How did Kansas City's card maker bank $4.4 billion in revenue last year? Partly by sending hometown jobs to China.

Hallmark cares enough to send the very best ... jobs to China 

How did Kansas City's card maker bank $4.4 billion in revenue last year? Partly by sending hometown jobs to China.

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After he retired, Hall turned over control to his only son, Don Hall Sr. Employees had watched the younger Hall grow up. When Don Hall was born, Joyce Hall sent chocolate chip cookies throughout the headquarters. He often took his son to work, according to a Hallmark brochure produced for the company's 80th anniversary. The elder Hall stayed on as chairman of the Hallmark board after his retirement, but as his influence waned, so did the family atmosphere. In 1973, the company did away with the refreshment carts that Hall sent around every afternoon. Gone were the cold milk and hot tea served by a woman who rang a bell through the offices. Instead, and to this day, vending machines dispense free snacks and drinks at different times throughout the day.

When Hall died in 1982, the company he had started from a shoebox was worth $1.5 billion. A year before his death, Hall told American Brands magazine that his goal had never been to accumulate wealth. "I didn't go into business with the idea of making money," he said. "The opportunity for furnishing a service is more important than money as a motivating force for man. If you put service and quality first, the money will take care of itself."

By the time Don Hall Sr. retired in 1985, Hallmark needed to be modernized. That year, former Kansas City Southern executive Irvine O. Hockaday Jr. His bio was named CEO, becoming the first person outside the Hall family to run the company.

Hockaday, who didn't return a phone call from The Pitch, quickly began computerizing the company, resulting in a widespread change of personnel. The change forced out many longtime employees who were either not willing or not capable of trading easels for computer screens. Longtime employees tell The Pitch that several hundred lost their jobs in the automation that took place from the early '80s into the '90s.

It's hard to see a switch to computers as anything but good for a company. But in the late 1990s, Hockaday made another push to eliminate a portion of Hallmark's workforce. This time, the motivation was money. He wanted to triple sales to $12 billion by 2010. At a press conference on August 17, 1999, company spokeswoman Julie O'Dell said Hallmark wouldn't lay off employees to make that goal happen — but that's exactly what was coming. In March 2000, Hockaday held a press conference to announce that meeting the $12 billion goal would mean departments would be "consolidated." The company would cut jobs in order to make itself more nimble.

As part of the restructuring, upper management installed a new performance evaluation program in many departments. It was a "rank and yank" process similar to the one made famous by former General Electric head Jack Welch and used by companies such as Ford, Enron and Cisco. Under the system, managers must identify subpar employees and document their inefficiencies in order to justify firing them. The system has many critics, who say it pushes out good employees simply to hit quotas. It also opens up companies to wrongful-termination lawsuits; Ford paid out $10.5 million in 2004 to employees who said they had been fired without reason under the forced evaluations.

Hallmark spokeswoman O'Dell says the forced evaluations were discontinued after one year. But several current and former employees say Hallmark still uses an evaluation program that requires managers to give bad evaluations to good employees and that regularly leads to layoffs.

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