Leadership & Management



    
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    <p>There’s no way to predict how employees will react to organizational changes. Whether it be downsizing, moving locations, a change of leadership, or some other transition, managing change in the workplace is an ongoing—and tricky—task. </p>
    
    <p><a href="http://www.prnewswire.com/news-releases/mergers-and-acquisitions-typically-disengage-employees-but-kenexa-research-institute-finds-that-effective-leadership-can-help-ensure-employee-retention-57937882.html" target="_blank">A 2005 WorkTrends study</a> of 10,000 employees representing 4,000 organizations found those from firms that had been engaged in a merger or acquisition reported significantly less favorable results than those who worked at companies not involved in a transition.</p>

    <p>Being prepared for how to handle employee reactions to workplace changes is key to a successful transition. To help you tap into your workforce’s emotions, we’ve compiled a few expert tips. </p>

    <h4 class="h4__alt">Alert Employees of the Changes</h4>
    <p><a href="http://ocfs.ny.gov/ohrd/materials/30370.pdf" target="_blank">Studies</a> have shown that people are more welcoming of change if they’re told about it at the beginning of the process. Be honest and direct when informing employees about the change; being open and transparent about how and why a change is taking place will lessen the distress employees are experiencing and put everyone on the same page, with the same vision. After communicating the message, be prepared—and willing—to listen to any and all feedback concerning the changes. </p>

    <p>Once information about the change has been shared, be ready for employees’ reactions by familiarizing yourself with the emotional phases of change.</p>

    <h4 class="h4__alt">Know the Emotional Phases of Change</h4>
    <p>Using Dr. Elisabeth Kübler-Ross’s “<a href="http://psychcentral.com/lib/the-5-stages-of-loss-and-grief/" target="_blank">The 5 Stages of Grief</a>” as a model, the following are <a href="http://www.lamarsh.com/the-7-emotional-phases-employees-go-through-during-change/" target="_blank">seven of the most common phases of loss</a> employees may feel when faced with organizational change.</p>

    <ol>
       <li><strong>Immobilization</strong>: Mental paralysis following initial news of a change. During this stage, information about the change doesn’t stick.</li>
         <ul>
            <li><strong>What to do</strong>: Repeat key facts about the change as well as the underlying reasons for it. Interview employees about their feelings. As Peter Stark points out, it’s important to understand what employees are thinking in order to know what issues might need to eventually be addressed.</li></ul>
         
         <li><strong>Denial</strong>: Thoughts that include “They won’t do it,”  “They don’t have the nerve,” or “They’re just trying to scare us.”</li>
         <ul>
            <li><strong>What to do</strong>: Mr. Stark recommends breaking down the change into a series of steps to help employees understand what’s happening and why. The more they can understand, the more they’ll cooperate. If possible, delegate tasks to employees that will help make the transition period smooth. This will both ease your workload as a manager as well as give employees a sense of involvement and responsibility/control.</li>
        </ul>
         
         <li><strong>Anger</strong>: Reality sinks in and negative emotions take over. Employees can become distracted and less committed to the organization. They’ll spend time venting and, perhaps, sabotaging the company by not sharing information, being less collaborative, and treating customers badly.</li>
     
         <ul>
            <li><strong>What to do</strong>: Let them vent. Management should hold “vent meetings” and one-on-one meetings where employees can talk about their concerns, fears, and thoughts about the transition. Listen, acknowledge the anger, and offer stress management programs as an option for any anxious employees. </li>
         </ul>
     
        <p> During a big change, employees will be hungry for information and answers. By getting employees’ opinions and reactions, you’ll show them you care and that you’re accessible to them. Keep them updated, clear up rumors, and as Peter Stark points out, it’s impossible to over-communicate.</p>
     
         <li><strong>Negotiation</strong>: Prescribed roles are rejected and attempts to negotiate ensue. </li>
         <ul>
            <li><strong>What to do</strong>: Remind them, gently, that the change is a positive thing and that their role can’t be negotiated as it is part of the plan toward future success. Speak to the people who make negative comments, and ask them to stop doing so. Reminding them that they’re important to the team and that their team needs their best work is often effective. Ask them what you can do to help them.</li> 
        </ul>
     
         <li><strong>Depression</strong>: Failed last-ditch negotiation efforts lead to a depressed state.</li>
         <ul>
           <li><strong>What to do</strong>: Encourage employees to talk things through with colleagues, managers, HR, and stress counselors. Offer information about stress management programs again. Make an effort to keep morale high. Bring in lunch for the office, celebrate small victories, offer half-days, write a note of encouragement on paychecks, take them aside and tell them what a great job they are doing: showing your employees you appreciate them and their cooperation during the change goes a long way. Here are several other ways you can motivate your employees.</li>
        </ul>
     
         <li><strong>Exploration</strong>: The realities of change sink in and thoughts about the future begin to take place. </li>
         <ul>
            <li><strong>What do to</strong>: Continue to acknowledge how valuable employee cooperation is in making a smooth transition and keep emphasizing positive aspects about the change. Have training programs in place to begin the transition when employees are ready. In fact, training should be a top priority, because even though it will take time and money, it will help reduce how much productivity is lost through this change. </li>
        </ul>
     
         <p>Christine Corelli recommends asking exactly these three questions when considering a training plan:</p>
     
         <ul>
            <li>What is the level of competence needed to support the changes in our company and help us make it through these challenging times?</li>
            <li>What training will be needed to bring the staff up to that level of competence?</li>
            <li>What training is needed on new products, procedures, and especially product support? (This is the area where you are likely to make the most profit in the environment.)</li>
                  </ul>    
     
         <li><strong>Acceptance</strong>: Confidence and willingness to participate.</li>
         <ul>
            <li><strong>What to do</strong>: Praise the steps being taken to embrace the change until the employee is confident enough to give the change a chance. Be sure to lead by example and keep a positive attitude. This will be a major factor in determining the attitudes of employees and the workplace atmosphere. Your attitude is the one thing that you can control and by being upbeat, positive, and enthusiastic, you’ll be able to foster motivation in others.</li>
         </ul>
     </ol> 

    <p>Being aware of and sensitive to your employees’ emotions is a key part to being a good leader. This is always true, but especially so during times of change. By communicating the message of the change directly and honestly, welcoming a dialogue with troubled employees, and embracing employees as they take the steps through the seven phases of change, you’ll be able to reengage and motivate your workface much sooner than if you do none of the above. Change is hard, but it doesn’t have to be crippling.</p>



    



How to Manage Change in the Workplace



    
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    <p>Communication is key to the success of all relationships, including the one between an employer and employee. To guarantee everyone is on the same page when it comes to a business’s rules, expectations, and other guidelines, it’s important to provide a thorough, clearly written employee handbook to everyone involved in the business. Even if it’s a two-man shop, having all the nitty-gritty details of the business in writing will lead to fewer headaches in the future.</p>


    <h4 class="h4__alt">Why Employee Handbooks are Important</h4>
    <p>Employee handbooks help newcomers understand the business. When done well, they provide answers to frequently asked questions; clearly outline company policies and expectations; explain the at-will nature of the employment; contain health, safety, and benefits plans; and explain the company’s disciplinary and termination policies. </p>

    <p>That’s a lot to cover. To help you from feeling overwhelmed, we’ve broken up the process of writing an employee handbook into simple steps and included a general outline for what all handbooks should contain. We’ve also provided a few tips that will be helpful to keep in mind before, during, and after crafting your handbook. Just follow along, and soon you’ll be all ready to go!</p>

    <p><em>(Note: Employment laws vary from state to state, so the following information and tips are written as general advice that applies to most situations. Always consult an employment attorney licensed to practice in your area in order to guarantee your handbook correctly covers all the necessary information.)</em></p>


    <h4 class="h4__alt">How to Make an Employee Handbook</h4>
    <p>The most basic function of an employee handbook is to communicate the rights and expectations of the employee and the rights and expectations of the employer. To do this, there are a handful of items every handbook must contain. </p>

    At minimum an employee handbook should contain the following eight items, according to <a href="https://www.nfib.com/documents/pdf/faststart/model-employee-handbook.pdf" target="_blank">the National Federation of Independent Business (NFIB) Legal Foundation</a>:
    <ol>
        <li>An employment at-will disclaimer (meaning the employment relationship may be terminated with or without cause and with or without notice at any time by the employee or employer)</li>
        <li>An <a href="http://www.ksdot.org/Assets/wwwksdotorg/bureaus/offChiefCoun/Documents/Sample EEO Policy Statement.pdf" target="_blank">equal employment opportunity policy statement</a></li>
        <li>A policy prohibiting unlawful <a href="http://www.eeoc.gov/laws/types/" target="_blank">discrimination</a> and <a href="http://www.eeoc.gov/laws/types/harassment.cfm" target="_blank">harassment</a></li>
        <li>A section that describes the policy for use of company property and privacy rules (computers, email, voicemail, etc.)</li>
        <li>A section on employment classification and overtime rules</li>
        <li>A policy on family and medical leave (if you have 50 or more employees)</li>
        <li>A section on safety</li>
        <li>A disciplinary guide</li>
    </ol>

    <p>Keep in mind, these are just the bare minimum. Many other elements — history and culture of the company, dress code, attendance policies, vacation, review procedures, benefits, etc. — should also be considered and, potentially, included. Adding more detail about more topics leaves less room for confusion and error (a.k.a. legal trouble) if an employee needs to be let go later. </p>

    <p>Below we've created a sample employee handbook outline, which incorporates recommendations from the NFIB, you can use for your organization's handbook. Remember, this is only an outline: You can and should tailor your employee handbook to meet your company’s specific needs. There is no must-follow order and there is no must-include list of items (the legal requirements mentioned above being the only exception — definitely include those!). We just believe that the more information provided upfront, the better.</p>


    <h4 class="h4__alt">The Ultimate Employee Handbook Sample Template</h4>

  <ol>
    <li>Welcome</li>
    <ul>
        <li>History, Goals, & Core Values</li>
        <li>Purpose of Handbook</li>
        <li>At-Will Employment</li>
    </ul>

    <li>Workplace Commitments</li>
        <ul>
            <li>Equal Opportunity Employment</li>
            <li>Non-Harassment / Non-Discrimination</li>
            <li>Drug Free / Alcohol Free</li>
            <li>Open Door Policy</li>
        </ul>

    <li>Company Policy and Procedures</li>
        <ul>
            <li>Code of Professional Conduct</li>
            <li>Dress Code</li>
            <li>Payday</li>
            <li>Company Property</li>
            <li>Privacy</li>
            <li>Personnel Files</li>
        </ul>

    <li><a href="http://www.dol.gov/elaws/esa/flsa/screen75.asp" target="_blank">Employment Classification</a></li>
        <ul>
            <li>Exempt, Non-Exempt, Part-Time, Full-Time, or Temporary Status</li>
        </ul>

    <li>Attendance Policies</li>
        <ul>
            <li>General Attendance</li>
            <li>Tardiness</li>
            <li>Breaks</li>
        </ul>

    <li>Leave Policies</li>
        <ul>
            <li>Vacation</li>
            <li>Sick Leave</li>
            <li><a href="http://www.dol.gov/whd/fmla/" target="_blank">Family and Medical Leave Act<</a>/li>
            <li>Holidays</li>
            <li><a href="http://www.dol.gov/dol/topic/benefits-leave/juryduty.htm" target="_blank">Jury Duty</a></li>
            <li>Voting</li>
            <li><a href="http://www.dol.gov/vets/programs/userra/userra_fs.htm" target="_blank">Military Leave</a></li>
            <li>Leave of Absence</li>
        </ul>

    <li>Work Performance</li>
        <ul>
            <li>Expectations</li>
            <li>Reviews</li>
            <li>Insubordination</li>
        </ul>

    <li>Discipline Policy</li>
        <ul>
            <li>Grounds for Disciplinary Action</li>
            <li>Procedures</li>
            <li>Termination</li>
        </ul>

   <li>Employee Health and Safety</li>
       <ul> 
            <li><a href="/resources/employment-law/what-is-OSHA-and-other-workplace-safety-questions-answered/">Workplace Safety</a></li>
            <li>Workplace Security</li>
            <li>Emergency Procedures</li>
        </ul>

    <li>Benefits</li>
        <ul>
            <li>Health Insurance</li>
             <li>Retirement Plans</li>
             <li>Worker’s Compensation</li>
             <li>Disability</li>
        </ul>

<li>Termination Policies</li>
    <ul>
        <li>Voluntary Termination</li>
        <li>Final Paycheck</li>
        <li>COBRA Continuation of Benefits</li>
         <li>Exit Interview</li>
     </ul>

<li>Acknowledgments of Receipt</li>
    <ul> 
        <li>Employee Copy</li>
        <li>Employer Copy</li>
    </ul>
</ol>

    <p>One good employee handbook example of is this one from <a hfre="http://www.skidmore.edu/employee-handbook/documents/2004-Employee-Handbook.pdf" target="_blank">Skidmore College</a>. While specific to the college, the categories and information included provide guidelines any business can use.</p>


    <h4 class="h4__alt">Tips to Keep in Mind</h4>
    Here are a few things to keep in mind when crafting your employee handbook.
    <ul>
        <li><strong>Keep it simple.</strong> An employee handbook should be concise and provide necessary information without flowery writing. Remember the handbook is meant to aid employees in understanding company policies and expectations. Using obscure language could lead to misunderstandings and — in worst-case scenarios — legal issues later on.</li>

        <li><strong>Have a disclaimer.</strong> The disclaimer is what defines the nature of a handbook and should clearly state that the document is not a contract of employment. The disclaimer is so important it should be included both at the beginning and end of the handbook for emphasis.</li>

        <li><strong>Have a lawyer review it.</strong> Anything you say or don’t say in your handbook could lead to legal trouble. It’s better to seek legal help early rather than need legal help later.</li>

        <li><strong>Remember the law.</strong> Make sure your handbook complies with state and federal laws. Again, a lawyer can help you with this.</li>

        <li><strong>Stay up-to-date.</strong> Your handbook should reflect the world as-is: that is, it should include relevant information about technology, laws, and society. Keep such things as same-sex marriage laws, internet privacy issues, and other timely issues in mind when writing your handbook. Stay on top of these laws so that you can update your employee handbook as new legislation is passed. If you do end up making changes, make sure to notify all staff and provide them with the new version.</li>

        <li><strong>Make sure all employees have a copy.</strong> This includes temporary, part-time, and contract employees, as well as interns. It’s also a good idea to have it posted on your company’s internal website. That way, updates can easily be made and it is always instantly accessible to employees.</li>

        <li><strong>Consider Non-Disclosure Agreements (NDAs).</strong> NDAs aren’t legally required, but they can protect trade secrets. However, don't confuse them with non-competes, as these can be tricky to enforce and aren’t always necessary. If you do want to include non-compete agreements in your handbook, be sure to look into <a href="/resources/employment-law/are-non-compete-agreements-enforceable/">whether or not a non-compete agreement would truly benefit your business</a> before including one in your contracts.</li> 

        <li><strong>Clearly define compensation expectations.</strong> Explain the deductions that will be made for federal and state taxes, as well as voluntary deductions for benefit programs.</li>
    </ul>

    <p>By following the outline provided by NFIB and considering the above tips, you’ll be able to write a helpful, thorough, and legally sound employee handbook that keeps you and your employees on the same page.</p> 




What Should Go In an Employee Handbook? Sample Template Included.



    
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    <p>The phrase “servant leadership” was first used by <a href="https://greenleaf.org/what-is-servant-leadership/" target="_blank">Robert K. Greenleaf in his 1970 essay</a>, The Servant as Leader. Greenleaf, a longtime director of management development at AT&T, defined a servant leader as someone who feels naturally inclined to serve others, and who then consciously aspires to serve in a leadership role.</p>

    <p>This mindset, which directly opposes more traditional views of leadership that focus on accumulating and exerting power, has grown in popularity over the years. Today, it is considered by many to be the best form of leadership. </p>

    <p>But is servant leadership really the most effective management style? Here, we look at what it means to be a servant leader, what servant leadership looks like in the workplace, and how servant leadership compares to other management styles.</p>


    <h4 class="h4__alt">What Is a Servant Leader?</h4>
    Servant leaders focus on the growth and well being of their employees above all else. They consider themselves “<a href="http://ctb.ku.edu/en/table-of-contents/leadership/leadership-ideas/servant-leadership/main" target="_blank">first among equals</a>” (rather than above others) and are willing to teach as well as learn. Servant leaders draw on the strengths of their employees and allow others to do what they do best instead of forcing a specific plan of action. They take equal responsibility for successes and failures, and are willing to step aside to let others lead when necessary.


    <h4 class="h4_alt">Servant Leadership Qualities</h4>
     In his essay, Greenleaf defines five key servant leadership qualities:
     <ol>
        <li>Listening</li>
        <li>Persuasion</li>
        <li>Access to intuition and foresight</li>
        <li>Use of language (communication)</li>
        <li>Pragmatic measurements of outcomes</li>
    </ol>

    <p>The first, <strong>listening</strong>, is the most important tool of a servant leader. Servant leaders must take the time to actively seek out the opinions and ideas of their followers, absorb what is being said, and then move forward appropriately. This builds mutual respect and shows that the leader is willing to grow alongside his or her followers. </p>

    <p><strong>Persuasion</strong> often has a negative connotation and conjures images of arm-twisting and trickery. That’s not the case here. Persuasion in relation to servant leadership means a servant leader uses his or her influence to point followers in the most beneficial direction for the team. They take various ideas and goals and combine them into one action plan that best fits a situation. </p>

    <p>The last three qualities — <strong>access to intuition and foresight, use of language, and pragmatic measurements of outcomes</strong> — are less action oriented and more individualistic. They require practice and effort, and are areas in which a successful servant leader is always looking to grow. </p>

    <p>Basically, these qualities mean that servant leaders gauge individual situations and respond to them in unique, rather than blanketed, ways. They are perceptive and go out of their way to effectively communicate their vision to followers. By asking questions, listening, thinking ahead, and taking every factor into consideration, servant leaders are then able to anticipate the needs of their followers and guide them toward an outcome that fosters growth, contentedness, and encouragement. </p>


    <h4 class="h4_alt">How Servant Leadership Affects the Workplace</h4>
    <p>A lot of literature talks about what an individual needs to do to be a servant leader. But what about the whole workplace? A workplace practicing servant leadership <a href="http://www.investopedia.com/articles/financialcareers/10/servant-leadership.asp" target="_blank">focuses on individuals and a decentralized organizational structure</a>, according to <a href="http://www.spearscenter.org/about-larry" target="_blank">Larry Spears</a>, president and CEO of the Larry C. Spears Center for Servant-Leadership, Inc. It serves all stakeholders in the corporation, everyone from the managers all the way to the customers. When properly implemented across the board in a workplace, servant leadership emphasizes relationships over returns. </p>

    <p>Servant leadership in the workplace means the qualities of a servant leader — listening, persuasion, intuition and foresight, communication, pragmatic measurement of outcomes — are applied in employee–customer relationships as well as manager–employee relationships. Employees need to stay connected to customers and industry developments, listen and remain receptive to clients, and practice empathy by taking the point of view of a customer.</p>

    <p>When a company employs servant leadership across the board it can help the business run more effectively and efficiently. A good example of this is Johnson &amp; Johnson (J&amp;J), whose mission statement puts the needs and well being of the customer first. This means that J&amp;J's upper management takes the time to serve employees and develop leaders who believe that what is good for the customer is good for business. That, in turn, motivates them to create products of high quality and value.</p>


    <h4 class="h4_alt">How Servant Leadership Compares to Other Leadership Styles</h4>
    There is no definitive list of leadership styles. Some experts consider Daniel Goleman’s 2000 Harvard Business Review study, <a href="https://www.haygroup.com/downloads/fi/leadership_that_gets_results.pdf" target="_blank"><em>Leadership That Gets Results</em></a>, the ultimate compilation. The study, conducted over three years with 3,000 mid-level managers, uncovered six leadership styles that the majority of managers use. The six styles, as well as examples of each servant leadership style, are:
    <ol>
        <li><strong>The Pacesetter Leader</strong> expects and models excellence and self-direction, sets high standards for performance, and is focused on doing things better and faster
            <strong>Example:</strong> Jeff Bezos, founder of Amazon</li>
        <li><strong>The Authoritative Leader</strong> moves people toward a new set of shared goals, articulating where a group is going but not how it will get there
            <strong>Example:</strong> Martha Stewart</li>
       <li><strong>The Affiliative Leader</strong> emphasizes the importance of team work and creates harmony in a group by connecting people to each other</li>
        <br><strong>Example:</strong> Joe Torre, former manager of the New York Yankees (1996–2007) 
       <li><strong>The Coaching Leader</strong> employs a one-on-one style focused on developing individuals, showing them how to improve performance, and helping to connect personal goals to the goals of the organization
           <br><strong>Example:</strong> Andrew Carnegie (mentored Charles Schwab, first president of U.S. Steel)</li>
       <li><strong>The Coercive Leader</strong> (or Military Style) demands immediate compliance, rarely involves praise, and frequently employs criticism; leads with a “do as I say” mentality
           <br><strong>Example:</strong> Tom Coughlin, head coach of the New York Giants</li>
        <li><strong>The Democratic Leader</strong> builds consensus through participation, draws on peoples’ knowledge and skills, and creates a group commitment to resulting goals
            <br><strong>Example:</strong> Dwight D. Eisenhower</li>
    </ol>

    <p>In addition to these six, <a href="http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=241962" target="_blank">The Center for Association Leadership</a> outlines its own set of leadership styles. These are based on Louis Mobley’s teaching that leadership is based in experience and habit, not intellect. Mobley was the director of IBM’s executive school in the 1950s and ‘60s, and taught that great leaders don’t know different things from everyone else, but they think in different ways.</p> 

    The Center’s list includes the following six leadership styles, in addition to the Pacesetter and Coercer styles from above:
        <ol>
            <li><strong>The Charismatic Leader</strong> influences through power of personality, acts passionately, and spurs others to action through his or her own energetic efforts
                <br><strong>Example:</strong> Oprah Winfrey</li>
            <li><strong>The Innovative Leader</strong> breaks established norms and goes beyond the usual course of action, creating a climate of innovation that encourages others to think in new ways
                <br><strong>Example:</strong> Richard Branson, founder of Virgin Group</li>
            <li><strong>The Laissez-Faire Leader</strong> takes a backseat approach, trusts others to do good work, monitors performances, and gives regular feedback without micromanaging
                <br><strong>Example:</strong> Donna Karan, of DKNY fashion</li>
           <li><strong>The Servant Leader</strong> puts service to others before self-interest, involves the whole team in decision making, teaches, and accepts successes and failures alongside employees
                <br><strong>Example:</strong> Herb Kelleher, cofounder and former CEO of Southwest Airlines</li>
            <li><strong>The Situational Leader</strong> changes plans according to a group’s readiness and skills, and is directing and supportive as well as empowering and coaching
                <br><strong>Example:</strong> Pat Summitt, former head coach of the University of Tennessee women’s basketball team</li>
            <li><strong>The Transformational Leader</strong> leads by doing and expects team members to take risks and give their best even when the going gets tough
                        <strong>Example:</strong> Ben Cohen and Jerry Greenfield, of Ben & Jerry’s</li>
        </ol>

   <p>Lists aside, most experts conclude that the best leadership style is one that encompasses all the aforementioned styles — a combination style that addresses every employee and every problem in a unique way.</p>

    <p>If that’s the criteria for building the most successful leadership style, then it could be said that servant leadership is, in fact, the most effective type of management style. Not only does it approach every situation as a singular event, but, as we mentioned earlier, it also challenges leaders to read between the lines, find ways to effectively communicate their vision, ask questions, listen, think ahead, and anticipate the needs of their followers. It’s a leadership style that encompasses the best aspects of the other leadership styles and boils them into one wholesale approach.</p>

    <p>We agree with experts that every leadership style has its strengths and weaknesses, and each can be inspiring in certain circumstances. But while no person or approach is perfect, given the qualities displayed by servant leaders, we think it’s safe to say that servant leadership is one of the most effective approaches to guiding employees toward an outcome that fosters growth, contentedness, and encouragement.</p>



Is Servant Leadership the Most Effective Type of Management?



    
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    <p>Raising the minimum wage has been a key initiative for the <a href="https://www.whitehouse.gov/raise-the-wage" target="_blank">Obama administration</a>. Obama wants to raise the national minimum wage from $7.25 to $10.10 per hour. Putting his words into action, he even signed an executive order to pay new hires working on federal service contracts a minimum wage of $10.10/hour.</p>

    <p>Obama isn’t the only one seeking to pay his workers more. Currently, <a href="http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx" target="_blank">29 states and D.C.</a> have minimum wages above the federal minimum wage of $7.25. To see how raising the minimum wage affected job creation, economists at Goldman Sachs (GS) <a href="http://www.cepr.net/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the-minimum-wage" target="_blank">conducted an evaluation</a> of the 13 states that enacted the change in 2014. GS compared the employment change between December and January in those 13 states to the states that didn’t raise minimum wage, and found that that the states with minimum-wage increases had faster employment growth than the states where the minimum wage remained at its 2013 level.</p>

    <p>Even some cities are raising their minimum wage. For example, <a href="http://murray.seattle.gov/minimumwage/#sthash.cvYB5lNy.dpbs" target="_blank">Seattle passed a new $15/hour minimum wage</a> that will begin going into effect starting April 2015. This will be the highest minimum wage in the U.S.</p>

    <p>Yet despite an executive order and positive results for some cities and states, many people still disagree with raising the minimum wage. Why should we raise the minimum wage? Why shouldn’t we? These are both good questions. Let’s take a look.</p>

  
    <h4 class="h4__alt">Why Businesses Owners Favor Raising the Minimum Wage</h4>
    <p><a href="http://www.bostonglobe.com/business/2015/02/25/maxx-marshalls-raise-minimum-hourly-wage/I5judyYzoQxvuzcULW9YXI/story.html" target="_blank">T.J. Maxx, Marshalls, HomeGoods</a>,<a href="http://blog.walmart.com/in-letter-to-associates-walmart-ceo-doug-mcmillon-announces-higher-pay" target="_blank"> Walmart</a>, <a href="http://www.nytimes.com/2014/02/20/business/gap-to-raise-minimum-hourly-pay.html&_r=0" target="_blank">The Gap</a>, <a href="http://www.usatoday.com/story/money/business/2014/06/26/ikea-minimum-wage/11357843/" target="_blank">IKEA</a>, and <a href="http://money.cnn.com/2015/01/13/news/economy/aetna-wages/" target="_blank">Aetna</a> all raised their minimum wages in the last few years. There’s no law in place saying they have to, and no protestors boycott their stores in an attempt to bully them into it. No, these stores made the decision on their own. </p>
    <p>But why would a business choose to pay its workers more? There are a lot of reasons, according to Chris Sommers, co-founder of Pi Pizzerias and Gringo Mexican restaurant. Sommers recently raised his workers’ minimum wages to $10.10/hour and wrote an opinion piece that ended up on the <a href="http://blog.dol.gov/2015/04/07/chris-sommers-boost-business-by-raising-minimum-wage/" target="_blank">Department of Labor’s blog</a>. Sommers argues that one big reason is that business can help create more jobs. </p>

    <p>"Business owners don’t create more jobs when they have more money in their own pockets," he writes. "We create more jobs when other people have more money in their pockets to spend at our businesses.”</p>

    <p>Okay, that argument has been made before. But Sommers continues, calling out three key benefits that balance increased payroll costs.</p>

    <h4 class="h4__alt">Reduced employee turnover rates</h4>
    <p>Employees who can make ends meet stay longer, are less stressed, and are more productive. High employee turnover costs businesses time and money in recruiting and training new workers. </p>

    <p>The example Sommers gave: “We spend more than $500 training a new line cook. We threw away thousands of dollars in product a year due to inexperienced employees preparing it improperly. Eliminating just a portion of these expenses pays for increased minimum wages.”</p>

    <h4 class="h4__alt">Increased productivity</h4>
    <p>The higher wages gave Sommers’ employees a morale boost and increased their loyalty. </p>

    <p>“It’s a win-win when employees can concentrate on serving customers, without worrying about how they are going to make rent or put food on their own table,” he says.</p>

    <h4 class="h4__alt">Greater customer satisfaction</h4>
    <p>“Our more experienced teams take better care of our guests,” says Sommers. “We’ve gained many new customers who have written us notes telling us how grateful they are that we treat our employees fairly. Those guests are visiting our business more frequently, further contributing to our bottom line.”</p>

    <p>Sommers isn’t alone in thinking we should raise the minimum wage. A <a href="http://www.dol.gov/minwage/mythbuster.htm" target="_blank">June 2014 survey</a> found that more than 3 out of 5 small business owners support increasing the minimum wage to $10.10/hour, saying they believe that a higher minimum wage would increase consumer purchasing power (58%), help the economy (56%), and benefit their businesses via lower employee turnover, increased productivity, and customer satisfaction (53%).</p>

    <h4 class="h4__alt">How Raising the Minimum Wage Would Look</h4>
    <p><a href="http://www.epi.org/publication/ib341-raising-federal-minimum-wage/" target="_blank">The Economic Policy Institute put out a report in August 2012</a> outlining who would benefit from an increase in minimum wage, looking at characteristics like gender, age, race and ethnicity, educational attainment, work hours, family income, and family composition. It also gave the estimated GDP and job creation impacts that would result from an increase in the federal minimum wage to $9.80/hour (not $10.10, which would be proposed by President Obama two years later).</p>

    Here’s what they found:
    <ul>
        <li>Increasing the federal minimum wage would raise the wages of about 28 million workers, who would receive nearly $40 billion in additional wages over the phase-in period</li>

        <li>GDP would increase by roughly $25 billion during the phase-in period, resulting in the creation of approximately 100,000 new jobs
        </li>
        <li>Women comprise nearly 55% of those who would benefit
        </li>
        <li>Nearly 88% of workers who would benefit are at least 20 years old
        </li>
        <li>Workers of all races and ethnicities would benefit from the increase; non-Hispanic white workers comprise the largest share (about 56%) of those who would be affected
        </li>
        <li>About 42% of affected workers have at least some college education
        </li>
        <li>Around 54% of affected workers work full time
        </li>
        <li>Over 70% are in families with incomes of less than $60,000
        </li>
        <li>More than a quarter are parents
        </li>
        <li>Over a third are married
        </li>
        <li>The average affected worker earns about half of his or her family’s total income
        </li>
    </ul>

    Fast forward two years to 2014 and Obama’s State of the Union address. After the address, the White House put together <a href="https://www.whitehouse.gov/raise-the-wage" target="_blank">an interactive web page</a> detailing how raising the minimum wage would positively impact people across America. Some of the facts it lists include:
    <ul>
        <li>A minimum wage increase would benefit more than 28 million workers across the country</li>
        <li>19 million workers from all types of households would see a direct increase in their wages</li>
        <li>The real value of the minimum wage has fallen by nearly one-third since its peak in 1968; today, a full-time minimum wage worker makes $14,500 a year</li>
    </ul>


    <h4 class="h4__alt">Why Businesses Owners Are Against Raising the Minimum Wage</h4>
    <p>While many business owners are in favor of increasing minimum wage, more are actually against it. According to a 2013 <a href="http://www.gallup.com/poll/165995/small-business-owners-split-raising-minimum-wage.aspx" target="_blank">Gallup poll</a>, 50% of small business owners disapprove of a law that would raise the national minimum wage, compared to 47% who approved. Furthermore, 60% of small business owners think raising the minimum wage would hurt most small business owners. </p>

    <p>Generally, arguments against raising the minimum wage fall into the three categories below:
    </p>
    <h4 class="h4__alt">Creates fewer jobs</h4>
    <p>When the minimum wage increased between 2007-2009 from $5.15/hour to $7.25/hour, small business owner <a href="http://business.nmsu.edu/krwg-news-small-businesses-and-the-minimum-wage/" target="_blank">Mike Beckett</a> was hit hard. He had to lay off 5 of his 35 employees who worked at his small book store in New Mexico. When reflecting on those layoffs, Beckett said, “It was crippling to us….there were just all these things that happened.” </p>

    <p>The Congressional Budget Office (CBO) <a href="http://www.cbo.gov/publication/44995" target="_blank">released a report</a> in early 2014 that confirmed Beckett's experience was not unheard of. The CBO report estimates that by increasing the minimum wage to $10.10/hour, there will be a loss of 500,000 jobs (which is about .3% of total jobs). </p>

    <h4 class="h4__alt">Increases consumer prices</h4>
    <p>Higher wages means it costs employers more money to operate their business. Many business owners offset these costs by passing them off to consumers. 
    </p>
    <p>The CBO report suggests that if goods/services cost more, then consumers will buy less of them, which hurts the economy overall. </p>

    <p>Restaurants especially have passed the cost of minimum wage onto consumers by increasing menu prices. <a href="http://www.bloomberg.com/bw/articles/2014-02-25/when-minimum-wage-goes-up-the-menu-price-also-rises" target="_blank">BloombergBusiness reports</a> that "Cheesecake Factory operates about one-fifth of its restaurants in California, where it expects to sustain an additional $2 million to $3 million in costs from the state’s new minimum wage. This was part of the chain’s reasoning in boosting prices by 2 percent this year."</p>

    <h4 class="h4__alt">Squeezes out unskilled employees</h4>
    <p>Hiring unskilled employees and taking the time to train them can be an expensive process. If the minimum wage is increased, employers might not want to invest as much money in unskilled workers, which can lead to those employees being squeezed out of the job market.</p>

    <p>US News <a href="http://www.usnews.com/opinion/blogs/economic-intelligence/2013/03/11/raising-the-minimum-wage-wont-help-the-poor" target="_blank">argues</a>, "Raising the minimum wage makes it harder for these inexperienced workers to find a job, because businesses will either eliminate positions or choose to hire someone with more experience at the higher mandated wage."</p>

    <p>This leaves unskilled workers unable to find a job that will train them in marketable skills that will help them find a job later down the road.</p>

    <p>Several studies have found conflicting results when it comes to the negative effects of increasing the minimum wage. To combat this, the DOL put out a <a href="http://www.dol.gov/minwage/mythbuster.htm" target="_blank">fact sheet</a> with “common myths” about raising the minimum wage, disputing many claims and offering new insights into the proposal.</p>
 

    <h4 class="h4__alt">Further Research on the Negative Effects of Raising the Minimum Wage</h4>
    Business owners aren't the only ones against raising the minimum wage. Economists and academics have also come forward against a wage hike. Here are some of the concerns <a href="http://www.huffingtonpost.com/tom-rogan/why-we-shouldnt-raise-the_b_4688701.html" target="_blank">voiced by those against</a> raising the minimum wage.
    <ul>
       <li><a href="http://www.nber.org/papers/w5224.pdf?new_window=1" target="_blank">A 1995 study by David Neumark and William Wascher</a> found that New Jersey's 1992 minimum wage increase led to a 4.6% decrease in employment</li>
       <li><a href="http://gregmankiw.blogspot.com/2006/04/minimum-wage-debate.html" target="_blank">Harvard's Greg Mankiw</a> writes about evidence that suggests raising the minimum wage has a particularly negative impact on employment opportunities for teens, quoting his <a href="http://www.cengage.com/economics/mankiw/index.html" target="_blank">economics textbook</a>: “The typical study finds that a 10% increase in the minimum wage depresses teenage employment between 1 and 3%. In interpreting this estimate, note that a 10% increase in the minimum wage does not raise the average wage of teenagers by 10%.”</li>
    </ul>
    <p>There are myriad opinions about raising the minimum wage, differing from person to person, company to company, and state to state. That said, there seems to be more support rather than criticism for raising the federal minimum wage. Many of the anti-raise arguments are challenged in this <a href="http://www.dol.gov/minwage/mythbuster.htm" target="_blank">DOL fact sheet</a>; and the fact that small and large businesses alike are already deciding to raise their minimum wages on their own accord makes it seem as if the “pro” of the debate is winning. </p>



    



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