Here are some suggestions for your HR priorities for 2017:
1. The Overtime Rule is on hold, but...
I did quite a few projects this year related to the proposed overtime rules that were supposed to take effect December 1. These changes were surprisingly put on hold at the 11th hour by a Federal judge in Texas, and their fate is uncertain due to the election results. But a common misconception I encountered with employers is the belief that as long as an employee meets the salary test, it is fine to treat that employee as exempt. What I found is that many of the jobs I surveyed were misclassified for failing to meet a duties test. The employers thought their risk was with the new higher salary threshold, but they were really at risk all along. So make sure your jobs are properly classified, even if the salary is over $24,000.
2. Switch to the new I-9 form
The USCIS has revised the I-9 form and employers are required to begin using it by January 22. The list of approved documents and the basic process haven't changed, they've just updated the form to make it a little easier to use.
3. Update Job Descriptions
This can seem like a mundane administrative task, but job descriptions are your first line of defense in any employment related conflict. An unemployment hearing? Send us the job description. A workers comp situation? Let's look at the job description. An EEOC charge? Send us the job description. A lawsuit? Your attorney is going to ask for the job description. Job duties change - make sure the job descriptions change with them.
4. Add or review your pre-employment assessments
If you currently use assessments as part of your interview and selection process, review them to make sure they are providing useful information toward making your hiring decisions. If you are not using assessments, that means you are probably depending on interviews alone, which is the least valid method for choosing new hires. Just saying...
5. Make on-boarding a priority
Most companies I speak with plan to add employees in 2017. Choosing the right people is critical, but getting them off to a great start is perhaps even more important. Too many companies hire good people, chunk 'em in the lake and tell 'em to start swimming. Invest in a solid plan for the first day, week, month and quarter, with plenty of feedback and plenty of support. You'll spend a lot less time recruiting if you get the on-boarding part right.
6. Evaluate your use of 1099 workers
There are legitimate and questionable uses of 1099 workers. Both the IRS and the DOL care about this issue, and the penalties for improperly designating workers as contractors when they should be employees are quite punitive (from heavy fines all the way to potential jail time). So if 1099 workers play a key role in your personnel strategy, you best make sure that you have all your ducks in a row in this area.
Thursday, December 8, 2016
Good Turnover, Bad Turnover
Employee turnover, the number of employees that leave your organization each year, is an underused metric that can tell us a lot about an organization. Many organizations don't even track it. Others simply shrug off the data. They rationalize that all turnover is the ex-employee's fault. However, top performing companies tend to track turnover by various categories (voluntary, involuntary, by department or manager, by age group, by ethnic group, etc.). And they make adjustments in their processes to ensure that what turnover they do experience is good turnover.
What do you mean, "good" turnover? Isn't all turnover bad? Not at all. Some turnover is good. A recent hire's performance starts to slip after about 6 months on the job. Management intervenes and gently tries to get the employee back on the right path, but the employee resists all efforts to rehabilitate and begins to have a negative impact on the team. The employee eventually quits or gets fired. The rest of the team thinks, finally! This is probably good turnover. An organization that holds onto poor performers without attempting to bring their performance up to standard hurts the morale of those who are delivering solid or even excellent performance. Which often leads to bad turnover.
Bad turnover is the turnover that's often dismissed by management. That's when a good worker gives her two week notice because she is frustrated that management is unwilling to address the poor performance of her coworkers. Or the employee who is struggling during his first 90 days, but no one is helping him master the skills or learn the ropes. He could have been a solid contributor if someone had just taken a little time to show him how to be successful. Finally, there's the employee who leaves your organization for a very small pay raise, indicating that his loyalty to your organization was pretty thin. Loyalty that you might have earned with some minor culture adjustments.
Here are some generalizations about turnover:
- Voluntary Turnover occurs when an employee quits on your company. If this number is high, it's generally a bad thing. People join companies but quit bosses. If your voluntary turnover is high, look at the soft skills of your supervisors and managers. That's not to say that all voluntary turnover is bad - some folks resign when they start being held accountable. But if your voluntary turnover rate is stubbornly high, it's likely linked to your management culture.
-Involuntary Turnover occurs when your company quits on an employee. If this number is high it means people are failing at your company at a high rate. Perhaps your organization needs a better training or on-boarding program? It can also mean that your performance standards (expectations) could be too high. Or, it can mean that your selection processes are ineffective and you're hiring people who aren't a good fit for the roles.
The important thing is to track your turnover by voluntary/involuntary at least. Then dissect it further if need be. And don't just blame the exes. Take a look at what the causes could be and try to build a culture where most turnover is good turnover.
What do you mean, "good" turnover? Isn't all turnover bad? Not at all. Some turnover is good. A recent hire's performance starts to slip after about 6 months on the job. Management intervenes and gently tries to get the employee back on the right path, but the employee resists all efforts to rehabilitate and begins to have a negative impact on the team. The employee eventually quits or gets fired. The rest of the team thinks, finally! This is probably good turnover. An organization that holds onto poor performers without attempting to bring their performance up to standard hurts the morale of those who are delivering solid or even excellent performance. Which often leads to bad turnover.
Bad turnover is the turnover that's often dismissed by management. That's when a good worker gives her two week notice because she is frustrated that management is unwilling to address the poor performance of her coworkers. Or the employee who is struggling during his first 90 days, but no one is helping him master the skills or learn the ropes. He could have been a solid contributor if someone had just taken a little time to show him how to be successful. Finally, there's the employee who leaves your organization for a very small pay raise, indicating that his loyalty to your organization was pretty thin. Loyalty that you might have earned with some minor culture adjustments.
Here are some generalizations about turnover:
- Voluntary Turnover occurs when an employee quits on your company. If this number is high, it's generally a bad thing. People join companies but quit bosses. If your voluntary turnover is high, look at the soft skills of your supervisors and managers. That's not to say that all voluntary turnover is bad - some folks resign when they start being held accountable. But if your voluntary turnover rate is stubbornly high, it's likely linked to your management culture.
-Involuntary Turnover occurs when your company quits on an employee. If this number is high it means people are failing at your company at a high rate. Perhaps your organization needs a better training or on-boarding program? It can also mean that your performance standards (expectations) could be too high. Or, it can mean that your selection processes are ineffective and you're hiring people who aren't a good fit for the roles.
The important thing is to track your turnover by voluntary/involuntary at least. Then dissect it further if need be. And don't just blame the exes. Take a look at what the causes could be and try to build a culture where most turnover is good turnover.
Sunday, November 13, 2016
New OSHA Reporting Procedure
If your organization has 10 or more employees and doesn't appear on the list of exempt industries, you are subject to OSHA's reporting rules. This includes maintaining an OSHA 300 log as well as posting an OSHA 300A form in a common area each year from February 1 through April 30.
OSHA has introduced some new rules that go into effect on January 1, 2017. OSHA believes that making injury data public will "nudge" employers to focus on safety and they believe these changes will help them gather more accurate data. Here are some of the highlights:
- employers with 250 employees or more will be required to submit the information on their 2016 OSHA 300A form electronically by July 1, 2017. This will expand to include their 300 and their 301 forms by July 1, 2018. In 2019 the deadline will move up to March 2.
- employers with 20 to 249 employees and fall in the official list of hazardous industries must also submit their 2016 OSHA 300A form electronically by July 1, 2017. They will also submit only their OSHA 300A form electronically in future years - by July 1, 2018 and beginning March 2 in subsequent years.
The website portal through which employers will submit their data is scheduled to go live in February 2017. Employers will reportedly have the option of entering data directly into a web form, uploading data from a csv file, or transferring data through an API interface (for those employers who are already using an automated record keeping platform).
OSHA has introduced some new rules that go into effect on January 1, 2017. OSHA believes that making injury data public will "nudge" employers to focus on safety and they believe these changes will help them gather more accurate data. Here are some of the highlights:
- employers with 250 employees or more will be required to submit the information on their 2016 OSHA 300A form electronically by July 1, 2017. This will expand to include their 300 and their 301 forms by July 1, 2018. In 2019 the deadline will move up to March 2.
- employers with 20 to 249 employees and fall in the official list of hazardous industries must also submit their 2016 OSHA 300A form electronically by July 1, 2017. They will also submit only their OSHA 300A form electronically in future years - by July 1, 2018 and beginning March 2 in subsequent years.
The website portal through which employers will submit their data is scheduled to go live in February 2017. Employers will reportedly have the option of entering data directly into a web form, uploading data from a csv file, or transferring data through an API interface (for those employers who are already using an automated record keeping platform).
Big Mistake with New OT Rules
I've been quite busy helping organizations prepare for the December 1 deadline to be in compliance with the new overtime rules. Most people understand the new salary test - that in order to be exempt from overtime compensation requirements an employee must now earn $913 per week or more. But many people still struggle with the duties tests. And it's not surprising as the Department of Labor's published Fact Sheets for Executive, Professional, Administrative and Computer-Related Occupations exemptions are intentionally (in my opinion) vague.
The biggest mistake I encounter when discussing this with a business owner or high-ranking executive is the misapplication of the Administrative exemption. The confusion lies in this sentence: The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Business leaders set the bar for what they think qualifies as discretion, independent judgement and matters of significance much lower than the DOL does and this places their business at risk for back pay and fines.
As a good example of what I mean, let's take the DOL investigator who may show up at your door one day. The investigator performs office or non-manual work directly related to the general operations of the business as defined in the Administrative exemption. The investigator has the discretion to recommend corrective action, levy fines and even submit violators for prosecution, based on the level of intent the investigator discerns. Sounds like that job certainly meets the standard for the Administrative exemption, right?
Wrong! DOL investigators are non-exempt. And here's why: investigators use an enforcement manual that guides them on the proper application of the law. And even though they frequently encounter situations that may not be specifically addressed in the manual, and even though they have a reasonable amount of discretion as to how to apply the standards, as evidenced by the sometimes contradictory advice you might get when you call their employer help-line, the DOL sees the investigators as people who apply the law, they don't write the law.
Now compare that with administrative employees in your organization whom you've deemed to be exempt based on this exemption. Does your payroll administrator have more discretion than a DOL investigator regarding matters of significance in your business? Does your accounting assistant have more? Most likely each spends the bulk of their day processing transactions based on policies or best practices already in place. Most likely they need to get the approval of someone who meets the Executive Exemption like their controller, CFO or business owner to make any significant change in the way things are done. Most likely their discretion lies in when to do certain things and to determine priorities within their defined scope of work, not in changing processes or policies in matters of significance.
So he punch line here is, if your administrative employees don't have more discretion than a DOL investigator, then you should classify them as non-exempt.
The biggest mistake I encounter when discussing this with a business owner or high-ranking executive is the misapplication of the Administrative exemption. The confusion lies in this sentence: The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Business leaders set the bar for what they think qualifies as discretion, independent judgement and matters of significance much lower than the DOL does and this places their business at risk for back pay and fines.
As a good example of what I mean, let's take the DOL investigator who may show up at your door one day. The investigator performs office or non-manual work directly related to the general operations of the business as defined in the Administrative exemption. The investigator has the discretion to recommend corrective action, levy fines and even submit violators for prosecution, based on the level of intent the investigator discerns. Sounds like that job certainly meets the standard for the Administrative exemption, right?
Wrong! DOL investigators are non-exempt. And here's why: investigators use an enforcement manual that guides them on the proper application of the law. And even though they frequently encounter situations that may not be specifically addressed in the manual, and even though they have a reasonable amount of discretion as to how to apply the standards, as evidenced by the sometimes contradictory advice you might get when you call their employer help-line, the DOL sees the investigators as people who apply the law, they don't write the law.
Now compare that with administrative employees in your organization whom you've deemed to be exempt based on this exemption. Does your payroll administrator have more discretion than a DOL investigator regarding matters of significance in your business? Does your accounting assistant have more? Most likely each spends the bulk of their day processing transactions based on policies or best practices already in place. Most likely they need to get the approval of someone who meets the Executive Exemption like their controller, CFO or business owner to make any significant change in the way things are done. Most likely their discretion lies in when to do certain things and to determine priorities within their defined scope of work, not in changing processes or policies in matters of significance.
So he punch line here is, if your administrative employees don't have more discretion than a DOL investigator, then you should classify them as non-exempt.
Wednesday, October 12, 2016
How will HR make us better?
I had a prospect recently ask me an important question, and indeed the right question. He asked, if I'd invested in an expensive HR leader a few years' ago, how would my organization be better off today? The reason this is the right question is that if investments in HR don't yield a positive return on investment (ROI), should they be made at all? My MBA training says, no, they shouldn't be.
The research shows that, on average, high performing small and mid-sized companies spend more on HR than their lower-performing competitors (i4cp study). So what is HR doing to make those companies more profitable?
The answer falls into several categories:
1. Opportunity Costs - when one small company waits longer than its competitors to invest in a HR resources, it probably doesn't mean the company has no HR function. It likely means the work that is being done is being done by committee. The committee often consists of the owner or operational leader, the administrative leader and the financial leader. If those leaders could be more effective at their jobs if not constrained by HR related tasks and issues, then the company might be better off. Examples might include a business owner investing many hours creating a performance review platform or a controller researching an HR compliance issue when a trained HR professional could do either much faster.
2. Targeted Expertise - another prospect once told me he didn't need HR help because his controller was a CPA. That's like saying I don't need a dentist because I have a doctor. If my tooth is hurting, my doctor may be able to help, but a dentist has more specialized knowledge - and vice versa for a cold or flu. A trained, experienced HR professional can help reduce the time it takes to arrive at a correct organizational diagnosis and develop an appropriate prescription for organizational aches and pains.
3. Priorities - when key HR initiatives are dependent on individuals in the organization whose primary roles are in other functional areas, HR initiatives often go unfinished. Frequently when I speak with companies who don't have a true HR function, they tell me lots of good ideas they've had but haven't had time to implement. A dedicated HR professional can help push those initiatives to the finish line. If they were worth putting on the list to begin with, they are perceived to have value by the leadership team (improved retention, improved engagement, quicker ramp-up in productivity, avoiding bad hires, etc.)
4. Risk Avoidance - this is the most tenuous argument, but it's not illegitimate - how many work comp claims/EEOC claims/unemployment claims, etc. might you have had if not for the programs initiated and managed by your skilled HR leader? Car insurance only has a positive ROI if you wreck your car. For those who have never wrecked, it's easy to feel that buying that insurance was not a good investment. But those who have wrecked know its value.
At the end of the day, if your organization could benefit from having a stronger, more capable, better trained workforce with a more efficient and user-friendly platform for finding, selecting, on-boarding, retaining, managing, evaluating and inspiring those workers, an HR professional can probably help. But feel free to measure that HR professional's performance against those standards.
The research shows that, on average, high performing small and mid-sized companies spend more on HR than their lower-performing competitors (i4cp study). So what is HR doing to make those companies more profitable?
The answer falls into several categories:
1. Opportunity Costs - when one small company waits longer than its competitors to invest in a HR resources, it probably doesn't mean the company has no HR function. It likely means the work that is being done is being done by committee. The committee often consists of the owner or operational leader, the administrative leader and the financial leader. If those leaders could be more effective at their jobs if not constrained by HR related tasks and issues, then the company might be better off. Examples might include a business owner investing many hours creating a performance review platform or a controller researching an HR compliance issue when a trained HR professional could do either much faster.
2. Targeted Expertise - another prospect once told me he didn't need HR help because his controller was a CPA. That's like saying I don't need a dentist because I have a doctor. If my tooth is hurting, my doctor may be able to help, but a dentist has more specialized knowledge - and vice versa for a cold or flu. A trained, experienced HR professional can help reduce the time it takes to arrive at a correct organizational diagnosis and develop an appropriate prescription for organizational aches and pains.
3. Priorities - when key HR initiatives are dependent on individuals in the organization whose primary roles are in other functional areas, HR initiatives often go unfinished. Frequently when I speak with companies who don't have a true HR function, they tell me lots of good ideas they've had but haven't had time to implement. A dedicated HR professional can help push those initiatives to the finish line. If they were worth putting on the list to begin with, they are perceived to have value by the leadership team (improved retention, improved engagement, quicker ramp-up in productivity, avoiding bad hires, etc.)
4. Risk Avoidance - this is the most tenuous argument, but it's not illegitimate - how many work comp claims/EEOC claims/unemployment claims, etc. might you have had if not for the programs initiated and managed by your skilled HR leader? Car insurance only has a positive ROI if you wreck your car. For those who have never wrecked, it's easy to feel that buying that insurance was not a good investment. But those who have wrecked know its value.
At the end of the day, if your organization could benefit from having a stronger, more capable, better trained workforce with a more efficient and user-friendly platform for finding, selecting, on-boarding, retaining, managing, evaluating and inspiring those workers, an HR professional can probably help. But feel free to measure that HR professional's performance against those standards.
Communicating Overtime Changes
So you have finalized your strategy for being in compliance with the new overtime changes on December 1. You have, haven't you? If not, you better get on with it. While there is some activity in congress that might delay or modify the new rules, it appears the chances of that happening are slim, so you better have a plan.
Assuming you have a plan, how are you going to break the news to those affected? Telling someone they're getting a raise to the new minimum is pretty easy - but it can demotivate those similarly situated who happen to already be over the limit. If Jane has spent 10 years getting to the $48,000 level, she's not going to be thrilled that Ann, 8 years her junior with 8 years less experience, gets automatically bumped from $39,000 to $47,500 in one day. Explaining the change to Ann is easy, but don't forget to have a conversation with Jane.
But how do you tell someone who is currently salaried that they are going back to hourly? Keep in mind that employees may react differently to the news. Some may be thrilled that they are going to be eligible for overtime compensation going forward (assuming that they will be making more money). On a side note: If Bob routinely worked 55 hours a week while he was salaried, calculating a break-even wage rate so that Bob must continue to work 55 hours to retain his total compensation is a sure loser. Before, Bob's 55 hours were discretionary, but now you've made them essentially mandatory. He's likely going to feel differently about those hours now.
However, others may see it as a demotion and a career killer. How do you assure them that neither is true? Here are some tips:
1. Tell them early - your employees watch the news and are likely waiting to hear how they're going to be affected. I understand delaying the conversation a while to see if congress intervenes, but some states require a notice before wages are reduced (7 days in SC, 24 hours in NC, before the hours are worked in VA). So don't let that deadline pass, especially if your plan is a "net zero" plan that accounts for hours-worked as an exempt employee.
2. Be honest - this has nothing to do with their performance and if not for a government mandate you wouldn't be having this conversation. If it's good for them (they're going to earn more), tell them. If you're having to modify (reduce) their hourly rate from a straight salary-to-hourly conversion in order to account for overtime, explain why you're having to do it that way. If they are being reclassified from exempt to non-exempt, they'll need to start keeping a timesheet of some sort. This can also be demotivating, but explain that it's not that the company doesn't trust them, it's required. And also explain how it affects their career ambitions. If their goal is to move up, make sure they understand that this change does not alter their ability to do that (assuming that is true).
3. Don't forget any benefits impacts - some organizations offer different benefits to exempt and non-exempt employees. While the government defines overtime compensation rules, they don't define your vacation policy, so give some thought as to how you're going to handle the things you can control.
4. Train supervisors - if Stan is now non-exempt, he can't work through his lunch anymore or work off the clock (including answering excessive emails or texts after hours). Praise his loyalty, but explain that he's putting the company at risk. Stan may also need training in the company's time-keeping system. Whether it's manual, a time clock, or an electronic system, don't assume he knows how to use it.
5. Tell them who to go to with questions - it may be better to have someone like your HR leader or your finance leader be the pressure valve for these conversations so the workers' supervisors and managers can focus on getting the work done and serving your customers rather than getting mired up in this transition.
Assuming you have a plan, how are you going to break the news to those affected? Telling someone they're getting a raise to the new minimum is pretty easy - but it can demotivate those similarly situated who happen to already be over the limit. If Jane has spent 10 years getting to the $48,000 level, she's not going to be thrilled that Ann, 8 years her junior with 8 years less experience, gets automatically bumped from $39,000 to $47,500 in one day. Explaining the change to Ann is easy, but don't forget to have a conversation with Jane.
But how do you tell someone who is currently salaried that they are going back to hourly? Keep in mind that employees may react differently to the news. Some may be thrilled that they are going to be eligible for overtime compensation going forward (assuming that they will be making more money). On a side note: If Bob routinely worked 55 hours a week while he was salaried, calculating a break-even wage rate so that Bob must continue to work 55 hours to retain his total compensation is a sure loser. Before, Bob's 55 hours were discretionary, but now you've made them essentially mandatory. He's likely going to feel differently about those hours now.
However, others may see it as a demotion and a career killer. How do you assure them that neither is true? Here are some tips:
1. Tell them early - your employees watch the news and are likely waiting to hear how they're going to be affected. I understand delaying the conversation a while to see if congress intervenes, but some states require a notice before wages are reduced (7 days in SC, 24 hours in NC, before the hours are worked in VA). So don't let that deadline pass, especially if your plan is a "net zero" plan that accounts for hours-worked as an exempt employee.
2. Be honest - this has nothing to do with their performance and if not for a government mandate you wouldn't be having this conversation. If it's good for them (they're going to earn more), tell them. If you're having to modify (reduce) their hourly rate from a straight salary-to-hourly conversion in order to account for overtime, explain why you're having to do it that way. If they are being reclassified from exempt to non-exempt, they'll need to start keeping a timesheet of some sort. This can also be demotivating, but explain that it's not that the company doesn't trust them, it's required. And also explain how it affects their career ambitions. If their goal is to move up, make sure they understand that this change does not alter their ability to do that (assuming that is true).
3. Don't forget any benefits impacts - some organizations offer different benefits to exempt and non-exempt employees. While the government defines overtime compensation rules, they don't define your vacation policy, so give some thought as to how you're going to handle the things you can control.
4. Train supervisors - if Stan is now non-exempt, he can't work through his lunch anymore or work off the clock (including answering excessive emails or texts after hours). Praise his loyalty, but explain that he's putting the company at risk. Stan may also need training in the company's time-keeping system. Whether it's manual, a time clock, or an electronic system, don't assume he knows how to use it.
5. Tell them who to go to with questions - it may be better to have someone like your HR leader or your finance leader be the pressure valve for these conversations so the workers' supervisors and managers can focus on getting the work done and serving your customers rather than getting mired up in this transition.
Monday, September 19, 2016
Performance Management for Millennials
I'm on record saying that much of what is written about how different millennials are than we baby boomers and Gen Xers is a bunch of baloney (click here for more). I believe it is the workplace that is evolving, not the people. Millennials simply have different stimuli than we had. But their responses to those stimuli are the same as ours would have been. Plus, I don't like stereotypes of any kind, including stereotypes based on the year someone was born. Not every millennial meets those stereotypes any more than any individual meets the stereotypes associated with their race, color, gender, etc.
But we have learned some things from millennials that we can apply in the workplace. Some of the more important come from video games. While not every millennial is a gamer, a higher percentage of them game than previous generations did. So one might ask, why are those games so addictive and so much fun?
When I ask my college students why they enjoy gaming, the answers are pretty obvious. The games engage multiple senses, they are challenging, and they provide immediate feedback about performance.
Two stereotypes about millennials that I have found to be unfair are: 1) they want the corner office but don't want to have to work for it and 2) they are so fragile they can't handle constructive feedback. In my experience, millennial gamers don't mind their character getting blown up in level 7. Their egos aren't crushed when they fail to advance. It just makes them determined to master that level more quickly in order to move up to level 8, even if it takes multiple attempts. But they will get frustrated if mastering level 7 is perceived to be unattainable or if the standard for advancement is unknown or keeps changing.
In other words, it was the parents who wanted every kid to get a trophy and for organizations to stop keeping score in youth sports, not the millennials themselves. They are as competitive as we were.
What many organizations can do much better is learning to explain what it takes to earn that corner office. Some version of you must be a level 15 to get that office; you're a level 4 right now - but here's what it takes to complete levels 5, 6, 7, 8 ... is the piece that is missing. Sometimes boomers just want millennials to be patient and wait their turn. But it's a myth that we were so patient when we were in our 20s. I clearly remember undervaluing experience when I didn't have any (like many millennials do now). But perhaps I overvalue experience now that I have a bunch.
When organizations have cultures based on if you don't hear from me, assume you're doing a good job, those organizations are not going to appeal to millennials (or Gen Xers or boomers either for that matter). Workers of all ages never were happy and are no longer going to tolerate organizations that give lukewarm feedback once per year when those workers have the option of going to another organization that has learned to build systems that provide immediate or at least more frequent (and relevant) performance feedback and have more clearly defined the roadmap options to help them achieve their career objectives.
But we have learned some things from millennials that we can apply in the workplace. Some of the more important come from video games. While not every millennial is a gamer, a higher percentage of them game than previous generations did. So one might ask, why are those games so addictive and so much fun?
When I ask my college students why they enjoy gaming, the answers are pretty obvious. The games engage multiple senses, they are challenging, and they provide immediate feedback about performance.
Two stereotypes about millennials that I have found to be unfair are: 1) they want the corner office but don't want to have to work for it and 2) they are so fragile they can't handle constructive feedback. In my experience, millennial gamers don't mind their character getting blown up in level 7. Their egos aren't crushed when they fail to advance. It just makes them determined to master that level more quickly in order to move up to level 8, even if it takes multiple attempts. But they will get frustrated if mastering level 7 is perceived to be unattainable or if the standard for advancement is unknown or keeps changing.
In other words, it was the parents who wanted every kid to get a trophy and for organizations to stop keeping score in youth sports, not the millennials themselves. They are as competitive as we were.
What many organizations can do much better is learning to explain what it takes to earn that corner office. Some version of you must be a level 15 to get that office; you're a level 4 right now - but here's what it takes to complete levels 5, 6, 7, 8 ... is the piece that is missing. Sometimes boomers just want millennials to be patient and wait their turn. But it's a myth that we were so patient when we were in our 20s. I clearly remember undervaluing experience when I didn't have any (like many millennials do now). But perhaps I overvalue experience now that I have a bunch.
When organizations have cultures based on if you don't hear from me, assume you're doing a good job, those organizations are not going to appeal to millennials (or Gen Xers or boomers either for that matter). Workers of all ages never were happy and are no longer going to tolerate organizations that give lukewarm feedback once per year when those workers have the option of going to another organization that has learned to build systems that provide immediate or at least more frequent (and relevant) performance feedback and have more clearly defined the roadmap options to help them achieve their career objectives.
Leadership, Growth and Hedging
I work with a lot of small and mid-sized businesses. Some call me because they've grown very quickly and need help. Others I speak with seem to have stayed the same size into their second and third generations of ownership. When I was the GM of a start-up pest management operation, we grew our region from four techs to a dozen in just over two years. When I started marketing HR and management services to pest management firms (as well as construction and trades organizations) in 2013, I was surprised at how many 40+ year old companies still operate with only five or six workers.
Does this mean those stable, smaller companies are not as good as the fast-growing, constantly-changing companies? Of course not. Those owners have generally settled into a size that they are comfortable with, earn a living they are satisfied with, and don't want the headaches associated with growing any larger. I get it!
But I worked for an organization with a clear vision of what we were trying to become, a solid infrastructure to support a growing operation, and systems that enabled us to meet our goals. The companies I work with that say they want to grow but are having difficulty doing so sometimes struggle because the owner/leader has difficulty creating momentum. One behavior that I observe from those leaders that can't seem to get the organization to bust through to the next level is what I call hedging. Here's an example of hedging:
In one of my corporate roles, a division leader asked me to help him roll out a CRM. He had already picked-out the one he wanted - he just needed me to handle the logistics. I did all the set-up with the vendor, communicated with the sales team, and coordinated the implementation and training. Shortly after the roll-out, he stuck his head in my door and said, Your CRM ain't working. He'd overheard a sales rep complaining about it in the hall. That's when I realized he had been sitting in the shadows waiting to see if his initiative was going to be popular. Once he heard the first complaint, it became my CRM. That's hedging.
Another version of hedging is when a productive employee threatens to quit and the owner makes all kinds of concessions and promises to that employee to keep from being inconvenienced. Once the storm passes, the owner often regrets the concessions and forgets about the promises. The employee never forgets about the promises and remains a lukewarm contributor - a victim of hedging.
Hedging can be intentional - like in the first example where the leader chose to stick a surrogate out front as a human shield to take the arrows in case things go wrong rather than own the initiative. Another example of intentional hedging is when the leader is reluctant to commit to a plan or a direction. As an old professor of mine used to say, If we aim at nothing, we hit it 100% of the time! Perhaps fear of missing goals makes some leaders hesitant to define any.
Hedging can also derive from panic - like the second example. Owners convince themselves if a particular event comes to pass, they're screwed. In my experience those fears are often overstated.
Former NFL football coach Bum Phillips said about hall of fame coach, Don Shula, He can take his'n and beat your'n and he can take your'n and beat his'n. When I look back at the best CEOs and COOs I had the pleasure of working with, they never allowed themselves to believe that their organization depended exclusively on one or two people and wouldn't survive if those people went away. They were confident in the vision they had for the organization and they were confident they could surround themselves with people who shared the vision, even if other talented individuals decided to leave. Those panic-driven owners would often be better off if the under-committed but perceived-to-be-irreplaceable employee left and a fully committed replacement was identified, even if the replacement is less talented.
My favorite definition of leadership is, A leader is someone who has followers. Leaders have lots of styles - some are extroverted, some are introverted, some are charismatic, others not so much, etc. But one thing all leaders seem to have in common is that they know where they are going and they are able to communicate that vision to people who are happy to follow them toward that desired state.
It's fine to struggle creating the vision (or the next vision) - that's what strategic planning is all about. But once a set of goals and a path to achieve them is established, a leader is fully committed to the plan and enthusiastically promotes it. Or to put it the way a teacher at my middle school put it, This train don't go but one way, and it don't supply pencils.
Does this mean those stable, smaller companies are not as good as the fast-growing, constantly-changing companies? Of course not. Those owners have generally settled into a size that they are comfortable with, earn a living they are satisfied with, and don't want the headaches associated with growing any larger. I get it!
But I worked for an organization with a clear vision of what we were trying to become, a solid infrastructure to support a growing operation, and systems that enabled us to meet our goals. The companies I work with that say they want to grow but are having difficulty doing so sometimes struggle because the owner/leader has difficulty creating momentum. One behavior that I observe from those leaders that can't seem to get the organization to bust through to the next level is what I call hedging. Here's an example of hedging:
In one of my corporate roles, a division leader asked me to help him roll out a CRM. He had already picked-out the one he wanted - he just needed me to handle the logistics. I did all the set-up with the vendor, communicated with the sales team, and coordinated the implementation and training. Shortly after the roll-out, he stuck his head in my door and said, Your CRM ain't working. He'd overheard a sales rep complaining about it in the hall. That's when I realized he had been sitting in the shadows waiting to see if his initiative was going to be popular. Once he heard the first complaint, it became my CRM. That's hedging.
Another version of hedging is when a productive employee threatens to quit and the owner makes all kinds of concessions and promises to that employee to keep from being inconvenienced. Once the storm passes, the owner often regrets the concessions and forgets about the promises. The employee never forgets about the promises and remains a lukewarm contributor - a victim of hedging.
Hedging can be intentional - like in the first example where the leader chose to stick a surrogate out front as a human shield to take the arrows in case things go wrong rather than own the initiative. Another example of intentional hedging is when the leader is reluctant to commit to a plan or a direction. As an old professor of mine used to say, If we aim at nothing, we hit it 100% of the time! Perhaps fear of missing goals makes some leaders hesitant to define any.
Hedging can also derive from panic - like the second example. Owners convince themselves if a particular event comes to pass, they're screwed. In my experience those fears are often overstated.
Former NFL football coach Bum Phillips said about hall of fame coach, Don Shula, He can take his'n and beat your'n and he can take your'n and beat his'n. When I look back at the best CEOs and COOs I had the pleasure of working with, they never allowed themselves to believe that their organization depended exclusively on one or two people and wouldn't survive if those people went away. They were confident in the vision they had for the organization and they were confident they could surround themselves with people who shared the vision, even if other talented individuals decided to leave. Those panic-driven owners would often be better off if the under-committed but perceived-to-be-irreplaceable employee left and a fully committed replacement was identified, even if the replacement is less talented.
My favorite definition of leadership is, A leader is someone who has followers. Leaders have lots of styles - some are extroverted, some are introverted, some are charismatic, others not so much, etc. But one thing all leaders seem to have in common is that they know where they are going and they are able to communicate that vision to people who are happy to follow them toward that desired state.
It's fine to struggle creating the vision (or the next vision) - that's what strategic planning is all about. But once a set of goals and a path to achieve them is established, a leader is fully committed to the plan and enthusiastically promotes it. Or to put it the way a teacher at my middle school put it, This train don't go but one way, and it don't supply pencils.
Wednesday, August 3, 2016
Clock is Ticking on OT Compliance
Frequent readers of my blogs are aware that the Department of Labor recently issued new rules governing overtime that take effect December 1, 2016. Summer is flying by and by the time we get to Labor Day (September 5), you'll have less than 90 days to be compliant with these rules.
Here's a quick review. The salary test for most of the Fair Labor Standards Act exemptions has essentially doubled from $455 per week to $913 ($23,660 to $47,476 annually). This means unless your salaried employees spend most of their time in outside sales or meet one of the other rare exemptions, they are no longer eligible to be treated as exempt if their weekly salary is below $913 week, no matter what their duties are.
I've gotten quite a few calls asking for opinions about specific jobs in recent months, and have written a few opinion letters (each with the appropriate disclaimer that I am providing the opinion of an HR professional only and I am not an attorney nor pretending to be one). The interesting thing I find is that many of those jobs were improperly classified to begin with. They met the old salary test but failed the duties test.
It's the salary test that's been in the news this summer, but each job must also meet the standards of the duties test. And this seems to be the forgotten piece of the equation and has put many organizations at risk and they may not have known it.
So between now and December 1 make sure you've reviewed all the exempt positions in your organization to consider both the new salary test and the duties tests to make sure that you are compliant. That's the easy part. Converting everyone who needs to be reclassified to non-exempt - that's the hard part. So develop a strategy for what you're going to tell them and what is expected of them regarding the maintaining of time records, managing their hours, etc. going forward.
If you need some assistance from a third party to conduct the analysis or to communicate the message, feel free to call The Davidson Group.
Here's a quick review. The salary test for most of the Fair Labor Standards Act exemptions has essentially doubled from $455 per week to $913 ($23,660 to $47,476 annually). This means unless your salaried employees spend most of their time in outside sales or meet one of the other rare exemptions, they are no longer eligible to be treated as exempt if their weekly salary is below $913 week, no matter what their duties are.
I've gotten quite a few calls asking for opinions about specific jobs in recent months, and have written a few opinion letters (each with the appropriate disclaimer that I am providing the opinion of an HR professional only and I am not an attorney nor pretending to be one). The interesting thing I find is that many of those jobs were improperly classified to begin with. They met the old salary test but failed the duties test.
It's the salary test that's been in the news this summer, but each job must also meet the standards of the duties test. And this seems to be the forgotten piece of the equation and has put many organizations at risk and they may not have known it.
So between now and December 1 make sure you've reviewed all the exempt positions in your organization to consider both the new salary test and the duties tests to make sure that you are compliant. That's the easy part. Converting everyone who needs to be reclassified to non-exempt - that's the hard part. So develop a strategy for what you're going to tell them and what is expected of them regarding the maintaining of time records, managing their hours, etc. going forward.
If you need some assistance from a third party to conduct the analysis or to communicate the message, feel free to call The Davidson Group.
I've Told 'em a Thousand Times!
I was sitting in a conference room waiting on an executive meeting to get started when the CEO casually mentioned to a division manager that he'd noticed something at one of the jobs. The division manager said, I've told those guys a thousand times not to do that... The CEO replied, Have you ever actually done anything about it?
Company culture is 100% based on what behaviors the organization, through its leaders and its most engaged employees, rewards, condemns and condones. I once heard a speaker say that organizations will spit out a person who doesn't belong like sour milk. Management's challenge is to make sure that good workers are spitting out bad and not vice-versa!
If a company has built a solid safety culture, for example, it will self-police unsafe work practices. I was hanging lights in a warehouse facility when one of my co-workers climbed on a short stack of pallets. We hadn't really noticed any warehouse workers back there, but before he was able to stand up, there were five of that company's workers circling the pallets yelling at him to get down immediately and go get a ladder! In that organization, safe work practices were a way of life and anyone who risked their safety record, safety bonus, whatever, was held accountable and potentially spit out.
Contrast that with the culture at an organization that constantly struggles with its workers comp mod rate and can't seem to get its employees to wear their PPE. The owner at that organization probably tells his insurance company, I've told them a thousand times..
If there are no consequences to off-brand behavior (behavior you don't want) and no rewards for on-brand behavior (behavior you do want), then your culture is going to be what the front line workers want it be. Rewards can be tangible (cash, bonuses, gift cards, promotions, etc.) or they can be intangible (recognition, public or private words of thanks, pats on the back, etc.). Consequences can also be formal (write-ups, verbal warnings, etc.) or informal (the other workers get the bonuses, the preferred shifts, public recognition, etc.).
When I was an operations manager in a service industry, I knew that terminating a worker for consistently ignoring our standards would be inconvenient and I might end up having to run a route or cover a shift myself. But I was taught and have always believed that the decision to let that worker slide just so that I will not be inconvenienced is the fork in the trail that leads to mediocrity.
The real win occurs when your front line workers begin to self-police off-brand behaviors rather than waiting for management to do it. This happens when your organization has the right mix of rewards and consequences in place, the first and second tier leaders know you are committed to the brand, and build they their teams with people that are also committed to the brand. Do that and you'll find that you don't have to tell them a thousand times anymore.
Or, you could do try it the easy way and just say it for the one thousand and first time. Maybe if you say it a little louder this time.
Company culture is 100% based on what behaviors the organization, through its leaders and its most engaged employees, rewards, condemns and condones. I once heard a speaker say that organizations will spit out a person who doesn't belong like sour milk. Management's challenge is to make sure that good workers are spitting out bad and not vice-versa!
If a company has built a solid safety culture, for example, it will self-police unsafe work practices. I was hanging lights in a warehouse facility when one of my co-workers climbed on a short stack of pallets. We hadn't really noticed any warehouse workers back there, but before he was able to stand up, there were five of that company's workers circling the pallets yelling at him to get down immediately and go get a ladder! In that organization, safe work practices were a way of life and anyone who risked their safety record, safety bonus, whatever, was held accountable and potentially spit out.
Contrast that with the culture at an organization that constantly struggles with its workers comp mod rate and can't seem to get its employees to wear their PPE. The owner at that organization probably tells his insurance company, I've told them a thousand times..
If there are no consequences to off-brand behavior (behavior you don't want) and no rewards for on-brand behavior (behavior you do want), then your culture is going to be what the front line workers want it be. Rewards can be tangible (cash, bonuses, gift cards, promotions, etc.) or they can be intangible (recognition, public or private words of thanks, pats on the back, etc.). Consequences can also be formal (write-ups, verbal warnings, etc.) or informal (the other workers get the bonuses, the preferred shifts, public recognition, etc.).
When I was an operations manager in a service industry, I knew that terminating a worker for consistently ignoring our standards would be inconvenient and I might end up having to run a route or cover a shift myself. But I was taught and have always believed that the decision to let that worker slide just so that I will not be inconvenienced is the fork in the trail that leads to mediocrity.
The real win occurs when your front line workers begin to self-police off-brand behaviors rather than waiting for management to do it. This happens when your organization has the right mix of rewards and consequences in place, the first and second tier leaders know you are committed to the brand, and build they their teams with people that are also committed to the brand. Do that and you'll find that you don't have to tell them a thousand times anymore.
Or, you could do try it the easy way and just say it for the one thousand and first time. Maybe if you say it a little louder this time.
Wednesday, July 13, 2016
What Scale is Best for Performance Reviews?
Dr. Ed Cornelius, one of my business school professors, was adamant that a traditional performance review form should have an even-numbered scale. He said it didn't matter if you chose a 4-point, a 6-point, an 8-point or a 10-point scale. He felt a mid-point - like a 3 on a 5-point scale - was a magnet for managers, and an easy way for them to cop out. An even-numbered scale has no mid-point.
I experienced this cop out once when I received a 3 out of possible 5 for Profitability when my business unit had literally tripled its budgeted profit. When I asked my VP what it would take to earn a 4, he just laughed, but didn't change the rating. Dr. Cornelius was right - mid-points really are a magnet for managers who don't take the time to properly prepare a review.
Another problem with Likert Scales like these is that the ratings seem to always be grouped around the top 3 numbers. So if an organization uses a 10 point scale, there will be a few 8s, a lot of 9s and a few 10s. If they use a 6 point scale, the ratings will distribute across 4, 5 and 6 in the same way. Most people get a B, and B is generally the number right below the top number on the scale.
So which scale is best?
If the goal of your performance management program is to provide meaningful feedback that leads to performance improvement, links to compensation and supports career development and succession initiatives, then my answer is, None of the Above!
More and more organizations have decided that rating attributes or behaviors on a Likert Scale has little impact on performance and can even be demotivating when poorly executed. I never really took my review seriously with that company after the 3 for Profitability incident. Plus there were no obvious links between my ratings and my compensation, anyway. The review devolved into an exercise that I tolerated each year so my boss could check the box. That's why organizations are abandoning their traditional Likert Scale reviews and either replacing them with something better or not replacing them at all.
But if forced to use a Likert Scale, I'll defer to a 4-point scale - that way, when the scores are distributed across 2, 3 and 4, the lowest rating will be below the mid-point of the possible ratings. But I'll be kicking and screaming that there is a better way!
If you would like to discuss alternatives to the traditional review, contact me for a free consultation.
I experienced this cop out once when I received a 3 out of possible 5 for Profitability when my business unit had literally tripled its budgeted profit. When I asked my VP what it would take to earn a 4, he just laughed, but didn't change the rating. Dr. Cornelius was right - mid-points really are a magnet for managers who don't take the time to properly prepare a review.
Another problem with Likert Scales like these is that the ratings seem to always be grouped around the top 3 numbers. So if an organization uses a 10 point scale, there will be a few 8s, a lot of 9s and a few 10s. If they use a 6 point scale, the ratings will distribute across 4, 5 and 6 in the same way. Most people get a B, and B is generally the number right below the top number on the scale.
So which scale is best?
If the goal of your performance management program is to provide meaningful feedback that leads to performance improvement, links to compensation and supports career development and succession initiatives, then my answer is, None of the Above!
More and more organizations have decided that rating attributes or behaviors on a Likert Scale has little impact on performance and can even be demotivating when poorly executed. I never really took my review seriously with that company after the 3 for Profitability incident. Plus there were no obvious links between my ratings and my compensation, anyway. The review devolved into an exercise that I tolerated each year so my boss could check the box. That's why organizations are abandoning their traditional Likert Scale reviews and either replacing them with something better or not replacing them at all.
But if forced to use a Likert Scale, I'll defer to a 4-point scale - that way, when the scores are distributed across 2, 3 and 4, the lowest rating will be below the mid-point of the possible ratings. But I'll be kicking and screaming that there is a better way!
If you would like to discuss alternatives to the traditional review, contact me for a free consultation.
How many HR people should I have?
This is a question I get asked a lot. Of course the answer is, it depends. Smaller organizations tend to have administrative employees who wear several hats. So if an office manager spends 80% of her time performing accounting tasks (including payroll) and 20% of her time dealing with employee issues, that company has 1/5th of an HR person.
Standard benchmarking practice is to exclude dedicated payroll and training/development people from the HR-per-100 employee ratio calculation. The rule-of-thumb metric I've often heard is one HR person per 100 employees. So, in the example above, the office manager can probably effectively provide HR services to up to 20 employees, assuming she knows anything about HR compliance and HR best practices. If that organization has 40 employees, their HR is probably suffering because the accounting is always going to get done.
But the 1-to-100 ratio can be misleading. According to benchmarking surveys conducted by the Society for Human Resource Management, companies with 250 and fewer employees have a ratio closer to 2-per-100 on average. Organizations with 250+ employees often have fewer than 1-per-100 due to efficiencies linked to being larger.
When I'm asked that question by organizations with 100 or fewer, I usually ask some follow-up questions before I recommend a number:
1. What is your competitive advantage (how does your company beat its competitors)?
2. What is your employee turnover rate?
3. How effective is your owner/president at assessing talent, developing talent and getting the right people in the right seats?
Cafe du Monde is a famous restaurant in New Orleans right in the heart of the French Quarter. It does a booming business because of its ideal location. I've always found the service there to be below average at best. Cafe du Monde does not need a lot of HR people because its people aren't critical to its success. A restaurant in a less desirable location that depends on its great service reputation to be successful will likely benefit from a higher HR ratio than Cafe du Monde needs.
Likewise, an organization that is in a very stable industry, doesn't have many competitors trying to pilfer its employees, and generally treats its people well won't need as much HR as a company in a high turnover, highly volatile industry where employees have lots of options.
Some owners are really good with people. People like working for them, they listen well and have a knack for positioning people to be successful. Others understand the technical aspects of their business but are terrible with employees. This second type of owner needs more HR help - to protect themselves from themselves.
The Institute for Corporate Productivity did a study a few years ago and found that the highest performing small companies have a higher ratio of HR people per 100 employees than their lower performing industry peers. This may seem counter-intuitive to the owner who sees HR as simply administrative overhead. But if that owner looks at the company he/she most admires in their industry, they'll likely see a company who invests more in their HR platform.
Standard benchmarking practice is to exclude dedicated payroll and training/development people from the HR-per-100 employee ratio calculation. The rule-of-thumb metric I've often heard is one HR person per 100 employees. So, in the example above, the office manager can probably effectively provide HR services to up to 20 employees, assuming she knows anything about HR compliance and HR best practices. If that organization has 40 employees, their HR is probably suffering because the accounting is always going to get done.
But the 1-to-100 ratio can be misleading. According to benchmarking surveys conducted by the Society for Human Resource Management, companies with 250 and fewer employees have a ratio closer to 2-per-100 on average. Organizations with 250+ employees often have fewer than 1-per-100 due to efficiencies linked to being larger.
When I'm asked that question by organizations with 100 or fewer, I usually ask some follow-up questions before I recommend a number:
1. What is your competitive advantage (how does your company beat its competitors)?
2. What is your employee turnover rate?
3. How effective is your owner/president at assessing talent, developing talent and getting the right people in the right seats?
Cafe du Monde is a famous restaurant in New Orleans right in the heart of the French Quarter. It does a booming business because of its ideal location. I've always found the service there to be below average at best. Cafe du Monde does not need a lot of HR people because its people aren't critical to its success. A restaurant in a less desirable location that depends on its great service reputation to be successful will likely benefit from a higher HR ratio than Cafe du Monde needs.
Likewise, an organization that is in a very stable industry, doesn't have many competitors trying to pilfer its employees, and generally treats its people well won't need as much HR as a company in a high turnover, highly volatile industry where employees have lots of options.
Some owners are really good with people. People like working for them, they listen well and have a knack for positioning people to be successful. Others understand the technical aspects of their business but are terrible with employees. This second type of owner needs more HR help - to protect themselves from themselves.
The Institute for Corporate Productivity did a study a few years ago and found that the highest performing small companies have a higher ratio of HR people per 100 employees than their lower performing industry peers. This may seem counter-intuitive to the owner who sees HR as simply administrative overhead. But if that owner looks at the company he/she most admires in their industry, they'll likely see a company who invests more in their HR platform.
Sunday, June 5, 2016
My Applicant has Green Hair!
One of my clients recently lost a sale. The feedback we received was that the potential customer was put off by our technician's visible tattoos and appearance.
According to the Pew Research Center, 40% of millennials have at least one tattoo. Many millennials are aware that some employers remain uneasy about body art and place their tattoos in areas that are covered by normal business dress. But I'll bet many of your applicants have not been as careful. Applicants I see for service roles and for trades and craft positions seem to have visible tattoos, piercings and unnatural hair colors at a higher rate than college grads looking for white-collar jobs.
So, how should your organization respond to this growing trend? I am reminded of a famous exchange between star basketball player Bill Walton and legendary coach John Wooden at UCLA in the early 1970's. Walton: You can't tell me how I can wear my hair, coach! Wooden: You're right Bill, but I do get to decide who plays and we're going to miss you. (here's the story)
While Coach Wooden stuck with his rigid policies, other college coaches decided to embrace the long hair trend in the 1970s. Wooden won his final championship in 1975 and the championship teams in '76, '77 and '78 had rosters full of players with longer hair than Wooden would allow. Other coaches decided hair length was no longer a deterrent to their university's brand and restrictions on hair length hurt their recruiting efforts. Sound familiar?
The first thing to review is whether your current policies accurately reflect the attitudes of your customer base. Based on the anecdotal evidence provided by a single customer, it would have been easy for my client to overreact and begin enforcing a stricter dress code for its field personnel. Fortunately, we keep metrics on technician performance and we discovered that this technician was #1 in the company in jobs closed and #2 in closing percentage over the past year. That one customer does NOT reflect the true attitudes of most of our customers, so it would have been a mistake to risk losing this technician over that one piece of feedback.
With unemployment rates dropping and the war for talent heating back up, now may be a good time to reevaluate those dress and appearance policies. Here are some things to think about:
1. Safety first - if the presence of earrings, loops, gauges, nose rings, etc. puts the employee at risk for injury or puts your product at risk for contamination, by all means ban those items from the workplace.
2. Unless you're going to stick to a "no visible tattoos allowed" policy, distinguish between offensive tattoos and tattoos in general. Gang symbols, confederate flags, sexual images and profanity pose different risks for an employer than flowers, dolphins or doves, children's names, tributes to family members and other benign images. The former can generate harassment or hostile work environment claims. Your organization must decide to what degree the latter are a business risk.
3. It is OK to have different policies for different categories of employees. No visible tattoos for outside sales people, for example, may make sense. Having no such restriction for back office, warehouse or plant floor personnel may also make sense.
It's a mistake to stereotype a candidate based on the presence of visible tattoos or green hair. Focus your interview on true predictors of success in the role - their knowledge, skills and abilities. And supplement the interview with other tools that will improve your good hire percentage (here's a previous blog on this topic). Stereotyping frequently leads to missed opportunities, no matter whether it's race, age, gender, etc. or lifestyle choices.
The main thing to remember is that if you're stuck in a rigid "no tattoo" mindset like we had in the 80s and 90s, you could be significantly shrinking the pool of potential employees (and potential star performers). Review that policy and decide if it still makes sense for your organization today. And if you're assuming your customers won't like it, find a way to survey them to ensure that your assumptions are accurate.
According to the Pew Research Center, 40% of millennials have at least one tattoo. Many millennials are aware that some employers remain uneasy about body art and place their tattoos in areas that are covered by normal business dress. But I'll bet many of your applicants have not been as careful. Applicants I see for service roles and for trades and craft positions seem to have visible tattoos, piercings and unnatural hair colors at a higher rate than college grads looking for white-collar jobs.
So, how should your organization respond to this growing trend? I am reminded of a famous exchange between star basketball player Bill Walton and legendary coach John Wooden at UCLA in the early 1970's. Walton: You can't tell me how I can wear my hair, coach! Wooden: You're right Bill, but I do get to decide who plays and we're going to miss you. (here's the story)
While Coach Wooden stuck with his rigid policies, other college coaches decided to embrace the long hair trend in the 1970s. Wooden won his final championship in 1975 and the championship teams in '76, '77 and '78 had rosters full of players with longer hair than Wooden would allow. Other coaches decided hair length was no longer a deterrent to their university's brand and restrictions on hair length hurt their recruiting efforts. Sound familiar?
The first thing to review is whether your current policies accurately reflect the attitudes of your customer base. Based on the anecdotal evidence provided by a single customer, it would have been easy for my client to overreact and begin enforcing a stricter dress code for its field personnel. Fortunately, we keep metrics on technician performance and we discovered that this technician was #1 in the company in jobs closed and #2 in closing percentage over the past year. That one customer does NOT reflect the true attitudes of most of our customers, so it would have been a mistake to risk losing this technician over that one piece of feedback.
With unemployment rates dropping and the war for talent heating back up, now may be a good time to reevaluate those dress and appearance policies. Here are some things to think about:
1. Safety first - if the presence of earrings, loops, gauges, nose rings, etc. puts the employee at risk for injury or puts your product at risk for contamination, by all means ban those items from the workplace.
2. Unless you're going to stick to a "no visible tattoos allowed" policy, distinguish between offensive tattoos and tattoos in general. Gang symbols, confederate flags, sexual images and profanity pose different risks for an employer than flowers, dolphins or doves, children's names, tributes to family members and other benign images. The former can generate harassment or hostile work environment claims. Your organization must decide to what degree the latter are a business risk.
3. It is OK to have different policies for different categories of employees. No visible tattoos for outside sales people, for example, may make sense. Having no such restriction for back office, warehouse or plant floor personnel may also make sense.
It's a mistake to stereotype a candidate based on the presence of visible tattoos or green hair. Focus your interview on true predictors of success in the role - their knowledge, skills and abilities. And supplement the interview with other tools that will improve your good hire percentage (here's a previous blog on this topic). Stereotyping frequently leads to missed opportunities, no matter whether it's race, age, gender, etc. or lifestyle choices.
The main thing to remember is that if you're stuck in a rigid "no tattoo" mindset like we had in the 80s and 90s, you could be significantly shrinking the pool of potential employees (and potential star performers). Review that policy and decide if it still makes sense for your organization today. And if you're assuming your customers won't like it, find a way to survey them to ensure that your assumptions are accurate.
The New Overtime Rules Are Here
Regular readers of my blog have seen numerous articles over the past year claiming the new overtime rules were coming. When the rules were delayed time and again, I'm sure I sounded a bit like Chicken Little - they really are coming!
Well now they're here and we know what is expected. The DOL eased up a bit on the salary test minimum from what they originally proposed. The number is now set at $47,476 annually and will go up every three years. They've also given us until December 1 to become compliant.
What this means for your organization is that, if you haven't already, now is the time to identify everyone that you pay on a salary basis rather than hourly who earns less than $47,476 annually. Then you need to develop and implement a compensation strategy for each of them. Here are a few options:
1. Raise them to the new minimum. If they're pretty close to that level now, the easiest solution may be to give them a raise and keep them exempt. But remember, they must meet the salary test and the duties test. The DOL might still consider them misclassified based on their duties, so review this as well.
2. Convert them to hourly. This may be well-received by some employees who will be happy to become eligible for overtime compensation, but may be poorly-received by others who will see it as a demotion.
3. See if salaried non-exempt or fluctuating workweek overtime will work in your situation. For some workers whose workload is heavy some weeks and light other weeks, a salaried non-exempt or fluctuating workweek structure may be a viable lower cost alternative. This may also work for employees who rarely work more than 40 hours in a week. The key here is that the employee must "win" sometimes and the employer "win" sometimes. You can't pay the lower overtime rate one week and then dock the employee for leaving early the next week. This approach will not work in situations where employees regularly and consistently work overtime or in states where it is illegal.
There are also some morale and engagement issues to consider before executing your strategy:
1. Employees moving from salaried to hourly who see this as a demotion. Hold meaningful conversations with these folks to help them understand why you're making this change, what it means to them in terms of tracking their time, and what your expectations are with regard to their working extra hours. Explain that this is not a change you would have made if not for the new regulations.
2. Employees who have worked hard to get to a $48,000 salary level only to have entry level people in their same job category now starting at $47,500. This is a case-by-case situation that organizations need to address. In many situations it's probably going to make sense to adjust compensation for these folks as well. The costs of allowing those employees to drift into a disengaged state or leave your organization altogether are probably greater than the cost of making them happy.
3. Understand the role of bonuses and commissions in achieving the minimum salary threshold. In some cases up to 10% of the $47,476 can be achieved through bonuses and commissions so long as they are performance based and paid at least quarterly.
Contact The Davidson Group if you'd like some assistance analyzing and developing strategies for your particular situation.
Well now they're here and we know what is expected. The DOL eased up a bit on the salary test minimum from what they originally proposed. The number is now set at $47,476 annually and will go up every three years. They've also given us until December 1 to become compliant.
What this means for your organization is that, if you haven't already, now is the time to identify everyone that you pay on a salary basis rather than hourly who earns less than $47,476 annually. Then you need to develop and implement a compensation strategy for each of them. Here are a few options:
1. Raise them to the new minimum. If they're pretty close to that level now, the easiest solution may be to give them a raise and keep them exempt. But remember, they must meet the salary test and the duties test. The DOL might still consider them misclassified based on their duties, so review this as well.
2. Convert them to hourly. This may be well-received by some employees who will be happy to become eligible for overtime compensation, but may be poorly-received by others who will see it as a demotion.
3. See if salaried non-exempt or fluctuating workweek overtime will work in your situation. For some workers whose workload is heavy some weeks and light other weeks, a salaried non-exempt or fluctuating workweek structure may be a viable lower cost alternative. This may also work for employees who rarely work more than 40 hours in a week. The key here is that the employee must "win" sometimes and the employer "win" sometimes. You can't pay the lower overtime rate one week and then dock the employee for leaving early the next week. This approach will not work in situations where employees regularly and consistently work overtime or in states where it is illegal.
There are also some morale and engagement issues to consider before executing your strategy:
1. Employees moving from salaried to hourly who see this as a demotion. Hold meaningful conversations with these folks to help them understand why you're making this change, what it means to them in terms of tracking their time, and what your expectations are with regard to their working extra hours. Explain that this is not a change you would have made if not for the new regulations.
2. Employees who have worked hard to get to a $48,000 salary level only to have entry level people in their same job category now starting at $47,500. This is a case-by-case situation that organizations need to address. In many situations it's probably going to make sense to adjust compensation for these folks as well. The costs of allowing those employees to drift into a disengaged state or leave your organization altogether are probably greater than the cost of making them happy.
3. Understand the role of bonuses and commissions in achieving the minimum salary threshold. In some cases up to 10% of the $47,476 can be achieved through bonuses and commissions so long as they are performance based and paid at least quarterly.
Contact The Davidson Group if you'd like some assistance analyzing and developing strategies for your particular situation.
Sunday, May 8, 2016
Advice on Criminal Background Checks
Criminal background checks are an important preemployment screen for many organizations. And rightfully so. If I own a company that sends service workers to other people's homes or businesses, I don't want to send someone I wouldn't want in my own home or business and expose my customers to potential risks they wouldn't find acceptable.
But this once commonplace practice has come under scrutiny in recent years. And the criticisms do have merit. Some segments of the population are convicted of crimes at a much higher rate than other segments, and critics suggest that requiring a criminal background check and screening out candidates for infractions that are not really job related may be a type of discrimination.
Employers should evaluate each job on its own merits. Certainly rejecting a candidate for a bookkeeper position who has a felony fraud conviction is hard to debate. But bouncing a candidate for a scaffolding erector position for a non-violent misdemeanor five years ago might be considered overzealous.
The key for employers is avoid having a blanket policy regarding what constitutes a passing or failing criminal background screen. Instead, set criteria for each job title or job grouping separately. For example, the company may set higher standards for candidates who will be driving company vehicles than those who will always be passengers or those working on the plant floor. The company might have a different set of standards for employees who will have access to cash or the company's books than for administrative roles that have no such access.
And finally, conduct the background screen post-offer! There are several advantages of conducting the screens after an offer has been made (contingent upon meeting the screening standards) versus conducting the screen in advance of the offer:
1. It's less expensive - why pay for a screen if you haven't come to financial terms with the candidate. Furthermore, the Fair Credit Reporting Act requires employers send a specific kind of notice to candidates who are rejected on the basis of a criminal background or credit check. Run the screen on several finalists, and you may have to send multiple notices out.
2. It provides a much stronger defense against discrimination. If you have a signed offer letter from a minority candidate conditional upon meeting the company's standards, and those standards are reasonable, it's hard for the EEOC to conclude that your organization utilizes discriminatory hiring practices. If you conduct the screen pre-offer, you can't prove that you would have hired the minority even if the screen results were acceptable.
3. Some states don't allow pre-offer criminal background screens (it is legal in NC, SC and VA). If your organization operates in multiple states, make sure you know the law in each state.
If you really want to be an early adopter and reduce your risk with the EEOC even further, consider revising your employment application to comply with the national "ban the box" trend. This means you don't ask candidates to list any convictions on the application (thereby demonstrating that you don't reject applicants on the basis of criminal background, alone). Instead, have a statement on the application that tells applicants that the company conducts post-offer criminal background screens and that criteria varies by position.
But this once commonplace practice has come under scrutiny in recent years. And the criticisms do have merit. Some segments of the population are convicted of crimes at a much higher rate than other segments, and critics suggest that requiring a criminal background check and screening out candidates for infractions that are not really job related may be a type of discrimination.
Employers should evaluate each job on its own merits. Certainly rejecting a candidate for a bookkeeper position who has a felony fraud conviction is hard to debate. But bouncing a candidate for a scaffolding erector position for a non-violent misdemeanor five years ago might be considered overzealous.
The key for employers is avoid having a blanket policy regarding what constitutes a passing or failing criminal background screen. Instead, set criteria for each job title or job grouping separately. For example, the company may set higher standards for candidates who will be driving company vehicles than those who will always be passengers or those working on the plant floor. The company might have a different set of standards for employees who will have access to cash or the company's books than for administrative roles that have no such access.
And finally, conduct the background screen post-offer! There are several advantages of conducting the screens after an offer has been made (contingent upon meeting the screening standards) versus conducting the screen in advance of the offer:
1. It's less expensive - why pay for a screen if you haven't come to financial terms with the candidate. Furthermore, the Fair Credit Reporting Act requires employers send a specific kind of notice to candidates who are rejected on the basis of a criminal background or credit check. Run the screen on several finalists, and you may have to send multiple notices out.
2. It provides a much stronger defense against discrimination. If you have a signed offer letter from a minority candidate conditional upon meeting the company's standards, and those standards are reasonable, it's hard for the EEOC to conclude that your organization utilizes discriminatory hiring practices. If you conduct the screen pre-offer, you can't prove that you would have hired the minority even if the screen results were acceptable.
3. Some states don't allow pre-offer criminal background screens (it is legal in NC, SC and VA). If your organization operates in multiple states, make sure you know the law in each state.
If you really want to be an early adopter and reduce your risk with the EEOC even further, consider revising your employment application to comply with the national "ban the box" trend. This means you don't ask candidates to list any convictions on the application (thereby demonstrating that you don't reject applicants on the basis of criminal background, alone). Instead, have a statement on the application that tells applicants that the company conducts post-offer criminal background screens and that criteria varies by position.
Age Discrimination by Millennials?
Jason is a 27 year-old recently promoted to operations manager. Donna, 53, held Jason's position for several years before receiving a promotion of her own into a supporting technical role. By all accounts (except Jason's), Donna performed the role very well. She beat budget, achieved high customer satisfaction scores and won awards for her business unit. In addition to her new responsibilities, she is charged with serving as a mentor to Jason.
Jason, however, believes Donna never did the job right and those upper managers at corporate who think she performed well and this job can be done with what he sees are impossible financial constraints are idiots and he's going to prove them wrong (presumably by spending as much as he wants). Jason either ignores or very publicly chides all of Donna's efforts to help him learn the ropes. Jason makes it clear in his rants that if he had the authority, he would fire Donna so he wouldn't have to listen to her anymore. Jason has run off or terminated several over-50 supervisors and replaced them with workers in their 20s. Jason's boss, who is also a millennial and was influential in getting Donna promoted out of the unit, is committed to Jason's potential and Jason is empowered by that support.
This is a true, though slightly modified, example of a disturbing trend. Age discrimination cases have been increasing. Part of this is demographic - there are more older workers today than there were in 2000 due to birthrate trends after World War II - but part is cultural.
I am on record as saying that much of what is being taught in seminars around the country about millennials and generational differences is hokum. For some reason it's acceptable to stereotype individuals based on the year they were born in ways we would never stereotype people based on their skin pigmentation or national origin. (For more on this subject, read my earlier blog).
Overall, I'm bullish on millennials. The purpose of this article is not to indict talented, young, millennial managers, it's to warn business owners that if they are investing in talented, young, millennial managers, they need to keep an eye out for potential biases against older workers. Your confident, aggressive millennial manager could land you in hot water.
When I turned 14, my father told me that for the next 7 or 8 years, he'd be the dumbest human being I ever met, but by the time I was 22, out of school and on my own, I'd eventually figure out he wasn't so dumb after all. He was absolutely right!
My theory about the prevalence of age discrimination by some millennial mangers lies in my dad's observation. Because some millennials have been much slower to mature due to a combination of economic factors that kept them home longer and parenting styles that kept them dependent longer, we have many young adults in their mid-20s who still regard adults in their 50's and 60's the way we did when we were 16. We figured it out by age 22 or 23. Some of them still haven't figured it out by age 29 or 30.
So, my advice is to continue to promote millennials like Jason. It's good for them and good for American business. Jason will either learn that some of those boomers and Xers at the corporate office aren't so dumb after all, or he'll bounce from job to job never advancing nor achieving the potential his millennial boss sees in him. But if you have a Jason, make sure you have some checks and balances in place so that you're not standing before an EEOC officer or a judge trying to explain how after Donna was replaced by Jason, your hiring and firing statistics show a clear trend toward age bias. You won't win that one.
Jason, however, believes Donna never did the job right and those upper managers at corporate who think she performed well and this job can be done with what he sees are impossible financial constraints are idiots and he's going to prove them wrong (presumably by spending as much as he wants). Jason either ignores or very publicly chides all of Donna's efforts to help him learn the ropes. Jason makes it clear in his rants that if he had the authority, he would fire Donna so he wouldn't have to listen to her anymore. Jason has run off or terminated several over-50 supervisors and replaced them with workers in their 20s. Jason's boss, who is also a millennial and was influential in getting Donna promoted out of the unit, is committed to Jason's potential and Jason is empowered by that support.
This is a true, though slightly modified, example of a disturbing trend. Age discrimination cases have been increasing. Part of this is demographic - there are more older workers today than there were in 2000 due to birthrate trends after World War II - but part is cultural.
I am on record as saying that much of what is being taught in seminars around the country about millennials and generational differences is hokum. For some reason it's acceptable to stereotype individuals based on the year they were born in ways we would never stereotype people based on their skin pigmentation or national origin. (For more on this subject, read my earlier blog).
Overall, I'm bullish on millennials. The purpose of this article is not to indict talented, young, millennial managers, it's to warn business owners that if they are investing in talented, young, millennial managers, they need to keep an eye out for potential biases against older workers. Your confident, aggressive millennial manager could land you in hot water.
When I turned 14, my father told me that for the next 7 or 8 years, he'd be the dumbest human being I ever met, but by the time I was 22, out of school and on my own, I'd eventually figure out he wasn't so dumb after all. He was absolutely right!
My theory about the prevalence of age discrimination by some millennial mangers lies in my dad's observation. Because some millennials have been much slower to mature due to a combination of economic factors that kept them home longer and parenting styles that kept them dependent longer, we have many young adults in their mid-20s who still regard adults in their 50's and 60's the way we did when we were 16. We figured it out by age 22 or 23. Some of them still haven't figured it out by age 29 or 30.
So, my advice is to continue to promote millennials like Jason. It's good for them and good for American business. Jason will either learn that some of those boomers and Xers at the corporate office aren't so dumb after all, or he'll bounce from job to job never advancing nor achieving the potential his millennial boss sees in him. But if you have a Jason, make sure you have some checks and balances in place so that you're not standing before an EEOC officer or a judge trying to explain how after Donna was replaced by Jason, your hiring and firing statistics show a clear trend toward age bias. You won't win that one.
Friday, April 1, 2016
Make Better Hiring Choices
Recently I was playing golf with a friend of mine and we were paired with a father and son we didn't know. After a couple of holes I asked the son, engineer or accountant? He smiled and said, Mechanical Engineer. As a certified professional behavior analyst I recognized fairly quickly that his behavioral style (or personality style) was consistent with someone you would expect to be successful in engineering or accounting, and I guessed correctly.
I began using DISC in my hiring process in 1997. Before that I was a skeptic. Personality profiles were hocus-pocus and a waste of money. Plus, it was obvious to me that the people I hired could have done a good job if they wanted to, they just chose not to and I had to fire them. It was their fault, not mine. But I couldn't ignore that my turnover rate was stubbornly high and that my business unit was not performing as well as some of my peers' business units. At the urging of my CEO, I began incorporating DISC into my selection decisions.
The results were almost instantaneous and within two years my turnover rate had dropped to among the lowest in the company and my branch performance had risen to among the top as well. Was it all because of DISC? No, we made some other adjustments too, but DISC was a big contributor.
We observe contrasting behavioral styles all the time. Some people are naturally outgoing, others are more reserved. Some people are more detail-oriented, others are more achievement-oriented. Some are animated, some have a poker-face. Some are sensitive, others are more about getting the job done even if people get their feelings hurt. It only makes sense that people who are in a job that rewards a certain natural behavior style are going to perform better if they share that style.
The problem I had prior to using DISC was that I judged candidates on the combination of their technical skills and their interviewing skills. But I eventually figured out that we could train technical skills and that interviewing skills weren't that relevant to nor predictive of performance in most jobs. I began to focus on finding people who were trainable, had a demonstrated work ethic, and had a DISC profile that was compatible with the natural demands of the job. That proved to be the combination that lead me to start hiring winners.
If your good hire percentage is lower than you'd like it to be and you're not utilizing DISC in your selection process, contact me and I'll show you how easy it is to benchmark a role in your company so that you can hire more people who have a chance to be great and hire fewer people who are likely going to hate the job.
I began using DISC in my hiring process in 1997. Before that I was a skeptic. Personality profiles were hocus-pocus and a waste of money. Plus, it was obvious to me that the people I hired could have done a good job if they wanted to, they just chose not to and I had to fire them. It was their fault, not mine. But I couldn't ignore that my turnover rate was stubbornly high and that my business unit was not performing as well as some of my peers' business units. At the urging of my CEO, I began incorporating DISC into my selection decisions.
The results were almost instantaneous and within two years my turnover rate had dropped to among the lowest in the company and my branch performance had risen to among the top as well. Was it all because of DISC? No, we made some other adjustments too, but DISC was a big contributor.
We observe contrasting behavioral styles all the time. Some people are naturally outgoing, others are more reserved. Some people are more detail-oriented, others are more achievement-oriented. Some are animated, some have a poker-face. Some are sensitive, others are more about getting the job done even if people get their feelings hurt. It only makes sense that people who are in a job that rewards a certain natural behavior style are going to perform better if they share that style.
The problem I had prior to using DISC was that I judged candidates on the combination of their technical skills and their interviewing skills. But I eventually figured out that we could train technical skills and that interviewing skills weren't that relevant to nor predictive of performance in most jobs. I began to focus on finding people who were trainable, had a demonstrated work ethic, and had a DISC profile that was compatible with the natural demands of the job. That proved to be the combination that lead me to start hiring winners.
If your good hire percentage is lower than you'd like it to be and you're not utilizing DISC in your selection process, contact me and I'll show you how easy it is to benchmark a role in your company so that you can hire more people who have a chance to be great and hire fewer people who are likely going to hate the job.
Bruce, Caitlyn and Transgender Restrooms
NC Governor Pat McCrory recently made news by signing into law the Public Facilities Privacy and Security Act which basically stops localities like Charlotte from passing ordinances that allow transgender individuals to use public restrooms that align with their gender identity, not their birth gender. The ACLU has quickly gotten involved and a lawsuit has been put in motion to declare the NC law unconstitutional.
All this will certainly play out in the political arena and in the courts. The purpose of this article is not to take sides in the dispute, rather to provide guidance to organizations like yours if faced with this dilemma in the meantime. Let's say "Bruce" joined your company a couple of years ago and has been a solid contributor. But Bruce has recently decided to reveal to his co-workers that he really identifies himself as a female, begins wearing female clothing to work, and asks the company to begin referring to him as "Caitlyn." He has also asked to begin using the women's restroom. How do you respond?
This story is becoming more common. The Social Security Administration reports that in the 2010 census some 90,000 Americans had changed their name to reflect the opposite sex and over 20,000 have actually changed their sex in the official record. This, however, is a small percentage of the reported 700,000 Americans who consider themselves transgender according to a study by the Williams Institute. If the Williams Institute is correct, it is only a matter of time before your organization faces this question, "what do we do about Caitlyn?"
The NC statute may give a sense of cover to those traditional employers in NC who may feel that an individual should really use the restroom that matches their actual plumbing rather than what they wish their plumbing to be. But I would caution against rushing to judgement over Caitlyn's request, expecting the NC law to protect you.
It is wise to consider that both OSHA and the EEOC have gotten involved in this debate. OSHA published a guidance on the topic last year in which it recommends that employers allow employees to use the restroom with which they identify. And while it is fine to offer unisex alternatives, it is not fine to require the transgendered to use them. The EEOC also made it clear in its Lusardi v. McHugh decision in April 2015 that it considers transgender rights to be covered by Title VII of the Civil Rights Act, so employers who choose to discriminate against LGBT employees are doing so at their own risk. Personally, I wouldn't want to stand in front of the EEOC depending on the NC law to justify my employment actions, and I definitely recommend you confer with an attorney before deciding to take a hard line stance on this issue.
Bruce becoming Caitlyn is one more example of a circumstance when a small business owner might benefit from having an HR Business Partner on speed dial.
All this will certainly play out in the political arena and in the courts. The purpose of this article is not to take sides in the dispute, rather to provide guidance to organizations like yours if faced with this dilemma in the meantime. Let's say "Bruce" joined your company a couple of years ago and has been a solid contributor. But Bruce has recently decided to reveal to his co-workers that he really identifies himself as a female, begins wearing female clothing to work, and asks the company to begin referring to him as "Caitlyn." He has also asked to begin using the women's restroom. How do you respond?
This story is becoming more common. The Social Security Administration reports that in the 2010 census some 90,000 Americans had changed their name to reflect the opposite sex and over 20,000 have actually changed their sex in the official record. This, however, is a small percentage of the reported 700,000 Americans who consider themselves transgender according to a study by the Williams Institute. If the Williams Institute is correct, it is only a matter of time before your organization faces this question, "what do we do about Caitlyn?"
The NC statute may give a sense of cover to those traditional employers in NC who may feel that an individual should really use the restroom that matches their actual plumbing rather than what they wish their plumbing to be. But I would caution against rushing to judgement over Caitlyn's request, expecting the NC law to protect you.
It is wise to consider that both OSHA and the EEOC have gotten involved in this debate. OSHA published a guidance on the topic last year in which it recommends that employers allow employees to use the restroom with which they identify. And while it is fine to offer unisex alternatives, it is not fine to require the transgendered to use them. The EEOC also made it clear in its Lusardi v. McHugh decision in April 2015 that it considers transgender rights to be covered by Title VII of the Civil Rights Act, so employers who choose to discriminate against LGBT employees are doing so at their own risk. Personally, I wouldn't want to stand in front of the EEOC depending on the NC law to justify my employment actions, and I definitely recommend you confer with an attorney before deciding to take a hard line stance on this issue.
Bruce becoming Caitlyn is one more example of a circumstance when a small business owner might benefit from having an HR Business Partner on speed dial.
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