results, and what “they” intend to do now.

A better way to communicate is to roll out the survey results in a top-down cascade, beginning with top management, and ending with the working groups at the shop floor. Right after the survey, some very general feedback can be given (e.g., about the participation rate or on some general trends on global job satisfaction), and also information about the next step, but all reports for managers should be held back until top management has seen the results and is ready to formulate first responses to this information. Such responses include, in particular, one or two areas of focus: “The survey showed to us that X is a major issue in the company. Most likely this is also true in your area of responsibility. If so, we expect you [Manager M] and your team to make a positive contribution. Please report by [date] to [M's supervisor] what you have done or plan to do–or that you feel that no action is needed or no action is possible in your area, and why.” The area of focus can even be a field of action, a clearly assigned task. For example, in one large IT company, the executive board said that “the survey showed us that our strategy must be better communicated and sold more effectively to all employees. Every officer will report to the Board by [date] on the actions that are implemented in his/her area of responsibility. And here is what we will do: …”.

The individual managers at the next-lower level of the hierarchy will then receive their survey reports together with such areas of focus. This will align the follow-processes, giving them strategic punch. Middle managers may add one or two additional areas of focus that deal with problems or opportunities relevant for their own areas of responsibility. So, supervisors at the bottom of the hierarchy will receive their survey reports together with a few top-down directions and goals for subsequent activities. This prevents that they simply report just about any action as their response to the survey (e.g., actions that were running anyway or “Mickey Mouse” actions such as re-decorating the rest rooms). Middle managers must also make sure that they have something solid to say when they report to their supervisors what they did in response to the areas of focus. Hence, they will, in turn, see that their subordinates deliver something that upper management likes to hear.

Figure 1. An MDS bubble plot, where bubble size represents percent agreement to item (“favorableness”); halo around index for commitment (the “dependent” variable) shows potential drivers for action planning .

But how can top managers identify powerful areas of focus? The typical PPT presentations on the survey results for top managers consist of a sheer endless series of colorful and animated slides with bullet points and histograms. They exhibit findings such as the company’s global results, often relative to industry benchmarks (where available), and compare the results of various organizational units, strata, and points in time (e.g., Production, Marketing, Sales, etc.; large subsidiaries; blue collar vs. white collar; new vs. older employees; this survey vs. last year’s survey). This is all nice to know, but hard to remember and even harder to translate into a survey “story” of what leads to what and why. Thus, managers are lost in piecemeal statistics that offer no convincing leads for what to do. They then grab what appears plausible, do what they wanted to do anyway, or simply do not respond to the data at all (thereby throwing away an opportunity for strong actions). What is typically missing in such presentations is something that shows, in a compact and accessible way, the structure of the data and information on what drives what. What is needed is a single slide that that supports data-guided discussions on what to focus on in action planning. Figure 1 shows an example. This display is a multidimensional scaling (MDS) plot of the inter-correlations of the items of a survey in a large IT company. Each point represents a question from the survey. The distance between any two points shows how similar the answers to these two items were in the survey: Knowing the answer of a person to item X, you can easily predict what the person says on item Y if the points X and Y are close neighbors (such as, for example, “enjoy my work” and “satisfied with tasks”). Items that are far apart in the MDS plot are unrelated (such as “satisfied with working conditions” and “trainings are good”). Here, a person who is satisfied with one issue, for example, may also be satisfied with the other issue. Or he/she may not. You cannot tell: The correlation is zero. (In the typical employee survey, there are no items with negative correlations. This makes MDS simple.)

In Figure 1 we also have a special variable, “commitment”, shown here as a small square. This variable is an index that shows the person’s tendency to leave the company in the near future. (The index is simply the mean value of items such as turnover tendency (reflected), advocacy, and pride in company). Turnover was a serious problem in this company, and so top management was particularly interested in drivers for turnover. To find them, a cloud is drawn about the commitment point in Figure 1. It shows what items are good predictors of commitment.

Now assume the plot in Figure 1 was made on a rubber sheet. If you were to grab this sheet with two fingers on any point X and pull it up, what would happen? The sheet would first lift off at this point, forming a small cone: Pulling up the sheet on point X would cause the neighborhood of X to go up too. Now imagine you would succeed improving (“pull up”) the item “performance=money” item in Figure 1. Since this is so closely associated with commitment, this would most likely also positively affect (“pull up”) the person’s commitment toward the organization. “Satisfied with chances for advancement” and “Satisfied with pay” are also drivers of commitment.

Our MDS plot also shows by the size of the points (“bubbles”) the extent to which these items were rated positively, and “money=performance” obviously received a particularly poor rating. Moreover, we also know from other data, that this rating is clearly below industry benchmarks and so it is realistic to assume that it can be improved! Hence, improving the relation of high performance to monetary rewards (and to chance for advancement) offers itself as a promising candidate for action. Naturally, improving this relation is not easy, requiring a complex action with changes in the pay system, but also in properly assessing performance by supervisors. So, this area of focus requires efforts on all levels, and by various departments.

Using MDS has been found to be an effective method in practice when working with managers on finding areas of focus. Managers understand such plots quickly, and then spend much time discussing the relationships of the various items and topics.

Further readings:

Borg, I., & Mastrangelo, P. (2008). Employee surveys in management. Cambridge, MA: Hogrefe-Huber.

Borg, I., Groenen, P. J. F. & Mair, P. (2012). Applied multidimensional scaling. New York: Springer.