Every service company I speak with is concerned about their ability to find good, quality workers. In an environment where the competition for talent is fierce, which companies are going to be most successful? What's the recipe for winning?
Let's start with the basic myth. When I'm training foremen and supervisors, I'll often ask them if today's young people have a poorer work ethic than their generation had. Almost unanimously they say "yes!"
They're shocked when I tell them every generation believes this and every generation is wrong. I heard the "young people today don't want to work" thing when I was a helper on construction sites in the 1970s. Engineers building the Taj Mahal in the 1640s were saying it, as were stone masons building the pyramids 4,000 years ago.
What is true is that some individuals have a stronger work ethic than others (in every generation). In periods of relatively low unemployment, we run across more candidates with lower motivation and weaker work-ethic than periods of higher unemployment rates.
What is also true is that work ethic and motivation is not all genetic. Work ethic can be learned and motivation can be tapped. Which leads us back to the question, which companies are going to win in this economy?
The service companies that are going to win are not the companies that invest in finding that secret supply of excellent workers that no one else can find. The companies that win are going to be the ones that find ways to be successful with less than ideal candidates.
The service companies that are going to win aren't simply complaining about the current talent pool, they're building systems that help a candidate who isn't an exact fit to have a reasonable chance at becoming successful. They're building on-boarding, training and feedback systems as well as mentoring programs and career paths to keep people who aren't natural-born stars to build a skill set, become engaged and remain on-track.
The service companies that are going to win aren't going to simply outspend everyone else on talent. If your culture sucks (read: your supervisors and foremen treat people like they're disposable), it doesn't matter how much money you throw at compensation, you'll eventually lose to the company that knows how to build a culture that workers embrace. If you can get $16 of value out of a $13 employee, you're going to handily outperform the company that's having to spend $23 to get that same $16 of value.
The service companies that are going to win will say "thanks" and "well done" a lot. The service companies that are going to struggle are going to generally ignore good performance as something that's expected and spend their energy berating poor performance.
The service companies that are going to win are going to be employers of choice who build their total rewards programs around what their workers really want versus what they'd prefer to give them. (Think: maybe an afternoon off with pay rather than a gift card?).
The service companies that are going to win are going to win with less than ideal candidates. If your organization is determined to find plug-and-play, immediately productive workers that don't need to be trained or managed, you're going to spend a lot of time recruiting.
Wednesday, December 13, 2017
What Matt Lauer Means to Your Business
There has been an avalanche of sexual harassment and misconduct claims making the headlines in recent weeks. I'm sure that a lot of politicians and public figures are sitting on pins and needles hoping their name doesn't make the news. This is good news for employees, mostly but not exclusively women who have tolerated much more of this type of behavior than they ever should have. Employers of all sizes will likely have more of these claims to process and more judgement calls to make as victims feel empowered to come forward.
With regard to the Matt Lauer situation, NBC is going to be facing the same questions your organization would be facing, albeit much more publicly - what is your policy, what kinds of training did you have in place, who knew about the behavior and what happened when management found out?
Here are some tips for any organization that is concerned about their own vulnerability to situations like NBCs current predicament:
1. Review your harassment policies. You likely have boilerplate language in your handbook. Nothing wrong with that, just make sure the language is clear and especially make sure that your employees know whom they may contact in the event they are harassed in any manner, including sexually. Make sure that there are several avenues for reporting the harassment, don't limit them to chain of command. Many Davidson Group clients include our phone number as an outside third-party option for employees to contact.
2. Train your managers and supervisors. Now is a great time to offer training to your managers and supervisors on what is and isn't harassment, what to do if they suspect harassment, and what to do if one of their team members reports harassment to them.
3. Train your employees. Now is a great time to remind your employees what types of behaviors are not acceptable in the workplace, what to do if they are victims of those types of behaviors, and what might happen to them if they are the one doing the harassing.
4. Treat all accusations seriously, investigate thoroughly and apply consequences consistently. This is the hard part because harassment claims are so personal and can vary so much in nature and substance. The very clear-cut cases, like when the behavior is caught on video or when there are multiple witnesses, are not as difficult. But sometimes these situations are much grayer. In some cases it may not even be clear that something happened at all. With these we can find ourselves torn between supporting the accuser and being fair to the accused.
We can learn something from observing the political personalities that have been in the news recently. What I have observed is when a figure considered a political opponent stands accused, it's portrayed as outrageous behavior that needs to be dealt with sternly and immediately, but when someone considered a political ally stands accused, we are urged not to rush to judgement.
How does this translate to your company? When the accused is a mediocre performer whose contributions are easily replaced, it's easy to stand with the accuser. When the accused is a rain-maker who is not so easily replaced, it's tempting to impugn the accuser or to raise our burden of proof requirements.
It takes courage of leadership to do the right thing, even if it temporarily hurts the organization. NBC will probably find that it would have been better off addressing the situation with Matt Lauer after the first credible complaint versus what they are now facing. It is the organization's responsibility to treat every case with the same level of seriousness, whether the accused or accuser is a low level employee or an executive, and attempt to apply consequences for bad behavior that are consistent and appropriate.
If your organization could use some help with developing policies, delivering training, conducting an investigation, or helping with a messy situation, contact The Davidson Group and we'd be happy to help.
With regard to the Matt Lauer situation, NBC is going to be facing the same questions your organization would be facing, albeit much more publicly - what is your policy, what kinds of training did you have in place, who knew about the behavior and what happened when management found out?
Here are some tips for any organization that is concerned about their own vulnerability to situations like NBCs current predicament:
1. Review your harassment policies. You likely have boilerplate language in your handbook. Nothing wrong with that, just make sure the language is clear and especially make sure that your employees know whom they may contact in the event they are harassed in any manner, including sexually. Make sure that there are several avenues for reporting the harassment, don't limit them to chain of command. Many Davidson Group clients include our phone number as an outside third-party option for employees to contact.
2. Train your managers and supervisors. Now is a great time to offer training to your managers and supervisors on what is and isn't harassment, what to do if they suspect harassment, and what to do if one of their team members reports harassment to them.
3. Train your employees. Now is a great time to remind your employees what types of behaviors are not acceptable in the workplace, what to do if they are victims of those types of behaviors, and what might happen to them if they are the one doing the harassing.
4. Treat all accusations seriously, investigate thoroughly and apply consequences consistently. This is the hard part because harassment claims are so personal and can vary so much in nature and substance. The very clear-cut cases, like when the behavior is caught on video or when there are multiple witnesses, are not as difficult. But sometimes these situations are much grayer. In some cases it may not even be clear that something happened at all. With these we can find ourselves torn between supporting the accuser and being fair to the accused.
We can learn something from observing the political personalities that have been in the news recently. What I have observed is when a figure considered a political opponent stands accused, it's portrayed as outrageous behavior that needs to be dealt with sternly and immediately, but when someone considered a political ally stands accused, we are urged not to rush to judgement.
How does this translate to your company? When the accused is a mediocre performer whose contributions are easily replaced, it's easy to stand with the accuser. When the accused is a rain-maker who is not so easily replaced, it's tempting to impugn the accuser or to raise our burden of proof requirements.
It takes courage of leadership to do the right thing, even if it temporarily hurts the organization. NBC will probably find that it would have been better off addressing the situation with Matt Lauer after the first credible complaint versus what they are now facing. It is the organization's responsibility to treat every case with the same level of seriousness, whether the accused or accuser is a low level employee or an executive, and attempt to apply consequences for bad behavior that are consistent and appropriate.
If your organization could use some help with developing policies, delivering training, conducting an investigation, or helping with a messy situation, contact The Davidson Group and we'd be happy to help.
Wednesday, November 8, 2017
Progressive Discipline Policy?
Our high school band director gave out demerits to students who misbehaved or failed to follow a band rule. For a couple of years I held the record for the most demerits ever accumulated in a single semester. Interestingly, I was among the very best musicians in that band. But I didn't particularly like that teacher, I got pleasure from getting under his skin, and was not particularly concerned with possible negative outcomes associated with the accumulation of demerits.
Well-defined progressive discipline policies are popular in some circles and I run across them frequently when reviewing or updating employee handbooks. 1st occurrence=Verbal warning, 2nd occurrence=written warning, then suspension... If you have a policy like this, here are some thoughts on progressive discipline programs in general:
1. The larger the organization the more it benefits from a defined progressive discipline program. If you have 5,000 employees and hundreds of managers and supervisors spread across multiple locations, ensuring consistency in the way employees are treated is an important risk management and cultural component.
2. The smaller the organization the less it benefits from a defined progressive discipline program. If you have 40 employees and you know them all by name and are based in a right-to-work state, why would you tie yourself down to a formal policy that may make it difficult for you to get rid of a problem employee?
3. Virtually all research I've ever read indicates that positive reinforcement is more powerful and longer lasting than punishment in changing behavior. Demerits, occurrences, and other forms of documenting negative behavior are attempts at deterrence that often fail to change behaviors at all, and if they do, it often isn't for very long.
Recognizing and/or rewarding behavior you want is going to be more effective over time than spending your energy punishing behavior you don't want. So, rather than giving demerits, occurrences or other forms of documentation for missing the target, try doing the opposite - some type of acknowledgement that an employee is doing what you want.
One example might be that all employees who meet some defined performance goal are eligible for a drawing (rather than all who fail get an occurrence). Pursuit of this recognition will motivate some employees, but at the worst it'll be neutral to the others. For those it motivates, it'll be more motivating than a desire to avoid an occurrence and for those to whom it's neutral, it won't motivate them in the wrong direction. (Yes, some employees derive pleasure from seeing their supervisor frustrated like I did with my band director, and some enjoy seeing how much they can get away with).
For you managers who say, "why should I give a prize to someone for simply doing what I hired them to do?" I ask, "why continue to use methods that don't work as well when the science is clear regarding how humans respond to punishment as a motivator?"
Does this mean that you don't document bad behavior? Of course not. If your goal is to win unemployment hearings you must demonstrate that you made a good faith effort to communicate your expectations and the employee failed. But there may be times when you have an employee who behaves like I did in high school and doesn't want to row in the same direction as everyone else. There's no need to be trapped by your progressive discipline policy. My band director should have simply kicked me out of the band, or he should have made more of an effort to engage me. If you're in a right-to-work state, you should do the same with your problem child. Your "A" players will appreciate it.
Well-defined progressive discipline policies are popular in some circles and I run across them frequently when reviewing or updating employee handbooks. 1st occurrence=Verbal warning, 2nd occurrence=written warning, then suspension... If you have a policy like this, here are some thoughts on progressive discipline programs in general:
1. The larger the organization the more it benefits from a defined progressive discipline program. If you have 5,000 employees and hundreds of managers and supervisors spread across multiple locations, ensuring consistency in the way employees are treated is an important risk management and cultural component.
2. The smaller the organization the less it benefits from a defined progressive discipline program. If you have 40 employees and you know them all by name and are based in a right-to-work state, why would you tie yourself down to a formal policy that may make it difficult for you to get rid of a problem employee?
3. Virtually all research I've ever read indicates that positive reinforcement is more powerful and longer lasting than punishment in changing behavior. Demerits, occurrences, and other forms of documenting negative behavior are attempts at deterrence that often fail to change behaviors at all, and if they do, it often isn't for very long.
Recognizing and/or rewarding behavior you want is going to be more effective over time than spending your energy punishing behavior you don't want. So, rather than giving demerits, occurrences or other forms of documentation for missing the target, try doing the opposite - some type of acknowledgement that an employee is doing what you want.
One example might be that all employees who meet some defined performance goal are eligible for a drawing (rather than all who fail get an occurrence). Pursuit of this recognition will motivate some employees, but at the worst it'll be neutral to the others. For those it motivates, it'll be more motivating than a desire to avoid an occurrence and for those to whom it's neutral, it won't motivate them in the wrong direction. (Yes, some employees derive pleasure from seeing their supervisor frustrated like I did with my band director, and some enjoy seeing how much they can get away with).
For you managers who say, "why should I give a prize to someone for simply doing what I hired them to do?" I ask, "why continue to use methods that don't work as well when the science is clear regarding how humans respond to punishment as a motivator?"
Does this mean that you don't document bad behavior? Of course not. If your goal is to win unemployment hearings you must demonstrate that you made a good faith effort to communicate your expectations and the employee failed. But there may be times when you have an employee who behaves like I did in high school and doesn't want to row in the same direction as everyone else. There's no need to be trapped by your progressive discipline policy. My band director should have simply kicked me out of the band, or he should have made more of an effort to engage me. If you're in a right-to-work state, you should do the same with your problem child. Your "A" players will appreciate it.
Overworking "A" Players
Jane manages both Bob and Stan. Bob does high quality work and never says "no" when asked to take-on an extra work project. Stan, on the other hand, is just as capable as Bob, also does high quality work, but sends out clear verbal and non-verbal signals of resistance when asked to do anything extra. When Jane has an important project with a quick turnaround, who is she going to ask? Bob, of course.
This is the plight of the Bobs of the world. They are punished for being good, efficient workers with a good attitude. The Stans of the world learn that they can be rewarded by being bristly, prickly or defiant. Managers who'd just as soon not have to hear the excuses or experience the huffs and the roll of the eyes will go to Bob just to avoid dealing with Stan.
Fortunately for managers like Jane, the Bobs of the world often score high S on the DISC profile and high S individuals often choose to stay with the devil they know rather than risk the devil they don't. Unfortunately for managers like Jane, high S individuals don't often show their emotions in an outwardly demonstrative way, so Bob could be highly frustrated but simply doesn't show it. When Bob really does reach the end of his rope, Jane is usually caught totally off-guard and is dismayed that she lost Bob and is stuck with Stan.
This is the dilemma facing conflict avoidant managers. By going to their Bobs over-and-over to avoid dealing with their Stans, the eventually end up with a department made up mostly of Stans.
The source of the managers' dilemma is the manager focusing too much on him or herself. When Bob submits his resignation, no doubt Jane's first thought will be, "how could you do this to me?" It's this same thinking that got her into this situation to begin with - "I don't want to deal with Stan."
Jane could avoid this by focusing more on her team than herself. "I have this important project with a quick deadline. Bob will do it, but I went to Bob last time. Stan will huff and puff to try to get out of it, but I'm not going to reward that behavior - it's Stan's project!"
Being willing to engage in difficult conversations and standing your ground to protect your "A" players is part of a manager's responsibility. It's why Jane was promoted. Avoiding conflict hurts both the team and the organization - and ultimately the manager, herself. Another question you might ask when facing this dilemma - "who would I rather have leave the organization - Bob or Stan?" If the answer is Stan, then why are you coddling his counterproductive work behaviors?
And who knows, if you refuse to reward Stan's resistance, he might get it - and morph into a new Bob. Now you have two Bobs on your team.
This is the plight of the Bobs of the world. They are punished for being good, efficient workers with a good attitude. The Stans of the world learn that they can be rewarded by being bristly, prickly or defiant. Managers who'd just as soon not have to hear the excuses or experience the huffs and the roll of the eyes will go to Bob just to avoid dealing with Stan.
Fortunately for managers like Jane, the Bobs of the world often score high S on the DISC profile and high S individuals often choose to stay with the devil they know rather than risk the devil they don't. Unfortunately for managers like Jane, high S individuals don't often show their emotions in an outwardly demonstrative way, so Bob could be highly frustrated but simply doesn't show it. When Bob really does reach the end of his rope, Jane is usually caught totally off-guard and is dismayed that she lost Bob and is stuck with Stan.
This is the dilemma facing conflict avoidant managers. By going to their Bobs over-and-over to avoid dealing with their Stans, the eventually end up with a department made up mostly of Stans.
The source of the managers' dilemma is the manager focusing too much on him or herself. When Bob submits his resignation, no doubt Jane's first thought will be, "how could you do this to me?" It's this same thinking that got her into this situation to begin with - "I don't want to deal with Stan."
Jane could avoid this by focusing more on her team than herself. "I have this important project with a quick deadline. Bob will do it, but I went to Bob last time. Stan will huff and puff to try to get out of it, but I'm not going to reward that behavior - it's Stan's project!"
Being willing to engage in difficult conversations and standing your ground to protect your "A" players is part of a manager's responsibility. It's why Jane was promoted. Avoiding conflict hurts both the team and the organization - and ultimately the manager, herself. Another question you might ask when facing this dilemma - "who would I rather have leave the organization - Bob or Stan?" If the answer is Stan, then why are you coddling his counterproductive work behaviors?
And who knows, if you refuse to reward Stan's resistance, he might get it - and morph into a new Bob. Now you have two Bobs on your team.
Tuesday, October 17, 2017
Assessing Talent Accurately
Sometimes I'll get a call from a client because they're ready to fire Bob. I'll ask a few follow-up questions and discover that there is no major policy violation, they're really just irritated with him for an accumulation of stuff that seems important today but is somewhat minor in the big picture. In most cases I'll convince them that they're probably better off keeping Bob than trying to replace him and recommend they just have a conversation with him regarding their frustrations and expectations.
Then I'll get a call a couple of weeks later to be informed that Bob's just been promoted to supervisor. "Since our talk, he's been doing great!"
I call this the talent assessment elevator - the speed of movement between "the penthouse suite" and "the basement." Some small to mid-sized businesses have express elevators. A worker can go from hero to bum and back to hero within a few days or even hours.
Organizational Behavior textbooks they call this "availability bias," which is defined as our tendency to make decisions based on information that is readily available in our memory. Decision makers can easily overvalue information that we recently received. So when we get word that Bob screwed up, "Bob's a bum. Fire him!" When we get word that Bob pulled us out of a ditch with an important client, "Bob's great. Promote him!"
One of my heroes, basketball coach Dean Smith, once said, "if you make every game a life and death proposition...you'll be dead a lot." He knew - he lost 254 games in his Hall of Fame career! The same applies to making important personnel decisions such as whom to keep and whom to promote, based almost exclusively on recent events. The problem is, the stuff that's in your short term memory may not be the best information to base an important organizational decision on.
So when it's time to decide whether to fire Bob or promote him, take a few minutes and consider:
1. What knowledge, skills and abilities (KSAs) does Bob add to the team and how easily will it be to replace those if we send him packing?
2. What performance metrics can we use to evaluate Bob's performance over the course of a year (or longer), so that we don't overvalue his most recent short-term performance?
2. What KSAs plus any intangibles does Bob potentially bring to an expanded role with the organization?
If Bob has solid KSAs and has historically been a solid contributor, don't over-manage as a result of a recent wobble. Have a conversation, if need be, or even a documented disciplinary write-up, if warranted. But investing in getting Bob back on track is going to be less costly than replacing him, almost guaranteed.
If Bob has done something worth celebrating, consider a one-time bonus or some form of public recognition, but don't rush to put him in that supervisor role that just opened-up based solely on this single victory or recent short-term success. Evaluate his KSAs and fitness for this new position separately from his recent star performance. Otherwise, you may have just taken a solid individual contributor and put him in a supervisor role where he's miserable and might soon be underperforming.
When it comes to your talent assessment elevator, it should be like a slow freight elevator - faster than the stairs but doesn't make your ears pop. Organizations with an express elevator seem to habitually lose good people that they needn't have lost because of over-reacting to both short-term performance failures and short-term performance successes.
Then I'll get a call a couple of weeks later to be informed that Bob's just been promoted to supervisor. "Since our talk, he's been doing great!"
I call this the talent assessment elevator - the speed of movement between "the penthouse suite" and "the basement." Some small to mid-sized businesses have express elevators. A worker can go from hero to bum and back to hero within a few days or even hours.
Organizational Behavior textbooks they call this "availability bias," which is defined as our tendency to make decisions based on information that is readily available in our memory. Decision makers can easily overvalue information that we recently received. So when we get word that Bob screwed up, "Bob's a bum. Fire him!" When we get word that Bob pulled us out of a ditch with an important client, "Bob's great. Promote him!"
One of my heroes, basketball coach Dean Smith, once said, "if you make every game a life and death proposition...you'll be dead a lot." He knew - he lost 254 games in his Hall of Fame career! The same applies to making important personnel decisions such as whom to keep and whom to promote, based almost exclusively on recent events. The problem is, the stuff that's in your short term memory may not be the best information to base an important organizational decision on.
So when it's time to decide whether to fire Bob or promote him, take a few minutes and consider:
1. What knowledge, skills and abilities (KSAs) does Bob add to the team and how easily will it be to replace those if we send him packing?
2. What performance metrics can we use to evaluate Bob's performance over the course of a year (or longer), so that we don't overvalue his most recent short-term performance?
2. What KSAs plus any intangibles does Bob potentially bring to an expanded role with the organization?
If Bob has solid KSAs and has historically been a solid contributor, don't over-manage as a result of a recent wobble. Have a conversation, if need be, or even a documented disciplinary write-up, if warranted. But investing in getting Bob back on track is going to be less costly than replacing him, almost guaranteed.
If Bob has done something worth celebrating, consider a one-time bonus or some form of public recognition, but don't rush to put him in that supervisor role that just opened-up based solely on this single victory or recent short-term success. Evaluate his KSAs and fitness for this new position separately from his recent star performance. Otherwise, you may have just taken a solid individual contributor and put him in a supervisor role where he's miserable and might soon be underperforming.
When it comes to your talent assessment elevator, it should be like a slow freight elevator - faster than the stairs but doesn't make your ears pop. Organizations with an express elevator seem to habitually lose good people that they needn't have lost because of over-reacting to both short-term performance failures and short-term performance successes.
Improve Your Good Hire Percentage
Many small companies choose their new employees based on a single interview. Unfortunately research shows that interviews have extremely poor validity when it comes to selecting the right employees. (In case you've forgotten, "validity" means an instrument measures what it's supposed to measure). Interviews are supposed to measure the likelihood that a candidate will be a good fit for our organization and our job vacancy. Casual interviews are pretty good at measuring interviewing skills, but they don't do very well at measuring how well a candidate will perform in the job we're trying to fill.
Studies show that we are subject to so many biases when it comes to a typical interview process that we are probably just as likely to pick a star employee from a stack of resumes, sight-unseen, than from bringing five people in for interviews.
So, how do we improve the validity of our process?
First, screen resumes against a predetermined set of KSAs (knowledge, skills and abilities) only. Consider having an administrative employee scrub information that might lead to biases from the resumes' themselves. For example, as a Carolina grad, I might have a negative opinion about a resume from a Duke grad. Another common bias is unintentionally rating a resume lower based on the candidate's name (assumptions rooted in gender, age and ethnic stereotypes). If you can't see the university name or the candidate's name, you are more likely to evaluate the resume on the KSAs alone.
Second, develop good interview questions! Write questions that have a likelihood of predicting the behaviors that you want. Use an interview guide and ask each candidate the same questions. Practice interviewing your current stars and see how they answer those same questions.
Third, use assessments! Utilize skills assessments - having them demonstrate skills they claim to have. This can range from taking a keyboarding test, to taking them out in the warehouse and allowing them to demonstrate their ability to operate your forklift. (There are some do's and don'ts regarding "auditions," so make sure you don't cross a line). Behavioral assessments will show if their personality style is ideal for the demands of the position. Driving Forces/Motivators assessments will show if their motivators align with the rewards and demands of the position. Competencies assessments will show what types of core competencies the candidate brings to the team.
Small employers frequently tell me, "I'm not spending $50 or $100 on a test - I know how to hire!" Considering the high cost of a poor hire and the science that shows utilizing valid assessments increases the validity of the selection process exponentially, that might be a penny-wise, dollar-foolish commitment.
Fourth, check references! LinkedIn is a great resource to see referrals and endorsements on many of your candidates. It's also a venue to conduct "unofficial" reference checks. If the candidate is connected to someone you know, you might be able to gain valuable insight. Many people dismiss the references the candidate submits - but I've gotten honest references from these in the past, so don't neglect them either. The best predictor of future success is past success!
Fifth, make sure your background screening criteria match your risk profile. Some organizations screen too tightly here and miss out on potentially good workers due to invalid criteria. If your company provides residential services and a candidate has a recent breaking-and-entering conviction, that candidate clearly doesn't fit your risk profile. But screening out a candidate who has a 12-year-old misdemeanor possession conviction might be an invalid selection criteria if you have an opening on a production line or on a commercial construction site.
Finally, if you're doing all these things but you're still losing people, it's probably not your selection process. It's likely something else, like job design, compensation, benefits and perks, or most likely, your supervision and management style. But that's a subject for another blog!
Studies show that we are subject to so many biases when it comes to a typical interview process that we are probably just as likely to pick a star employee from a stack of resumes, sight-unseen, than from bringing five people in for interviews.
So, how do we improve the validity of our process?
First, screen resumes against a predetermined set of KSAs (knowledge, skills and abilities) only. Consider having an administrative employee scrub information that might lead to biases from the resumes' themselves. For example, as a Carolina grad, I might have a negative opinion about a resume from a Duke grad. Another common bias is unintentionally rating a resume lower based on the candidate's name (assumptions rooted in gender, age and ethnic stereotypes). If you can't see the university name or the candidate's name, you are more likely to evaluate the resume on the KSAs alone.
Second, develop good interview questions! Write questions that have a likelihood of predicting the behaviors that you want. Use an interview guide and ask each candidate the same questions. Practice interviewing your current stars and see how they answer those same questions.
Third, use assessments! Utilize skills assessments - having them demonstrate skills they claim to have. This can range from taking a keyboarding test, to taking them out in the warehouse and allowing them to demonstrate their ability to operate your forklift. (There are some do's and don'ts regarding "auditions," so make sure you don't cross a line). Behavioral assessments will show if their personality style is ideal for the demands of the position. Driving Forces/Motivators assessments will show if their motivators align with the rewards and demands of the position. Competencies assessments will show what types of core competencies the candidate brings to the team.
Small employers frequently tell me, "I'm not spending $50 or $100 on a test - I know how to hire!" Considering the high cost of a poor hire and the science that shows utilizing valid assessments increases the validity of the selection process exponentially, that might be a penny-wise, dollar-foolish commitment.
Fourth, check references! LinkedIn is a great resource to see referrals and endorsements on many of your candidates. It's also a venue to conduct "unofficial" reference checks. If the candidate is connected to someone you know, you might be able to gain valuable insight. Many people dismiss the references the candidate submits - but I've gotten honest references from these in the past, so don't neglect them either. The best predictor of future success is past success!
Fifth, make sure your background screening criteria match your risk profile. Some organizations screen too tightly here and miss out on potentially good workers due to invalid criteria. If your company provides residential services and a candidate has a recent breaking-and-entering conviction, that candidate clearly doesn't fit your risk profile. But screening out a candidate who has a 12-year-old misdemeanor possession conviction might be an invalid selection criteria if you have an opening on a production line or on a commercial construction site.
Finally, if you're doing all these things but you're still losing people, it's probably not your selection process. It's likely something else, like job design, compensation, benefits and perks, or most likely, your supervision and management style. But that's a subject for another blog!
Monday, September 11, 2017
Referral Bonuses - Good or Bad?
The battle for talent is heating up. Unemployment rates have been steadily declining over the past few years and we've reached that point where I'm hearing, "we're having a hard time finding people" even from my clients who hire low skill workers.
One temptation during times like these is to add a referral bonus incentive or increase the one already in place. I've heard of companies offering as much as $4,000 for an employee referral!
Here are some things to think about when considering an employee referral bonus program:
1. If you have a healthy culture, you don't need one. Employees will refer people they want to work with for no referral at all if they consider your place to be a good place to work. If your culture is lousy, they won't refer people they like, but they may refer people they don't care about if the bonus is tempting enough.
2. The higher the bonus, the weaker the referrals get. Good employees will refer "A" players whenever they get the chance. However, they'll also screen out people they don't think would be a good fit or whom they'd be embarrassed to be linked to. However, the higher the bonus, the easier it is for them to convince themselves that "Bob" who they know is lazy and has never been able to hold down a job, might just work out this time. I remember one of our supervisors took a bunch of application forms, wrote his name in the "referred by" space, and went down to the local mall and handed them out like fliers. Not exactly what we had in mind.
3. Referral bonuses can weaken your employment brand. Research recently published by Applied Psychology suggests that candidates, upon learning that the company has a referral bonus, may question the motives of the referring employee and change their perception of the hiring organization.
4. Too much dependence on employee referrals can increase discrimination risk. People tend to refer people like them (same race, age, gender, etc.). So bragging that 100% of your vacancies are filled by employee referrals could result in a discrimination claim by someone who doesn't look like the rest of your employees.
This is not to say that you should trash your employee referral bonus altogether. There are some benefits. Positions filled by referral tend to be filled more quickly and those referred tend to last longer and perform better (on average). But make sure your bonus is a token of gratitude, not an incentive to refer every bum they know or distribute applications like a ticker-tape parade. When the candidate finds out the employee referring them is getting something, it shouldn't be large enough to bring into question the referring employee's motives nor make it look like your organization is desperate and willing to settle for just about anybody.
One temptation during times like these is to add a referral bonus incentive or increase the one already in place. I've heard of companies offering as much as $4,000 for an employee referral!
Here are some things to think about when considering an employee referral bonus program:
1. If you have a healthy culture, you don't need one. Employees will refer people they want to work with for no referral at all if they consider your place to be a good place to work. If your culture is lousy, they won't refer people they like, but they may refer people they don't care about if the bonus is tempting enough.
2. The higher the bonus, the weaker the referrals get. Good employees will refer "A" players whenever they get the chance. However, they'll also screen out people they don't think would be a good fit or whom they'd be embarrassed to be linked to. However, the higher the bonus, the easier it is for them to convince themselves that "Bob" who they know is lazy and has never been able to hold down a job, might just work out this time. I remember one of our supervisors took a bunch of application forms, wrote his name in the "referred by" space, and went down to the local mall and handed them out like fliers. Not exactly what we had in mind.
3. Referral bonuses can weaken your employment brand. Research recently published by Applied Psychology suggests that candidates, upon learning that the company has a referral bonus, may question the motives of the referring employee and change their perception of the hiring organization.
4. Too much dependence on employee referrals can increase discrimination risk. People tend to refer people like them (same race, age, gender, etc.). So bragging that 100% of your vacancies are filled by employee referrals could result in a discrimination claim by someone who doesn't look like the rest of your employees.
This is not to say that you should trash your employee referral bonus altogether. There are some benefits. Positions filled by referral tend to be filled more quickly and those referred tend to last longer and perform better (on average). But make sure your bonus is a token of gratitude, not an incentive to refer every bum they know or distribute applications like a ticker-tape parade. When the candidate finds out the employee referring them is getting something, it shouldn't be large enough to bring into question the referring employee's motives nor make it look like your organization is desperate and willing to settle for just about anybody.
Wednesday, September 6, 2017
NC Cracking Down on 1099 Workers
Last month, North Carolina governor Roy Cooper signed legislation that creates an office within the North Carolina Industrial Commission to investigate companies who might be misclassifying employees as contractors and to discourage the practice.
This legislation doesn't change the rules regarding how to go about evaluating whether your workers are legitimate contractors or are really employees that you've misclassified as contractors. What's different is that a separate office is now funded with the sole purpose of ferreting-out those the government considers to be abusers of this practice.
Some of my workers prefer to be paid by 1099. Why does the state care?
It's all about the money! When you pay your employees on a Friday, you immediately send a check to the government for income taxes withheld and other obligations like social security and unemployment tax. An employee who makes $10 per hour may gross $400, but they actually take home less because you withheld taxes. When you pay your 1099 worker the same $400, there is a contractual obligation, or at least an implicit understanding, that the 1099 worker will file his or her own taxes. But even if they do file quarterly, the government would prefer to have its money every pay day. The reality is, most laborers paid via 1099 file at year-end, at best. Many never file at all.
I save a lot of money by paying workers via 1099 rather than W-2.
While employers who either mistakenly or intentionally pay workers by 1099 do gain some short-term cost advantage over their compliant competitors, it is generally not as much as they think. For instance, the company's workers comp carrier will often roll those 1099 workers for whom the company can't produce a workers comp insurance certificate right into the company's premium during their annual or semi-annual audit. They've paid out the employee-paid portion of the income taxes to the worker in the form of gross wages, so there's no savings there. They have saved on some of the matching taxes like FICA, SUTA and FUTA, as well the company-paid portion of employee benefits the worker might have been eligible for. But the potential costs associated with being found to be out of compliance are quite high - steep fines, back taxes (even if they worker paid them), and jail time in extreme cases. Seems like a bad risk-reward scenario to me.
What should I do?
Make sure any legitimate subcontractors you use to help during periods of peak demand have an executed subcontract agreement with your company and you have their certificates of insurance on file. Note: many one-person operators will tell you the state doesn't require workers comp on business owners, but if that "business owner" is in the field performing work on your behalf and your work comp carrier sees them as a risk, you're perfectly in your rights to say, the state might not require it but we do...
Second, identify any workers that don't really meet the IRS definition of a contractor and either find a temp agency partner to run them through or hire them as employees.
If you need assistance determining who meets the definition and who doesn't, contact The Davidson Group and we'll be happy to consult with you.
This legislation doesn't change the rules regarding how to go about evaluating whether your workers are legitimate contractors or are really employees that you've misclassified as contractors. What's different is that a separate office is now funded with the sole purpose of ferreting-out those the government considers to be abusers of this practice.
Some of my workers prefer to be paid by 1099. Why does the state care?
It's all about the money! When you pay your employees on a Friday, you immediately send a check to the government for income taxes withheld and other obligations like social security and unemployment tax. An employee who makes $10 per hour may gross $400, but they actually take home less because you withheld taxes. When you pay your 1099 worker the same $400, there is a contractual obligation, or at least an implicit understanding, that the 1099 worker will file his or her own taxes. But even if they do file quarterly, the government would prefer to have its money every pay day. The reality is, most laborers paid via 1099 file at year-end, at best. Many never file at all.
I save a lot of money by paying workers via 1099 rather than W-2.
While employers who either mistakenly or intentionally pay workers by 1099 do gain some short-term cost advantage over their compliant competitors, it is generally not as much as they think. For instance, the company's workers comp carrier will often roll those 1099 workers for whom the company can't produce a workers comp insurance certificate right into the company's premium during their annual or semi-annual audit. They've paid out the employee-paid portion of the income taxes to the worker in the form of gross wages, so there's no savings there. They have saved on some of the matching taxes like FICA, SUTA and FUTA, as well the company-paid portion of employee benefits the worker might have been eligible for. But the potential costs associated with being found to be out of compliance are quite high - steep fines, back taxes (even if they worker paid them), and jail time in extreme cases. Seems like a bad risk-reward scenario to me.
What should I do?
Make sure any legitimate subcontractors you use to help during periods of peak demand have an executed subcontract agreement with your company and you have their certificates of insurance on file. Note: many one-person operators will tell you the state doesn't require workers comp on business owners, but if that "business owner" is in the field performing work on your behalf and your work comp carrier sees them as a risk, you're perfectly in your rights to say, the state might not require it but we do...
Second, identify any workers that don't really meet the IRS definition of a contractor and either find a temp agency partner to run them through or hire them as employees.
If you need assistance determining who meets the definition and who doesn't, contact The Davidson Group and we'll be happy to consult with you.
Wednesday, August 9, 2017
Update on the Overtime Law
Remember the new overtime regulations that were supposed to take effect on Dec 1, 2016? Remember all the headaches you went through last Fall trying to figure out the best way to handle those exempt employees who made less than the proposed new threshold? Remember how it all seemed to just go away but can't remember why and where things stand? Here's a reminder of what happened and an update on where things are today:
Just before Thanksgiving a Federal Judge in Texas issued an injunction to pause the new rules from going into effect on Dec. 1. In one of its last acts under the Obama administration, The Department of Labor appealed that injunction. The DOL, now under the new Trump administration, dragged its feet on that appeal while waiting to get the new Secretary of Labor confirmed and new top administrators in place. Finally, on June 30, the DOL officially dropped the appeal, as expected. So this means the changes are dead, right?
Not so fast! The DOL also submitted a formal Request for Information to another agency in late June signaling that the new administration and Secretary Acosta might still be considering changes. While no one expects the new salary test thresholds to be as high as the $47,476 proposed by the Obama team, even many conservatives agree that the current threshold of $23,660 is too low.
Duties test? To be compliant with the Fair Labor Standards Act, employers must consider both the salary test and the duties test in determining whether an employee is eligible to be classified as exempt (salaried). All the hoopla in 2016 was related to proposed changes in the salary test - but no changes were proposed for the duties test. The salary test has always been the easy part of the FLSA to understand and be in compliance with. The duties tests have always been where the gray areas are and where confusion lies. The Society of Human Resource Management (SHRM) and other lobbying groups have repeatedly asked the Department of Labor to review the duties tests.
Hopefully this Request for Information is the beginning of a process that will lead to a meaningful review of both the salary test AND the duties test this time around! Stay tuned to this blog for updates as they happen.
In the meantime, just because some of your employees meet the old salary test doesn't mean that a wage and hour division auditor would agree that they are exempt. We always recommend reviewing the duties test requirements that apply to each of your exempt positions to ensure that your exempt employee meets both standards.
Just before Thanksgiving a Federal Judge in Texas issued an injunction to pause the new rules from going into effect on Dec. 1. In one of its last acts under the Obama administration, The Department of Labor appealed that injunction. The DOL, now under the new Trump administration, dragged its feet on that appeal while waiting to get the new Secretary of Labor confirmed and new top administrators in place. Finally, on June 30, the DOL officially dropped the appeal, as expected. So this means the changes are dead, right?
Not so fast! The DOL also submitted a formal Request for Information to another agency in late June signaling that the new administration and Secretary Acosta might still be considering changes. While no one expects the new salary test thresholds to be as high as the $47,476 proposed by the Obama team, even many conservatives agree that the current threshold of $23,660 is too low.
Duties test? To be compliant with the Fair Labor Standards Act, employers must consider both the salary test and the duties test in determining whether an employee is eligible to be classified as exempt (salaried). All the hoopla in 2016 was related to proposed changes in the salary test - but no changes were proposed for the duties test. The salary test has always been the easy part of the FLSA to understand and be in compliance with. The duties tests have always been where the gray areas are and where confusion lies. The Society of Human Resource Management (SHRM) and other lobbying groups have repeatedly asked the Department of Labor to review the duties tests.
Hopefully this Request for Information is the beginning of a process that will lead to a meaningful review of both the salary test AND the duties test this time around! Stay tuned to this blog for updates as they happen.
In the meantime, just because some of your employees meet the old salary test doesn't mean that a wage and hour division auditor would agree that they are exempt. We always recommend reviewing the duties test requirements that apply to each of your exempt positions to ensure that your exempt employee meets both standards.
Workers Comp Landmines
One of the more risk-filled areas associated with having employees is Workers Compensation insurance and the issues that surround it. Here are a few thoughts:
1. Make Sure You Have It (if required) - in general, companies with three or more employees (part-time or full-time) are required to carry workers comp insurance. Discuss your specific situation with a licensed insurance professional as there are some exceptions. Penalties for not having it when it's required can be severe. And if you utilize 1099 workers, an injury by one of them can prompt a review of your practices and subject you to even more fines and penalties.
2. Make Sure You Report Quickly and Accurately - Bob sprains his ankle on the job. Bob says he's fine - he'll go home and put some ice on it. Bob shows up for work the next day, still limping slightly, but powers through. The company doesn't bother to report the incident to their work comp carrier because there are no medical expenses and Bob hasn't missed any time from work. Two months later, Bob's still limping. He finally goes to his doctor and discovers he has a stress fracture which will require surgery and he will be out of work for 6 weeks. Now the work comp carrier is wondering why the company is reporting an injury that happened two months ago and questioning whether the stress fracture is related to the original injury or something that may have happened since the original sprain. The owner spends a lot of time wrestling with his carrier and his broker to get the claim approved - time that he could have spent doing something productive for the business.
Had the company had Bob's injury evaluated at the time it occurred, there would be no question of liability, but the delay has now complicated the claim and, very likely, made the claim much more expensive than it would have been.
3. Make Sure You Don't Retaliate (or even appear to) - Bob is now out of work and Mike is covering his workload. Mike seems to be getting the work done much faster than Bob did and Mike has discovered several errors that Bob made in the weeks prior to his leave of absence. The business owner has decided he really doesn't need Bob anymore because Mike is doing so well. When Bob is released to return to work, the owner tells him that he's no longer needed. Bob sues for retaliation and ultimately wins a large settlement.
The owner is miffed because he thought working in an at-will state allowed him to let Bob go for any reason or no reason. Unfortunately for the owner, his state (as most states do) has legal protections for employees against various forms of retaliation that trump at-will employment statutes. In NC it's the Retaliation Employment Discrimination Act. So the owner tries to shift his argument that the termination was justified on business grounds, but Bob's lawyer has an easy time with it - Bob worked there for several years and his performance reviews were excellent and he was never written up. He got hurt, which cost the company money, so they fired Bob to punish him. Any reasonable person would agree that Bob's termination was in retaliation for his injury and all that stuff about Mike doing better is just a pretext for getting back at Bob. Slam dunk!
The owner now has to file a claim with his insurance policy to cover the settlement, driving up the cost of that insurance at the same time his work comp premiums jump up - not to mention the legal fees he paid to defend his losing position!
Employee injuries and work comp exposure is one of the riskier areas that owners must manage. Unfortunately, owners sometimes outsmart themselves by making mistakes like the ones I identified above and they end up risking dollars in an effort to save nickels.
1. Make Sure You Have It (if required) - in general, companies with three or more employees (part-time or full-time) are required to carry workers comp insurance. Discuss your specific situation with a licensed insurance professional as there are some exceptions. Penalties for not having it when it's required can be severe. And if you utilize 1099 workers, an injury by one of them can prompt a review of your practices and subject you to even more fines and penalties.
2. Make Sure You Report Quickly and Accurately - Bob sprains his ankle on the job. Bob says he's fine - he'll go home and put some ice on it. Bob shows up for work the next day, still limping slightly, but powers through. The company doesn't bother to report the incident to their work comp carrier because there are no medical expenses and Bob hasn't missed any time from work. Two months later, Bob's still limping. He finally goes to his doctor and discovers he has a stress fracture which will require surgery and he will be out of work for 6 weeks. Now the work comp carrier is wondering why the company is reporting an injury that happened two months ago and questioning whether the stress fracture is related to the original injury or something that may have happened since the original sprain. The owner spends a lot of time wrestling with his carrier and his broker to get the claim approved - time that he could have spent doing something productive for the business.
Had the company had Bob's injury evaluated at the time it occurred, there would be no question of liability, but the delay has now complicated the claim and, very likely, made the claim much more expensive than it would have been.
3. Make Sure You Don't Retaliate (or even appear to) - Bob is now out of work and Mike is covering his workload. Mike seems to be getting the work done much faster than Bob did and Mike has discovered several errors that Bob made in the weeks prior to his leave of absence. The business owner has decided he really doesn't need Bob anymore because Mike is doing so well. When Bob is released to return to work, the owner tells him that he's no longer needed. Bob sues for retaliation and ultimately wins a large settlement.
The owner is miffed because he thought working in an at-will state allowed him to let Bob go for any reason or no reason. Unfortunately for the owner, his state (as most states do) has legal protections for employees against various forms of retaliation that trump at-will employment statutes. In NC it's the Retaliation Employment Discrimination Act. So the owner tries to shift his argument that the termination was justified on business grounds, but Bob's lawyer has an easy time with it - Bob worked there for several years and his performance reviews were excellent and he was never written up. He got hurt, which cost the company money, so they fired Bob to punish him. Any reasonable person would agree that Bob's termination was in retaliation for his injury and all that stuff about Mike doing better is just a pretext for getting back at Bob. Slam dunk!
The owner now has to file a claim with his insurance policy to cover the settlement, driving up the cost of that insurance at the same time his work comp premiums jump up - not to mention the legal fees he paid to defend his losing position!
Employee injuries and work comp exposure is one of the riskier areas that owners must manage. Unfortunately, owners sometimes outsmart themselves by making mistakes like the ones I identified above and they end up risking dollars in an effort to save nickels.
Sunday, July 9, 2017
A Practical Approach to Documentation
Bob was late for work again today. It's only a few minutes, but I'm afraid if I don't say something, it'll be a few more minutes tomorrow and a few more the day after that. When do I write him up?
Front line managers face these dilemmas all the time. On the one hand, they know that bad behavior that is not condemned is condoned. On the other hand, they know that if they write people up for every minor infraction, they'll spend an inordinate amount of time processing and documenting write-ups. And the employee being written-up will likely retreat into some deeper level of disengagement - the last thing you want from an employee who is basically a solid contributor with a few flaws.
Some managers take the cautious route and document everything, to the detriment of employee engagement. On the other extreme are managers who don't document anything, then terminate their "Bobs" when they've reached a breaking point. Unfortunately these managers have nothing to use in the defense of an unemployment charge, or worse, an EEOC charge.
Here's a few tips:
1. Distinguish between a true policy violation and a manager pet peeve. Using the "Bob is late" example, the manager needs to ask, is being on-time a basic job requirement for Bob's position? For many roles, being on-time is essential. If the phones start ringing at 8:00 and Bob's the receptionist or a CSR, he needs to be at his station at 8:00 or someone else is forced to do his job. But nit-picking start and stop times with an exempt employee whose immediate presence or absence at 8:00 a.m. doesn't really impact the team or their ability to produce their assigned workload can actually be counter-productive.
2. Start with a conversation. For most relatively minor but annoying infractions where the employee is drifting from standard expectations, simply having a brief conversation with the employee may be enough to get your Bob back on the right path. But be sure to make a note to yourself that you held the conversation with Bob on this day, so that, if necessary, you can...
3. Cleverly get your verbal warning into the record. One way to do that is with a follow-up email. Sometimes the email can even be phrased positively: "Bob, I was pretty direct with you yesterday when we spoke about your struggles to get to work on time, but I want you to know that if you can get that issue under control, there's no reason why you can't have a prosperous career here. You have the skills necessary to be successful." The second way is to let the conversation suffice until the behavior appears again. Let's say two weeks after the conversation Bob is late again. The manager moves to a more formal write-up and includes language like, "On July 11 we had a conversation about your lateness to work an how it affects the team. Today you were late again..." Now, with Bob's signature, you have both the verbal warning and the written warning on the record, but only shoved one piece of paper in front of Bob to sign and it wasn't on his first offense.
Progressive Discipline
The larger the organization, the more it benefits from a formal, defined, progressive discipline process. But most of my clients are small or mid-sized and reside in right-to-work-states, so I don't recommend a formal process for them. I want my clients to legally be able to rid themselves of an employee who is bad for their organization without violating their own policies. If your progressive discipline policy is too defined, bad employees can dance around the edges for months or even years without ever crossing the final line. The company can become a victim of its own policy.
With major infractions like violence, threats of violence, sexual/racial/ethnic harassment, theft, fraud, etc., it's certainly not necessary to go through any progressive process (just make sure your handbook is clear about that), but for the types of behavioral or performance issues that tend to build frustration from management over time, you need some type of evidence that you've made a good faith effort to clarify your expectations for Bob's performance and that Bob has acknowledged that you've done so. So starting with a conversation or two, moving to a counseling form that is signed by Bob that incorporates the prior verbal conversations into the record can do that nicely. Make sure the counseling form clearly defines what policy or procedure Bob failed to follow and what your expectations are for Bob going forward.
Then, when you're finally fed-up with Bob, you have a nice paper trail to show an unemployment referee demonstrating what a patient and fair employer you've been. You might even have a shot at winning those difficult to win unemployment charges. But don't wait until you're fed-up with Bob before you start the documentation trail.
Front line managers face these dilemmas all the time. On the one hand, they know that bad behavior that is not condemned is condoned. On the other hand, they know that if they write people up for every minor infraction, they'll spend an inordinate amount of time processing and documenting write-ups. And the employee being written-up will likely retreat into some deeper level of disengagement - the last thing you want from an employee who is basically a solid contributor with a few flaws.
Some managers take the cautious route and document everything, to the detriment of employee engagement. On the other extreme are managers who don't document anything, then terminate their "Bobs" when they've reached a breaking point. Unfortunately these managers have nothing to use in the defense of an unemployment charge, or worse, an EEOC charge.
Here's a few tips:
1. Distinguish between a true policy violation and a manager pet peeve. Using the "Bob is late" example, the manager needs to ask, is being on-time a basic job requirement for Bob's position? For many roles, being on-time is essential. If the phones start ringing at 8:00 and Bob's the receptionist or a CSR, he needs to be at his station at 8:00 or someone else is forced to do his job. But nit-picking start and stop times with an exempt employee whose immediate presence or absence at 8:00 a.m. doesn't really impact the team or their ability to produce their assigned workload can actually be counter-productive.
2. Start with a conversation. For most relatively minor but annoying infractions where the employee is drifting from standard expectations, simply having a brief conversation with the employee may be enough to get your Bob back on the right path. But be sure to make a note to yourself that you held the conversation with Bob on this day, so that, if necessary, you can...
3. Cleverly get your verbal warning into the record. One way to do that is with a follow-up email. Sometimes the email can even be phrased positively: "Bob, I was pretty direct with you yesterday when we spoke about your struggles to get to work on time, but I want you to know that if you can get that issue under control, there's no reason why you can't have a prosperous career here. You have the skills necessary to be successful." The second way is to let the conversation suffice until the behavior appears again. Let's say two weeks after the conversation Bob is late again. The manager moves to a more formal write-up and includes language like, "On July 11 we had a conversation about your lateness to work an how it affects the team. Today you were late again..." Now, with Bob's signature, you have both the verbal warning and the written warning on the record, but only shoved one piece of paper in front of Bob to sign and it wasn't on his first offense.
Progressive Discipline
The larger the organization, the more it benefits from a formal, defined, progressive discipline process. But most of my clients are small or mid-sized and reside in right-to-work-states, so I don't recommend a formal process for them. I want my clients to legally be able to rid themselves of an employee who is bad for their organization without violating their own policies. If your progressive discipline policy is too defined, bad employees can dance around the edges for months or even years without ever crossing the final line. The company can become a victim of its own policy.
With major infractions like violence, threats of violence, sexual/racial/ethnic harassment, theft, fraud, etc., it's certainly not necessary to go through any progressive process (just make sure your handbook is clear about that), but for the types of behavioral or performance issues that tend to build frustration from management over time, you need some type of evidence that you've made a good faith effort to clarify your expectations for Bob's performance and that Bob has acknowledged that you've done so. So starting with a conversation or two, moving to a counseling form that is signed by Bob that incorporates the prior verbal conversations into the record can do that nicely. Make sure the counseling form clearly defines what policy or procedure Bob failed to follow and what your expectations are for Bob going forward.
Then, when you're finally fed-up with Bob, you have a nice paper trail to show an unemployment referee demonstrating what a patient and fair employer you've been. You might even have a shot at winning those difficult to win unemployment charges. But don't wait until you're fed-up with Bob before you start the documentation trail.
Is Being a Team Player Important?
We often use the term "team player" to describe an employee who gets along with others, works well on team projects, and/or is willing to contribute discretionary effort toward the organization's goals. It's important for every organization to recognize the true importance of team skills as a success factor and a selection criteria for job candidates. Here's two examples to demonstrate the subtle difference:
Jane is a commissioned outside sales rep with a defined territory. She's a hunter and spends most of her time seeking out new sales opportunities as opposed to taking orders from existing clients. She has the technical knowledge to make the sale on her own without the assistance of technical support staff and she's not dependent on marketing or back office people to prepare proposal documents or support the sales process. When she makes the sale, she turns the order over to operations personnel and moves on to the next prospect.
Sally is a sales/marketing rep and earns a straight salary. Her primary job is to get appointments with decision makers in order to bring in a technical expert to wow the client with the company's capabilities. After the sale is made, Sally works with a team of people to pull together the solution for the prospect and she remains the primary point of contact for both implementation and customer questions or concerns going forward. She is also responsible for identifying potential future sales with that same client.
If either Jane or Sally should leave their respective organizations, which company should be more concerned with whether or not potential replacements are "team players." Obviously Sally's role requires much more interaction with co-workers and the successful candidate to replace her needs to be someone who plays well in the sandbox with others. In reality, Jane could be perceived as difficult to work with and uncooperative from the perspective of her co-workers and still be a rock-star when it comes to her core job duties - making rain! Over-weighting team skills during the selection process for Jane's replacement could result in overlooking the candidate who might have delivered the strongest results.
You can apply the same logic to multiple roles in your organization - how important is it that this individual be able to work well with other people? If the role is really designed for an individual contributor, someone who sits in a back office and cranks out work without need to interact with others, the organization should look for someone who scores high for traits such as Commanding, Resourceful and Intentional. If the role is really designed for someone whose work frequently interacts with other team members, the organization should look for someone who scores high for traits like Collaborative, Selfless and Harmonious.
How do you identify those traits during the selection process? A) You ask behavioral interview questions targeted at those motivators and B) you give them a pre-employment assessment that measures those internal motivators. Don't currently use a motivators assessment? Contact me and I'll show you a great one that will help your organization make better hiring decisions.
Jane is a commissioned outside sales rep with a defined territory. She's a hunter and spends most of her time seeking out new sales opportunities as opposed to taking orders from existing clients. She has the technical knowledge to make the sale on her own without the assistance of technical support staff and she's not dependent on marketing or back office people to prepare proposal documents or support the sales process. When she makes the sale, she turns the order over to operations personnel and moves on to the next prospect.
Sally is a sales/marketing rep and earns a straight salary. Her primary job is to get appointments with decision makers in order to bring in a technical expert to wow the client with the company's capabilities. After the sale is made, Sally works with a team of people to pull together the solution for the prospect and she remains the primary point of contact for both implementation and customer questions or concerns going forward. She is also responsible for identifying potential future sales with that same client.
If either Jane or Sally should leave their respective organizations, which company should be more concerned with whether or not potential replacements are "team players." Obviously Sally's role requires much more interaction with co-workers and the successful candidate to replace her needs to be someone who plays well in the sandbox with others. In reality, Jane could be perceived as difficult to work with and uncooperative from the perspective of her co-workers and still be a rock-star when it comes to her core job duties - making rain! Over-weighting team skills during the selection process for Jane's replacement could result in overlooking the candidate who might have delivered the strongest results.
You can apply the same logic to multiple roles in your organization - how important is it that this individual be able to work well with other people? If the role is really designed for an individual contributor, someone who sits in a back office and cranks out work without need to interact with others, the organization should look for someone who scores high for traits such as Commanding, Resourceful and Intentional. If the role is really designed for someone whose work frequently interacts with other team members, the organization should look for someone who scores high for traits like Collaborative, Selfless and Harmonious.
How do you identify those traits during the selection process? A) You ask behavioral interview questions targeted at those motivators and B) you give them a pre-employment assessment that measures those internal motivators. Don't currently use a motivators assessment? Contact me and I'll show you a great one that will help your organization make better hiring decisions.
Sunday, June 18, 2017
Handling Final Pay
Many owners or managers get angry when an employee unexpectedly quits or when they are forced to fire an employee for misconduct, so they take it out on the employee by deducting as much as they can from that final paycheck. This behavior is rife with risk, so keep the following in mind before you start tallying those deductions:
First, former employees are alumni of your organization, for good or bad, so sometimes it may serve you better to let little things go and take the high road. This could reduce the chances they'll do damage to your employment brand by telling all their friends how horribly they were treated while working at your organization; and might minimize the chances that they'll file a complaint with the Department of Labor if you get too aggressive.
Second, make sure you're on solid footing when making those deductions:
1. Don't hold their check! Some employers will hold the employee's final paycheck until all their "stuff" is returned. In most states (including NC, SC and VA) employers are required to pay the employee for time-worked by the next regular pay day. But know the laws in your state, as some require final pay as quickly as immediately for terminated employees, and the rules may be different for employees who voluntarily leave versus those who are terminated or laid-off). While you can't hold their entire paycheck, it is legal to withhold any preauthorized amounts from that final check so long as they don't run afoul of certain rules.
2. Have a signed document on file allowing the deductions. The employee must authorize deductions for damaged or lost equipment and uniforms, so make sure you have a signed document on file that gives you permission to take those deductions. It is best to specify the deduction amounts in the original document that the employee signed (Cell phone deduction = $150, for example). If there is no document on-file authorizing the deductions, you can't just arbitrarily hold $50 out of their check because their truck was returned dirty.
3. Understand who benefits from the deduction. The state of NC, for example, differentiates the rules for deductions that benefit the employee (savings plans, parking fees, employee loans, uniforms that are not required, etc.) and deductions for the benefit of the employer (lost or damaged equipment, keys, uniforms which are required, etc.).
4. Watch for minimum wage and overtime. It is not permissible to take deductions to the employer's benefit that drop the employee's final pay down below minimum wage for actual time worked. Plus, you can't deduct anything to the employer's benefit from overtime wages. This makes it difficult to recover virtually any costs from minimum-wage workers, even with signed authorization forms.
5. Be reasonable. If you issue an employee a new laptop in 2017 and they quit in 2020, deducting the full purchase price of that laptop (if not returned) is not going to seem reasonable to the investigator. The state of NC allows the deduction authorization to be non-specific in the case of depreciable assets like laptops, but the company must notify the employee, in-writing, the calculated value of the deduction per their authorization. (Here's a link to a document that spells that out in more detail).
6. Vacation or PTO. Your employee who just quit had taken 5 vacation days this year but only accrued 3 per your policy, putting them 2 days in arrears. Those 2 days are considered pre-payment of wages in NC and not a deduction from wages. Therefore those two days of vacation or PTO can be adjusted on their final paycheck without regard to the minimum wage or pre-authorization limitations (at least in NC).
Final thoughts: if you are a small to mid-sized employer who makes his or her living leveraging the efforts of lower paid hourly workers, you're going to experience a certain amount of lost and damaged equipment. Some of the time you'll be able to recover the costs of an employee's negligence, but other times you won't. But don't make the mistake of going overboard in looking for ways to decrease that departing employee's final pay. When that $25 deduction for a lost tool or uniform shirt ends up costing you hundreds or even thousands because a regulator determined you were out of compliance in the way you handled it, you've really only outsmarted yourself.
First, former employees are alumni of your organization, for good or bad, so sometimes it may serve you better to let little things go and take the high road. This could reduce the chances they'll do damage to your employment brand by telling all their friends how horribly they were treated while working at your organization; and might minimize the chances that they'll file a complaint with the Department of Labor if you get too aggressive.
Second, make sure you're on solid footing when making those deductions:
1. Don't hold their check! Some employers will hold the employee's final paycheck until all their "stuff" is returned. In most states (including NC, SC and VA) employers are required to pay the employee for time-worked by the next regular pay day. But know the laws in your state, as some require final pay as quickly as immediately for terminated employees, and the rules may be different for employees who voluntarily leave versus those who are terminated or laid-off). While you can't hold their entire paycheck, it is legal to withhold any preauthorized amounts from that final check so long as they don't run afoul of certain rules.
2. Have a signed document on file allowing the deductions. The employee must authorize deductions for damaged or lost equipment and uniforms, so make sure you have a signed document on file that gives you permission to take those deductions. It is best to specify the deduction amounts in the original document that the employee signed (Cell phone deduction = $150, for example). If there is no document on-file authorizing the deductions, you can't just arbitrarily hold $50 out of their check because their truck was returned dirty.
3. Understand who benefits from the deduction. The state of NC, for example, differentiates the rules for deductions that benefit the employee (savings plans, parking fees, employee loans, uniforms that are not required, etc.) and deductions for the benefit of the employer (lost or damaged equipment, keys, uniforms which are required, etc.).
4. Watch for minimum wage and overtime. It is not permissible to take deductions to the employer's benefit that drop the employee's final pay down below minimum wage for actual time worked. Plus, you can't deduct anything to the employer's benefit from overtime wages. This makes it difficult to recover virtually any costs from minimum-wage workers, even with signed authorization forms.
5. Be reasonable. If you issue an employee a new laptop in 2017 and they quit in 2020, deducting the full purchase price of that laptop (if not returned) is not going to seem reasonable to the investigator. The state of NC allows the deduction authorization to be non-specific in the case of depreciable assets like laptops, but the company must notify the employee, in-writing, the calculated value of the deduction per their authorization. (Here's a link to a document that spells that out in more detail).
6. Vacation or PTO. Your employee who just quit had taken 5 vacation days this year but only accrued 3 per your policy, putting them 2 days in arrears. Those 2 days are considered pre-payment of wages in NC and not a deduction from wages. Therefore those two days of vacation or PTO can be adjusted on their final paycheck without regard to the minimum wage or pre-authorization limitations (at least in NC).
Final thoughts: if you are a small to mid-sized employer who makes his or her living leveraging the efforts of lower paid hourly workers, you're going to experience a certain amount of lost and damaged equipment. Some of the time you'll be able to recover the costs of an employee's negligence, but other times you won't. But don't make the mistake of going overboard in looking for ways to decrease that departing employee's final pay. When that $25 deduction for a lost tool or uniform shirt ends up costing you hundreds or even thousands because a regulator determined you were out of compliance in the way you handled it, you've really only outsmarted yourself.
Essentials of a Strong Culture
Organizational culture is defined by former MIT professor Ed Schein as the set of shared, taken-for-granted implicit assumptions that a group holds that determines how it perceives, thinks about and reacts to its environment. In other words, it determines how we dress, speak, act, interact and perform our jobs. It is often the glue that holds employees to the mission and the goals of the organization.
Peter Drucker has been attributed with saying, "culture eats strategy for breakfast," but it was Mark Fields, CEO at Ford who made the slogan popular in 2006.
There are 3 levels of organizational culture:
1. Visible Artifacts - these are the acronyms and vocabulary your organization uses, the uniforms or manner of dress that is allowed/required, your org chart, the layout and vibe of the office, the myths and stories about the organization that are repeated formally and informally, and observable rituals and ceremonies, both formal and informal.
2. Espoused vs. Enacted Values - these are the values we say are important. Words and phrases like integrity, trust, do it right the first time, always good ships, etc. Unfortunately, sometimes the espoused values conflict with enacted values or actual behavior. It's fine to have integrity on a plaque or on the first page of the employee handbook, but if the owner or a manager frequently acts in observable ways that conflict with that (such as frequently lying to customers, suppliers or employees), then the culture is going to be defined by the enacted values, not the espoused values. Enacted values are essentially defined by what managers choose to reward, condone and condemn.
3. Basic Underlying Assumptions - these are values that are taken for granted over time. These are more deeply held beliefs that employees have about their company and are the most resistant to change.
Is your culture helping you achieve your goals or is it hindering it? Can you define your culture and do your employees agree with your assumptions about what your culture really is? Is the culture that got you where you are the same culture that's going to get you where you want to go?
I once worked with a company that reached a stage where it determined it needed to significantly change its culture to achieve its next growth phase. It had grown from 4 employees to 400 as basically an adhocracy (adaptable, creative, agile, decentralized, externally focused and flexible). Many of its managers were quite entrepreneurial and had been hired because they were. But executives felt that in order to grow the company to the next level it needed to become more of a hierarchy (internally focused with more formalized and rigid systems and controls). This culture shift resulted in more than a little turbulence over several years and cost the company quite a few of its long-term, loyal employees, but the shift did position the company to achieve remarkable growth and reach the goals of the owners, which ultimately included selling the company at the right time.
There's a lot more involved in culture change than buying some tee shirts and adopting a new slogan. So if you decide you want to investigate your organization's culture, how it is helping and/or hurting, contact a professional who understands organizational behavior and how to change not only artifacts, but systematically resetting those basic underlying assumptions.
Peter Drucker has been attributed with saying, "culture eats strategy for breakfast," but it was Mark Fields, CEO at Ford who made the slogan popular in 2006.
There are 3 levels of organizational culture:
1. Visible Artifacts - these are the acronyms and vocabulary your organization uses, the uniforms or manner of dress that is allowed/required, your org chart, the layout and vibe of the office, the myths and stories about the organization that are repeated formally and informally, and observable rituals and ceremonies, both formal and informal.
2. Espoused vs. Enacted Values - these are the values we say are important. Words and phrases like integrity, trust, do it right the first time, always good ships, etc. Unfortunately, sometimes the espoused values conflict with enacted values or actual behavior. It's fine to have integrity on a plaque or on the first page of the employee handbook, but if the owner or a manager frequently acts in observable ways that conflict with that (such as frequently lying to customers, suppliers or employees), then the culture is going to be defined by the enacted values, not the espoused values. Enacted values are essentially defined by what managers choose to reward, condone and condemn.
3. Basic Underlying Assumptions - these are values that are taken for granted over time. These are more deeply held beliefs that employees have about their company and are the most resistant to change.
Is your culture helping you achieve your goals or is it hindering it? Can you define your culture and do your employees agree with your assumptions about what your culture really is? Is the culture that got you where you are the same culture that's going to get you where you want to go?
I once worked with a company that reached a stage where it determined it needed to significantly change its culture to achieve its next growth phase. It had grown from 4 employees to 400 as basically an adhocracy (adaptable, creative, agile, decentralized, externally focused and flexible). Many of its managers were quite entrepreneurial and had been hired because they were. But executives felt that in order to grow the company to the next level it needed to become more of a hierarchy (internally focused with more formalized and rigid systems and controls). This culture shift resulted in more than a little turbulence over several years and cost the company quite a few of its long-term, loyal employees, but the shift did position the company to achieve remarkable growth and reach the goals of the owners, which ultimately included selling the company at the right time.
There's a lot more involved in culture change than buying some tee shirts and adopting a new slogan. So if you decide you want to investigate your organization's culture, how it is helping and/or hurting, contact a professional who understands organizational behavior and how to change not only artifacts, but systematically resetting those basic underlying assumptions.
Thursday, May 4, 2017
Changes in Comp Time Rules Coming?
Jim is a technician with XYZ Corp. He's non-exempt (hourly) and worked 42 hours last week. Jim's supervisor has asked Jim if he'd like to take 3 hours off next Friday as comp time instead of being paid cash for his overtime last week. Is this OK? Does it matter if Jim would prefer the comp time to cash?
The answer to both questions as of today is "no." Only government workers are allowed to take comp time in lieu of overtime pay.
The Good News: The U.S. House of Representatives passed HR 1180, sponsored by Virginia Foxx of NC and dubbed The Working Families Flexibility Act, on May 2. This bill, if approved by the Senate, would allow private sector employers similar rights to those enjoyed by public sector folks to decide if they'd prefer cash or time off. The Society for Human Resource Management (SHRM) has been an advocate for this bill.
The Bad News #1: HR 1180 had zero support from Democrats in the House and none is expected from Senate Democrats either, who are anticipated to filibuster the bill. So its passage is iffy at this point.
The Bad News #2: If you are a private employer and you are granting comp time to your non-exempt employees who work overtime rather than paying them time plus 1/2, you are likely running afoul of the Fair Labor Standards Act. It doesn't matter whether it's being imposed by management or requested by the employee, either scenario is illegal.
This doesn't apply to shifting schedules around during the same workweek. If XYZ's official workweek is Sunday through Saturday and Jim worked 10 hours on Monday then 8 hours each on Tuesday, Wednesday and Thursday, then worked only 6 hours on Friday for a total of 40 for the week - that's fine (in most states other than California). But Jim is not allowed to work 10 hours on Monday, 8 hours each day from Tuesday through Friday and carry-over comp time earned this workweek into a future workweek, even if the comp time is calculated at time + 1/2.
And finally, avoid using the term "comp time" in emails or in formal policy language when referring to exempt workers. This can compromise those employees' exempt status in the eyes of the DOL and IRS. If you have an exempt employee who put in a lot of hours in week 1 and knocks off early on Friday of week 2 - don't call that comp time - they're simply exempt.
The answer to both questions as of today is "no." Only government workers are allowed to take comp time in lieu of overtime pay.
The Good News: The U.S. House of Representatives passed HR 1180, sponsored by Virginia Foxx of NC and dubbed The Working Families Flexibility Act, on May 2. This bill, if approved by the Senate, would allow private sector employers similar rights to those enjoyed by public sector folks to decide if they'd prefer cash or time off. The Society for Human Resource Management (SHRM) has been an advocate for this bill.
The Bad News #1: HR 1180 had zero support from Democrats in the House and none is expected from Senate Democrats either, who are anticipated to filibuster the bill. So its passage is iffy at this point.
The Bad News #2: If you are a private employer and you are granting comp time to your non-exempt employees who work overtime rather than paying them time plus 1/2, you are likely running afoul of the Fair Labor Standards Act. It doesn't matter whether it's being imposed by management or requested by the employee, either scenario is illegal.
This doesn't apply to shifting schedules around during the same workweek. If XYZ's official workweek is Sunday through Saturday and Jim worked 10 hours on Monday then 8 hours each on Tuesday, Wednesday and Thursday, then worked only 6 hours on Friday for a total of 40 for the week - that's fine (in most states other than California). But Jim is not allowed to work 10 hours on Monday, 8 hours each day from Tuesday through Friday and carry-over comp time earned this workweek into a future workweek, even if the comp time is calculated at time + 1/2.
And finally, avoid using the term "comp time" in emails or in formal policy language when referring to exempt workers. This can compromise those employees' exempt status in the eyes of the DOL and IRS. If you have an exempt employee who put in a lot of hours in week 1 and knocks off early on Friday of week 2 - don't call that comp time - they're simply exempt.
5 Dumb Things Managers Say
Being a manager is tough. Every employee is different and the same words coming out of your mouth can be motivating to one worker and demotivating to another. But here's a handful of things managers either say directly or indirectly through their actions that are always demotivating (and, I confess, I may have said or done these myself at one time or another):
1. "Customer is always right" A customer calls and accuses an employee of something heinous (theft, rudeness, etc.). Manager confronts the employee and starts ripping into him or her based on the call. Guilty by accusation. Unfortunately, sometimes when the manager gets around to conducting an investigation, it turns out the customer was mistaken (or had a hidden agenda). Managers should give their employee the benefit of the doubt. The employee will understand that you must follow-up on customer complaints, but they'll appreciate being treated as innocent until proven guilty - so ask about the situation, speak to all those who might be in the know about what happened, and listen before passing judgement. If the employee is guilty of poor communication, use the incident as a development opportunity. If they're guilty of theft, violence or threats of bodily harm - get them out of your organization. If the customer intentionally mislead you - fire the customer.
2. "I'm too busy" A retired banking exec once told me the best piece of feedback he received from his employees was that he tended to continue to hold his pen over his notepad when people came to his door, and they interpreted that posture to mean they were interrupting him from his important work and they needed to hurry up. Modern variations of this you're less important than other stuff I have going includes keeping your hands on your keyboard when someone stops to ask you a question, or peeking at your monitor or phone while one of your workers is speaking with you. If you are a manager, there is little that is more important than your team members, so when they come to see you, put your pen down, close your laptop, put your phone to the side and listen. If you do have a time-sensitive deadline, politely negotiate an alternative time for them to return when you can give them your full attention.
3. "...but..." Managers were promoted into management roles because they know how to add value to an organization. They leverage the work of others so that the team is greater than the sum of its parts. But this positive can become a negative when giving performance feedback or responding to employees when they offer suggestions or have ideas. Great idea, Bob, but have you considered... or Nice job on the Jones account, but you should have... Remember, everything after the "but" is generally demotivating. Learn to finish your statements with a period, not a comma and a but, except in those few situations where it is really warranted. You don't have to add value to everything!
4. "I don't give 5s" Early in my career I had the I don't give 5s manager. We had a review form where we were rated on a scale of 1-5, but my manager made it clear that no one was a 5. My thoughts are the same now as they were then: 6, 7, and 8 are unachievable scores because they're not on the form - if 5 is also not achievable, let's go to a 4 point scale!
First of all, if you're still rating employees' behaviors or attributes on a performance review form, you're performance management system is probably broken. My meaningful behavior and performance changes occurred when I was coached in the moment by someone I trusted, not in an annual meeting.
But that aside, if you're evaluating them against an unachievable standard, it's going to be tough to motivate. Can you imagine Bill Belichik (head coach of the Super Bowl champion Patriots) telling Tom Brady (the quarterback who engineered one of the great comeback wins in history) that he was giving him a 4 on his performance for that game because he threw an interception during the 1st half? Unfortunately, managers do that kind of stuff all the time.
5. "You'll gain valuable experience" The manager thinks he/she is being motivational - holding out a carrot. What the employee hears is, we want you to do extra work for no additional pay. Unfortunately, managers often forget about how the employee bailed them out once the work is done and the experience never translates into a reward. Make sure rewards are timely - if you ask someone to do extra work, make sure they get some kind of reinforcement for their discretionary effort soon after they gave it. The promise that their discretionary effort has not gone unnoticed may not be enough to ensure they continue to give it.
1. "Customer is always right" A customer calls and accuses an employee of something heinous (theft, rudeness, etc.). Manager confronts the employee and starts ripping into him or her based on the call. Guilty by accusation. Unfortunately, sometimes when the manager gets around to conducting an investigation, it turns out the customer was mistaken (or had a hidden agenda). Managers should give their employee the benefit of the doubt. The employee will understand that you must follow-up on customer complaints, but they'll appreciate being treated as innocent until proven guilty - so ask about the situation, speak to all those who might be in the know about what happened, and listen before passing judgement. If the employee is guilty of poor communication, use the incident as a development opportunity. If they're guilty of theft, violence or threats of bodily harm - get them out of your organization. If the customer intentionally mislead you - fire the customer.
2. "I'm too busy" A retired banking exec once told me the best piece of feedback he received from his employees was that he tended to continue to hold his pen over his notepad when people came to his door, and they interpreted that posture to mean they were interrupting him from his important work and they needed to hurry up. Modern variations of this you're less important than other stuff I have going includes keeping your hands on your keyboard when someone stops to ask you a question, or peeking at your monitor or phone while one of your workers is speaking with you. If you are a manager, there is little that is more important than your team members, so when they come to see you, put your pen down, close your laptop, put your phone to the side and listen. If you do have a time-sensitive deadline, politely negotiate an alternative time for them to return when you can give them your full attention.
3. "...but..." Managers were promoted into management roles because they know how to add value to an organization. They leverage the work of others so that the team is greater than the sum of its parts. But this positive can become a negative when giving performance feedback or responding to employees when they offer suggestions or have ideas. Great idea, Bob, but have you considered... or Nice job on the Jones account, but you should have... Remember, everything after the "but" is generally demotivating. Learn to finish your statements with a period, not a comma and a but, except in those few situations where it is really warranted. You don't have to add value to everything!
4. "I don't give 5s" Early in my career I had the I don't give 5s manager. We had a review form where we were rated on a scale of 1-5, but my manager made it clear that no one was a 5. My thoughts are the same now as they were then: 6, 7, and 8 are unachievable scores because they're not on the form - if 5 is also not achievable, let's go to a 4 point scale!
First of all, if you're still rating employees' behaviors or attributes on a performance review form, you're performance management system is probably broken. My meaningful behavior and performance changes occurred when I was coached in the moment by someone I trusted, not in an annual meeting.
But that aside, if you're evaluating them against an unachievable standard, it's going to be tough to motivate. Can you imagine Bill Belichik (head coach of the Super Bowl champion Patriots) telling Tom Brady (the quarterback who engineered one of the great comeback wins in history) that he was giving him a 4 on his performance for that game because he threw an interception during the 1st half? Unfortunately, managers do that kind of stuff all the time.
5. "You'll gain valuable experience" The manager thinks he/she is being motivational - holding out a carrot. What the employee hears is, we want you to do extra work for no additional pay. Unfortunately, managers often forget about how the employee bailed them out once the work is done and the experience never translates into a reward. Make sure rewards are timely - if you ask someone to do extra work, make sure they get some kind of reinforcement for their discretionary effort soon after they gave it. The promise that their discretionary effort has not gone unnoticed may not be enough to ensure they continue to give it.
Monday, April 10, 2017
Common HR Audit Fails
One of the pleasures of my job is conducting HR audits for small and mid-sized companies. No, I don't derive pleasure from saying, gotcha. I derive pleasure from helping small and mid-sized business owners have a realistic assessment of any employment risks they are facing and how their management practices stack up against best practices.
Most small business owners want to do things correctly. But it's difficult to create momentum for their business through sales and marketing, manage operations so they deliver on their promises, and keep track of things like labor laws, tax laws, and other government rules and regulations. The smart owners surround themselves with specialists who can help keep an eye on those things so that they can keep their eyes on their customers.
So, in doing these audits, I find many organizations make the same errors. Here's a few:
1. Exempt/Non-exempt - in the second half of last year everyone was scrambling to make sure they had a plan for the new overtime rules. Unfortunately for many, the procrastinators were the winners as a judge put a halt on the rules at the 11th hour. Furthermore, the election results cast doubt on the rules' future. However, the audits I performed during that time revealed that many employers were misclassifying employees based on the duties test (not the salary test) and many remain misclassified today. The courts put the new salary test on hold, but the duties tests still apply. Just because you're paying that employee more than $24k doesn't mean he or she is legally exempt.
2. Use of 1099 Contractor Status - I have many clients and receive 1099s from quite a few of them. I invoice those clients through a corporate entity that maintains its own insurance. No auditor from the departments of labor or revenue is going to question the legitimacy of those 1099s - I meet the standard. But that guy you have working for you 40 hours per week, driving your truck, wearing your uniform, using your tools and working when you tell him to...not so much. That same agency representative is going to have heartburn over that guy and it could turn out to be very expensive for you. And you're probably shifting a lot less risk than you think you are.
3. Forms I-9 and e-verify - I'm still surprised at how many small companies are not using e-verify. The penalties for hiring unauthorized workers or failing to properly document work authorization through an I-9 are significant (see here). E-verify is required for all employers in NC with 25+ employees (see FAQ here), and is required for all employers in SC, but is only required for certain government agencies and contractors in VA. However, even though it is not always required in VA, the system is free and is a useful supplement to form I-9 - I recommend that my VA clients use it voluntarily.
If you haven't had a fresh set of eyes on your HR compliance platform recently, contact The Davidson Group for a free consultation.
2. Use of 1099 Contractor Status - I have many clients and receive 1099s from quite a few of them. I invoice those clients through a corporate entity that maintains its own insurance. No auditor from the departments of labor or revenue is going to question the legitimacy of those 1099s - I meet the standard. But that guy you have working for you 40 hours per week, driving your truck, wearing your uniform, using your tools and working when you tell him to...not so much. That same agency representative is going to have heartburn over that guy and it could turn out to be very expensive for you. And you're probably shifting a lot less risk than you think you are.
3. Forms I-9 and e-verify - I'm still surprised at how many small companies are not using e-verify. The penalties for hiring unauthorized workers or failing to properly document work authorization through an I-9 are significant (see here). E-verify is required for all employers in NC with 25+ employees (see FAQ here), and is required for all employers in SC, but is only required for certain government agencies and contractors in VA. However, even though it is not always required in VA, the system is free and is a useful supplement to form I-9 - I recommend that my VA clients use it voluntarily.
If you haven't had a fresh set of eyes on your HR compliance platform recently, contact The Davidson Group for a free consultation.
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