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

Employer is Denied Enforceability of Arbitration Agreement Found in Employee Handbook

September 27, 2012 Leave a comment

In the California Court of Appeals case of Sparks v. Vista Del Mar Child and Family Services, the employee filed a wrongful termination complaint against the company after he complained of various employment practices he believed violated state and federal reporting and compensation laws. The defendant, intendant to compel arbitration based on a provision found in its employee handbook. The court denied enforceability stating that, in general, arbitration agreements in employee handbooks are non-enforceable. This is because they should be signed as a separate document, employee handbooks often state that they are not contracts, that they can be unilaterally changed, etc.

In California and elsewhere, employers are having greater and greater difficulty enforcing arbitration agreements to the point where you have to ask if it is worse than the fight before the fight. What sense does it make to try and compel arbitration if losing costs you $50,000 to do so?

If you have an arbitration agreement, remember to make sure:

  1. It is signed as a stand-alone document.
  2. It is specific to coverage rights waived and any process to follow.
  3. Get it reviewed by a lawyer. It may cost you a few hours of their time, but you are doing it to save many thousands if you do get sued.

HR Director Gone Wild?

September 20, 2012 Leave a comment

I was browsing on the internet looking for employee complaints about HR for a piece I’m writing. There’s a ton of it out there. In the process, I ran across what most business executives would consider a nightmare-employees fighting internal battles online. Take a look at this doozy out of L. A. involving the city’s corrupt Section 8 housing authority, of which HR was a full participant.

 

Looks like these folks had a good ol’ time at taxpayer expense a search shows much worse than that. The HR director was fired last December.

 

What lessons can be learned from a crazy story like this?

  1. You can’t trust anyone blindly; even HR. Checks and balances are a must in ANY organization.
  2. Bad HR can create far more liabilities than it is hired to prevent.
  3. There is no hiding your dirty laundry anymore.
  4. Set Google alerts for your company and employees. Just stay out of private, non-work-related activities.
  5. Deal with internal conflicts now…before they spill out onto the internet.
Categories: Risk Management

No Wrongful Termination Claim for Failure to Renew Employment Contract

September 18, 2012 Leave a comment

Touchstone Television Productions v. Nicolette Sheridan Court of Appeals, State of California Second Appellate District

In a recent case decided by the California Appellate Court, actress Nicolette Sheridan who appeared as Edie Britt in the program Desperate Housewives did not have her contract renewed because she had complained about a battery allegedly committed upon her by Desperate Housewives creator, Mark Cherry. Not only did they not renew her contract for a sixth season, in one of the episodes, they had her die off in a car accident. Then in a subsequent episode she returned as a ghost! Due to earn $4.2 million for a sixth season, when her contract was not renewed, she cried foul and filed suit.

The court ruled that Ms. Sheridan was not entitled to sue for wrongful termination in violation of public policy because of the fixed contract nature of her employment. The court did, however, allow her to amend her complaint under Labor Code §6310(d) which permits “an action for damages if the employee is discharged, threatened with discharge, or discriminated against by his or her employer because of the employee’s complaints about unsafe work conditions.” Here it is alleged that the defendant discriminated against the plaintiff by not renewing her employment contract. To prevail on the claim, she must prove that, but for her complaints about unsafe work conditions, the defendant would have renewed the contract. Damages, however, are limited to ‘lost wages and work benefits caused by the acts of the employer.’”

Looks like Hollywood doesn’t just produce dramas for us, it creates their own too!

I-9 Form Extended

September 14, 2012 Leave a comment

You may notice the I-9 form has an expiration date of 8/31/12. Don’t fret it, the INS has extended the form. Per the INS:

Continue to Use the Current Form I-9 for Employment Eligibility Verification

Until further notice, employers should continue using the Form I-9 currently available on the forms section of http://www.uscis.gov. This form should continue to be used even after the OMB control number expiration date of August 31, 2012 has passed. USCIS will provide updated information about the new version of the Form I-9 as it becomes available.

Employers must complete Form I-9 for all newly-hired employees to verify their identity and authorization to work in the United States.

Subscribe to I-9 Central to receive Form I-9 updates.

Categories: Immigration

Should Sexual Harassment Be a Crime?

September 13, 2012 Leave a comment

Apparently France now thinks so, as reported in the Huffington Post. In fact, sexual harassment can be a crime in the U.S. if it involves a battery, assault or false imprisonment. Times have certainly changed. I can remember the French scoffing at U.S. sexual harassment laws claiming that flirting was the French national pastime. Now that pastime can land them some jail time!

California Passes Workplace Religious Freedom Act of 2012

September 11, 2012 Leave a comment

According to the bill, this amendment to the Fair Employment and Housing Act AB 1964 would clarify that undue hardship, as defined in the Definitions section of the Fair Employment and Housing Act, will also apply to the Religious Discrimination section, clearing up legal confusion of federal vs. state definitions of “undue hardship”. The bill would also specify that religious clothing and hairstyles qualify as a religious belief or observance and that segregating an employee from customers or the public is not a reasonable accommodation of an employee’s religious beliefs now protects “religious dress practice” shall be construed broadly to include the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed. “Religious grooming practice” shall be construed broadly to include all forms of head, facial, and body hair that are part of the observance by an individual of his or her religious creed.

The bill, sponsored by The Sikh Coalition would clarify that undue hardship, as defined in the Definitions section of the Fair Employment and Housing Act, will also apply to the Religious Discrimination section, clearing up legal confusion of federal vs. state definitions of “undue hardship”. The bill would also specify that religious clothing and hairstyles qualify as a religious belief or observance and that segregating an employee from customers or the public is not a reasonable accommodation of an employee’s religious beliefs.

To learn more about the bill’s passage, go to http://asmdc.org/members/a08/religious-freedom?layout=category  To read an interesting article chronicling the passage of the bill go to http://www.hyphenmagazine.com/blog/archive/2012/08/what-unity-looks-ab-1964