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business of wine

Sustainable Growing’s Third ‘E’

Cliff Ohmart

While many definitions of sustainable farming have been proposed, one point of agreement for most is the three “E”s of sustainability: farming that is economically viable, environmentally sound and socially equitable. Sustainable discussions almost always deal with the first two “E”s in great detail, however social equity, the third “E,” gets the least amount of time devoted to it. Why is that? I think it is because it is the factor that is the most challenging to address for many companies.

In thinking about the title of this column, I was tempted to call it “The Third Rail of Sustainability,” because no one wants to touch the subject for fear of getting zapped. I am not implying that the wine industry has ignored human resource issues—there are many vineyard and wine companies that have devoted time and resources to developing exemplary HR programs. However, it is fair to say that the third “E” has not received the same attention as the other two.

My own inattention towards this topic is a great example of how the third “E” gets neglected, either consciously or unconsciously. While thinking about topics for this space, it suddenly struck me that in the 12 years of writing a column about sustainable winegrowing I had never devoted one to human resource issues. I will now rectify the situation.

Why are human resource issues in the wine industry, as well as the rest of agriculture, so challenging and often consciously or unconsciously avoided? I think there are at least two important reasons: Labor is by far the most costly part of growing winegrapes. Many growers are either barely meeting or just exceeding the cost of production. So issues that involve increasing wages and/or benefits can easily become make-or-break financial situations. The second reason is that people can be very challenging to deal with. They complain, they can be stubborn, they have egos and—unlike a troublesome piece of equipment—they cannot be simply and easily replaced with the newest model. Nevertheless, human resources are the most important part of our business, so we must do everything we can to meet the HR challenges we face today.

I will be the first to admit to not being a human resources expert. However, I am human, I have held many jobs and supervised many people during my career, and I feel I have learned some things in the process. Job-related human resource issues can be viewed as falling into two main areas: One deals with job satisfaction and a person’s feeling of worth in a company, the other involves the more matter-of-fact planning and processes used in managing employees effectively.

Job satisfaction has always played a key role in whether I achieve my peak job performance, and this is likely true for many others. A business where employees operate at peak performance is a successful and sustainable business.

How many of you know people who are unsatisfied with their jobs and as a result are not really committed to working as hard as they are capable? It is a very common phenomenon. There are lots of reasons for being unsatisfied in one’s job, but often it is related to the worker feeling they are not valued by their employer.

One way to start building job satisfaction is to get everyone in the company on the same page. Creating a sustainable vision for your vineyard or winery business and sharing it with all employees is a great way to bring employees together. Better yet, have the employees participate in creating the company vision, because it will help them see their role in making the vision a reality. Why is a company vision important? As Yogi Berra once said, “If you don’t know where you are going, you may end up some place else.” Without a company vision, you may find a few years down the road that you don’t know how you got there. Sustainable winegrowing is more than a laundry list of practices employers use in the vineyard or winery. It is creating and recording a vision for where the proprietor, any business partners and employees want the business to end up. Many jobs in the winery and vineyard are difficult and tedious, yet they are absolutely critical for the company’s vision to be realized. If the people doing these jobs can see they are important contributions to achieving the company’s goals, they will likely have good job satisfaction no matter what tasks they are asked to perform. A guide to creating a sustainable vision can be found either in the “Lodi Winegrower’s Workbook 2nd Edition”1 or in the Companion Document for the “Lodi Rules for Sustainable Winegrowing.”2

There are many other things that affect job satisfaction. One of the most difficult to discuss and possibly implement is increased wages and/or benefits. However, if we are honest with ourselves, most of us gain some if not a lot of job satisfaction from how much we are compensated for our work. It tells us our worth to the company in very direct terms. There are many indirect ways to build job satisfaction, too. Promoting an open, fun and productive work environment is one. Another is convening fun and imaginative team-building events. A third is a formal system that recognizes employees for years of service, job performance or commitment to helping achieve the company’s vision.

Developing an effective human resources management program, particularly if you work in a large company, involves a lot of planning, designing, implementing and evaluating practices. I will present a basic outline, but for more information a good reference is the human resources management chapter that Dr. Liz Thach of Sonoma State University wrote for the “Lodi Winegrower’s Workbook 2nd Edition.”1

Human resource management can be divided into at least four major topic areas: 1) staffing and recruiting, 2) training and organizational development, 3) employee relations and 4) compensation and benefits.

Staffing and recruiting
By establishing a strategic staffing, recruiting and retention plan, you will ensure your company has the correct number of employees and appropriate skills you need to achieve your sustainable vision and business strategy. Not retaining good employees is costly. The current estimate for the cost of replacing an employee is 1.5 times their annual salary. This figure is arrived at by adding up the cost to recruit a new employee, downtime, potential overtime or temporary employee costs, costs of management time to interview new employees, cost to orient and train the new employee and potential unemployment costs. Good staffing and recruiting involves job descriptions for each position, a standard interview process and an established orientation program for new employees.

Training and organizational development
Good training and organizational development not only ensures you and your employees have the skills needed to accomplish vineyard work, it will also increase job satisfaction, which has been proven to enhance job performance. Safety training is regulated, so it is important to be up to date on the requirements. New practices are constantly being developed for improving winegrape quality and other aspects of sustainable winegrowing, so it is important that you keep informed by reading trade journals, attending seminars and networking with growers in the region, around the state and even in other regions of the United States. Encouraging your employees to grow professionally through education and training will keep them stimulated and performing at an optimum level. The type, level and amount of education and training will vary based on the type of job an employee occupies.

Employee relations
Establishing clear and positive employee relations policies and practices creates a more positive company culture and also decreases your exposure to legal liability issues. Moreover, it will create an open and more relaxed working environment. It is important to have regular employee meetings to encourage good and open communication. A documented job performance system that describes how employees will be evaluated for job performance, and what will occur if there are discipline issues, is highly recommended, as is a documented grievance process. The importance of a recognition program for employee job performance, years of service and safety record has already been mentioned.

Compensation and benefits

Employee recognition may or may not include a monetary bonus. The purpose of an employee recognition system is to recognize employees for contributing to the overall business strategy of the company. Contributions come in many forms such as good work ethics, good safety performance, customer service, length of service, teamwork or community service. Recognition might include praise, a gift certificate, a team outing, a bonus or salary increase and/or promotion. Health benefits are another form of compensation. There are many ways to compensate employees and some good books have been written on the topic.3

Social equity, the third “E” of sustainability, is complex and challenging to implement well. However, doing it well will likely mean the difference between a successful sustainable business compared to one that never reaches its full potential or even fails. I have just scratched the surface of this topic but hopefully provided some food for thought along the way.

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