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December 2012 Compliance and Culture Newsletter

December 1, 2012 Leave a comment

“Don’t be afraid to take a big step if one is indicated. You can’t cross a chasm in two small steps.” –David Lloyd George (1863-1945), British Prime Minister

This issue discusses:

  • Editor’s Column: Workplace Statistics Speak Volumes
  • Three Questions Job Applicants Should Be Asking You
  • Have You Ever Promoted the Wrong Person Into Management?
  • The Importance of Formalized Training
  • Data Retention vs. Data Destruction
  • Three Keys to Effective Wellness Programs
  • Why Workers Don’t Use Vacation Time
  • Improving Performance Evaluations
  • Spotting Scoundrels
  • Leadership Challenges with Millennials
  • Most Employees Face Health Challenges
  • Considering Obamacare

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Workplace Statistics Speak Volumes


The September 2012 issue of Inc. magazine offered a variety of statistics related to the workplace. Here are a few that I found interesting:

  • More than two in five small business owners or managers (43%) say that they feel more stressed now than they did a year ago. This should be a scary sign for all of us, because these folks have created the only real net job growth in the U.S. during the past few years.
  • Apparently, 77% of American workers are stressed about something at work. My question is: What’s going on with that other 23%? Are they slackers? Zen Buddhists? Numb? Or have they given up? I don’t know anybody trying to be successful who doesn’t feel at least somewhat anxious and stressed. Stress is generally related to low salary (49%), lack of opportunities for advancement (43%), heavy workload (43%), unrealistic expectations from managers (40%), and long hours (39%). It seems as if you could pick any subject and half of us would be stressed about it.
  • Interestingly, among Americans who listed their go-to stress relievers, watching TV came in at 64% for men, and 70% for women, while exercising came in at only 44% for men and only 42% for women – one reason why we have a growing obesity epidemic.
  • Inc.500 companies offered these employee benefits: Health insurance (92%), bonus plan (85%), retirement plan/401(k) (66%), Life insurance (49%), Disability insurance (49%), and tuition reimbursement (25%). These are “rich numbers.” I wonder if this is because these companies are so fast growing and successful that they can afford such generous benefits; or does the fact that they provide benefits allow them to attract great employees, who help grow their companies quickly? Chances are that it’s a little bit of both.
  • Among Inc. 500 CEOs who took a leadership quiz, 51.7% viewed themselves as creator-builders, happiest at the start of projects. Only 11.9% considered themselves to be people-movers who excelled at spotting, motivating, and nurturing talent. Think about this statistic for a minute – if the CEO is not excelling at the talent game, then who at the organization is? How can HR step into this incredible void and allow those builders-owners to expand and execute on their creative visions?

Three Questions Job Applicants Should Be Asking You

The October 2012 issue of Inc. magazine posted three great questions that applicants should ask you and, in turn, you should be prepared to answer:

  1. What do you expect me to accomplish in the first 60 to 90 days?
  2. What are the common attributes to your top performers?
  3. What are the major factors that drive results for the company?

Have You Ever Promoted the Wrong Person Into Management?

When we asked Webinar participants this question, 76% replied yes. Please take advantage of the Webinar First Time Supervisors and Managersand the White Paper: Critical Transition: From Employee to Manager on the HR That Works program. Here are some pointers that these tools set forth:

  1. Promotion into management is a hiring decision.
  2. Make sure they want the promotion more than you do.
  3. Talk about expectations upfront and what “outs” the company and employee have if these expectations are unmet. The last thing you want to do is let go of a poor manager and lose a great employee in the process.
  4. Make sure that these managers have a formalized training process (see the next article)

Here’s another chart from that Webinar. The first hurdle for a new manager is “moving from friend to boss.” The second is “learning how not to do the job of others.”

Think about it this way: If you’re paying an employee $30,000 a year ($15 an hour) and you then promote them to management and pay them $50,000 a year ($25 an hour), every time they do $15 an hour work, you lose. Although nobody is suggesting that friendships end because of a promotion, becoming a boss is a fundamental shift that might require assistance. You can role-play scenarios with these managers. What type of situations show up in your workplace when you ask managers to do the jobs of others, or when people try to influence management decisions with their friendships? Teach your managers how to deal with these situations effectively and you’ll have far better managers.

The Importance of Formalized Training

Two-thirds of HR That Works companies have between 25 and 100 employees. In a recent webinar, when asked “Do you provide your managers with formalized training?” only 43% answered yes. This means that less than half of these companies have a plan to create top-flight managers. I say this because if they don’t have formalized training, I doubt that they’ll have a formalized management success plan. Here’s a list of topics on which all managers should have training:

  1. Hiring great people
  2. How to manage the performance of great people
  3. Keeping great people
  4. How to motivate great people
  5. Dealing with poor performers and the termination process
  6. Compliance basics
  7. Effective leadership and management skills
  8. Emotional intelligence
  9. Business acumen
  10. Creativity and innovation
  11. Managing across generations
  12. Time management

Yes, HR That Works offers training in each of these subjects. Make sure that your managers watch at least one of these programs every month. At the end of the year they are guaranteed to be much better managers. Amazing! In addition, reward them with bonuses, contests, recognition, etc. when they seek out their own training programs.

Data Retention vs. Data Destruction

An excellent article in the September 2012 issue of Corporate Counsel Magazine focuses on the tradeoffs between data management (storage, security, speed, and storage space), information management (storage, organization, and rapid access to information ), and data retention (creating a defensible policy to avoid litigation and regulatory sanctions if certain information is destroyed). According to the author, just because a business can keep data in perpetuity, often in cloud-based applications, does not mean that it should do so. The negative aspects of unlimited data retention include the difficulty of archiving and segregating information for easy access. The gist of the article is that it makes sense to have a retention policy that discards information when it’s no longer required for compliance purposes, backup, or analysis. Click here to read the article.

Three Keys to Effective Wellness Programs

A consensus of six healthcare organizations have released a Joint Consensus Statement entitled “Guidance for a Reasonably Designed, Employer-Sponsored Wellness Program Using Outcomes-Based Incentives.” Anyone in HR, benefits, or who cares about wellness or productivity should read this article.

Here are three major conclusions I gleaned from the paper:

  1. Evidence suggests that long-term lifestyle modification and risk factor management require more than financial motivation.
  2. The key to a successful worksite wellness program capable of sustaining behavioral change is the creation of a culture and environment that supports health and wellness.
  3. You can’t wing wellness; you need a strategic plan to make sure that it works. That strategic plan should provide the right mix of rewards versus penalties and have cultural support, include assessment and screening, behavioral change interventions, engagement methods, measurement, and valuation, HIPAA and ADA compliance, and effective incentives.

Why Workers Don’t Use Vacation Time

A survey by Harris Interactive, Inc., found that by the end of 2012 Americans will leave an average of 9.2 vacation days unused, up from 6.2 days in 2011.

According to a survey by Expedia, here are the top five reasons why U.S. employees don’t use all of their vacation time:

  1. I can’t afford a vacation;
  2. My work is my life;
  3. I have trouble scheduling far enough in advance;
  4. I can get paid for my unused vacation days; and
  5. Taking off might be perceived negatively at work.

Unfortunately, only the Japanese take fewer annual vacation days than Americans (5 versus 12), compared to 20 in India, 25 in the UK, 28, in Germany, and 30 in Brazil. Although employers want employees to work hard, burnout and disengagement is a real concern. If it were my company, I would make sure my employees used all their vacation!

Improving Performance Evaluations

I don’t like the idea of traditional performance evaluations. Most managers don’t like to give performance evaluations – and most employees don’t like to get them – because they seldom identify the real issues. For example, poor performance can be caused by a number of factors beyond the employee’s control.

  • They have a poor boss. Remember, half of all managers are above average, while the other half are below average. What’s the value of a performance evaluation from a below average manager?
  • The reviews are seldom honest. Because no one wants to offend anyone else we rate toward the comfortable middle or, if there’s a “let’s get rid of them” agenda, the performance appraisal gets manipulated toward the low end.
  • The Peter Principle. The person was moved into a new role (whether through hiring, transfer, or promotion) for which they lack the requisite skills or training. They have the desire, but not yet the ability. Whose fault is that?

Even though there are other difficulties associated with the traditional performance appraisal process, 75% of small to mid-sized companies still do them. What should we do instead? Here are a few points to consider:

  1. Make sure you have crystal clarity about what constitutes good performance – in terms of quality and quantity.
  2. Allow the employee to own the performance benchmarks.
  3. Provide as much feedback as possible on these benchmarks.
  4. Catch problems early.
  5. See where the “system” might be hampering performance.
  6. Think of yourself as more of a coach than a manager.
  7. Seek anonymous feedback of your staff and other managers. If you truly want to be a good manager, you need 360˚ input. Solicit it and take any judgment as a gift.
  8. Finally, there are only three results to a performance evaluation process: rewarding good performance, coaching poor performance, and terminating employees who just can’t cut it.

This last option is the trickiest because it involves more emotion than any of the others. Nobody likes to end a relationship, even if it’s a bad one. As a manager, you have to embrace the fact that employees won’t be happy about getting fired and will probably begin pointing fingers. If your performance evaluation process is able to identify their shortcomings without surprise, there should be little regret on your part.

Spotting Scoundrels

A recent issue of Scientific Mind discussed studies of truthfulness and physical signals. The bottom line: Opportunists or liars tend to display a cluster of four cues: hand touching, face touching, crossing arms, and leaning away. Although none of these individual clues in itself indicated deceitfulness, taken together they provided a highly accurate indicator. How can you benefit from this insight? When hiring an employee or investigating a matter, make sure to challenge the interviewee. If he or she starts displaying these gestures, beware!!

Leadership Challenges with Millennials

I’ve read numerous books and watched webinars about managing younger workers. Here’s a summary of the key points to remember:

  1. Don’t micromanage them. A better approach is to be very clear about the outcomes you’re looking for and allow these employees to play a part in figuring out how to get there. Get them to define and own success benchmarks.
  2. Allow them to share their ideas. Even if they’re young and new. Many of their parents raised them to be their peers or friends, so they will expect the same from you.
  3. They can expect to be acknowledged and rewarded for participation. So do that.
  4. Remember when you were young? Make it fun!

As Millennial work expert Blake Cavignac reminds us: “Remember, you raised us!”

Most Employees Face Health Challenges

I’ve come across a few surveys recently that really got my attention. According to a Gallup – Healthways Wellbeing Index, here’s the health status of full-time employees:

  • 13.9% are normal weight and without chronic conditions
  • 17.9% are overweight or obese without chronic conditions
  • 30.2% are overweight or obese with one or two chronic conditions
  • 17.8% are overweight or obese with three or more chronic conditions
  • 14.8% are normal weight with one or two chronic conditions
  • 5.3% are normal weight with three or more chronic conditions

These are scary statistics for employers and our nation as a whole. Of course, some of these statistics vary with location, job position, employer, etc. Employers are beginning to realize that they should do everything possible to put a dent in these figures – not just to reduce healthcare costs, but also to reduce absenteeism and increase presenteeism, improve productivity, and more.

It’s not just employees suffering from health challenges. According to Manta, 44% of small business owners say that the poor business climate had a negative effect on their health in 2011. A third said that they exercised less; 22% said they gained weight.

This health trend has caused employees to view their benefits as on a par with their compensation. According to a Mercer Workplace Survey, 75% of employees said that as healthcare costs rise, they would rather pay more out of pocket than have their health benefits reduced. The survey also found that 61% of companies offer wellness benefits and 30% of employees say they take advantage of those benefits. Unfortunately, this might be the same 30% who try to keep themselves healthy in the first place.

Considering Obamacare

An interesting dialogue sponsored by AFLAC on how today’s agents and brokers can help their clients navigate healthcare reform offered these pointers:

  1. Carriers and brokers will be supplying a Summary of Benefits Coverage in 2013. Payroll companies will help with reporting benefit payments to the IRS.
  2. In 2014 we’ll have to worry about obtaining insurance from either federal or state exchanges. Much remains to be worked out before any advice can be given in this area.
  3. Agents and brokers will still need to advise their clients on the purchase of Disability, Life, and other insurances and often times on a voluntary basis.
  4. Employee education will be essential. Work with an agent or broker that can provide employees with this education so they don’t get their information from the TV.
  5. The healthcare exchanges will be providing “navigation services,” and we’re still not sure exactly what that means.
  6. Ultimately, employers are going to ask, “What should I do?” and your agent or broker must have the experience and expertise to provide you with insight.

This will be a challenging time as carriers, brokers, employees, employers, and healthcare administrators struggle through the implementation of the Affordable Care Act. The bottom line: Getting your benefits act together with your Health insurer, agent, broker, and employees will provide a significant competitive advantage for your business.

Form of the Month

Team Commitments (PDF) – This form was designed to give you a head start on creating a set of Team Commitments that can work for your company. Make sure you get employee input in the process. Once you finalize this document display it proudly and often.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

November 2012 Compliance and Culture Newsletter

November 1, 2012 Leave a comment

“Your playing small does not serve the world.” —Marianne Williamson

This issue discusses:

  • Editor’s Column: Time to Start Delegating
  • Raise the Financial Awareness of Your Employees
  • Accommodations Related to Commuting to and From Work
  • Automatic Transfer to Vacant Position May Be Required as Reasonable Accommodation
  • Anyone Not Stressed Out?
  • What is HPM?

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Time to Start Delegating

I can’t seem to say this enough: You need to stop doing things in order to grow in your career. This is true for me, you, and anyone else. How do you know when to stop doing something? When should you outsource it, delegate it, or ignore it completely? Here are some potential indicators:

  • You’re exhausted, burnt out, a piece of toast.
  • You’re spending more than 50 hours per week at the office and taking work home.
  • You spend more than half of your day doing low-value work. For example, if you make roughly $50 per hour, this means you spend more than half your day doing work worth $8 to $49 per hour.
  • You find yourself doing other people’s jobs for them. This means you clearly haven’t defined a standard operating procedure (SOP) for the job and its benchmarks.
  • The opportunity that lies dormant in your career is not being realized. This is true whether you are in HR, not in HR, or run the company! You know that there are cool, exciting, profitable things that can get done, but you’re not able to get to them.
  • You’re bored with your work. When you have these fantasies of quitting and moving on, you’re in a dangerous place. It’s time to figure out what excites you and delegate your way to reaching this position.
  • You’re not meeting the expectations of ownership. You’re not contributing to the bottom line as they had hoped because you find yourself mired in nonessential, non-strategic work.

In coaching HR executives, I stress that finding the first five hours of a week to delegate are the easiest. Put it this way: if I put you in a life or death situation that required you to stop doing five hours of work, do you think you could do it? Of course you could! Delegation is all about the choices we make. Think of it this way: Find five hours of low-denominator, nonessential, uncool work you do — and then delegate it, outsource it, or stop doing it altogether. You could probably find at least another two hours per week if you stop wasting time in social chat forums, online shopping, checking out scores, texting your friends, etc.

Make sure that the work you delegate is done properly. Don’t give it to someone who’s already overwhelmed, doesn’t have the talent, or lacks the understanding of how to do the job right. Make delegation a process, rather than an event.

Once you’ve found your initial five hours, hunt for an additional hour per month that you can delegate for the rest of the year. At the end of the year, you’ll have made a 16-hour a week difference in your work tasks. You should be able to keep at least two or three of those hours for yourself and focus the rest on adding value to your career and company.

Raise the Financial Awareness of Your Employees

“Think of saving as well as getting.” ̶ Benjamin Franklin

The past five years have been difficult for companies and employees alike. One in seven workers currently faces debt collectors. One in three is living paycheck to paycheck. The “true” unemployment rate remains above 15% and is unlikely to change in the near future. Because of today’s financial challenges, one in four employees don’t expect to retire by the time they turn 65. I believe that this figure is wishful thinking and will end up far higher.

What are we to make of these facts as owners and managers? My answer: Provide financial and accounting education to all of your employees — and don’t wait to do it! Ten years ago, companies began to realize that they couldn’t leave employees on their own when it came to managing their health. As a result, wellness initiatives exploded. It’s time for a similar explosion when it comes to this other malaise of our time: How we manage our money.

To create a financial education initiative in your business, I’d recommend taking these steps, all of which you can find on HR That Works:

  1. Make sure that management understands how the financial stress of individual employees affects the company as a whole. We did an excellent webinar on this topic with Coach George from Dave Ramsey’s organization. He gave the workshop Overextended: A Special Program on How the Personal Financial Stress of Your Employees is Impacting Your Business.
  2. Give employees a basic education in accounting. This is why we brought in the best teachers in the business — the folks from The Accounting Game. I would recommend having every employee watch their webinar; and then follow up with a workshop so that employees commit to taking action.
  3. Provide financial planning. On average, half of your employees don’t have a budget and half don’t have a retirement plan (probably the same half). The webinar Financial Planning 101features a member of the Certified Financial Planners Board sharing the fundamentals of good finance.
  4. Expose every employee to the concept of ownership thinking and open book management. Two of the best webinars for this are Jack Stack’s Great Game of Business and Brad Hams’ Ownership Thinking.
  5. Stress overall business acumen. To place employee financial education in its larger context, have every employee watch Kevin Cope’s webinar Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company.

I guarantee that doing all of the above will transform your workplace. You’ll see less stress, improved focus, higher profitability — and greater financial security for owners and employees alike. You can’t ask for much more than that.

Accommodations Related to Commuting to and From Work

A frequent question at the Job Accommodation Network is whether the ADA requires employers to provide accommodations for a disabled employee who has trouble getting to and from work because of his or her condition. A related question is whether it makes any difference if the employee’s only disability-related problem is the commute; if once at work, he or she has no problem performing the job.

The answer to the first question is “yes”; employers must consider some accommodations related to commuting problems. The answer to the second question is “no;” it doesn’t matter whether the employee is able to perform the job fully without the need for accommodations at work.

According to informal guidance from the ADA Policy Division of the Equal Employment Opportunity Commission, although employers don’t have to actually transport an employee with a disability to and from work (unless the employer provides this as a perk of employment), employers might have to provide other accommodations, such as changing an employee’s schedule so that he or she can access available transportation, reassigning an employee to a location closer to home when the length of the commute is the problem, or allowing an employee to telecommute.

The underlying reason why employers might have to provide such accommodations is that the employer usually controls employee schedules and work locations; so, when a schedule or work location poses a barrier to an employee with a disability, the employer must consider reasonable accommodation to overcome this problem. As with any accommodation under the ADA, when considering accommodations related to commuting, employers can choose among effective accommodation options and do not have to provide an accommodation that poses an undue hardship.

Linda Carter Batiste, J.D.
The Job Accommodation Network

Automatic Transfer to Vacant Position May Be Required as Reasonable Accommodation

A question that often comes up during the Americans with Disabilities Act interactive process is whether a disabled individual must be reassigned automatically to a vacant position as a reasonable accommodation, or whether a company can require the employee to compete for the position.

The federal appellate courts have split on this this issue. Although the courts have all acknowledged that an employer need not violate other important employment policies in order to provide a transfer; the question turns on what each court would consider a legitimate employment policy. Collective bargaining agreements and entrenched seniority systems are clearly such policies; however, a policy of hiring the best-qualified applicant is viewed differently by the different Circuit Courts that have addressed this issue.

The EEOC as well as the 9th, 10th, and D.C. Circuits, require automatic transfer, regardless of the relative qualifications of the disabled employee compared with other candidates for a vacant position. The 7th and 8th Circuits, on the other hand, have not required automatic transfer, holding that a reasonable accommodation offered the opportunity to compete for the position. However, the 7th Circuit recently took the unusual step of having the full bench review this position in EEOC v. United Airlines (although decisions are usually issued by a three-judge panel).

The full bench has now issued its decision to overturn its prior ruling in EEOC v. Humiston-Keeling on this issue. Now the law in the 7th Circuit states, as it does in the 9th, 10th and D.C. Circuits, that the ADA requires employers to transfer employees to a vacant position, provided that the transfer does not create an undue hardship, such as contravening a collective bargaining agreement or valid seniority policy. The Court specifically stated that a “best-qualified” hiring policy is not the same as a seniority policy.

At this time, the 8th Circuit remains the only federal appellate court to hold that automatic or mandatory reassignment is not required as a reasonable accommodation. However, because the 8th Circuit’s position was based on the 7th Circuit’s ruling in Humiston-Keeling, it has now become open to question.

For employers, this means that, even if it’s clear that a disabled employee can’t perform the essential functions of his or her position, you probably can’t just terminate the employment relationship. Rather you should review your open positions to determine whether there are any that the employee can perform (with or without accommodation); if the employee is qualified for the position, offer it even if the employee is not the best qualified person for the job. It’s also important to note that the EEOC takes the position that there are no geographic limitations on the open position, meaning that the company must consider positions at other company locations — even those in other states.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Anyone Not Stressed Out?

According to the National Institutes of Health, “We all have stress sometimes. For some people, it happens before having to speak in public. For other people, it might be before a first date. What causes stress for you might not be stressful for someone else. Sometimes stress is helpful — it can encourage you to meet a deadline or to get things done. However, long-term stress can increase the risk of such diseases as depression, heart disease, and a variety of other problems.”

To help your workforce find that healthy balance with stress, check out this excellent web site: http://www.nlm.nih.gov/medlineplus/stress.html — and the tools are free!

What is HPM?

Next year I’ll be speaking for the American College of Occupational and Environmental Medicine (ACOEM) on helping employers and employees manage the “Bermuda Triangle” (the intersection of Workers Comp Return to Work, the ADA, and FMLA). The ACOEM website has this to say about the concept of Health and Productivity Management (HPM):

“The American workplace continues to be at a crossroads. Global economic competition demands increased productivity; technology is rapidly influencing the dynamics of industries and marketplaces; and major demographic shifts are changing the face of the American workforce.

“At the same time, work-related illness and injuries continue to impose a tremendous burden. Each day, an average of 137 Americans die from work-related illness and an additional 17 die from work-related injuries. According to the National Safety Council, work injuries cost Americans more than $132 billion a year — or $970 per worker — in lost wages, lower productivity, higher health care expenses and other costs.

“Now a new factor — chronic disease — has entered the picture. As the percentage of older workers in the United States grows, it’s expected that chronic diseases such as diabetes and cancer will cost employers heavily, as they provide medical benefits for employees and absorb the costs of long and short-term disability claims. One study found that of the nation’s $2 trillion in medical spending, 75% goes toward care for chronic conditions.

“Caught in the middle of this continuously evolving workplace, employers grapple with a growing issue: The impact of worker health on company productivity. As the link between health and productivity has been studied a new discipline has emerged, known as Health and Productivity Management.

“Simply defined, Health and Productivity Management, or HPM, is a concept which directs corporate investment into interventions that improve employee health and business performance. It can also be described as the integrated management of health risks, chronic illness, and disability to reduce employees’ total health-related costs, including direct medical expenditures, unnecessary absence from work, and poor performance at work — also known as “presenteeism.”

“A growing body of evidence suggests that worker health can be measured and managed more effectively for increased profitability and organizational effectiveness. More and more employers have begun to embrace this concept, as the relationship between the health of workers and the bottom line of American business has become increasingly clear.

“Proponents of HPM view the workforce as human capital, which should be managed with the same level of focus and interest applied in the management of financial capital. They recognize the value of managing human capital by focusing on health in the workplace environment. With healthier employees, companies perform better.

“At the heart of the HPM process lies the measurement of workplace health costs, accurate evaluation of the factors that are driving those costs, and the creation of health enhancement programs and strategies for workers. Occupational and environmental physicians can play a pivotal role in helping the workplace understand these concepts and the relationship between health and productivity.

“HPM promotes better individual health, which in the long term improves the overall health of our nation and the stability of our health care system. HPM becomes a win-win, benefiting both the employee and the employer.

“The bottom line: good health is good business, and HPM helps achieve both.”
Just as you need to use lawyers to help prevent HR risks at the front end, you want to use doctors to help prevent Workers Comp and other risks. My longtime friend, Dr. Russ Dunnum in San Diego, has shown companies how to save millions in health and Workers Comp-related overhead. He has also helped many employees in the process.

I would encourage you to go to the http://www.acoem.org/ website to learn more about how to use doctors more effectively in the front end of your business.

Form of the Month

Vision, Mission, Goals Worksheet (PDF) – Use this document to help your employees get on board. It is important for leadership to define the “why” that’s in it for the employee.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

October 2012 Compliance and Culture Newsletter

October 1, 2012 Leave a comment

“Your work is to discover your work and then to give yourself to it with all your heart.” —The Buddha

This issue discusses:

  • Editor’s Column: HR Survival
  • 1,500 Hours of Your Life … Wasted Away On Busywork
  • ‘Intentional Growth’ In Your HR Career
  • Watch Those Attendance Policies!
  • The Economy: Prepare for the Other Shoe to Drop

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: HR Survival

An excellent article in the October Backpacker Magazine discussed five emotional aspects of preventing deadly threats. Although the “threats” facing human relations professionals might not be as extreme as dangling from a cliff, we’re certainly guaranteed a turbulent future. Here’s how the five emotional intangibles in the article might apply to the survival of HR:

  1. Assess risk — As the article asks, “What’s the worst thing that could happen if I do this?” Another good question to consider is “Whose judgment would I be concerned about if things didn’t work?” You should also ask, “What’s the worst thing that could happen if I don’t do this?” This gives a broader understanding of the risk. For example, the real risk that our economy can go south again would affect your entire company, as well as you. If the risk of the economy going south is greater than the risk of improvement — and the downside is extreme — have a contingency plan. How would HR help to manage a 15%-30% drop in revenue?
  2. Stay calm — The article recommends that you “Take control by forcing yourself to slow down.” When you’re used to running 75mph, it’s important to stop, breathe, and think. Give yourself the opportunity to find that safe, calm place for observation and reflection.
  3. Set priorities — According to the article, “You need to be able to survive the conditions you’re in. Assess your situation and determine your most pressing needs.” Not all HR risks are equal. For example, the risk of making a poor hire is perhaps the most serious in terms of frequency and severity. Another significant risk is failing to get rid of a poor performer or an employee who is sabotaging your brand on social media. What are the three greatest risks your company faces and what plan do you have for addressing them?
  4. Be a leader — In risky times, resist groupthink by discussing possible scenarios up front. Give each employee a specific assignment to focus on in risky times. What tasks can you assign to HR subordinates, other managers, or employees?
  5. Stay positive — According to the article, “A powerful desire to keep living leads directly to successful survival stories. You don’t have to be comfortable to survive this situation.” I can supplement this statement by adding “A powerful desire to be a strategic HR executive leads directly to successful career stories.”

Risk management is an exercise in logic and emotion. To reduce their exposures, HR professionals must use both.

1,500 Hours of Your Life … Wasted Away On Busywork

“Work can be a life-draining affair.” —Joseph Campbell

Effective time management is essential if you wish to be a successful HR executive — and have a life at the same time. According to CEO surveys, when HR professionals focus their time on administrative and compliance duties (positions in which one is particularly likely to say “no”) their companies don’t see them as being strategic partners to the business. The problem is that HR executives spend an average of only 25% of their time on strategic activities. From a career and company goals perspective, this is akin to orchestrating their own demise.

When I advise HR executives to manage their time more effectively by minimizing administrative and compliance activities, I get a variety of “reasons” why they don’t do so:

  • This simply has to get done.
  • Somebody has to do it.
  • I don’t have the time to delegate this right now.
  • There’s nobody else here to do it.
  • I’m not sure I would know how to delegate it properly.
  • I can’t manage the person to whom I delegated it.

These are all poor excuses that can block your career success.

Let’s think about some numbers. Suppose you spend an average of 10 hours a week managing payroll and other administrative tasks. Let’s say you earn $40 per hour (roughly $80,000 per year) and administrative tasks such as this are the least valuable work you do. In fact, it’s work that $20 an hour people can do. On the conservative side, every hour that you do this work, the company loses $20 an hour — which comes to $800 a month or $9,600 a year. If you put this same effort into doing $60 an hour strategic work instead, the company would gain $20 every hour — and you’d be in a far better position to ask for a raise.

Think about it: If you waste 10 hours a week for the next three years, that’s 500 hours this year, and 1,500 hours during the next three years of your life that you’ll never get back! What’s more, this waste will cost the company at least $30,000.

If you label your work as “A”, “B,” and “C” work, you should be spending 80% of your time on A work, 20% on B work — and zero time on C work. Otherwise, you’re spinning your wheels.

C work basically wastes time completely. It’s nothing you can delegate; it’s just something you should stop doing. B work is administrative and can be delegated or outsourced — such as payroll and benefits administration. Focus on A work: What the business needs and what you want to get great at doing. A classic example would be training in a company that’s focused on technological advances.

To determine where your time is going — and should be going — use this checklist:

A-Level Activities:

  • Meeting with the executive team to understand their vision, mission, value, goals, etc.
  • Studying and understanding the company’s strategic plans, financials, succession plan, markets, branding, and other operations.
  • Identifying the critical human resource needs for this organization (surveys, observation, focus groups, interviews, etc.).
  • Input into the company’s overall compensation plan, including pay rates, incentives, bonuses, rewards programs, etc.
  • Creating strategic plans and processes for carrying out top objectives.
  • Developing training plans to support implementation.
  • Input into the company’s overall risk-management plan, including assistance with the purchase of benefit programs, Workers Comp insurance, Cyber Liability insurance, and Employment Practices Liability insurance (EPLI).
  • Creating systems for hiring, performance, retention and compliance.
  • Facilitating creativity, branding, suggestion systems, etc.
  • Implementing any other company strategic objectives to which you can provide input.

B-Level Activities:

  • Payroll and benefits administration.
  • Implementation of hiring, performance, retention and compliance systems.
  • HRIS management.
  • Delivery of training.
  • Creation of employee handbook and executive contracts.
  • Personnel files management.
  • Attendance, vacation, and leave management.
  • COBRA administration.
  • Compliance posters and handouts.

C-Level Activities:

  • Employee dramas.
  • Meetings that go nowhere.
  • Doing any $10-20/hour work.

‘Intentional Growth’ In Your HR Career

Keeping with this theme, an excellent article by John C. Maxwell in a recent issue of Success magazine identifies the key factors in “intentional growth.” Here are my recommendations on using these factors to help yourself grow as an HR professional.

  • Start today. Your power lies in the present. Although it’s important to create strategic plans, you need to begin where you are. What will you do today to have a greater impact on your company and help you grow in your career?
  • Take complete responsibility for growth. I’m not a fan of blame or justification. As the Buddha stated, “What comes to you, comes from you.” Your HR career and its impact on the company is what you’ve chosen it to be — at least up to now. It’s your responsibility to grow your career and make bottom-line decisions where you work.
  • Learn from mistakes. I did a training program on Making Mitsakes (the misspelling is intentional). One of the best ways to prevent making mistakes is to “model” people who have been successful before you. For example, who are the most balanced, effective HR executives you’ve ever met — and what are they doing right? Chances are, if you do the same things they do, you will be equally successful.
  • Rely on hard work, rather than good luck. In this economy, you need to work both hard and smart. One important caveat: Don’t think that working longer hours than everybody else is smart.
  • Persevere long and hard. There are no quitters on the way to success. Expect bumps in the road. As I often state in my workshops, how we deal with what feels unfair to us determines our personal culture. People who adopt a survivor mentality, as opposed to a victim mentality, will come out on top.
  • Stick with good habits. The worst habit I see in managers is poor time management (see the article “1,500 Hours of Your Life … Wasted on Busywork”) How many of you have taken a disciplined approach to how you use your time? If you’re an HR That Works Member, take advantage of the Time Management Training Module.
  • Follow through, rather than talking big and doing nothing. It’s far better to get something done and then publicize it afterward, than to brag about what you will do and then trying to justify why you failed to deliver. As the saying goes, “Under-promise and over-deliver.”
  • Take risks. This is a real challenge for the HR community. Having coached many HR executives, I can tell you that most of them tend to follow the rules, rather than taking risks. I encourage you to read Orbiting the Giant Hairballby Gordon MacKenzie. By the way, the term “hairball” refers to company policies and procedures — something that HR is great at developing.
  • Think like a learner. Whether it’s from mistakes or study, life is one big learning lesson. To earn more tomorrow, you must learn more today. This holds true for both the individual and the company as a whole. To what degree are you enhancing your education?
  • Rely on character, as opposed to talent. Having integrity, doing what you said you were going to do, when you said you were going to do it, shows character.
  • Never stop growing. Don’t let yourself get comfortable for too long. You’re either growing or you’re fading. How would you describe what’s going on with you? Where do you have to coax, encourage, and inspire yourself to take the next step toward your growth?

None of this should come as news. It’s about taking action! As Maxwell reminds us, “Growth doesn’t just happen — not for me, not for you, not for anybody. You have to go after it!”

Watch Those Attendance Policies!

Every month we receive dozens of calls from employers asking whether they can terminate an employee with an attendance problem. In most circumstances, they have every right to do so — especially if there’s a well-defined attendance policy and the company holds other employees to a similar standard. Employers get in trouble when the attendance problem results from a work injury, disability, serious medical condition, pregnancy, or other protected category that impacts the employee or a family member. All too often, employers don’t ask why somebody missed work. In one case, an employer told us the employee was late for work on a repeated basis because she had been having flu-like symptoms and getting sick. The employer never asked what might be causing the problem. It turns out that the employee was pregnant. Terminating her would have been a huge, and costly, mistake.

The law does not expect employers to be doctors or psychiatrists. However, it does create a standard of liability that requires managers to determine, if there is a disability, serious medical condition, or pregnancy involved. In the end, a judge or jury will determine whether the employer met this standard.

In most circumstances, employers don’t face lawsuits for their compliance failures. But bear in mind that it only takes a single employee bringing a claim to expose you to hundreds of thousands of dollars in damages (not to mention legal costs). This is another good reason to make sure that your company purchases Employment Practices Liability Insurance. HR That Works Members should take advantage of the training modules and other tools on leave management.

The Economy: Prepare for the Other Shoe to Drop

Although I don’t pretend to be a financial expert, I have disciplined myself to learn basic accounting principles. The more financial news and literature I read, the more I want to pound my head. Here’s why:

The global economy remains shaky. The industrialized world, the U.S. included, has fallen deeply into debt. To maintain our affluent standard of living, we have mortgaged our countries, states, cities, and households. Debt is crushing us. Despite their best efforts, many nations will have to devalue their currencies eventually. Japan is one such example. In countries with aging populations (such as Japan, the United States, and Western Europe), demographic trends are upside-down. For the foreseeable future, fewer and fewer workers will be supporting more and more retirees, an unsustainable situation. Something will have to give.

Keynesian economists argue that we can keep going into debt because sooner or later we’ll have boom times and be able to pay off our obligations. For example, at the crest of the dot.com boom, governments were actually running surpluses and we thought we were rich. Those days are gone, at least for a while, until the demographics change once again.

I speak in front of many private company CEOs. Most of them are feeling shaky, even the ones with a positive cash flow. They don’t like the tea leaves either. Collectively they’re highly reluctant to put any of their cash into making investments, including hiring new employees.

Here’s why I’m sharing this gloomy prognostication: You need to prepare your company and clients in case the economy tanks by 10%, 15%, 20% or even more. I believe that such a downturn is only a matter of when, because I see no reason for things to be anything but “flat” at best.

To help prepare you and your clients for this economic crisis, I’d recommend that you follow these guidelines:

  • Change all the time. How do we continue to differentiate ourselves is the question we constantly ask ourselves at HR That Works. Being ordinary, being like your competition, being the same company you were five years ago, won’t cut it moving forward. When the shoe drops, your image needs to be progressive and forward thinking — and yet offer stability.
  • Generate a Plan B under which you can survive a 20% drop in revenue. It would be smart to scale this plan assuming a drop of 10% to 40%. If you don’t have the expertise to generate such cash flow projections on your own, you can easily find someone to do it for you on Elance. I did this for my company and it cost roughly $500. That’s money well spent. Knowing that you have a plan to address the worst that could happen offers great comfort.
  • Tighten up performance benchmarks to improve your performance in general. This is no time to stand for subpar performance because somebody has either been there for a long time, is related to someone, is very likeable, etc. Results are what matter.
  • Have your entire team watch The Accounting Game webinar on HR That Works. This is the best accounting webinar I’ve ever seen. Also, have the team watch Brad Hams’ Ownership Thinking. Bear in mind that Accounting is the course most often dropped or failed in college.
  • Conduct “what if …” workshops with your management team and employees. Remember, none of us are as smart as all of us!

The primary goal of risk management is preparation. Don’t let yourself get too comfortable — and thus vulnerable. Have a plan to keep well prepared in case the economy tanks again.

Form of the Month

Reasons People Leave (PDF) – Use this checklist as a starting point in understanding the causes of unwanted turnover.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

September 2012 Compliance and Culture Newsletter

September 1, 2012 Leave a comment

“No amount of happiness can buy money.” —Jack Nordhaus

This issue discusses:

  • Editor’s Column: Where’s Your HR ‘Edge’?
  • Social Media Background Checks Make Sense
  • Life Expectancy: Reality Check
  • Who’s Really Supporting The Economy?
  • There’s A Lot to Know About HR!
  • Getting Commissions Agreements Right
  • The Cost of Not Having Employment Practice Liability Insurance
  • Inspired HR: An ‘Inside-Out’ Opportunity

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Where’s Your HR ‘Edge’?

Where’s your edge? This is the question Sounds True founder, Tami Simon, asks her New Age guests. Their answer is usually the most interesting part of the interview.

So I ask you the same question. What are you doing in HR at your company that excites you? What are you doing that’s cool, different, outrageous, experimental, and otherwise, really edgy?

If your answer is silence, you have a serious problem. What do you think will happen if your competition is focused on creating an “edge” and you’re not? Kind of like Southwest Airlines vs. American, United, etc.

Pushing for the edge helps keep us going here at HR That Works. Sure we focus on doing the HR blocking and tackling as well as we can — but we also want to make sure that our clients keep looking for their edge. For example, what if you distributed the Creativity Checklist and Employee Suggestion forms to your entire workforce? I’ll bet that you can discover a lot of edge lying dormant at your company. Trust me. Just do it. One good idea can more than repay your investment in HR That Works for years to come! It can also do wonders for your career.

Here’s what we’re doing to build our edge at HR That Works:

  • We recently produced the Job Security Program and book. You can find it in the Training Modules. There’s a lack of literature or programs on how to be a great employee. This program fills that void. I would encourage you to allow all your employees to spend the 90 minutes it takes to watch the program — and then task them to complete the exercises in the book.
  • We’ve released the Time Management Program, a project that was years in the making. We did the Webinar months ago, got great feedback from our Members, and have produced a program that I believe all your employees and executives should watch. In today’s “squeezed” economy, time is your most precious asset.
  • We’ve upgraded our website and are revamping our social media platforms. We realized that although we knew what we wanted to do with social media, we just weren’t implementing it fast enough. So we brought on third-party experts to do the job for us. If your social media platform is in the same spot we were in, using a third party can help take you to the edge.
  • We’re providing cutting-edge Webinars. We’ll continue to push the edge with who we bring in to help educate you on growing your managers and company. HR is not, and should not, be viewed primarily as a way to avoid getting sued. We’re convinced that cultivating great employee relationships and a high level of trust helps minimize lawsuits. Last year we did 20 excellent webinars that you can now watch at any time. We’ll produce an equal number this year — giving us a library of more than 100 great stored webinars.
  • We’ve upgraded site navigation. By now, you’ve been able to view the latest version of HR That Works. We’ve added the ability to attach documents to the audits, quizzes, and surveys. We’ll also be making it easier to upload your own documents to the SharePoint portal.

I could go on, but that’s plenty for now. I encourage you to keep asking yourself, “Where’s my edge?” To compete in today’s crazy business environment, you need to be creative, proactive, and ahead of the curve. Playing catch-up will guarantee the failure of your business — and your career.

Social Media Background Checks Make Sense

There’s been plenty of HR press about the use of social media in doing background checks on job applicants. Some attorneys have gone so far as to recommend that employers should ignore social media completely. I think that’s poor advice. If people are willing to do stupid things on their social media sites, they’ll be just as willing to do stupid things when working for you. According to a Career Builder/Harris Interactive survey, more than one in three employers rejected job candidates because of their social media activity. The four top reasons were that candidates: 1) Had posted inappropriate photos or information, 2) showed evidence of drinking or drug use, 3) demonstrated poor communication skills, or 4) badmouthed a previous employer.

Risk management is not about eliminating risk. As Walter Olson once stated, “There’s no such thing as the golden shore of legal compliance.” Ask yourself: Which is the greater risk — facing a potential discrimination claim because they showed one of the bad behaviors discussed above, or hiring them and allowing them to damage your company? You get the idea of where I think the real risk lies. The bottom line: Don’t hire a candidate until you learn everything you legally can about them.

Life Expectancy: Reality Check

How long can you expect to live? A “life expectancy analysis” provided by Lincoln Financial Group lists the impact of various factors on reducing average longevity:

  • Driving record (DUI): 12 years
  • Smoking: 10 years
  • Hard or recreational drugs: 10 years
  • Drinking: 7 years
  • Lack of exercise: 6 years
  • High blood pressure: 6 years
  • Poor nutrition: 5 years
  • Gender (male): 4 years
  • Family history of heart disease: 4 years
  • Failure to use seat belts: 4 years
  • Neglect of regular physical exam: 2 years
  • Stress: 1 to 2 years

The big three are obviously drug, alcohol, and tobacco addiction. When you add poor eating and exercise habits to the mix, you have a formula for disaster. Any wellness program must keep curbing these killers at the top of the list.

Who’s Really Supporting The Economy?

According to a report from ADP, the companies that we help with HR That Works usually have fewer than 500 employees — a size category that produce 97% of the jobs added in the private sector during April 2012! Although most of these companies intend to maintain their current level of employment, 31% expect to add more workers, compared with only 13% that expect to reduce their head count.

Interestingly, according to a Simply Hired survey, 39% of college graduates would prefer to work for a small or medium-sized business (compared with 27% at a large corporation, 19% in the public sector, 11% for nonprofits, and 4% with a start -up). The respondents see job security as their No. 1 priority (33%) followed by salary (23%), benefits (23%), and company culture (18%).

The Catch-22 is that smaller companies often offer less job security, benefits, and salary. Looks like the greatest opportunity then is to focus on building a great culture!

There’s A Lot to Know About HR!

In just three pages of the recent SHRM HR Magazine, you’ll find these topics:

Absenteeism/presenteeismAuditingAwards/incentivesBrandingConfidence

Dating

Diversity

Ergonomics

ESS

Facebook

FatigueGood listenerHealth care benefitsLeadershipMotivation/morale

NLRB

Pharmaceuticals

Price transparency

Problem solver

Productivity

RetentionRetirementSafetySocial mediaStress

Stress management

Technology

Technology tools

Working with finance

A separate article on benefits included these subjects:

401(k)Alternative medicineBenefits coordinationCatastrophic coverageClaims management

Consultants

– Available 24/7

– Negotiation ability

– Wellness

– Total premium cost saved

Co-pays

Cost drivers

Coverage

DeductiblesEAPEducation about usage of benefitsEnrollment assistanceERISA, HIPAA, ADA, FMLA, state laws

Flexibility

HSAs

Life insurance

Long-term care

Nutritionists

On-site nurse

Opting out

Outsourced administration

Overlaps/gapsPension plansPet insurancePreventive care/wellnessRetirement planning

Retirement plans

Satisfaction surveys

Self-funded plans

STD

Supplemental

Total compensation statements

Union negotiation

Younger worker buy-in

The point is that there’s a lot to know about HR. Great HR executives are constant learners — they have to be!

Getting Commissions Agreements Right

A recent California case, DeLeon v. Verizon Wireless, involved an attack on the company’s commission program for alleged violation of a labor code section that prohibits the secret underpayment of wages. Basically, the complaint was that the Verizon employees who were paid both a wage and a commission should not have been charged back against those commissions for customers who did not fulfill their agreements.

Verizon prevailed for these reasons:

  1. The commission was clearly defined as such, and the employees already received a wage that satisfied minimum wage standards.
  2. Employees knew that the commissions were not final until the customer completed their contract period, and that anything paid was considered an advance on commissions.
  3. Employees underwent training which included the chargeback feature.
  4. The court reminded employees that “the essence of an advance is that at the time of payment the employer cannot determine whether the commission will eventually be earned because a condition to the employee’s right to the commission has yet to occur or its occurrence as yet is otherwise unascertainable.” In this case, an advance was not a wage because all conditions for performance have not been satisfied.
  5. The court reminded employers that a chargeback based on “unidentified returns” from the wages of all sale associates violates the law. There are also cases in which the employee cannot be charged with business losses i.e. work comp claims, theft, etc.

Settling commission claims can be costly — so get the agreement right!

The Cost of Not Having Employment Practice Liability Insurance

According to insurance industry estimates, fewer than 50% of companies carry EPLI — and the smaller the employer, the lower the percentage. Although the cost of coverage varies, a $1 million policy with a $5,000 deductible usually costs from $50 to $250 a year per employee. When you think about obtaining EPLI, weigh the cost of this protection against the likelihood of a claim, settlement, verdict, etc.

Check out the cost figures on claims, derived from Jury Verdict Research and other sources:

  • Median award (2004-2010:) $199,600
  • Mean award (2004-2010): $632,589
  • Median settlement (2004-2010): $85,000
  • Mean settlement (2004-2010): $515,816
  • Nearly two in four plaintiffs’ verdict (39%) ranged from $100,000 to $500,000 range; 12% of verdicts were $1 million or more. Note: Verdicts tend to be higher in state cases than in federal ones.
  • Legal fees, stress, additional exposures, etc. — a minimum of $25,000 per claim and going up from there.
  • Loss of pre-claim non-productivity due to the fear of not letting a poor performer go because you might get sued — hard to quantify.
  • Impact on the company’s loss of reputation among all stakeholders — priceless.

Note: The mean is the arithmetical average of a group of scores. The mean is sensitive to extreme scores when population samples are small. Means are often used with samples of larger sizes. The median is the middle score in a list of scores; it’s the point at which half the scores are higher and half the scores are lower. Because medians are less sensitive to extreme scores, they’re probably a better indicator with smaller samples.

That’s the potential exposure. What’s the potential of getting hit with it? According to CNA, an employer is more likely to face an EPLI claim than a Property or General Liability claim. Almost 75% of litigation against corporations involves employment disputes. Nearly 100,000 sector charges were filed in 2011 against private employers under EEOC statutes, leading to more than $450 million in settlements and charges. This does not include statistically-based claims or settlements that never see the EEOC, state agency or courtroom. More than 40% of Employment Practices claims are filed against companies with 15-100 employees.

Doing some rough math, there are about 6 million companies in the U.S. Although many of these firms are too small to bother suing, some 2.5 million businesses have 15 or more employees. My experience tells me that tripling the number of EEOC claims give a fairly realistic number of total claims filed. Dividing 2.5 million companies by 300,000 claims comes to roughly a one in eight chance of experiencing a claim during a given year — which means the firm can expect to face at least one employment-related claim over an eight-year period (of course, this probability depends on the size of the company, location, compliance practices, culture, etc.).

By purchasing EPLI, you not only cap your risk at $5,000 to $10,000 a year, but you allow yourself the freedom to let go of poor performers without the threat of litigation. Let’s say a 50-person company pays $7,200 a year (an average of $120 per employee) for EPLI coverage. Over an eight-year period, this comes to a total cost of $57,600, plus the time value of those dollars. The chances are that the company will face a claim at some time during those eight years, which will cost an average of $85,000 just to settle, plus another $25,000 in legal fees, for a total of $110,000 (see the average premium cost and settlement figures above). You’d still come out $52,400 ahead — not to mention eliminating the hassle. If the case goes to verdict, those numbers can easily triple. Bear in mind that there is no way you can amortize this expense! Of course, you might easily face more than one claim during the policy term.

The bottom line: Not getting EPLI is a gamble that could significantly impact or even wipe out your cash flow at any time.

If you’re interested in a checklist for purchasing EPLI, please contact me don@hrthatworks.com.

Inspired HR: An ‘Inside-Out’ Opportunity

Because so few companies have inspired HR practices, those that do enjoy an enormous competitive advantage. Unfortunately, all too many businesses don’t take advantage of this opportunity. Here’s why:

  1. Cultivating great HR practices must be an “inside-out” job. I’ve reached this conclusion after coaching and working with hundreds of HR executives over the years. Those who believe, achieve. There are a number of reasons why someone might not believe that they’re capable of producing great HR practices:
    • They don’t have the skill set. If that’s the case, they can learn one critical aspect of HR at a time and implement this expertise. Most people can only do things one step at a time anyway.
    • They don’t feel they have the time it takes to improve HR practices. The solution is to make the time. Great HR practices offer a cost-effective return on investment. I advise HR executives to save at least five hours a week by outsourcing or delegating these activities, so they can in turn devote this time to strategic activities.
    • They don’t believe they have the support of top management. When it comes to business owners, nothing is more important than demonstrating the potential ROI of good HR practices. This is why we’ve created the HR Cost Calculator. I start my CEO workshops with an hour-long review of this form so that participants understand the math surrounding their HR practices.
  2. Private companies, unlike their publicly held counterparts, aren’t required to have anything but basic compliance. There’s no Board of Directors demanding that they get their HR act together; as a result, most privately-held firms do little or no real HR.
  3. HR professionals don’t get managers on their side. Begin by surveying them. HR That Works members can use the HR Department Survey to have managers rank specific practices and comment on opportunities for improvement.
  4. Failing to educate everyone in the company about the opportunities that a good HR program offers them. Learn to let people know the progress you’ve made every month and how this impacts best practices and the bottom line. Show that your HR practices are better than those of the competition.

Form of the Month

10 Steps to Getting a Raise (PDF) – This form identifies the correct process for asking for a raise — the right way!

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:
©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

August 2012 Compliance and Culture Newsletter

“How people can have ‘the way of success’ shown to them, visible to their naked eye, even the principles behind what they are seeing, and still not copycat it, not do it, or even perversely do the opposite?” —Dan Kennedy

This issue discusses:

  • Editor’s Column: Honest Terminations
  • Six Steps to Help Prevent Data Theft
  • HR Internships Make Sense
  • How to Build a ‘Learning Organization’
  • Smoke, Smoke, Smoke That Cigarette!
  • The HR Executive of the Future

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Honest Terminations

 I’ve had the opportunity to answer more than 3,000 “hotline calls” in the past 10 years. On many of those calls, the employer wanted to know if they’d be sued for terminating someone.

After representing hundreds of employees during my litigation career I can tell you that “how” an employer fires an employee has a lot to do with an employer’s propensity to get sued. Here are some guidelines to consider:

  • Don’t create a lie to make the terminated employee feel good. Recently I received a hotline call which described how an HR consultant working with the company advised them to lie about the reason for the employee’s termination by claiming that it was a “layoff.” Horrible advice! The problem with this approach is if the employee ends up suing you for whatever reason you’ll then have difficulty proving that poor performance, etc. was the reason for their termination. Telling employees the truth is the best way to stay out of the courtroom — and don’t ask HR people legal questions that require a lawyer’s judgment!
  • Don’t underestimate how traumatic the event will be for the terminated person or tell them how tough it was on you. Yes, it’s tough for you, but guess what? It’s even tougher on them and their family. Feeling bad yet?
  • Don’t lose sleep over the termination. Where did management fail this employee? Did the relationship begin with a bad hire? If you’ve done everything you can to be responsible to the employee, then you should have no fear or other negative emotion associated with letting them go. Terminating poor performers allows them to work someplace where they’ll have the opportunity to perform better. It also relieves the burden on your remaining employees. Again, if you have any concerns, what is the source of those concerns?
  • Don’t embarrass the employee. Try not to terminate them in front of the rest of the team, make a scene of their walking out of the office, etc. Terminate in a dignified manner, even if the employees have been less than dignified themselves. You don’t have to stoop to their level. If the employee is belligerent or obnoxious, do what you must to calm the situation and protect yourself.
  • Don’t turn the termination into a one-hour conversation. By now there should be no surprises. Employees should have known that if they didn’t improve their performance they would be off the bus. Don’t negotiate or sympathize — just let them go.
  • Don’t make promises you’ll regret. In a well-known case, a school concerned about the employee’s backlash (he claimed he was falsely accused of sexual harassment) offered a letter of recommendation on which a subsequent employer relied. As it turned out, the employee was once again accused of sexual harassment. When the victims of this alleged sexual harassment sued the new employer, they cross-complained against the previous employer for misrepresentation. Don’t be that previous employer!
  • Finally, don’t try to buy off terminated employees with a release for two weeks of severance — all this will do is invite them to see a lawyer. Don’t offer a release when you fire employees for poor performance or because you’re in fact in an economic downturn. They don’t deserve the former and you can’t afford the latter!

If you’re an HR That Works Member, follow the Pre-Termination Checklist.

Six Steps to Help Prevent Data Theft

An excellent article in Corporate Counsel lists these guidelines to help minimize the risk of preventing data from walking out the door:

  1. Ensure that employees sign confidentiality and invention-assignment agreements on the first day of work, if not before.
  2. Provide meaningful training.
  3. Gain control of remote-access and data-protection policies.
  4. Set up data protection and employee mobility restrictions affect incoming and outgoing employees.
  5. Let laptops cool off before allowing the IT department to repurpose them.
  6. Don’t rely on only unpredictable non-competition covenants alone.

I encourage you to read the entire article here.

HR Internships Make Sense

The May 2012 issue of HR Magazine has a special report on how to create an HR internship. I have constantly preached the importance of HR managers delegating less valuable activities so that they can focus on more strategic areas. Having an intern is the perfect way to perform this handoff!

Other benefits of internship include:

  • Provides a powerful recruitment tool
  • Decreases turnover
  • Contributes to positive branding
  • Stresses altruism
  • Improves employee morale
  • Helps generate new ideas
  • Adds social networking know-how

These young people usually earn $10-$15 per hour. Although it certainly helps to have interns do some grunt work, you’ll also want to give them challenging assignments and developmental training.

You can find interns by word-of-mouth, going to your local SHRM chapter, local schools, college career centers, or by visiting www.internships.com.

How to Build a ‘Learning Organization’

According to Wikipedia, “a learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself.” This concept was popularized by Peter Senge in his excellent book The Fifth Discipline. No, it’s not an old rock group; Senge ran a think-tank at MIT Sloan School of Management. His Fifth Discipline Fieldbook provides a manifesto that companies can use to build a learning organization.

According to Senge, there are five main aspects to a learning organization. Let’s discuss how each of those might apply to the HR equation.

  1. Systems Thinking. This means that HR doesn’t operate in a bubble, but rather in concert with other aspects of the system. Understand how HR affects everything in your business from operations to sales, marketing, customer support, and so on. A strategic HR manager will take a cross-disciplinary approach when it comes to their HR practices, training, etc.
  2. Personal Mastery. This means you commit yourself to the process of learning. How many books have you read in your area of expertise during the last year? Do you receive trade publications, attend trade conferences, network with your peers, and look for additional learning outside of your expertise? Do you make sure everyone else at your company is engaging in personal mastery?
  3. Mental Models. Basically, this means the assumptions or framework in which each of us operates. To become a learning organization we have to challenge these models, and HR must be part of this conversation. A classic mental model in the HR arena is the management of performance evaluations. In most organizations, this model is more than 50 years old, meaning that it’s time to retire it. What new model can you develop that will generate integrity, trust, and better performance?
  4. Shared Vision. All business authors stress the importance of this factor. Jim Collins emphasized it in his Good to Great book, as did Senge in The Fifth Discipline. How is HR helping to push out and market your organization’s vision? How are you making it “visual”? For example, if I walked into your company would I know what your vision is without having to ask about it? If not, start working with the marketing department and engage in some internal” branding” of the vision.
  5. Team Learning. As the saying goes, none of us is as smart as all of us. How can we create vigorous dialogues in which we all learn from each other? I encourage you to go to the five-minute video I did on a very powerful team learning process that anyone can facilitate.

In growing your business as a “learning organization,” you’ll probably need to deal with obstructions. Opposition might come from individuals trying to protect their turf, one department not wanting to communicate with another, a lack of empowerment among leaders or employees — or an organization that’s just too big to share information fully (Senge suggests a cutoff point of 150 employees). Cultural dimensions can also impede the learning process. What barriers have you identified to building a knowledge organization? What strategies do you have to get past these blockages? If you have yet to do so, I encourage you to pick up a copy of Senge’s The Fifth Discipline as well as The Fifth Discipline Fieldbook.

Smoke, Smoke, Smoke That Cigarette!

About one in five Americans still smoke. Most employers want to eliminate smokers not only from their workplace, but from their payrolls as well. In researching this article I found statistics estimating the annual additional cost to a company of a smoker at $3,000 to more than $12,000 — a costly proposition! On the other hand, trying to terminate, or not hire, smokers raises three questions: 1) Will state laws prevent you from doing so? 2) Does your policy follow the guidelines of such federal laws as ADA and HIPAA? 3) Will it really be worth the effort?

Not hiring, or terminating employees who smoke offers companies these advantages:

  • Lower incidence of heart disease, asthma, lung cancer, and other diseases among employees, thus lowering company Group Health insurance rates.
  • Less absenteeism and shorter breaks, increasing productivity.
  • Reducing conflict between smokers and non-smokers.

The cons:

  • You’ll reduce the job applicant pool by 20% to 25%.
  • You might offend some of your best workers.

What’s more, state law might prohibit this practice. Twenty nine states and the District of Columbia have laws that prevent employers from discriminating against employees for using tobacco products. (A number of these states exempt people in the firefighting and health professions). Although California, Colorado and New York don’t specifically prohibit this practice, they do protect workers against discrimination for engaging in any lawful activity outside the workplace.

According to the website www.ash.org, which I highly recommend, many of these laws are “toothless and easily avoided.” I encourage you to check out this site, which does an excellent job of identifying relevant state statutes, as well as the loopholes in them.

Although smoking and alcohol use are not protected per se, the health impacts they generate might be. For example, you might be able to terminate an employee for smoking, but not for having lung cancer as a result of smoking. HIPAA allows you to “penalize” smoking employees, but limits the penalty to 10%-20% of their health insurance premiums.

There’s the argument that this is Big Brotherism at its worst: Creating a slippery slope that can lead to restrictions against the food we eat, the beverages we consume, having high cholesterol counts, etc. Plenty of smokers who abide by the company’s policy not to smoke in the workplace are highly effective employees. Do you really want to terminate workers of this caliber? Finally, this quote from a woman about how many people feel about smoking hits the nail on the head. She said, “It’s a stupid choice, but it’s a personal choice.”

The HR Executive of the Future

HR has an exciting future with incredible opportunities — yet most companies undervalue it. As Kevin Cope’s Business Acumen Webinar stresses, if you want to have a more profitable HR operation, you’ll have to be unique. To meet this goal, you’ll need HR managers that have these 10 characteristics (listed in alphabetical order):

  1. Adaptable. We’re going through a period of accelerating, meaning that change is happening faster than ever. This means we need to adopt new practices quickly. Chances are that if you’ve been doing anything in the same way for the past 10 years, it’s out of date today. Adaptability happens in real time. You can’t think on it, plan on it, have a committee, produce a plan, etc. You just have to adapt, now! For example, have you adapted to today’s performance management realities — or are you using the same ridiculous performance management approach that didn’t work 10 years ago?
  2. Collaborative. We need the IQ and EQ of the entire team. Today we collaborate around projects and activities, rather than job titles. To collaborate, we have to communicate, produce vigorous dialogues that result in action. Collaboration does not mean consensus — it means input from all.
  3. Constant learner. To earn more, you must learn more. To learn more, you must train more. Whether you’re in an organization with five employees or 5,000, you must out-educate the competition. How do you make it easy for everyone from the owner to the rank-and-file to educate themselves? Do you provide employees with on-demand access to training materials? Do you give them CDs that they can listen to in the car or MP3s they can upload to their players? Have you taught them about the factors that drive profitability at the company?
  4. Cross-disciplinary. Don’t limit collaboration to your own circle of influence — reach out beyond that. To what extent have you collaborated with your marketing director to help with internal branding? Have you spoken with the CFO to help understand the bottom-line impact of HR practices? Zappos requires new HR executives to start out by working in the warehouse taking customer orders and support calls, so that all of their executives have a cross-disciplinary view of the workplace.
  5. Designer. Daniel Pink’s book, A Whole New Brain, which discusses how we’re moving to the right side of the brain, includes design as one of the factors. Think about it: One reason why Apple products are so popular is because of their design, not just their functionality. To what extent can you be a designer of your environment, your internal brand, your culture, and workflow? Pick up a few design magazines and ask yourself how you can apply this thinking to human resource practices. You’ll never know the answer until you go through this exercise.
  6. Expert in time management. Most executives and employees get zero time management training and yet it’s the greatest stressor they face. Make sure you that you, and your workforce, get time management training (HR That Works has an excellent Training Module). Good time management involves 1) knowing where your time goes; 2) identifying where it should be going; and 3) determining how to replace low-value work and bring on higher value work. Although this isn’t rocket science, it requires discipline to implement. For example, how much time do you lose to distractions (an e-mail from a friend, an article in the New York Times or a Facebook page)? Because the amount of information is doubling approximately every 500 days, without time management discipline you’ll be twice as distracted as ever!
  7. Innovator. When you think of human resources, does innovation jump to mind? Of course not! To become an innovator, you need be a good observer of your current environment and “think outside the box.” As mentioned earlier, pick up a magazine on design, sales, or business in general and ask how any of the principles discussed could apply to HR. Dr. Deming taught that profound knowledge comes from outside a system because the system can’t understand itself. Your breakthrough thinking in HR will come from outside the HR field, not within it. HR That Works members should take a look at the Creativity Checklist and Employee Suggestion Form. HR also has the opportunity to get everybody else to the company engaged as innovators as well.
  8. New-media savvy. To what extent are you using social media tools to help empower the HR function? To what degree do you use social media outlets such as Facebook, LinkedIn, and Twitter to help build a dialogue at your company? How do you employ tools such as YouTube videos to attract, retain, and motivate workers?
  9. Motivator. The last thing HR needs is to manage an endless series of dramas. A better approach would be to find a way to empower, engage, and motivate the workforce. For example, how effective are your retention policies? Are you getting the biggest bang for the buck? Are you addressing people’s psychological needs? Have you surveyed workers to determine what their emotional drivers are?
  10. Technologist. It has become easier and easier to build database management programs, whether it’s for sales, finances, operations, or human resources management. Years ago there were a dozen or fewer human resource information systems (HRIS); today, there are hundreds and they’re increasingly available to smaller companies. How can you use technology to manage data more effectively? In an information society, well-managed data is essential. What tools can help drive performance management and what tools will you use for strategic HR purposes (of course we think HR That Works is the best!).

Form of the Month

How Would You Rate Your HR Practices? (PDF) – Evaluate your HR department in nine areas to find potential problems.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

© 2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

July 2012 Compliance and Culture Newsletter

“It is the duty of the executive to remove ruthlessly anyone — and especially any manager who consistently fails to perform with high distinction. To let such a man stay on is to disrupt the others. It is grossly unfair to the whole organization” —Peter Drucker

This issue discusses:

  • Editor’s Column: Three Major Gaps
  • Keeping Cool in the Summer Heat
  • What’s Important to HR Pros
  • The NLRB: A Political Football
  • Challenges with Intermittent FMLA Leave
  • It Pays to Provide Healthy Snacks
  • HR: You Versus the Competition
  • Using Outsourced Workers
  • HR and Risk Management
  • Oh No! Where Did Our Information Go?

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Three Major Gaps

In a recent Webinar, I reviewed 15 forms and tools on HR That Works that can have a direct impact on a company’s bottom line. If you haven’t yet watched this Webinar, I encourage you to do so by clicking on this link.

During the Webinar, I asked three polling questions. How would you respond to each one of these?

  1. Do you have a social media policy?
    Amazingly, less than half of respondents have such a policy — they’re sticking their heads in the sand. Don’t ignore this significant risk exposure. The best way to create a policy is by coordinating with your HR, marketing, and IT departments, as well as a representative team of employees. This can’t be a top-down document — it just won’t work. You need to create your policy by consensus so that everyone at the company will buy into it. A good way to start is by taking advantage of the Social Media Training Module and Sample Policy on HR That Works.
  2. Do you have a written hiring process?
    Once again, less than half of respondents do. This is amazing when you consider that the single most important thing you can do for your company is hire the right people. Don’t take my word for it; rely on the research of best-selling author Jim Collins (Built to Last, Good to Great, etc.) who argues that the main factor in creating great companies is hiring great people. How can you possibly do this on a consistent basis without an effective hiring process? Answer: You can’t!
  3. Does your employee handbook tell employees how to be a good employee?
    Believe it or not, two-thirds of respondents said that their handbook doesn’t.The reason: Lawyers, who have taken over writing employee handbooks, focus on protecting your business, rather than helping you to grow it.Remember, as Norman Vincent Peale preached, you get what you focus on. Your handbook should definitely include the How to Be an Excellent Employee and sample Team Rules provision from HR That Works.

Keeping Cool in the Summer Heat

When it comes to outdoor workers, “water, rest and shade” can literally make the difference between life and death. Every year, thousands of workers nationwide suffer from serious heat-related illnesses. If not addressed quickly, heat exhaustion can become heat stroke, which has killed — on average — more than 30 workers annually since 2003. Labor-intensive activities in hot weather can raise body temperatures beyond the level that normally can be cooled by sweating. Heat illness might first manifest itself as heat rash or heat cramps, but can quickly turn into heat exhaustion, and then heat stroke, unless workers follow basic preventive measures.

“It’s essential for workers and employers to take proactive steps to stay safe in extreme heat, and become aware of symptoms of heat exhaustion before they get worse,” says Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health. “Agriculture workers; building, road and other construction workers; utility workers; baggage handlers; roofers; landscapers; and others who work outside are all at risk. Drinking plenty of water and taking frequent breaks in cool, shaded areas are incredibly important in the hot summer months.”

In preparation for summer, OSHA has developed heat illness educational materials in English and Spanish, as well as a curriculum for workplace training. Additionally, a Web page provides information and resources on heat illness — including how to prevent it and what to do in case of an emergency — for workers and employers. The page is available here.

OSHA also has released a free application for mobile devices (both Android-based platforms and the iPhone) in English and Spanish that workers and supervisors can use to monitor the “heat index” at their work sites. This app displays a risk level for workers based on the index, as well as reminders about protective measures to take at that risk level. You can download the app here.

NOAA also includes pertinent worker safety information on its heat watch Web page.

What’s Important to HR Pros

SHRM surveyed 504 HR professionals on their degree of satisfaction with 26 different job attributes. The respondents’ top five concerns, in order, were:

  1. Opportunities to use skills and abilities — Exactly what skills and attributes are you interested in using? Does management even know that you have this ability or desire or are you keeping it to yourself? For example, if you’ve recently completed a course of self-study, does management know this?
  2. Relationship with immediate supervisor — This holds true for all employees, not just HR executives. What, if anything, feels “unfair” about this relationship? Have you been given time to discuss your agenda for the company and your career? Has your boss pooh-poohed some of your ideas? Does your immediate supervisor even know what’s most important to you in the relationship or are you hoping that he or she can guess at it?
  3. Communication between employees and senior management — It’s highly frustrating to be stuck in the middle when there’s a poor relationship between manager and employees. (Guess what? It’s your job to help improve this communication!)
  4. The work itself — If you find yourself doing under-valued work, whose fault is this? Have you made the case for ditching your $10-$20 per hour work so you can focus on higher value work? Can you show management the ROI on your moving up the ladder?
  5. Autonomy and independence — You want to do your own thing like everybody else. Have you earned the trust necessary to have this independence? What level of authority do you have?

Interestingly, compensation and pay came in at seventeenth place! As I kid in my workshops with HR executives, “They know this about you.” In my survey of HR executives, most of them tell me that what they want more than anything else is to make a difference — which is great. Just don’t underestimate the importance of getting paid well to do it!

The NLRB: A Political Football

Many employers have expressed their frustration about the National Labor Relations Board’s agenda. Are they really surprised or just annoyed? The NRLB, like OSHA, the EEOC, DOL, etc. are administrative branches under the control of the President, who is currently backed by unions. As you can see from the graph, the figures in yellow show how NLRB enforcement declined once the Bush administration came into office, and has been back on the rise since the Obama administration came in (in pink). No surprise here. Unfortunately for the NLRB, state legislatures and courts have begun to rein in the NLRB agenda, which arguably goes beyond any authority found under the Act. Take, for example, the demise of the Employee Free Choice Act, problems with the NLRB Poster, and most recently the new election regulations.

My advice: Make sure that someone at your company stays on top of the NLRB agenda. Check out the HR That Works Blog posts, as well as the www.nlrb.gov website and our recent Webinar on managing recent NLRB requirements.

Challenges with Intermittent FMLA Leave

Few things drive HR executives nuts more than dealing with intermittent FMLA leave. When faced with this situation, bear these facts in mind:

  1. Employees must comply with reasonable call-in procedures and no-call/no-show policies affected by intermittent leave.
  2. Employers are allowed to get recertification under appropriate circumstances. They can also put employees in an accommodated position that might reduce the need for the intermittent leave.

HR That Works has an excellent series of podcasts produced by the Franczek firm discussing FMLA leave.

It Pays to Provide Healthy Snacks

Smart employers realize that they should make healthy energetic foods available to their employees. After all, what’s the cost of a few healthy snacks when you’re paying a worker $50,000 a year to produce? I encourage all employers to provide rice cakes, fresh apples, lemons, fresh water, sparkling water, oranges, carrot sticks, almonds, broccoli, etc. You can often go to the local supermarket and buy a tray which already has many of these fruits and vegetables. The point: Make it easy for your people to eat healthy food — and they’ll become far more alert and productive. Even better, work with a local farmer or health food store to set up a regular delivery schedule.

HR: You Versus the Competition

HR operates in a highly competitive landscape. For example, your ability to attract and retain employees more effectively than your competitors will benefit your bottom line. HR can play a key role in this process. How would your company compare to the competition in these elements of employee compensation?

  • Salaries and wages
  • Benefits and other rewards
  • Training
  • Career growth opportunities
  • Flexible work arrangements
  • Retirement benefits

If you’re not clear about how you stack up, you have some serious homework to do. Many industry groups or local employer groups can help you obtain data related to your industry. Contacting a recruiter in your field can also help supply you with this information. Remember that these factors can have a significant effect on your ability to attract employees, get them engaged, retain them, avoid unionization efforts, and improve your brand and customer relations.

Using Outsourced Workers

HR That Works has an extensive report and checklist about what’s known as the “contingent workforce.” This includes temporary employees, leased employees, and more. Here are some questions to consider in these relationships:

  • Who is responsible for what? — As with any arrangement, it’s important to study the contract. For example, if an employee isn’t working out, who should be responsible for firing them? Consider every aspect of managing personnel from hiring through performance management and retention to termination.
  • How much are you paying to outsource various HR functions? — Whether you’re outsourcing because you don’t have the time, expertise, or desire to do the job in house, you’ll have to pay for someone else to do it for you. What’s the competitive rate? What about the provider’s experience and results? Do your homework and interview at least a couple of providers and their clients before you choose one.
  • What is the provider’s hiring process? — They should be able to show it to you in writing. If they can’t, pick someone else. Make sure that the provider does proper skill testing, character assessments, background checks, extensive interviews, immigration checks, and pre-hire physicals.
  • What references can the provider offer? — Don’t just ask for references, get the names of companies who have used the vendor during the past year. See if the vendor is willing to share this information and allow you to interview those companies. Ask “What will these companies tell us?” Then do Google research to see what comments you can find online.
  • What’s the knowledge on board at the vendor? — How long has the person who does the hiring and staffing been doing their job? What are their credentials? Is there expertise on board to help you with any compliance concerns?
  • Does the agent carry the right insurance? — Depending on whose payroll is involved, the law requires employers to provide Workers Compensation benefits, as well as withholding unemployment and Social Security taxes, and more. If the temp or leasing agency treats their workers as independent contractors you could end up being in a heap of trouble.
  • Does the agency provide employees benefits? — Remember, if a worker walks and talks like your employee, they’re probably going to be considered your employee, whether they’re a sole employee or in a joint employer relationship. If an employee receives no benefits from the provider, you can easily face a hefty benefits claim down the road.
  • What about union activities? — To what extent has the agency been faced with unionization efforts? Your temporary workforce might be considered part of an existing bargaining unit and thus covered by your union contract.

HR That Works members should view the extensive Contingent Worker Report and Checklist.

HR and Risk Management

We usually think of HR helping to avoid employment practice risks. We want to make sure not to be trapped in wage and hour claims, discrimination and harassment litigation, and wrongful termination lawsuits. Then there’s leave management, including ADA and FMLA. Although these are the major issues in HR risk management, HR is also instrumental in helping with other aspects of managing risk, such as:

  • Workers Compensation — Insurance companies don’t pay claims, they finance them. When you suffer a Comp claim, your experience modifier (“MOD”) increases to repay the claim during a three-year period at a high interest rate. This can be the most expensive money that your company borrows. That’s one reason we recommend that employers do everything possible to get employees returned to work. Has your HR person helped develop a comprehensive return-to-work program?
  • Cyber Liability — To what extent are poor employee practices leaving your information systems vulnerable? To what degree is HR working with IT and security to make sure that new employees receive proper orientation and terminated employees are managed effectively from a security standpoint? For example, what precautions have you taken to have mobile devices returned, passwords retrieved, trade secrets protected, etc.? To what degree does HR make sure that telecommuting employees don’t expose the company to cyber risks?
  • Social media — One element of cyber liability, risk from social media, is expanding every day. Has HR made it clear who owns the company Twitter account? Have they set social media guidelines? Do they know how to respond to any perceived risks, such as negative employee postings?
  • Privacy exposures — Whether it’s medical records (HIPAA), Social Security information, financial information, etc., employees can both generate exposures and be subject to them.
  • Disaster planning — One disaster can wipe out your company overnight. Whether it’s a tornado, hurricane, earthquake, flood, or a brutal snowstorm, the news is replete with the devastating impact of such events. To what degree has HR helped generate a plan to protect the company in the aftermath of a disaster?
  • Employee Benefits — With a growing number of ERISA claims and a rapidly changing benefits landscape, HR is thick in the mix. Who is responsible for staying on top of the emerging benefit trends?

Perhaps the greatest risk that HR can help with is growing the business: Providing strategic advice about what your company needs for growth and how to move in this direction. At smaller companies, it’s difficult for the HR executive to wear all these hats. In this situation, many businesses have partnered with their insurance agency or other professional providers of risk management services.

Oh No! Where Did Our Information Go?

During recent months I’ve been reading a large number of lawsuits related to industrial espionage, sabotage, misappropriation, and theft. Most of these cases involve a current or former employee or some third party stealing valuable financial or other information. In several recent decisions, courts have ruled that they lack criminal jurisdiction over theft of information by an employee who had access to a company’s database. The courts essentially held that the misappropriation in question did not violate the National Stolen Property Act, the Economic Espionage Act, or the Computer Fraud and Abuse Act (CFAA). In the case of US v. Nosal, Judge Kozinski, known for his left-of-center opinions, engaged in a display of semantic gymnastics to rule that the Computer Fraud and Abuse Act was nothing more than an anti-hacking statute and doesn’t apply to misappropriation. Essentially, he argued that employees who wasted time on Farmville, Facebook, New York Times, daily Sudoku, etc. would be in violation of the Act, which is too broad for the government to enforce. If you want to see some feathers fly in a scorching dissent, read the case.

Bottom line: Make sure to buy Cyber Liability insurance; it looks like you’re going to have a hard time getting protection from the courts, especially if you happen to be in the Ninth Circuit.

Form of the Month

Factors Affecting HR (PDF) – Check out this comprehensive list of the internal and external factors that have a significant impact on your HR activities.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

Categories: Newsletters, Podcast

June 2012 Compliance and Culture Newsletter

“Be a mental engineer and use tried and proven techniques in building a grander and greater life.” —Joseph Murphy

This issue discusses:

  • Editor’s Column: “I’m Disabled…So Take Care of Me”
  • Organizing Through Enforcement of State Employment Laws
  • Managing Disabled Workers
  • Age Discrimination
  • The ABCs of Right-to-Work Laws
  • Stupid Boss Tricks
  • Incorporate Reasonable Accommodation Practices Into Your ‘Onboarding’ Process
  • National Labor Relations Act Update

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: “I’m Disabled…So Take Care of Me”

I read recently that a record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office. Many unemployed apply for disability benefits as soon as their unemployment benefits run out. There are now a record 10.8 million Americans on disability — double the number since Obama took office. The EEOC has stated a clear agenda to protect the disabled, with an ever-expanding definition of what the term means. The commission is even suggesting that government contracts include hiring of a minimum of 7% disabled.

Politics aside, that’s a lot of disability going on. The ultimate proof of victimology comes from the government labeling people disabled. Uncle Sam classified an astonishing 54 million people as “disabled” in 2005. That’s 19% of the population, or nearly one in five Americans. The U.S. Census Bureau has classified Disabled Americans as the nation’s largest “minority population segment.” Given obesity and longevity trends, we can expect a growing number of disabled, placing considerable strain on the government and employers alike. The crazy thing is most of this “disability” is not due to accident or genetic pre-disposition, but primarily to individual’s lack of exercise, poor diet, and mental attitude.

Of course, the recent jump in disability filings is largely due to current unemployment and poverty levels. The Obama administration is also encouraging it. To see the Department of Labor’s overall approach to this issue, visit http://www.dol.gov/odep/.

Employers need to bone up on ADA regulations, take advantage of the resources on HR That Works and from sites such as JAN.

As a final note, I believe that we should help the truly disabled, especially those who can’t help themselves. On the other hand, people who make poor lifestyle choices and then claim disability as result garner little sympathy from me, as do those who “work the system,” taking precious dollars away from those in the disability community who deserve help. Unfortunately, I don’t see the administration making this distinction.

Organizing Through Enforcement of State Employment Laws

In doing online research, I came across an interesting white paper that discusses how vigorous (and perhaps manipulative) use of non-union laws can help with organizing efforts. Employers must realize that there are many stakeholders in the compliance game — perhaps including those some never thought of! Note: this is relevant to employers in any state, even though this campaign is targeting California employers.

Managing Disabled Workers

Speaking of help for disabled workers, the Office of Disability Policy (ODEP) has launched an excellent Web site to help hire and manage disabled employees. All employers should become familiar with it: www.dol.gov/odep/topics/Employers.htm.

Age Discrimination

Finding that a 41-year-old former tree-trimming foreman had presented sufficient evidence that a jury could find his employer’s stated reasons for his termination pretextual, the U.S. Court of Appeals for the Sixth Circuit has reversed a lower court’s grant of summary judgment for the employer, and allowed the employee’s age discrimination claim to proceed to trial. In Brooks v. Davey Tree Expert Company, the plaintiff, after working for the employer for 12 years, was assigned a new supervisor who almost immediately began making negative age-related comments to him. For instance, he allegedly told the employee that he was too old to be doing the kind of work he was doing, and, on one occasion, called him an “old fart.” The plaintiff was eventually terminated over an incident in which a crew member at the site where the plaintiff was working was injured by a falling tree. The plaintiff had been in his truck, and not out with his crew, at the time of the accident. The supervisor, determining that the accident might not have occurred if the employee had been out with the crew, reported his conclusion to the area supervisor, who terminated the employee based on the supervisor’s report.

After the plaintiff lost his age discrimination case on summary judgment, he appealed. In reversing the grant of summary judgment, the Court of Appeals noted that the age-based comments by the supervisor could be considered “probative of pretext,” even though the supervisor did not make the ultimate termination decision, because the area supervisor based his termination decision on the supervisor’s recommendation. In addition, the Court noted that the employer could not prevail on summary judgment based on the contention that it honestly believed that the plaintiff was responsible for the accident, because the employer had failed to articulate how or why it concluded that the accident would have been prevented if the plaintiff had been out with the crew, rather than in his truck.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

The ABCs of Right-to-Work Laws

The term “right to work” often confuses HR executives, business owners, and employees alike. Roughly half the states in nation are “right-to-work” states, while the other half are not. In a right-to-work state, an employee does not have to join a union (where there is one) in order to obtain work. In non-right to work states they do. Proponents of right-to-work laws point to the fact that employment rates are higher in right-to- work states that allow for individual contracts. In non-right to work states, which have stronger union lobbying efforts, the argument is that employees in right-to-work states take advantage of the hard work of unions, but don’t have to pay any dues for the effort. It’s a fact that wages are higher in non-right-to-work states. However, if you look at geography, Northeastern and West Coast states tend to be the non-right to work jurisdictions where wages are higher in the first place.

State legislatures throughout the nation are continuing to introduce right-to-work laws. A lot has to do with the political balance of power in that state. Of course, conservative Republican states tend to favor right-to-work laws and Democratic pro-union states prefer what some call “forced unionism.” If you enter “right-to-work” in a search engine, you’ll see plenty of arguments both for and against these laws. To a read an excellent Wikipedia article on this topic, go to http://en.wikipedia.org/wiki/Right-to-work_law.

Stupid Boss Tricks

Peter Drucker and Dr. Edward Deming reminded us that poor performance is a management issue, not an employee one. Most managers receive little management training, and some are capable of such brilliant exploits as:

  • Bringing somebody on your team going 45 mph. If your team is going 75 mph, what happens when you bring someone onto it who’s going 45 mph? I guarantee there will be crashes, upset, injuries, and fingers pointed. Make sure that you bring employees up to speed before you thrust them onto a team. Unless it’s an emergency, there’s no excuse for not having an excellent “onboarding” process. Remember that who you hire is the most important part of your job; not simply something to get over.
  • Focusing on what people don’t get right. All of us screw up every day. Sometimes it’s a basic thing like accidentally deleting a document. At other times, we make some huge mistakes. Either way, when you’re a boss running 75 mph, it’s easy to nitpick. If you find yourself making more negative deposits than positive ones, cut it out.
  • Never giving an “atta-boy.” As a corollary, if managers aren’t giving negative jabs, they’re not saying anything at all. There are no positive offsets. They make no time to show they care. Not a five-minute conversation, not a thank-you note, not a pat on the back, nada. How long does anyone want to work for a boss like that, even if they know they’re doing a good job?
  • Taking credit for positive results and pointing fingers at the negative ones. We’ve all been around people like this — and not for long. The job of a boss is to make every person on his or her team a better player. When the team wins, the boss shares credit. When there are losses, the buck stops with the boss. When I search for an example of this behavior, Jets football coach Rex Ryan comes to mind. It’s all about “look at me” and, of course, when things go wrong, it’s not his fault; simply poor play by his players. Right.
  • Setting employees up to fail. In my litigation days, I met plenty of bosses who went out of their way to create an employee’s failure, whether out of fear, revenge, or stupidity. Managers like this are a cancer on any organization. If an employee isn’t performing and ownership won’t let you fire them, call ownership out on it. If management still fails to make necessary changes and you can’t be at peace with it, then work someplace else.
  • Running their own fiefdoms, detached from corporate objectives. I’ve seen many bosses build a bureaucratic wall around them to guarantee their personal survival. I’ve talked to executives who have run multi-million dollar departments more interested in protecting their retirement savings than growing the company. These managers will damage the company eventually. One reason why companies are smart to move managers around every few years is to keep them from building a moat around their department.
  • Failing to keep their mouths shut. Managers learn things about people’s personal lives, job histories, medical problems, family problems, nasty little habits, and more. A manager who shares this information with more people than those who “need to know” is a manager who will get employees upset and the company sued. I remember one manager who was so curious about a subordinate’s possible breast enhancements that he snuck into her personnel files, reviewed her medical records, and proved himself “right.” Then the idiot chose to share thus information with his buddies at the company. When the employee got wind of the situation, you can understand her outrage. What this manager didn’t know was that she had undergone a double mastectomy due to breast cancer two years before, which is why she eventually had the enhancements. How does an employee relationship recover from a situation like that?

Of course, there are more horror stories, but that’s plenty for now. The answer: Promote only qualified people into management and train them constantly so they keep improving.

Incorporate Reasonable Accommodation Practices Into Your ‘Onboarding’ Process

Spring is in full swing — and a number of signs are indicating an increase in hiring of people with disabilities in both the Federal and private sectors. With Federal Executive Order 13548 – Increasing Federal Employment of Individuals with Disabilities and the potential changes for Federal contractors in the Office of Federal Contract Compliance Programs’ (OFCCP) Notice of Proposed Rulemaking (NPRM) for Section 503 of the Rehabilitation Act, employers would be wise to review their “onboarding” processes.

The purpose of this process is the smooth integration of new employees into their positions and company culture. If you already have an onboarding process, does your process consider reasonable accommodation issues for your new employees who might have a disability? It should. Take a look at your process and see if you need to incorporate these reasonable accommodation considerations.

A key to the success of any process, including the accommodation process, is education and training for those responsible for implementing it. Know who these players are in your organization. Who sets up a new employee’s workstation? Who provides access to the facility and parking? If a new hire with a disability needs an accommodation to be an effective member of your team, who will make sure the accommodation is in place for the individual’s first day of work? Key players will certainly include your human resources (HR) department, as well as managers and supervisors. Don’t forget to include staff from information technology (IT), facilities, and security departments in this training. Also, when conducting training, be sure to make everyone aware of the need and requirement to keep all medical information confidential.

Once your staff is educated about your company’s accommodation process for new hires, the next step is to make sure new hires know that they can and should ask for an accommodation if they know or think they might need one. Many individuals who know they need an accommodation to do the job successfully will choose to make an accommodation request. However, others might fear the job offer will be rescinded if they do so, and some might not be sure if they need an accommodation, or know how to request what they need. To deal with these issues, the individual who makes the job offer can share information about the company’s desire to facilitate a smooth transition and integration for the new employee — and explain employment policies, including that for implementing effective reasonable accommodations.

Whoever is responsible for responding to an individual who has accepted a job offer should be prepared to describe to the new employee the office location and the type of equipment the company will provide. This need not be detailed, but should include information about the work location and work area, such as: Parking is provided onsite or no parking at the site; standard computer, telephone, cell phone provided; ID card needed to access building; desk workstation/cubicle environment, etc. Also, if the new employee needs to fill out forms before the start date, or to go to a location to obtain an ID, etc., explain this in advance, giving the employee the opportunity to address other potential needs. Having all this information enables new employees to consider if they need to request a reasonable accommodation.

Effective onboarding of employees might require these accommodations:

You don’t need to have all of these accommodations in place for the first day of work; however, an awareness of the potential need and a willingness to implement accommodations as part of your company culture will help you onboard new employees successfully. To help you update your onboarding process if needed, here’s a sample onboarding accommodation assessment form.

Anne Hirsh, M.S., JAN Co-Director

National Labor Relations Act Update

The U.S. Court of Appeals for the D.C. Circuit has found that an employer was required to reinstate an employee who the NLRB determined had been terminated unlawfully, despite his subsequent statements reflecting disloyalty to the employer. In Stephens Media, LLC v. NLRB, the employer appealed the NLRB determination that the employer, a newspaper publisher, violated the NLRA in connection with its termination of two employees.

One employee had been terminated after confronting a manager over the discipline of a co-worker for allowing a union representative onto the premises without management’s prior approval. After his discharge, the employee attended a public event at which he spoke critically about the employer, claiming that the employer failed to staff its newsroom adequately and that he had considered starting a rival newspaper.

In a separate incident, another employee was terminated after making a surreptitious recording of a meeting with management in which he expected to receive discipline but was denied the right to union representation.

With respect to the first employee, the D.C. Circuit upheld the Board’s determination that he engaged in “protected activity” when he confronted the manager over what he reasonably believed was the impermissible discipline of a bargaining unit employee (it did not matter whether he was correct in his belief). Despite the employer’s argument that the employee’s post-discharge comments showed blatant disloyalty, the Court held that his post-discharge comments did not absolve the employer of its obligation to reinstate the employee. The Court noted that where an employer seeks to avoid its obligations based on post-discharge conduct, the employer must demonstrate that the misconduct was so flagrant as to render the employee unfit for further service or a threat to efficiency at the plant. The Court found that the employee’s comments failed to meet this standard. With respect to the second employee, the Court deferred to the Board’s ruling that the surreptitious recording was protected activity because the employee reasonably believed that he was about to be disciplined and that the employer violated his right to have union representation. The Court noted that the company did not have a policy prohibiting audio recordings and that the recording was legal under state and local law.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Editor’s note: if employers don’t get by now what the administration is up to when it comes to protecting disgruntled employees, cases such as this should be a resounding wake-up call! Do yourself a favor and watch our recent NLRB webinar.

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