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What Would You Do If the CEO of Your Company Were the One Stealing Your Lunch Every Day?

What Would You Do If the CEO of Your Company Were the One Stealing Your Lunch Every Day?


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‘Should we turn him in, or destroy the evidence and invest in insulated lunch boxes instead?’

Shutterstock/Jason Salmon

If there’s any lesson to be learned here, it’s that you should take your lunch break outside of the office.

In a recent submission to Dear Prudence, the advice column from Slate, a stressed out office worker seeks advice on what to do with the miscreant who will not stop stealing his coworkers’ lunches.

“We’ve tried putting notes and signs on our lunches asking people to please leave them alone,” the employee explains.

“We’ve spiked our lunches with hot sauce or pepper in an attempt to make them unappealing (which also leaves them inedible for us), but the lunch thief has still been striking a couple of times a week.”

It’s not just an average case of passive versus aggressive confrontation, either — after one victim set up a hidden camera, the group discovered that the thief was the CEO of their company.

“Should we turn him in, or destroy the evidence and invest in insulated lunch boxes instead?”

Prudence is sympathetic, and even suggests a hidden penchant for embezzlement, but cautions that since it is the CEO’s company, there’s little do except invest in an insulated lunch box and keep it in a desk drawer.

Behold, the disastrous power that the sad desk lunch hath wrought. If anything, this should be a lesson to everyone about the value of leaving the office during lunch hour.


5 Employment Laws You Do Not Want to Break

As a veteran entrepreneur and small-business owner, I know how hard it is to keep your operation lean and profitable. Often small-business owners are striving to make their businesses less complicated so they can keep more of their time and money. However, the measures taken to streamline a small business can unintentionally lead to costly mistakes, like breaking employment laws.

Here are five employment laws that you might inadvertently be breaking.


Texas Power Broker highway exec Bailey taking road less traveled

1 of 4 Andrew Bailey was appointed CEO of SH 130 Concession Co. in June after the company emerged from bankruptcy. It operates the 41-mile southern section of Texas 130 between Seguin and Mustang Ranch. William Luther /San Antonio Express-News Show More Show Less

2 of 4 Andrew Bailey, CEO of SH 130 Concession Co., which operates and maintains a portion of Texas 130, said it is considering discounting tolls for frequent users of the roadway. William Luther /San Antonio Express-News Show More Show Less

3 of 4 Andrew Bailey, CEO of SH 130 Concession Co., said about 10,000 to 12,000 vehicles travel some portion of the 41 miles of Texas 130 it oversees. William Luther /San Antonio Express-News Show More Show Less

4 of 4 Andrew Bailey, SH 130 Concession Co. CEO, was involved in reconstruction work in Iraq and in building infrastructure in South Sudan prior to joining the toll-road operator. William Luther /San Antonio Express-News Show More Show Less

Andrew V. Bailey II oversees the southern section of Texas 130 between Seguin and Mustang Ranch, the road with the highest posted speed limit in the nation at 85 mph.

Yet when Bailey&rsquos driving the toll road, he says: &ldquoPeople are constantly flashing their lights for me to speed up.&rdquo

At least he can take comfort in knowing there are drivers who use the lightly traveled road.

The dearth of traffic and a mountain of debt led SH 130 Concession Co., which operates and maintains the 41-mile stretch of highway, into Chapter 11 bankruptcy in March 2016.

SH Concession Co. emerged from bankruptcy protection in June with about $1.4 billion trimmed from its balance sheet and a new ownership group &mdash led by funds managed by distressed-debt buyer Strategic Value Partners or affiliates.

The U.S. government is the second-largest owner with a 35 percent stake, after a loan made through the Transportation Infrastructure Finance and Innovation Act was converted to equity.

Spanish infrastructure developer Cintra and San Antonio-based Zachry Construction Corp. which built the section of Texas 130 as the first public-private toll road in the state, no longer are involved. SH 130 Concession still has a 50-year lease agreement with the Texas Department of Transportation.

The new ownership group hired Louis Berger, a New Jersey-based professional services firm that helps clients tackle infrastructure and development challenges, to operate and maintain the road.

Bailey, a longtime Louis Berger executive who also had a 25-year career with the Virginia Department of Transportation, was named the new CEO of SH 130 Concession when it emerged from bankruptcy. The company recently announced it would undertake a $60 million road improvement project starting this month.

Bailey, 65, recently sat down to discuss his role with SH 130 Concession at its Buda headquarters overlooking the toll road. Here is an edited transcript of the interview.

Q: How did you land this job?

A: The company that I came from, Louis Berger, does a variety of different things. Part of that company was working with the lenders during the bankruptcy process. It started with one of our consulting groups that does traffic analysis, traffic projections and revenue projections. And then another part that does engineering and consultancy work that had previously worked with one of the consultants to the lenders on the Indiana toll road and the Chicago Skyway and a few other roads, brought that team in. Because there was a lot of maintenance and issues associated with this road, they asked me to get engaged. We were then asked to bid on becoming the operator for the facility, and that&rsquos how I got involved.

Q: Was Louis Berger involved with Texas 130 before the bankruptcy?

Quick facts on Andrew V. Bailey II

What's your morning routine: I get up sometime between 4:30 and 5:30, go for a run, come back, fix breakfast, drive in here.

What book are you reading right now: "Master of the Senate: the Years of Lyndon Johnson" by Robert A. Caro and "Thinking Fast and Slow" by Daniel Kahneman

What is your favorite restaurant: My favorite place in Austin is La Condesa. My wife took me there for my birthday.

What was your first paying job: Hauling trash. I worked for Fairfax County in Northern Virginia during college.

What is your passion or hobby outside of work: Running, primarily, because that's something my wife and I do together. But I really like being outside, so we do gardening and fishing and all those types of things.

If you had to choose an entirely different career in an entirely different industry, what would it be: Teach. I'd be a teacher. I would hope I'd be able to teach math because it seems to unlock the door to a lot of things.

A: No. We worked on the lender side through the bankruptcy process. Once it emerged from bankruptcy, I became the CEO of the company.

Q: Did you leave Louis Berger to come to SH 130 Concession Co. or are you still with Louis Berger?

A: I&rsquom still formally a Louis Berger employee. But my life is consumed by this job. Louis Berger has a contract with SH 130 for me to serve in this specific role.

Q: What did your previous job with Louis Berger entail?

A: We did a lot of military contracting for the U.S. We had work in every time zone globally. We managed traffic control at Rota Air Base (in Spain) and at other air bases where we were doing material handling and passenger manifesting for the Air Force or the Navy. We ran power plants in Afghanistan and Iraq. Had different operations and maintenance activities state side, like the Florida toll road. We provide support for them for their facilities management. We just did a lot of little puts and takes in that type of work, but it&rsquos all operations- and maintenance-oriented.

Q: What sticks out for you in working at Louis Berger?

A: I&rsquove gotten to do a lot of different things with Louis Berger, go to a lot of very different and interesting places. Louis Berger was one of the program managers for the reconstruction effort in Iraq. I was responsible for the three sectors that were nonindustrial: transportation and communication, security and justice and health and education. And so we built a lot of stuff, bought a lot of equipment, trained a lot of people over there. After that, I got to go to South Sudan on a U.S. AID (Agency for International Development) project where we were building roads, power plants, public facilities and water systems. So I got to do a lot of exciting stuff.

Q: Prior to Louis Berger, you were at the Virginia Department of Transportation, where you were responsible for highway design, construction, maintenance and operations. Yet you&rsquore not an engineer?

A: I am not. But I&rsquove been an engineering junky. I went to work for the highway department as an inspector trainee, and they trained you to be an engineer. So they teach you everything you need to know but you&rsquoll never have that credential. I just got the opportunity to take very challenging roles in the organization where I was responsible for the largest field organization in the state. And then took over the maintenance division.

Q: What&rsquos your undergraduate degree?

A: I have an undergraduate degree in urban affairs, which is a planning degree. I also got an MBA in 2000.

Q: How big of an operation do you oversee at SH 130 Concession Co.?

A: There are 33 of us, people-wise. About 10,000 to 12,000 vehicles going up and down the road on any given day (up from a reported 6,000 to 9,000 vehicles a day in 2014). As far as revenue generation, maybe $100,000 a day that we generate from tolls. It&rsquos a 41-mile road. Plus all of these nice frontage roads that you came in on, we take care of those as well.

Q: Do you have a revenue target?

A: Right now, the road&rsquos growing pretty well. Look out the window. Over in that little depression is the toll road, SH 130. You see there&rsquos breaks in the traffic. We have a lot of opportunities to build ridership here and grow it. So I don&rsquot know if I have a specific revenue target. But I would like to see at least double the traffic out here in the medium-term. We could carry that much more traffic and we still would not be congested.

Q: Are those your marching orders?

A: I think that&rsquos part of making it better. We want really to improve the rider&rsquos experience. Before, when the company was in bankruptcy, they really couldn&rsquot invest in things. We&rsquore now looking to start investing. And it starts in investing in studies so you get to know your client, know who your customer is.

Q: What can you do to boost traffic?

A: We&rsquore looking at a lot of different things. We want to do toll discount programs potentially for frequent users of the roadway.

Q: Wouldn&rsquot the solution be to just lower the tolls for everybody?

A: We&rsquore actually going to look at that as part of the consultant study. The other complicating factor on this road is that we do revenue sharing with TxDOT. We can do targeted discount programs.

Q: So how do you get the people not driving Texas 130 to use it?

A: Part of it is a marketing initiative. We&rsquove had some long-standing advertising that we have done with TxDOT. We&rsquore also talking with them about some additional marketing efforts, but we&rsquore really specifically reaching out through the trucking associations and other people that are involved with trucking to show this alternative.

Q: What would you say to those who say Texas 130 is a white elephant?

A: I don&rsquot know that I want to get drawn into that. I didn&rsquot grow up on this roadway. One of my first trips on it was when the blue bonnets were in full force. I also remember half the blue bonnets left when the sunflowers came up. It&rsquos a beautiful road and you can travel predictably on it. So I don&rsquot know what white elephant means. It certainly hasn&rsquot cost the public any money to build this road.

Q: The company&rsquos debt load is now $260 million. Will that alone be enough to make Texas 130 successful?

A: That in it of itself will not make it successful. That gives everybody, all the 33 people here that are going to make this successful, the opportunity to be successful. That exit facility assures us that we&rsquove taken care of the costs of the past and that we&rsquove set money aside that we can use to do things that we need to do on the roadway. The revenues that we generate out here will cover our debt service and the repayment of that debt. So it then it comes to the crew we have here doing what we can do to achieve that.


Confronting a Co-Worker

It is never wise to confront a co-worker about theft. A co-worker may take drastic measures to cover his tracks, and this could include sabotaging you. The person might spread rumors about you or otherwise try to ensure that your employment is terminated. Some co-workers also could lash out in anger and threaten physical violence in or out of the workplace. In some instances, the co-worker may ask you to keep quiet about the theft. Be wary of making promises that could make you an accomplice.


Ten Things Your Boss Doesn't Want You To Know

Your boss is secretly smiling. He knows things you don’t about your workplace rights. And what you don’t know about those rights can destroy your career or even get you fired. Understanding those rights can help you wipe that smile right off his face. Here are 10 things you need to know.

1. You have the right to discuss working conditions with co-workers. The National Labor Relations Act or NLRA guarantees most non-supervisory employees in the private sector the right to talk about working conditions with co-workers. Does your company try to keep you from comparing salaries or benefits with co-workers? They may be breaking the law. If you have a contract or policy saying you can’t discuss wages and benefits with coworkers, you can file a Charge Against Employer with the National Labor Relations Board (NLRB).

2. You have the right to complain or protest about working conditions. Ever wonder why the Wal-Mart strikers last Fall weren’t fired in one swoop? That’s because they were legally protected. The NLRA says you have the right to protest and object to workplace conditions. If you do it on just your own behalf, you aren’t protected. So make sure, if you complain, to discuss how the policy or working conditions affects co-workers.

3. You have the right to keep copies of documents you sign. Remember that pile of papers you signed without reading when you started this job, or that confidentiality agreement your boss shoved in front of you? Somewhere along the way you may have agreed not to work for a competitor or not to solicit or communicate with clients, vendors and employees of the company for a year or two. It’s also conceivable that you gave up the right to a jury trial or agreed to arbitrate any disputes against your employer, rather than suing.

Whether you’re leaving the company, or plan to hang your hat there for a while, get a copy of everything you sign when you sign it. If it’s too late for that, ask to see a copy of your personnel file so you can get copies. If your company says they don’t have to give it to you, they may be right in some states know your rights before you have a dispute. But you can still try saying, “How am I supposed to know what I’m not allowed to do if you won’t give me a copy of my agreement?”

If they still won’t give a copy, send the head of personnel an email or letter saying that you have asked for a copy of any agreement you signed that the company has not provided it and that you will proceed on the assumption that there are none unless they give you a copy within 72 hours.

4. You should read and get a copy of your employee handbook. This document is chock full of important information. Some companies have employees sign a paper saying they’ve received it, but never give it out. Others keep it locked away. Your handbook has important information about discrimination, harassment, sick leave, personal leave, and Family and Medical Leave.

You should read and be familiar with your rights and responsibilities before you have a crisis. You don’t want to be scrambling for information while you’re on the way to the hospital, after you’ve been groped by a supervisor, or if you’ve been subjected to illegal harassment.

5. Your employee handbook may have illegal provisions. Many handbooks contain policies the NLRB considers illegal. Some policies the NLRB has recently found unlawful include at-will employment (your employment is still likely at-will, but the policy might be illegal), prohibitions against discussing wages, prohibitions against saying negative or disparaging things about the company, confidentiality (to the extent it keeps you from discussing working conditions), and their social media policy.

6. A hostile work environment is not necessarily illegal. A hostile work environment (sometimes described as harassment or workplace bullying) is only illegal if it’s due to some legally-protected status, such as: race, age, sex, religion, national origin, disability, taking Family and Medical Leave or whistleblowing. One example of an illegal hostile environment is being subjected to racial or ethnic slurs. If you’ve been subjected to an illegal hostile environment due to a legally-protected status, make a formal complaint under the company’s harassment policy.

7. You don’t have the right to free speech at work. If you complain about bullying, a hostile environment or anything that is not illegal, you aren’t protected against retaliation. You can be fired for your speech in the workplace (or even outside the workplace) if you don’t work for the government. If you write a long letter to the CEO complaining that your boss is unprofessional, you aren’t protected. If you have a loud argument with your co-worker about a hot political issue, you have no legal protection either.

8. You are probably not an independent contractor. Your employer may try to classify you as a contractor to avoid paying its share of employment taxes and evade coverage under most employment laws. But they probably got it wrong. If your company controls the time, place and manner of your work hires or fires your assistants does evaluations pays for vacation or says you can only work for them, you are probably an employee.

The Internal Revenue Service has a handy-dandy form to fill out if you think you are misclassified. If you're right, you may be able to recover back taxes that are owed to you through the IRS or through a lawsuit. You also have rights under discrimination, wage and other employment laws. When in doubt, contact an employment lawyer in your state.

9. You may be entitled to overtime pay. Employers use a variety of tricks to avoid paying overtime. For example, they might: misclassify you, telling you that you’re salaried and therefore exempt require off-clock work, combining exempt and non-exempt duties require on-call or off-hours work make you wait to clock in and pretend not to know you worked through lunch to avoid paying you. Unless you are exempt, you are entitled to be paid time and a half for all hours worked over 40 per week. If you think you aren’t being paid the overtime you’re entitled to, you can either file a complaint with the Department of Labor or contact an employment lawyer about filing a suit for your unpaid overtime.

10. Your company might make a grab for your social media contacts when you leave. Employers have been known to claim they own former employees’ LinkedIn, Facebook, Twitter and other contacts. If you signed an intellectual property agreement, they’ll claim that the own anything you wrote or thought it of while you worked there. They might also claim they own your blog or anything you’ve written (like the novel you’ve been secretly writing at night). If you have a non-compete or non-solicitation agreement, they’ll claim you have to delete all the customer, vendor and employee contacts you’ve built up.

Social media has been in the news lately in connection with departures from news organizations. In one case, an employer is claiming the employee should have to pay them $2.50 per Twitter follower. In another, a former employee was allowed to walk away with 75,000 followers.

If you have a huge following in social media related to work, the ownership of that following might give you leverage when it comes time to negotiate severance. If your employer wants you to turn over your tweeps, you may be able to get them to pay for that right. On the other hand, if your social media is important to you, it might be worth giving up some severance so you can keep them. Before you leave, review your agreements carefully. You may want to consult a lawyer to discuss your rights to your social media before you make your move.


10 Killer Questions To Make The Most Of Your Mentor Meeting

So you finally mustered the nerve to ask a mentor for a cup of coffee. You're sweating. You can feel pressure mounting. She strolls through the Starbucks door holding an Americano with two pumps of hazelnut in one hand and years of experience in the other.

Here are 10 questions you can ask her to take the pressure off you and make the most of your meeting:

  1. How do you spend most of your time? Ask this question for one reason only -- digging. Does your mentor have children, a favorite charity she supports, or an addiction to a particular Mediterranean cuisine? Most people who ask for advice never take the time to build an authentic connection. Gathering these answers will allow you to follow up with relevant articles, magazine clippings for passion projects, or recipes for your mentor, who will appreciate hearing from you. Givers gain.
  2. What would you do if you were me? Don’t waste your time looking to impress your mentor with how smart you are. Tell them about your specific challenges, and ask for their recommendations.

Bert Gervais, a.k.a. “The Mentor Guy”, is the founder of Success Mentor Education. He is a national best selling author, speaker, and award-winning entrepreneur. You can follow him @BertGervais

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.


What is intellectual property?

IP can be anything from a particular manufacturing process to plans for a product launch, a trade secret like a chemical formula, or a list of the countries in which your patents are registered. It may help to think of it as intangible proprietary information. The World Intellectual Property Organization’s (WIPO’s) formal definition of IP is creations of the mind — inventions, literary and artistic works, symbols, names, images and designs used in commerce.

IP is divided into two categories: Industrial property includes but is not limited to patents for inventions, trademarks, industrial designs and geographical indications. Copyright covers literary works like novels, poems and plays, films, music and artistic works, for example drawings, paintings, photographs, sculptures, web site pages and architectural design. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and broadcasters in their radio and television programs.

For many companies, such as those in the pharmaceutical business, IP is much more valuable than any physical asset. IP theft costs U.S. companies as much as $600 billion a year according to the Theft of Intellectual Property Commission.

The four legally defined categories of intellectual property for which theft can be prosecuted are:

Patents grant the legal right to exclude anyone else from manufacturing or marketing your unique tangible things. They can also be registered in foreign countries to help keep international competitors from finding out what your company is doing. Once you hold a patent, others can apply to license your product. Patents can last for 20 years.

Trademarks are names, phrases, sounds or symbols used in association with services or products. A trademark often connects a brand with a level of quality on which companies build a reputation. Trademark protection lasts for 10 years after registration and can be renewed in perpetuity.

Copyright protects written or artistic expressions fixed in a tangible medium — novels, poems, songs or movies. A copyright protects the expression of an idea, but not the idea itself. The owner of a copyrighted work has the right to reproduce it, to make derivative works from it (such as a movie based on a book), or to sell, perform or display the work to the public. You don't need to register your material to hold a copyright, but registration is a prerequisite if you decide to sue for copyright infringement. A copyright lasts for the life of the author plus another 50 years.

Trade secrets can be a formula, pattern, device or compilation of data that grants the user an advantage over competitors is a trade secret. They are covered by state, rather than federal, law. To protect the secret, a business must prove that it adds value to the company — that it is, in fact, a secret — and that appropriate measures have been taken within the company to safeguard the secret, such as restricting knowledge to a select handful of executives.

IP can can simply be an idea as well. If the head of your R&D department has a eureka moment during his morning shower and then applies his new idea at work, that's intellectual property too.


1. The narcissist

A narcissist is a coworker who "inflates their own sense of self-worth" and " demands to be fed only praise and vanity," Foster says.

Type signs include exaggerating accomplishments, blaming others for their shortcomings, interrupting others, taking credit for other people's work and lashing out when anyone questions them.

"Underlying this is a dichotomous self-esteem picture, with an underlying, deeply entrenched insecurity," she says.

If you're working with a narcissist, Foster suggests, try to get on his or her good side, without compromising your time or your integrity.

"Find opportunities to say 'You know, you do this really well,'" she says.

Giving them occasional compliments will reduce their angry outbursts. But at the same time, it's important to also stand up for yourself. If he or she takes credit for your work, find ways to show you were involved, Foster says. For example, if you're submitting a big report, you can CC your boss or other colleagues involved in it. If your work is being discussed in a meeting, you can find ways to show that you were involved.

Of course, if an angry outbursts make you feel unsafe or you feel your contributions are consistently going unrecognized, tell your manager or human resources.


Fairness Beyond Equity: Procedural and Interactional Justice

Equity theory looks at perceived fairness as a motivator. However, the way equity theory defines fairness is limited to fairness of rewards. Starting in the 1970s, research on workplace fairness began taking a broader view of justice. Equity theory deals with outcome fairness, and therefore it is considered to be a distributive justice theory. Distributive justice refers to the degree to which the outcomes received from the organization are perceived to be fair. Two other types of fairness have been identified: procedural justice and interactional justice.

Figure 5.8 Dimensions of Organizational Justice

Let’s assume that you just found out you are getting a promotion. Clearly, this is an exciting outcome and comes with a pay raise, increased responsibilities, and prestige. If you feel you deserve to be promoted, you would perceive high distributive justice (your getting the promotion is fair). However, you later found out upper management picked your name out of a hat! What would you feel? You might still like the outcome but feel that the decision-making process was unfair. If so, you are describing feelings of procedural justice. Procedural justice refers to the degree to which fair decision-making procedures are used to arrive at a decision. People do not care only about reward fairness. They also expect decision-making processes to be fair. In fact, research shows that employees care about the procedural justice of many organizational decisions, including layoffs, employee selection, surveillance of employees, performance appraisals, and pay decisions (Alge, 2001 Bauer et al., 1998 Kidwell, 1995). People also tend to care more about procedural justice in situations in which they do not get the outcome they feel they deserve (Brockner & Wisenfeld, 1996). If you did not get the promotion and later discovered that management chose the candidate by picking names out of a hat, how would you feel? This may be viewed as adding insult to injury. When people do not get the rewards they want, they tend to hold management responsible if procedures are not fair (Brockner et al., 2007).

Why do employees care about procedural justice? There are three potential reasons (Cropanzano, Bowen, & Gilliland, 2007 Tyler, 1994 Tyler, Degoey, & Smith, 1996). First, people tend to believe that fairness is an end in itself and it is the right thing to do. Second, fair processes guarantee future rewards. If your name was picked out of a hat, you have no control over the process, and there is no guarantee that you will get future promotions. If the procedures are fair, you are more likely to believe that things will work out in the future. Third, fairness communicates that the organization values its employees and cares about their well-being.

Research has identified many ways of achieving procedural justice. For example, giving employees advance notice before laying them off, firing them, or disciplining them is perceived as fair (Kidwell, 1995). Advance notice helps employees get ready for the changes facing them or gives them an opportunity to change their behavior before it is too late. Allowing employees voice in decision making is also important (Alge, 2001 Kernan & Hanges, 2002 Lind, Kanfer, & Earley, 1990). When designing a performance-appraisal system or implementing a reorganization, it may be a good idea to ask people for their input because it increases perceptions of fairness. Even when it is not possible to have employees participate, providing explanations to employees is helpful in fostering procedural justice (Schaubroeck, May, & William, 1994). Finally, people expect consistency in treatment (Bauer et al., 1998). If one person is given extra time when taking a test while another is not, individuals would perceive decision making as unfair.

Now let’s imagine the moment your boss told you that you are getting a promotion. Your manager’s exact words were, “Yes, we are giving you the promotion. The job is so simple that we thought even you can handle it.” Now what is your reaction? The feeling of unfairness you may now feel is explained by interactional justice. Interactional justice refers to the degree to which people are treated with respect, kindness, and dignity in interpersonal interactions. We expect to be treated with dignity by our peers, supervisors, and customers. When the opposite happens, we feel angry. Even when faced with negative outcomes such as a pay cut, being treated with dignity and respect serves as a buffer and alleviates our stress (Greenberg, 2006).

OB Toolbox: Be a Fair Person!

  • When distributing rewards, make sure you pay attention to different contribution levels of employees. Treating everyone equally could be unfair if they participated and contributed at different levels. People who are more qualified, skilled, or those who did more than others expect to receive a greater share of rewards.
  • Sometimes you may have to disregard people’s contributions to distribute certain rewards. Some rewards or privileges may be better distributed equally (e.g., health insurance) or based on the particular employee’s needs (such as unpaid leave for health reasons).
  • Pay attention to how you make decisions. Before making a decision, ask people to give you their opinions if possible. Explain your decisions to people who are affected by it. Before implementing a change, give people advance notice. Enforce rules consistently among employees.
  • Pay attention to how you talk to people. Treat others the way you want to be treated. Be kind, courteous, and considerate of their feelings.
  • Remember that justice is in the eye of the beholder. Even when you feel you are being fair, others may not feel the same way, and it is their perception that counts. Therefore, pay attention to being perceived as fair.
  • People do not care only about their own justice level. They also pay attention to how others are treated as well. Therefore, in addition to paying attention to how specific employees feel, creating a sense of justice in the entire organization is important.

Sources: Adapted from ideas in Colquitt, J. A. (2004). Does the justice of the one interact with the justice of the many? Reactions to procedural justice in teams. Journal of Applied Psychology, 89, 633–646 Cropanzano, R., Bowen, D. E., & Gilliland, S. W. (2007). The management of organizational justice. Academy of Management Perspectives, 21, 34–48.

Employers would benefit from paying attention to all three types of justice perceptions. In addition to being the right thing to do, paying attention to justice perceptions leads to outcomes companies care about. Injustice is directly harmful to employees’ psychological health and well-being and contributes to stress (Greenberg, 2004 Tepper, 2001). High levels of justice create higher levels of employee commitment to organizations, and they are related to higher job performance, higher levels of organizational citizenship (behaviors that are not part of one’s job description but help the organization in other ways, such as speaking positively about the company and helping others), and higher levels of customer satisfaction. Conversely, low levels of justice lead to retaliation and support of unionization (Blader, 2007 Cohen-Charash & Spector, 2001 Colquitt et al., 2001 Cropanzano, Bowen, & Gilliland, 2007 Masterson, 2001 Masterson et al., 2000 Moorman, 1991 Skarlicki & Folger, 1997).


A Long Queue

Everything in the restaurant appeared to be in constant motion, like sea grass in the waves. That’s because each table was suspended from the ceiling, and every seat was a swing. Even more surprising was how many of the seats were occupied.

“I’m getting the point that this lunch excursion is a theme-park ride devoted to daily deals,” Allie said. “So what’s the angle here?

Ruth grinned. “You’re right. The ride is over. This is our final destination. The DailyDilly reps told me that this restaurant just ran a very successful group buy, offering 50%-off lunch coupons. They sold thousands of them. That’s what you’re looking at. Can you think of any other type of marketing initiative that could target so many people predisposed to a quirky experience like this? Forget it. There isn’t one.”

Allie looked around at the dozens of people gently swinging as they talked and ate. The clink of dishes and the buzz of conversation mingled with the creaking of ropes. But Allie knew that if these were DailyDilly customers, they weren’t the good ones every merchant wanted. She’d heard enough from her hotel clients about how badly deal seekers behaved. They were rude, left holes in walls, and, most important, never came back to pay full price.

“Let’s talk to them,” Allie said.

“No, the customers.” Picking a table of four women in their twenties, she asked if they’d bought into the DailyDilly deal, and indeed they had. “So how much are you going to spend beyond the coupon?”

They giggled. “As little as possible,” one said.

“Would you come back and pay full price?” Allie asked.

“Doubt it,” another answered. “Who wants to get seasick while you eat?” More laughter.

Allie turned to Ruth. “Ask any table. I’m sure you’ll get the same answers. Now imagine these people at Mermaid Landing or one of the other parks. Would they pay for photos or buy stuffed animals? Never. They probably wouldn’t even buy food. They’d get sandwiches through some other DailyDilly deal, smuggle them in, and eat lunch on a bench.”

Allie pointed toward the door, where another group of young women had just lined up at the hostess stand—more DailyDilly people, no doubt. “Do you see? They’re queuing up for tables, just as they’d queue up for the Great White, making the experience that much worse for the good customers, the ones who pay.”

“I just see a lot of eager customers, all acquired very efficiently at a relatively low cost,” Ruth replied. “If short queues are Flanagan’s goal, we’re already a screaming success. I want to see longer queues. Not so long that people get fed up, but long enough to make them feel they’re waiting for something special—and to make Flanagan money.

“And if you want to interview a deal seeker, talk to me,” Ruth continued. “I use DailyDilly for all kinds of things, and I dobuy more than the coupon value, and I dogo back to places I like. I’m one of those ‘good’ customers you’re talking about.” She paused and looked around again. “This could really help Flanagan,” Ruth said. “That’s why I’m asking you to reconsider your decision.”

What Would You Do? Some advice from the HBR.org community

At the yoga studio I use, Groupon totally disrupts the peace that the regulars enjoy and expect. Classes get too full people are turned away. Grouponers use cell phones and talk during practice. And they don’t buy memberships, as far as I can tell.
Alex Jarvis, DJ, Graves Hotel Minneapolis

I would not write off DailyDilly and assume that people who buy daily deals are bad customers. Flanagan needs to have faith that all its customers will have a good experience, recommend the parks to others, and come back at some point.
Jacob Hagemann, founder and CEO, Searcus AG

Flanagan must first improve customer service, add capacity to the eateries, manage the traffic flow in and out of the parks, and schedule shows to match customer preferences. Then engage DailyDilly for a limited partnership to see how effective it is.
Hrishikesh Karekar, manager, Amdocs

This company should identify its target segment and then aim to reach that group with incentives. The free-for-all approach that most deals sites offer is not targeted enough for many small businesses—and harms both the top and bottom lines.
Anirudh Suri, founder and CEO, EkSMS.com

Should Allie approve the DailyDilly promotion?

Allie James is right that Flanagan needs to provide a better customer experience to sustain the business for the long term. What she doesn’t see is that social-media discounts might be the perfect way to help the company work toward that goal. But those discounts must be handled with care.

As part of a broad promotional mix, price is a powerful way to drive sales—it always has been and always will be. Social-media discounts extend and refine the benefits of pricing by allowing merchants to reach beyond their usual pools of potential consumers and turn newly acquired customers into online advocates for a product or brand. That advocacy raises brand awareness.

But discounts can destroy margins. At BuyaPowa, we have a sign on the wall that says “Revenue is vanity. Profit is sanity.” Many business owners forget that and focus more on the total dollars coming in than on how profitable each customer is. That makes it too easy for merchants—and their customers—to get addicted to discounts. Discount-addicted customers will never be profitable and can wreck your brand’s value because hardly anyone pays full price.

A discount should always be framed only as a way to lure customers to your product.

Flanagan can avoid the discount addiction by telling customers that any discount is a special, time-limited deal. BuyaPowa’s “co-buy” strategy encourages consumers to earn a discount by aggregating themselves into a single transaction. Co-buyers receive, for a brief time and at restricted volumes, a wholesale price for specific products. The limits, which everyone agrees on up front, ensure that a merchant does not start down the slippery slope of ever-deepening discounts.

If Flanagan sidesteps the addiction trap with a strategy like that, Allie can still fulfill her assignment to improve the customer experience. The key, as I will explain, is cash.

Making Flanagan’s customers happier is going to take more than getting rid of pesky mosquitoes. It will require investments in training and other steps to motivate the current staff, not to mention more hiring. That takes cash, of course, and for now Flanagan isn’t in a healthy cash position.

A discount through a social-media site could help solve the cash problem—if it is done right. Simply offering discounted daily tickets would get customers through the turnstiles but might not increase cash flow much if the discounts were steep. So Flanagan should consider selling discounted season passes. That would generate a meaningful amount of cash that Allie could quickly deploy in the form of better-managed eateries, more conveniently timed shows, smoother traffic flow, fewer insects, and so on. Families would then show up with their discount season passes, have a fun day in a captivating setting, and leave thinking, “What a great experience that was!” instead of “What a great deal we got!”

Like so many tools, pricing can do a great amount of damage if it’s wielded ineptly, but a lot of good if it’s handled well. A discount should always be framed only as a way to lure customers to your product. At that point it’s up to you to persuade them that they should keep coming back for more of it.

Gideon Lask is the founder of BuyaPowa, a UK-based social commerce business.

Allie was smart to talk directly with the DailyDilly coupon holders in the restaurant with the swinging seats. Until then, her knowledge about the risks of partnering with daily-deal sites came mainly from reading case studies. The customers told her plainly that they probably wouldn’t come back without the deal, and that’s exactly what I’ve seen in the restaurant industry.

Acquiring customers organically is both an art and a science. For restaurants, it starts with choosing the right real estate. About 75% of customers in our industry segment are walk-ins, so people must be able to see you and get to you easily. Then you have to give them a great experience, because word of mouth and repeat business are crucial. A meal can be ruined in a thousand ways, so we must get everything right: the air-conditioning, the music, the quality of the food, the timeliness of the meal’s arrival, the accuracy of the check, and much more.

I like to think that if you give consumers a fresh, reasonably priced meal in a pleasant environment, they’ll be willing to pay what you ask. Even very price-conscious customers, which many people are today, will recognize the good value you’re offering. They’ll tell their friends and maybe return again soon.

Given the cost and difficulty of acquiring customers, many restaurants turn to online deals to fill their seats. But deal seekers are different from other customers. Even if they love the food and service, they inevitably look for the next discount: “What offer will I find tomorrow?” If they can’t get a deal at your restaurant, they’ll look for one elsewhere. In my experience, very few of these deal seekers become regular, full-paying customers, and they are almost never as loyal as the customers you’ve earned organically.

I think it’s dangerous for a customer-facing business to begin offering deep discounts, through a daily-deal site or anywhere else, because the expectation of getting a deal then takes on a life of its own. Pretty soon even your longtime customers are hunting for them. In a low-margin industry like mine, that’s just suicide.

It’s dangerous for a customer-facing business in a low-margin industry to begin offering deep discounts through a daily-deal site.

So, although I’m no authority on the theme-park industry, I agree with Allie that daily deals aren’t the best way to build Flanagan’s business. However, I don’t subscribe to her view that deal seekers ruin other customers’ experience. And, of course, I see Ruth’s point that daily deals allow a company to market to likely customers rather than to people who don’t fit the profile for its business.

Fortunately, companies no longer have to market blindly. Today it’s possible to use aggregators to acquire detailed data that identify, for example, who in your community eats out regularly, who likes ethnic food, even who has subscribed to websites that feature Asian recipes. Businesses today can mine that information and market to people who show an affinity for their products or services while ignoring the neighbors who don’t.

Al Bhakta is the CEO of Genghis Grill, a restaurant chain based in Dallas.



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