The Best and Worst Corporate Practices

Thumbs up for employee-referral bonuses and matching contributions, but no-moonlighting policies and "love contracts" are for the birds

by Liz Ryan

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Some people collect snow globes or miniature spoons in their travels. I collect HR and management practices. I'm always on the hunt for the latest workplace policies and programs. Why? Well, for one thing, I need to keep on top of HR practices in general. But also I find these new programs and policies fascinating in their own right. They speak to employers' values and beliefs. They also often tellingly illustrate employers' fears about their employees and their own limitations as managers.

For example, I'm a big fan of employee referral bonus programs. Once in a while, an idea comes along that makes so much sense, it's thrilling (at least to an HR nerd like me). Employee referral bonuses fill that bill. They're terrific because of the message they send: "Bring us your friends and colleagues, people you know well who can fill jobs at our company and do great work. We'll save money on search fees and pay you." What could be more sensible?

When I was a corporate HR person and got the employee-referral-bonus bug in the early '90s, I went whole hog. I gave a special bonus to the person in our company who referred the most employees in each quarter and held regular raffles for everyone who referred any candidates at all.

Pointless Policy

So employee-referral bonuses make our list for the Top 10 Best Management Practices. And we have found nine others that we love just as well—programs that make sense for employers and employees alike. But, sad to say, there are some pretty wretched management practices out there, too—and we've listed them, as well. One of my least favorites is forced job rankings (see BusinessWeek.com, 2/12/07, "Why 'Forced' Job Rankings Don't Work").

For instance, one of the newer (and, for me, more appalling) practices out in the working world is the no-moonlighting policy. Now, employers have had noncompete agreements in place for years. I can't quarrel with those. If I'm working for you by day designing baby clothes, I really shouldn't be designing baby outfits for another company by night. It's easy to see where a conflict of interest could arise if I did. So I think that, properly written and administered, noncompete agreements make sense. (Note that I'm talking about noncompete agreements that are in force while you're actually working for the company. Noncompete agreements that extend beyond the term of your employment with the company are another story.)

But directly competing with your employer is one thing. Taking a part-time job, maybe for the social aspect or just for enjoyment, is completely different. For instance, I sing opera and musical theater for fun. This summer, I'll be singing in a local production of Man of La Mancha. As in other arenas, the musical-theatre realm has various levels, from community theater to Broadway productions. This local production is somewhere in between, but the performers do get paid a small amount.

Loud Statement

If I were working for an employer with an anti-moonlighting policy in place, I could be in violation of the policy for exercising my creative juices at night. That's ridiculous. Ditto for people who tend bar, cantor religious services, or drive a limo on the weekend. After all, folks make big bucks and spend countless hours selling items on eBay (EBAY), and they're free to do it (based on these anti-moonlighting policies) because they're not on anyone's payroll. How does that make sense?

So an anti-moonlighting policy is a bad thing in my view, and that's why it made my Top 10 Worst Management Practices List. An anti-moonlighting policy sends a loud statement to employees. It says: "We, the management team, aren't capable of managing your output at work, so we must resort to trying to limit what you do when you're not at work." That's pathetic.

We're always looking for—and then analyzing and passing judgment on—the latest and greatest management and HR practices. We would love to hear of any new (or old and tired) management practices that are especially praiseworthy or especially vile. Please write to Liz@asklizryan.com and share some of your favorites.

And, in case you're not quite sure you know which set of policies and programs you're working under…you may want to grab a copy of your company's employee handbook and read it cover to cover. Better safe than sorry!

Liz Ryan is an expert on the new-millennium workplace and a former Fortune 500 HR executive.