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AT&T, which built the U.S. communi­cations infrastructure in the past century, could once claim to be the company "where the future was invented." But now its legacy businesses are becoming obsolete. With its industry moving from cables to the cloud, AT&T is in a race to reinvent itself. As part of that transformation, it has initiated a massive effort to help its workers acquire new digital skills. In this article Cathy Benko, vice chairman of Deloitte, and John Donovan, AT&T's chief strategy officer, offer a look inside the company's ambitious program, dubbed Workforce 2020. The challenges are sizable: The firm employs 280,000 workers, and their average tenure is 22 years (not counting people in call centers). At least half the workforce has been assigned a new role and is expected to get the credentials or training to fill it. To manage the talent overhaul, the company has revised its performance metrics, raised performance expectations, and redesigned compensation plans. It is also providing workers with a host of tools for training and development through an online self-service platform, courses in new technologies, tuition reimbursement, and even online master's degrees in computer science, developed with Georgia Tech and Udacity.

At the conclusion of the (A) case, Jennifer Trosper needed to decide whether or not to throw her support behind the training and outreach represented by the ROV-E program to build small rovers like the ones used on the surface of Mars by NASA JPL. The (B) case describes her decision and provides further information on her subsequent efforts made after the initial decision.

This case describes Hewlett Packard Enteprise's "Dandelion Program," which has developed a new service offering for the company's clients by drawing on the special talents of people with autism. The company has deployed "pods" organized around 8 or 9 employees with autism, to function as high performance mini-ecosystems, which have turned out to be 30% more effective than average service teams (in some areas). The case centers around questions of how to adapt this successful model to new demands in a different service domain, specifically, cybersecurity and defense related areas. The case also explores how the company is innovating and refining its assessment and training processes in support of the program.

Singapore Safety Glass, a 27-year-old manufacturer of customised glass solutions for buildings, had built a reputation on its high product quality. Faced with increased competition from China, and the tightening flow of foreign labour supply into Singapore, how should the company change its business model and people management practices to sustain and grow its business?

This case explores an ambiguous, public incident of a mature student touching a younger Professor, which created the perception of a hostile work environment for the Professor and for some students in her class. The ambiguous nature of the contact itself, uncertainty about organizational processes, potential career and reputation outcomes, and the impact on the learning environment in her classroom are all considered by the professor as she tries to decide whether to make a formal complaint, attempt to resolve the issue informally, or ignore it. This case does not address sexual harassment from a legal or regulatory perspective, but rather considers the role of perception and attribution in defining harassment, the social and psychological impact of sexual harassment on individuals, and the reasons that sexual harassment incidents continue to occur.

A smooth transition from former CEO John Chambers to new CEO Chuck Robbins had put Cisco in a position of strength. Looking back, the board reflected on what they had done well and what they might have done differently, and pondered whether another company might be able to implement a similar CEO transition process. This case reviews the specific steps taken by the board of directors and other stakeholders during the selection process. Participants in the process included John Chambers, who was the company's CEO at the time, the Cisco board of directors, Cisco's human resources group, and the executive search firm Spencer Stuart. The process occurred in several stages, including an informal stage during which the board became familiar with candidates, followed by a 16-month formal process with goal-setting and clear definition of roles for all involved, various interactions with and evaluations of possible candidates, and voting.

Supplements the (A) case (417-031). This case supplement describes Cisco's communications strategy around the CEO announcement, which focused on controlling the narrative and avoiding leaks. The strategy included both internal and external processes aimed at introducing the new CEO to employees and the general public, respectively. Externally, the process unfolded without media leaks and with a modest stock market reaction.

Supplements the (A) case (417-031). This case supplement describes new CEO Chuck Robbins' earliest days after being announced as Cisco's new chief executive. During this time, Robbins focused on building a leadership team featuring people with complementary skills and the disclosure of top executive departures during the transition period. Chambers also assumed his new role as executive chairman during this time frame.

The crew on board a Singapore naval patrol vessel was tasked with providing humanitarian aid to Vietnamese boat people and preventing them from reaching Singapore shores. The crew was confronted with a dilemma when it was carrying out its order from headquarters.

Most diversity training programs are a waste of money, says Iris Bohnet. Companies often conduct programs without ever measuring their impact. And unfortunately, research on their effectiveness shows they seldom change attitudes, let alone behavior. The solution? Focus on processes, not people. Behavioral science tells us that it's very hard to eliminate our biases, but we can redesign organizations to circumvent them. Behavioral design makes it easier to do the unbiased thing by either preventing biased choices or changing people's beliefs. Companies can start by collecting data on their current diversity training. Then they must bring the same rigor to people management that they apply to financial and marketing decisions. This means defining the desired change, implementing new programs, collecting hard data, and evaluating the results. Even simple changes can be effective. For example, hiring managers can use software that allows them to strip age, gender, socioeconomic background, and similar information out of résumés so that they focus only on talent. Bias affects everyone, despite efforts at awareness and the best of intentions. The good news, says Bohnet, is that behavioral design can break the link between our gut reactions and our actions, and allow our biased minds to get things right.

Decades' worth of studies show that a diverse workforce measurably improves decision making, problem solving, creativity, innovation, and flexibility. But most of us also believe that hiring, development, and compensation decisions should come down to merit. Although the two ideas don't seem contradictory, they're tough to reconcile in practice. Cognitive roadblocks keep getting in the way. The author looks at recent books and research studies on the subject, including Success and Luck: Good Fortune and the Myth of Meritocracy, by Robert H. Frank, and Pedigree: How Elite Students Get Elite Jobs, by Lauren A. Rivera. Frank points out, for example, that hindsight bias causes us to believe that random events are predictable and to manufacture explanations for the inevitability of our achievements. And winner-take-all markets intensify the consequences of our cognitive shortcuts. Rivera studied hiring committees at professional services firms that believed they were ensuring rigor and counteracting bias through group discussions of job candidates from the school-recruitment pipeline. But those conversations actually dampened diversity by giving negative racial, ethnic, and gender stereotypes greater sway over decisions.

The United States stands at a crossroads in how to pay for health care. Fee for service, the dominant payment model in the U.S. and many other countries, is now widely recognized as perhaps the single biggest obstacle to improving health care delivery. A battle is currently raging, outside of the public eye, between the advocates of two radically different payment approaches: capitation and bundled payments. The stakes are high, and the outcome will define the shape of the health care system for many years to come, for better or for worse. In this article, the authors argue that although capitation may deliver modest savings in the short run, it brings significant risks and will fail to fundamentally change the trajectory of a broken system. The bundled payment model, in contrast, triggers competition between providers to create value where it matters--at the individual patient level--and puts health care on the right path. The authors provide robust proof-of-concept examples of bundled payment initiatives in the U.S. and abroad, address the challenges of transitioning to bundled payments, and respond to critics' concerns about obstacles to implementation.

Recent studies suggest that at least 35%--and maybe over 50%--of all health care spending in the U.S. is wasted on inadequate, unnecessary, and inefficient care and suboptimal business processes. But efforts to get rid of that waste face a huge challenge: Under current payment methods, the providers who develop more cost-effective approaches don't receive any of the savings. Instead, the money goes mainly to insurers. The providers, who are paid for the volume of services delivered, end up actually losing money, which undermines their finances and their ability to invest in more cost-saving innovations. To address this quandary, say two top execs from the nonprofit Intermountain Healthcare system, we need a different way to pay for health care: "population-based payment." PBP gives care delivery groups a fixed per-person payment that covers all of an individual's health care services in a given year. Under it, providers benefit from the savings of all efforts to attack waste, encouraging them to do it more. And though PBP may sound similar to the HMOs of the 1990s, there are significant twists: Payments go directly to care delivery groups, and patients' physicians--not insurance companies--assume responsibility for overseeing and managing the cost of treatment. Provider groups are also required to meet quality standards that further protect patients. By applying PBP in just part of its system, Intermountain, which serves 2 million people, has been able to chop $688 million in annual waste and bring total costs down 13%.

When managers believe their company is a meritocracy because formal evaluative and distributive mechanisms are in place, they are actually more likely to exhibit the very biases that those systems may seek to prevent. The very belief that an organization is meritocratic may open the door to biased, non-merit-based behavior when managers make key individual-level career decisions. The good news, the author reports, is that establishing a more meritocratic workplace doesn't require an inordinate amount of time or resources. It is a matter of establishing clear processes and criteria for hiring and evaluating employees. It is also a matter of monitoring and evaluating the outcomes of such company processes and bestowing an individual or group within the organization with the responsibility, ability, and authority to ensure that those formal processes are fair. The collection and analysis of data on people-related processes and outcomes -often referred to as "people analytics"-can enable companies to identify and correct workplace biases. The author conducted a longitudinal investigation of the translation of employee performance evaluations into compensation decisions at a large service organization in North America. He found that, over the long run, women and minorities received lower salary increases than white men with the same performance evaluation scores, even after controlling for job, work unit, and supervisor effects. The company's solution was to adopt a set of organizational procedures that incorporated both accountability and transparency into its performance reward system. The intervention consisted of introducing three key changes. First, a performance reward committee was appointed to monitor the fairness of pay decisions. Second, all senior managers had to follow a formalized process for assigning rewards based on employee evaluations. This process required the senior managers to briefly justify how much was awarded

An employee heard through the grapevine that his new supervisor had a micromanaging and task-focused leadership style. He wondered if he could excel under this type of leadership and if he should start looking for a new job.

This case explores the nature of the relationship between Uber Technologies, Inc., and its driver-partners. Uber touted itself as a technology company that licensed an app to independent contractors acting as drivers. However, some Uber driver-partners were unhappy and their lawyers filed lawsuits seeking class action status. The driver-partners believed that Uber should have treated them as employees and should have given them benefits (e.g., workers' compensation and reimbursement for their expenses). They complained that Uber unfairly denied them gratuities. The case provides a brief history of Uber Technologies, its competitors, and the taxi and limousine industry, discusses the requirements for working as an Uber driver-partner, and delves into litigation related to Uber's labor practices. It raises substantial questions about how to classify workers (employee v. contractor) and how to develop human resource practices in the sharing economy.

In a 2013 Business Horizons article, we described the serious legal problems that can arise when companies develop corporate wellness programs, and outlined ways in which companies can minimize their financial risk. Recently, the landscape changed: For the first time, the Equal Employment Opportunity Commission asserted that several wellness programs violate the Americans with Disabilities Act. In this installment of Organizational Performance, we explain the battles that are taking place along this new legal front and suggest steps companies can take to best ensure that their financial positions are not undermined by their wellness programs. In particular, we recommend (1) ensuring that wellness programs actually improve employee health; (2) revisiting whether programs are truly voluntary; (3) being cautious about including dependents in wellness programs; (4) collaborating with disabled employees to meet their needs; (5) providing clear, written explanations when asking for medical information; and (6) taking extra precautions to ensure that medical information is confidential.

Employers are using pre-employment personality tests with increased frequency to identify the candidates best equipped to perform certain jobs and to eliminate the candidates least likely to succeed. While these tests promise higher retention rates and increased objectivity in hiring, they can also expose employers to litigation for violation of federal anti-discrimination statutes. This installment of Accounting Matters explores several recent lawsuits and the laws governing the discrimination claims, and concludes by offering several best practices for reducing the risk of litigation when using pre-employment personality tests.

In the knowledge economy, skilled employees are the assets that drive organizational success. Thus companies must learn from them--why they stay, why they leave, and how the organization needs to change. A thoughtful exit interview--whether it be a face-to-face conversation, a questionnaire, a survey, or a combination--can catalyze leaders' listening skills, reveal what does or doesn't work inside the organization, highlight hidden challenges and opportunities, and generate essential competitive intelligence. It can promote engagement and enhance retention by signaling to employees that their views matter. And it can turn departing employees into corporate ambassadors for years to come. Unfortunately, too few leaders pay attention to this tool; their programs fail to either improve retention or produce useful information. The authors believe this is owing to poor data quality and a lack of consensus on best practices. They suggest six overall goals for a strategic exit interview process and describe tactics and techniques to make it successful. Among their recommendations: Have interviews conducted by second- or third-line managers. Make exit interviews mandatory for at least some employees. And because standard interviews enable you to spot trends, but unstructured ones elicit unexpected insights, consider combining the two approaches in semistructured interviews.

While social media can have significant benefits for organizations, the social media presences and postings of employees can be problematic for organizations. This is especially true when employees have connections to co-workers and managers. Workers posting content deemed inappropriate or detrimental to the organization has led to a significant number of workers being fired for their social media behavior. To avoid such situations, organizations should create social media policies to guide employee content. Organizational implementation of social media policy is on the rise, but serious questions remain as to how to make it effective. One crucial question is how well employees know and understand their employer's policy. In this article, we discuss how to communicate social media policies to workers and help their understanding. To inform our recommendations, we draw on exploratory data from a sample of young adult workers regarding their knowledge of their own company's social media policies.