'Corner Office': Invest in Your Brightest

— You probably aren't in a position to be quite as magnanimous with employees as the MacArthur Foundation, but you can do the next best thing.

Every year, the John D. and Catherine T. MacArthur Foundation makes grants to a distinguished group of MacArthur Fellows. These grants, popularly known as the MacArthur Genius Grants, are given to individuals who show "exceptional merit and promise for continued and enhanced creative work."

The grants are paid in quarterly installments over five years, and they are given with no restrictions or requirements that the recipients report back. The grants are simply votes of confidence in gifted people. The nearly 600 recipients include novelist Thomas Pynchon, filmmaker John Sayles, dancer/choreographer Twyla Tharp, and actress/playwright Anna Deavere Smith.

So with the "genius grants" as your example, why not do the next best thing, and reimburse the tuition of employees pursuing college or postgraduate degrees?

Tuition reimbursement is an investment in your best and brightest, those people ambitious enough to pursue an education even while working. As employees develop their skills, you can reap the rewards of those improved skills on the job. It's a win-win for everyone.

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Establish parameters for reimbursement. Some employers believe that education — any education — is good for employees and, ultimately, for the company. Accordingly, they offer to reimburse tuition for any college courses (or the equivalent) that an employee might elect to take. That includes everything from a weekend class in travel photography to coursework for an MBA.

There's nothing wrong with such generosity. However, it may make more sense to limit your reimbursement to classes that directly support an employee's current job or established career path. The reason is that if the company has financial difficulties at some point, you aren't put in the position of having to decide which classes seem worthwhile and which do not; it's cleaner to have a business rationale.

Put your program in writing. To avoid misunderstandings, make certain your tuition reimbursement plan is in writing, covers all the bases, and is distributed to all employees.

Ask for a plan. Unless you decide to reimburse any course, it's a good idea to ask employees to present a plan. The plan should explain what their overall objective is (are they pursuing a degree, or seeking specific skills?), where they plan to enroll, what coursework (generally) they plan to take, and when they expect to finish. Asking for a plan helps ensure that you're supporting employees who are serious about their goals.

Clarify expectations. Avoid hurt feelings by clarifying an employee's expectations before she begins classes. An employee may enroll in an MBA program because she believes that employees with MBAs earn more, for example. If that's true, give her a range of what her postgraduate salary may be. If it's not true, say so. It's better for her to know at the outset than to expect something you can't deliver.

Monitor progress. Ask to see employees' transcripts. It's not unreasonable to expect proof that employees have completed the courses they claim to be taking. It's also not unreasonable to make reimbursement contingent on employees earning passing marks. For those reasons, most employers reimburse expenses after classes are taken, not before.

Don't overlook incidentals. Tuition is the biggest expense for most adult students, but miscellaneous fees, books and supplies can add up. Consider reimbursing all related costs (when receipts are provided) or offering a fixed amount to offset those costs.

Be consistent in your support. Don't say that you support education and then make it all but impossible for an employee to pursue it. Don't refuse to modify an employee's schedule once in a while, for example, or deny a request for a day off to take a final. If you decide to reimburse tuition, buy into the whole process.

Decide whether to attach strings. Some employers stipulate that any employee receiving tuition reimbursement must stay with the company for a fixed period of time (usually at least a year) after completing the program. If an employee leaves before that, she must repay some or all of the tuition. Employers simply want a return on their investment.

Our advice is not to make such stipulations. Yes, you run the risk of paying for someone's education and then losing him. But most employees are fair-minded. The question to ask is whether you really want an employee who doesn't want to be there and is staying only because he "has" to. In addition, trying to recover the money will be time-consuming and costly — perhaps more than the money is worth.

Remind employees of their total compensation. Because employees don't "see" the tuition money in their paychecks they can "forget" that they're receiving it. But the investment is part of their total compensation. Remind them of that during their annual review so they can see all the rewards of working for you.

Advice for Staying Out of Jail

Whatever standards you determine for reimbursement, use them consistently. Don't pick and choose who gets the money based on whether you like them.

Be careful not to attach promises to any reimbursement. For example, don't get in a position of having to pay the tuition even if the company can no longer afford it. And don't guarantee an employee a promotion at the end of the program unless you can and will deliver.

And keep track of any reimbursement and keep records in the appropriate files.

Bob Rosner is the co-author of The Boss's Survival Guide (McGraw-Hill, 2001), along with Allan Halcrow, former editor of Workforce Magazine and Alan Levins, senior partner of San Francisco-based employer law firm Littler Mendelson. Rosner is also founder of the award-winning workingwounded.com. He can be reached via fax at (206) 780-4353, and via e-mail at: bob@workingwounded.com.