Workplace News….Employee Recognition Important during Holidays (And the Rest of the Year)

Newswise — Whether it’s a festive holiday party, an end-of-the-year bonus or a thoughtful gift, many employees can expect something from their employers during this holiday season.

Although giving gifts and parties can certainly be appreciated by employees, do they offer employers any long-term benefits?

It seems many organizations think they do.

A recent CareerBuilder survey of more than 4,000 workers and more than 2,600 employers shows organizations are more likely to provide holiday parties and perks this year. According to the survey, 40 percent of employers plan to give their employees holiday bonuses, up from 33 percent in 2010. Fifty-eight percent of employers are planning a holiday party for their employees, up from 52 percent, and 30 percent of employers plan to give holiday gifts to employees, up from 29 percent.

Research on employee recognition demonstrates that sincere, credible recognition is appreciated by employees and can enhance their motivation and performance, said Tom Becker, chair and professor in the Department of Business Administration at the University of Delaware.

“This is likely to be true whether the recognition is provided during the holidays or at other times,” Becker said.

Providing parties, bonuses and other forms of acknowledgement, including gifts, for employees’ work has symbolic value beyond the objective value that may be attached. “They send a message that the employment relationship is more than simply a transactional one. That message is especially important to convey if employees have endured a year of no raises, extra workloads, threats of layoff or many of the other conditions common in workplaces right now,” said Kimberly Merriman, an assistant professor of management and organization at Pennsylvania State University.

The key to gift giving and other forms of recognition around the holidays is being sincere, explained Robert Eisenberger, a professor in the psychology department at the University of Houston. He studies perceived organizational support—what makes employees feel supported and cared about—and has recently published a book titled “Perceived Organizational Support: Fostering Enthusiastic and Productive Employees.”

“What’s important is the genuineness of what you do,” he explained. “If the employer just goes through the motions of giving a gift that doesn’t really indicate they value employees, then it doesn’t count for much. What, really is important is a genuine indication of valuation and caring.”
What type of a gift or recognition will seem genuine to employees?

“One is the amount of time you are willing to spend on indicating you care about employees. For example, taking employees or subordinates out for a meal shows you really care about them, because it’s easy to give them a few dollars, but taking the time to treat employees to a meal involves effort and planning,” Eisenberger said,
It’s important to know employees’ needs and values, said Becker. “That’s a key principle of management. This allows managers and others to select a form of recognition or reward that employees will welcome. For some it might be money and for others a simple and sincere verbal acknowledgement of a job well done.”

Becker said non-monetary recognition can be just as effective as a bonus. “Forms of recognition besides money include written or verbal praise; symbolic rewards, such as plaques and certificates; small, meaningful gifts; or anything else that employees perceive as sincere recognition of their contributions and accomplishments,” he explained.

It’s important to be consistent, according to Merriman. If gift giving is eliminated after years of doing it without a credible explanation, employees are likely to be upset. “The motivational effects may be most obvious in the absence rather than presence of such recognition, since employees anticipate receiving something,” she explained. “For instance, one organization I know of experienced employee backlash when it stopped giving out holiday turkeys. The company wisely reinstated the tradition the following year.”

In order to manage employee entitlement perceptions, like the turkey example, organizations should separate financial rewards from the tradition of holiday recognition and instead provide a form of recognition that can be maintained each year, Merriman added.

“The trick is finding something that can be maintained—even in lean years—but still has value to employees. Here are two creative things a company might consider: providing free on-site car washes to employees for the day or providing free on-site gift wrapping. Of course, most employees would most value some extra paid time off during the holiday season if possible!”

Although general recognition such as parties and gifts can be expected to improve morale and help employees feel support from their organization, most of the benefits come in the form of positive assessment and appreciation, said Robert T. Brill, an associate professor psychology at Moravian College.

Because this show of holiday recognition is general and not tied to any one employee’s work, employers should not expect it to impact employees’ work habits, Brill said.
“It will go a long way toward morale and the worker’s sense of commitment and gratitude to the employer, but changing performance usually will require a more ongoing, systematic approach to performance feedback and management. A one-time reward for basically being a part of the organization does a great deal for attitude and emotional connection, but little for long-term performance change.”

Although many organizations may not have time for it during the hectic holidays, Brill said individual recognition—such as performance bonuses instead of blanket holiday bonuses—by employers would be most effective at improving motivation.

Eisenberger stressed that it is important for employees to feel supported all year, not just around the holidays.
“If people aren’t supported and card about the rest of the year and then a show of that is made just around holiday time, it isn’t taken very seriously,” he explained. “If you just do it on one occasion during the year, it’s not going to have much effect. It needs to be part of a pattern of indicating that employees are valued and cared about. It’s just like with relatives, you can’t be nice to relatives on the holiday and not be nice to them the rest of the year.”

Released: 12/12/2011

Source: The Society for Industrial and Organizational Psychology (SIOP)

Related Link:

http://www.newswise.com/articles/employee-recognition-important-during-holidays-and-the-rest-of-the-year

Social Media Is Having a Major Impact on Businesses

Companies are shifting to digital platforms and media to interact and collaborate with customers and employees

Newswise — As businesses become increasingly global and competitive, social media is playing a major role because of its ability to bridge distances and enable the development of relationships, a key component for any business.

”It is totally reshaping the way organizations communicate,” says Andrea Goldberg, the president and founder of Digital Culture Consulting, LLC in Bedford, NY, and an industrial and organizational psychologist with a background in marketing, communications and human resources.

“Increased openness and collaboration are greatly impacting the workplace and leading to the creation of internal and external networks and communities. Driving much of this is the relatively new phenomenon of social media, which is also contributing to organizational effectiveness, branding and customer support,” Goldberg said.

A 2010 Burson Marsteller study of Fortune 100 companies found that 66 percent used Twitter; 54 percent had a Facebook page and half managed a corporate YouTube channel. And, according to another survey, 73 percent of businesses plan to increase their social media presence, while 90 percent of marketers have adopted social media as a valuable tool.

Savvy companies, both large and small, have recognized the value social media can bring to their organizations; something that employees and customers are expecting more and more.

This is due in large part to the increased use of social media sites like Facebook and LinkedIn by people of all ages as well as the numbers of technically oriented people entering the workforce who have grown up with social media. For these people, social media is an integral part of their lives and they expect it to be part of their work environment as well.

“A new business environment is emerging as many employees have the ability and the desire to use these tools to interact with their colleagues, managers and customers and to accomplish work differently than by traditional methods,” said Goldberg.

On the customer or external side this has been demonstrated by the growth of sites such as Yelp and Angie’s list that allow customers to evaluate vendors. Twitter is being used to respond to customer concerns and Facebook enables customers to become fans.

On the internal side, Goldberg sees organizations transforming and shifting strategies because of the way social media is impacting recruiting and selection, communications, rewards and incentives, defining job roles and leadership and training and development.

The fact is that social media has already become a common part of the workplace, so companies need to accommodate the new realities, said Goldberg.

She said some of the positive outcomes stemming from these realities include new marketing and public relations channels; better customer acquisition, service and loyalty; new approaches for branding and communications; collaborative innovations for product development; opportunities for thought leadership; recruitment of hard-to-find skilled candidates and increased employee engagement.

This trend does come with some risks. Employees posting unacceptable comments about colleagues and/or their company on Twitter and other social media outlets have occurred.

To mitigate misuse, companies need to develop policies governing use of social media that restricts certain content including personnel matters, contract negotiations and corporate policies.

Forward thinking companies are leveraging employees’ social media skills and training them to become brand stewards to help promote loyalty and support for the organization. Positive postings on employees’ social networks can boost an organization’s employment brand. “They can help position the company as an employer of choice,” said Goldberg.

She also pointed out that organizations actively involved in social media often have employees more engaged with their companies. “The value is they get people talking and interacting across boundaries, borders and silos,” she said.

Benefits include greater transparency, trust, responsibility, innovation and improved customer service, she added.

But some things have to be in place before social media use can be effective, says Goldberg. Realistic expectations and guidelines must be established and clearly communicated to all employees while allowing opportunity for dialog and commentary. Also, employees should be aware of not only the benefits but also the limitations of social media. “Employees need to be careful how they use company information on social media networks,” she said.

Another way to enhance satisfaction is to encourage employees to offer ideas and suggestions and incorporate them into both company programs and products. “They need to know management is listening to them and they are important to the company’s success. And that helps build trust,” she said.

However, despite the proven benefits not all organizations have jumped on the social media bandwagon. Others are slow to see its value.

Goldberg pointed to Accenture as an organization that had made social media part of its culture. The global management consulting, technology services and outsourcing company provides avenues for employees to connect through an internal Twitter Network, a company blog and a YouTube site.

Kevin Kramer, Accenture’s director of human capital, said “We are very wired. People here are excited about social media and have been using it for years. We are hooked on our mobile devices.”

Goldberg said that social media is not just the domain of young people. “The fastest growing segment of social media users is over 40. In part, that’s because so many young people are active users and there is not much room to grow. Nevertheless, older people are learning just how effective a tool social media can be and that’s why they are the fastest growing group.”

Released: 12/13/2011

Source: Society for Industrial and Organizational Psychology (SIOP)

Related Link:

http://www.newswise.com/articles/social-media-is-having-a-major-impact-on-businesses

The Paradox of Gift Giving: More Not Better

Newswise — Holiday shoppers, take note. Marketing and psychology researchers have found that in gift giving, bundling together an expensive “big” gift and a smaller “stocking stuffer” reduces the perceived value of the overall package for the recipient.

Suppose you’re trying to impress a loved one with a generous gift this holiday season, says Kimberlee Weaver, assistant professor of marketing in the Pamplin College of Business. One option is to buy them a luxury cashmere sweater. A second option is to add in a $10 gift card.

If their budget allows, most gift givers would choose the second option, as it comprises two gifts — one big, one small, Weaver says. Ironically, however, the gift recipient is likely to perceive the cashmere sweater alone as more generous than the combination of the same sweater and gift card. “The gift giver or presenter does not anticipate this difference in perspectives and has just cheapened the gift package by spending an extra $10 on it.”

Weaver is part of a research team that recently discovered, through a series of studies, what the team has called the “Presenter’s Paradox.” The paradox arises because gift givers and gift recipients have different perspectives, Weaver says. Gift givers follow a “more-is-better” logic; recipients evaluate the overall package.

“People who evaluate a bundle, such as a gift package, follow an averaging strategy, which leads to less favorable judgments when mildly favorable pieces (the gift card) are added to highly favorable pieces (the sweater). The luxury sweater represents a generous ‘big’ gift. Adding on a ‘little’ gift makes the total package seems less big.”

The same contradictory effect can be found in other situations, says Weaver, whose research article, “The Presenter’s Paradox,” co-authored with Stephen Garcia and Norbert Schwarz of the University of Michigan, has been accepted for publication in the Journal of Consumer Research.

“People who present a bundle of information assume that every favorable piece adds to their overall case and include it in the bundle they present,” she says. However, notes Garcia, associate professor of psychology and organizational studies at the University of Michigan, “this strategy backfires, because the addition of mildly favorable information dilutes the impact of highly favorable information in the eyes of evaluators. Hence, presenters of information would be better off if they limited their presentation to their most favorable information — just as gift givers would be better off to limit their present to their most favorite gift.”

Weaver and her co-authors found that the paradox was strongly evident in seven studies across many product domains, from bundles of music to hotel advertisements, scholarships, and even “negative” items such as penalty structures.

When asked to design a penalty for littering, for example, those who were put in charge preferred a penalty that comprised a $750 fine plus 2 hours of community service over a penalty that comprised only the $750 fine. However, perceivers evaluated the former penalty as less severe than the latter, Weaver says. “Adding a couple of hours of community service made the overall penalty appear less harsh and undermined its deterrence value.”

The discovery of the Presenter’s Paradox sheds new light on how to best present information, says Weaver. “Whether it is a public relations expert pondering which reviews to include on a book jacket, a music producer considering which songs to include in a music album, or a legal team building up arguments for a case, they all face the important task of deciding what information to include in their presentations. So do consumers who apply for a job and homeowners who try to sell their house.”

All of them, she says, run the risk of inadvertently diluting the very message they seek to convey by their efforts to strengthen it. “Fortunately, there is a simple remedy: take the perspective of the evaluator and ask yourself how the bundle will appear to someone who will average across its components. Doing so will alert you to the fact that others will not always share your sense that more is better.”

“Prompting consumers to consider the overall picture entices them to adopt a holistic perspective, which allows them to correctly anticipate evaluators’ judgments,” says Schwarz, professor of marketing and psychology at the University of Michigan. “But when left to their own devices, presenters are unlikely to notice that evaluators do not share their more-is-better rule.”

Released: 12/12/2011

Source: Virginia Tech (Virginia Polytechnic Institute and State University)

Related Link:

http://newswise.com/articles/the-paradox-of-gift-giving-more-not-better

Environmental Update….Affordable Solar: It’s Closer Than You Think!

Photo Credit: Sarah Bird, Affordable solar power is on the horizon, says Joshua Pearce, pictured here with a high-tech photovoltaic panel.

Newswise — It’s time to stop thinking of solar energy as a boutique source of power, says Joshua Pearce.

Sure, solar only generates about 1 percent of the electricity in the US. But that will change in a few years, says Pearce, an associate professor of electrical engineering and materials science at Michigan Technological University. The ultimate in renewable energy is about to go mainstream.

It’s a matter of economics. A new analysis by Pearce and his colleagues at Queen’s University in Kingston, Ontario, shows that solar photovoltaic systems are very close to achieving the tipping point: they can make electricity that’s as cheap—sometimes cheaper—as what consumers pay their utilities.

Here’s why. First, the price of solar panels has plummeted. “Since 2009, the cost has dropped 70 percent,” says Pearce. But more than that, the assumptions used in previous studies have not given solar an even break.

“Historically, when comparing the economics of solar and conventional energy, people have been very conservative,” says Pearce.

To figure out the true cost of photovoltaic energy, analysts need to consider several variables, including the cost to install and maintain the system, finance charges, how long it lasts, and how much electricity it generates. Pearce and his colleagues performed an exhaustive review of the previous studies and concluded that the values given those variables were out of whack.

For example, most analyses assume that the productivity of solar panels will drop at an annual rate of 1 percent or more, a huge overestimation, according to Pearce. “If you buy a top-of-the-line solar panel, it’s much less, between 0.1 and 0.2 percent.”

In addition, “The price of solar equipment has been dropping, so you’d think that the older papers would have higher cost estimates,” Pearce says. “That’s not necessarily the case.”

Equipment costs are determined based on dollars per watt of electricity produced. One 2010 study estimated the cost per watt at $7.61, while a 2003 study set the amount at $4.16. The true cost in 2011, says Pearce, is under $1 per watt for solar panels purchased in bulk on the global market, though system and installation costs vary widely. In some parts of the world, solar is already economically superior, and the study predicts that it will become increasingly attractive in more and more places.

In regions with a burgeoning solar industry, often due to favorable government policies, there are lots of solar panel installers, which heats up the market.

“Elsewhere, installation costs have been high because contractors will do just one job a month,” says Pearce. Increasing demand and competition would drop installation costs. “If you had ten installers in Upper Michigan and enough work to keep them busy, the price would drop considerably.”

Furthermore, economic studies don’t generally taken into account solar energy’s intangible benefits, reduced pollution and carbon emissions. And while silicon-based solar panels do rely on a nonrenewable resource–sand–they are no threat to the world’s beaches. It only takes about a sandwich baggie of sand to make a roof’s worth of thin-film photovoltaic cells, Pearce says.

Based on the study, and on the fact that the cost of conventional power continues to creep upward, Pearce believes that solar energy will soon be a major player in the energy game. “It’s just a matter of time before market economics catches up with it,” he says.

The study, “A Review of Solar Photovoltaic Levelized Cost of Electricity,” was coauthored by Kadra Branker and Michael Pathak of Queen’s University and was published in the December 2011 edition of Renewable and Sustainable Energy Reviews, Volume 15, Issue 9, pages 4470-4482.

Released: 12/8/2011

Source: Michigan Technological University

Related Link:

http://www.newswise.com/articles/affordable-solar-it-s-closer-than-you-think

Professor Offers Holiday Tipping Advice During the Economic Downturn

Newswise — DURHAM, N.H. – With pocketbooks stretched even more during the holidays this year, Americans may find it difficult to tip their service providers as much as they would like to, but according to a University of New Hampshire professor who researches service expectations, consumers should do their best to give something.

“Giving a gift during the holiday is a fundamental part of every joyful season, and one such holiday extra is the giving of a ‘tip’ to those individuals that have provided a service during the year. However, extra money for many Americans has been tight this year due to the economic times which many have not recovered from. So this time of year, when we feel obligated to buy presents and tip our various service providers, it may be difficult to decide who to drop from your gift list or reduce in tips if money to spread around is limited,” said Nelson Barber, associate professor of hospitality management at UNH.

“During the holiday season, tipping is more a gesture of thanks to individuals who provide services on a regular basis to you and your family,” Barber says. “We all know that both gifts and tips are great, and for many, holiday tips can make a huge difference in their annual income.”

How important are tips? According to a survey by PayScale, personal-care workers, including makeup, barbers, hairdressers, nail technicians, and cosmetologists, receive 25 percent of their income from tips.

Barber offers the following tipping advice:

How Best to Tip?
Prioritize your most important service providers by considering those who have provided you services and the extent of interaction with them, particularly those who may not be that obvious, even if you may not have tipped them regularly. “Do not make your tipping decision solely based upon ‘an implied obligation.’ At the top of your list should be those individuals that enhance your life considerably,” he says.

Think about the valued housekeeper or the barber that squeezes you in or the individual that delivers your newspaper to the front door when it is raining or snowing saving you the walk down the driveway. “These are the people that should receive the top dollars rather than infrequently used service providers,” Barber says.

How much should I tip?
When deciding how much to tip, remember that tipping is discretionary. Consider the length of time you have been receiving the service and whether you live in an urban or rural setting where tipping levels may vary. Consider the relationship to the service provider. Are you close? Is the relationship informal?

“If you don’t think tipping is necessary in a particular circumstance, then don’t tip. The following is a guide and amounts have been adjusted for today’s economic conditions. It is not implying a moral duty to tip. If you are using a service that is widely known to be a tipped service, such as hair salons and valet parking, then tip for good service,” Barber says.

Some suggestions for minimum tipping are:
• Day care provider: $20 and a gift from your child
• Parking garage attendants: $20 or a gift
• Housekeeper: no more than one week’s pay or a gift
• Nanny: no more than one week’s pay or a gift from you and your child
• Newspaper carrier: $15 or a gift
• Package carrier: a gift of no more than $15
• Home caregiver: no more than one week’s salary or a gift
• Pet groomer: 25 percent the cost of a session or a gift
• Baby sitter: no less than half one evening’s pay
• Hairstylist for women: minimum half the cost of one visit. Tipping the owner who provides you the service: yes at your discretion.
• Hairstylist for men: minimum half the cost of one haircut.
• Manicurist: $10
• Sanitation worker: $5 to $10
• Mail carriers working for the United States Postal Service may not accept cash gifts, checks, gift cards, or any other equivalent.

If consumers need to reduce their tipping amounts, Barber suggests adding a note of thanks with the tip.

“I find, depending on the service provider, including a note expressing how much you appreciate them adds value and can make the gift mean more even if the amount given is less,” Barber says. “Service workers depend on these gifts as part of their income. So unless you’ve lost your own job, or are having financial troubles of your own, try to give.”

Released: 12/5/2011

Source: University of New Hampshire

Related Link:

http://www.newswise.com/articles/unh-professor-offers-holiday-tipping-advice-during-the-economic-downturn

Workplace News….New Research Finds Obesity Negatively Impacts Income, Especially for Women

Newswise — WASHINGTON – A new report from The George Washington University School of Public Health and Health Services’ Department of Health Policy (GW) uncovered an overall wage differential between those of normal weight and those who are obese, especially when it comes to women. The research, released today, demonstrates the impact obesity may have on a person’s paycheck.

Examining years 2004 and 2008 in the National Longitudinal Survey of Youth (NLSY79) to quantify obesity-attributable wage gaps, the GW research team found the connection between obesity and reduced wages to be stronger and more persistent among females than males. In 2004, wages among the obese were $8,666 less for females and $4,772 lower for males. In 2008, wages were $5,826 less for obese females, a 14.6% penalty over normal weight females.

“This research broadens the growing body of evidence that shows that in addition to taxing health, obesity significantly affects personal finances,” said Christine Ferguson, J.D., Professor in the Department of Health Policy. “It also reinforces how prevalent stigma is when it comes to weight-related health issues.”

Additionally, the research shows that there are significant differences in wages dependent upon race. In 2004, Hispanic women who were obese earned $6,618 less than those who were normal weight. In 2008, the differential doubled for Hispanic men who were obese to earnings of $8,394 less than normal weight counterparts, while for women the gap narrowed slightly.

Other key findings from Gender and Race Wage Gaps Attributable to Obesity include:
• Both men and women who were obese experienced reduced wages compared to their normal weight counterparts.
• For both genders, and all racial categories, except Hispanic men, the wage differential narrowed between 2004 and 2008, despite the economy worsening.
• Caucasian women who are obese experienced a wage penalty in both 2004 and 2008 while Caucasian men only experienced a differential in 2004.
• Hispanic women who were obese experienced a wage differential in both 2004 and 2008; Hispanic men who were obese only experienced a wage differential in 2008.
• In both years, wages for African-American men who were obese were higher than their normal weight counterparts, while for African-American women, wages were similar between those who were obese and those who were normal weight.

The research builds upon findings discovered by GW last year, which raised the different ways that obesity impacts each gender. That report was focused on the individualized costs of obesity which outlined the overall, tangible, annual costs of being obese based on a series of measures including indirect costs, including lost productivity, and direct costs, such as obesity-related medical expenditures, to estimate the price tag of obesity at the individual level. On average, those costs are $4,879 for an obese woman and $2,646 for an obese man . The biggest difference among gender was wages, leading them to dive deeper in this focus area.

About the Methodology
The GW research team explored wage differentials more NLSY79 wave years 2004 and 2008 to further quantify obesity-attributable wage gaps. The NLSY79 provides detailed information about earnings, education, employment status, and employment characteristics, but also provides information about health and household characteristics. The NLSY79 follows the same panel of participants over time.

Released: 12/1/2011

Source: George Washington University

Related Link:

http://www.newswise.com/articles/new-research-finds-obesity-negatively-impacts-income-especially-for-women

In The News….What Does It Look Like When an Economy Collapses?

Newswise — Europe’s financial crisis has now reached a point where many economists worry the continent’s economy could collapse in weeks, if not days, unless political leaders can agree on a bailout package for economies groaning under unmanageable debt loads.

But what would an economic crash look like when the crash is only metaphorical, so there’s no actual rubble or twisted metal strewn about? And how much time would pass before we knew it happened?

“There would be immediate financial chaos,” said Paul Weller, a professor of finance at the University of Iowa’s Tippie College of Business. “Europe would be plunged into a deep recession and the real economic effects would come into play quite quickly.”

Most worst-case scenarios that have been playing out in recent days involve a default by Italy’s government on its sovereign debt, a scenario Weller believes is unlikely, but “is more likely than it was a few weeks ago.” The country would need billions of Euros from the European Central Bank to relieve its staggering $2.5 trillion debt, but leaders in other Eurozone countries are balking at such a large amount. They want Italy, Greece, and other struggling countries to put more effort into reforming their economies first, and there’s political resistance in Germany because the country’s still-strong economy would likely bear most of the costs of any bailout.

Weller said the triggering event of an all-out economic collapse would be an announcement that “Italy has begun an orderly debt restructuring, which is really a euphemism for default.”

After that, he says the first immediate visible sign that the economy has collapsed would be runs on banks, leading to long lines at banks and ATMs and people spending lots of time online trying to get their money out of failing banks. This would begin on the day of the default in Italy if not earlier, then quickly spread to the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain), other Eurozone countries with massive debt and fragile economies that are also in danger of default. Eventually, he said banks in other parts of Europe, in particular France and Germany, would feel the effects, and then banks in other countries.

With no cash, many banks go out of business and those that survive stop lending. Credit dries up, leaving even healthy businesses with no cash to pay their bills or short-term debt and no choice but to close their doors. Workers are laid off within weeks and unemployment shoots up. A default also likely leads to the break-up of the Eurozone and the collapse of the European Union as an economic entity, leading to more economic and political chaos.

Governments fall and in a matter of months, Europe is in a deep recession with high unemployment and unstable, austerity-wrecked governments unable to provide assistance or stimulus.

Weller says the U.S. economy would take a hit because American banks own huge amounts of European debt and credit default swaps written on that debt. With Europe’s economy plunging off a cliff, those banks are forced to swallow a loss on most if not all of that debt.

He says the current European scenario is similar to what happened when the bankrupt investment bank Lehman Bros. collapsed in 2008, causing a credit freeze among other lenders and investment banks that sent the U.S. economy into recession within a quarter. The damage was so sudden and so traumatic that the Federal Reserve immediately took action to minimize the fallout and spent billions of dollars to prop up other weakened financial services companies, while Congress passed the Troubled Asset Relief Program.

Weller said the EU scenario is similar, with Italy in the role of Lehman Bros. and the European Central Bank as the Fed. But he is cautiously optimistic that the collapse that would have occurred in 2008 without Fed intervention won’t play out because he thinks Europe’s political leaders will eventually agree on a bailout plan for Italy and other beleaguered eurozone economies. It might not happen until the eleventh hour, but Weller said a collapse would be so catastrophic that politicians, especially in Germany, will do all within their power to sell a bailout to voters as a least-bad option.

“When people stare into the abyss, they often decide other options are worth pursuing,” he says.

Released: 11/29/2011

Source: University of Iowa

Related Link:

http://newswise.com/articles/what-does-it-look-like-when-an-economy-collapses

For Future Job Seekers, ‘Tis the Season to Network!

Newswise — While students look forward to the holidays as a chance to unwind, ’tis the season to “network before they need work,” advises Brett Woodard, director of the Career Development Center at Saint Joseph’s University. Students should use this time purposefully, he says, to “plant seeds” for their career search by deepening existing relationships and expanding their network with new contacts.

Look for opportunities to strike up conversations at holiday social functions, says Woodard, and consider whether personal contacts (perhaps a family friend) can bring you as a guest to professional associations or company parties. “Seize the opportunity to introduce yourself and engage others by asking about their career,” he adds. “Share a little about your own career goals, and watch your network multiply before your eyes.” While students shouldn’t expect an immediate internship offer or job lead, they are laying the groundwork and establishing rapport. The next steps? A brief ‘thank you’ note or email to express how much you enjoyed meeting them, then continuing to nurture these relationships by staying in touch in the new year.

This season of giving is a good time to remember that networking is not a one-way street, Woodard notes. “It can be as simple as taking the lead on referring one person to another, sharing an interesting article, or forwarding a job opportunity. A reciprocal approach will engender generosity as you cultivate a network of professionals who understand your goals, recognize your commitment to your career search, and become excited and invested in supporting you.”

Released: 11/22/2011

Source: Saint Joseph’s University

Related Link:

http://newswise.com/articles/for-future-job-seekers-tis-the-season-to-network

Study Suggests Rules Requiring Minimum Standards Lower Standards to the Minimum

Newswise — Rules that are supposed to ensure minimum standards may in the end serve only to lower standards further than they might be without any rules at all, according to a study by a University of Iowa researcher.

Tom Rietz, professor of finance in the Tippie College of Business, speculates that this is because rules put in place to ensure minimum standards unwittingly establish a “good enough” level, so that people will perform only what is minimally needed.

“Rules may serve to calibrate expectations indicating what actions are good enough and, as a result, behavior may effectively fall to the rule,” Rietz said. “People who on their own initiative may have gone above and beyond instead do only the minimum.”

For example, he said free-will offerings might generate more admission income at a charity event than an established entry fee. Or, at a larger level, minimum wage laws may actually reduce overall wages in some situations because employers that might otherwise pay more instead pay only what the law requires them to.

Rietz said that minimum rules may also create a lack of trust between two parties in a relationship because it eliminates the benefit of the doubt. This is important, he said, because “social contracts commonly depend on trusting and reciprocating relationships. In modern economies, these relationships determine outcomes in conjunction with formal rules and explicit contracting.”

Take out that trust, he says, and societies and economies function less efficiently. In some ways, rules are put in place with the expectation that a guaranteed minimal level of performance will increase trust by reducing the risk to both parties and raising standards across the board. But recent experiments and studies have been calling into question the assumption.

Rietz’s experiment involved groups of 18 to 24 subjects who were paired off. One of the people in each pair—an “Investor”—was given $10, any amount of which could be given to the second person, the “Trustee.” Whatever was given was then tripled, and the Trustee could return any portion of that tripled amount to the Investor.

In some of the pairings, there were no rules dictating how much money Trustees had to return to Investors. With other pairs, Trustees were required to return a minimum of 10 percent, 20 percent or 30 percent to Investors.

The results showed that when there were no minimum return rules, the average Trustee returned 35 percent of the tripled amount to the Investor. But when a 10 percent minimum return rule was put in place, that median amount returned dropped to 10 percent, with 57 percent of Trustees returning only the minimum. Rietz said this is an indication that typical Trustees are no longer trustworthy in the sense that they don’t return more than the minimum.

While returns rise mechanically with 20 and 30 percent minimum return rules, Rietz said there is no evidence that trust returns between the two people.

“Without minimum return rules, trustees have to decide how much to return based on their own expectations about the value of information and what should be done in context,” Rietz said. “Rules restrict their ability to show trustworthiness through voluntary discretionary reciprocity.”

Minimum return rules also influenced how much Investors would initially send to Trustees. With no rules, Investors typically send about half of their $10, a figure that went down as minimum rules were put in place.

Rietz’s paper, “Trust Reciprocity and Rules,” was co-authored with Eric Schniter, Roman M. Sheremeta, and Timothy W. Shields of Chapman University.

Released: 11/9/2011

Source: University of Iowa

Related Link:

http://www.newswise.com/articles/uiowa-study-suggests-rules-requiring-minimum-standards-lower-standards-to-the-minimum

Money and Health…New Study Finds Physical Functioning Declines More Rapidly Among the Poor

Newswise — COLUMBUS, Ohio – A new national study shows that wealthier Americans and those with private health insurance fare better than others on one important measure of health – and this health gap only grows wider as they age.

Researchers found that, when the study began, middle-aged and older Americans with more income and assets reported having less trouble with five activities of daily living: walking across a room, bathing, eating, dressing and getting in and out of bed.

Especially troubling, though, was how the disadvantage for the poor snowballs over time, said Virginia Richardson, co-author of the study and professor of social work at Ohio State University.

“The rich stay healthier, while the poor see steeper declines in their health as they age,” Richardson said.

Those with private health insurance also reported less trouble with these activities than did those without such insurance. That gap also increased over time.

These findings held true even after researchers took into account other variables which may have affected physical functioning, including the participants’ age when the study began, marital status, employment status, and their generational group.

The results are important because physical functioning is the key for older adults to be able to take care of themselves without needing a caregiver, Richardson said.

“When people can no longer bathe themselves or cook for themselves, that’s when they need to be institutionalized,” she said.

Richardson conducted the study with Jinhyun Kim, assistant professor at Marywood University. Their results were published in a recent issue of the journal Health and Social Care in the Community.

This study is one of the few that have linked socioeconomic status – which includes income and assets – and health insurance on people’s physical functioning over an extended period of time, according to Richardson.

The researchers used data from the Health and Retirement Study, run by the University of Michigan, which followed Americans over 50 years of age over the course of 12 years, from 1994 to 2006. Data was collected every two years. For this study, Richardson and Kim used data on 6,519 participants.

In 1994, when data was first collected, the researchers found that those with higher income and assets had better functioning. The key finding, though, said Richardson, was how this gap grew over time.

“The more income and assets you have, the slower your health decline will be,” she said.

This was true for both men and women, although there was more variability among women in the study.

Those who had private health insurance also reported fewer problems with physical functioning than those who didn’t at the beginning of the study. And, just like with income and assets, the gap between the haves and the have-nots increased over time.

The researchers expected that those with higher levels of education would report better physical functioning, but that was not true of most of the sample. However, education did make a difference among older Black adults – those with more education tended to have better functioning than those with lower levels.

The data in this study can’t answer the question of how socioeconomic status and private health insurance help protect people’s physical functioning, Richardson said. But the results fit with other studies that suggest that economically disadvantaged people may not be able to afford medications they need, or may take steps to make their prescriptions last longer, like cutting pills in half.

They may also skip diagnostic tests that could help identify disease earlier, when it is more treatable. This may be especially true for those who lack private health insurance that can help pay for expensive testing.

“One of the first questions many elderly adults ask when their doctors order tests is ‘will my insurance cover it?’ Richardson says.

Richardson said the findings suggest that our public health care policies need to consider how people’s economic resources will change their physical functioning as they age.

“Our policies need to incorporate a life course perspective. We need to find way to prevent the rapid deterioration in physical functioning that is more likely among those who have fewer resources.”

Released: 11/7/2011

Source: Ohio State University

Related Link:

http://www.newswise.com/articles/physical-functioning-declines-more-rapidly-among-the-poor