Georgia is an at-will state. That means that, absent an employment contract, employees have no guarantee of employment. The employment relationship is based upon mutual consent of both parties (employer and employee). Of course, there are limitations to the at-will rule, such as discrimination or retaliation.
In my experience, employers are sometimes scared to terminate employees. They fear it will result in a lawsuit or discrimination claim. To help alleviate this fear, I give the "at-will" lesson.
The "At-Will" Lesson:
I use this lesson most often when I am discussing problem employees who toe the line with regard to company policies, never quite committing a serious enough infraction to be terminated but always creating some level of workplace drama.
The lesson goes something like this:
- Can you terminate an employee for misconduct?
- Can you terminate an employee for chewing gum?
- Can you terminate an employee for wearing a blue shirt on a Tuesday?
- Can you terminate an employee for being homosexual?
With the note that it depends on the state in which you operate, the answer to the each question above is yes in Georgia.
At-will employment means you can terminate an employee at any time, with or without notice, for any reason not prohibited by law.
Seriously, any reason. I don't like you, you're fired...acceptable. I don't like people who wear blue, you're fired...acceptable. As one of my business advisers says: any reason, which includes a good reason, a bad reason, no reason, or a stupid reason, so long as it is not an illegal reason.
That being said, I don't recommend using the at-will doctrine unless it is the only choice.
Lo the Peril: Just Because You Can, Does not Mean You Should.
While the law does not prohibit termination for stupid reasons, it does not mean you are beyond scrutiny for doing so. If you terminate an employee who is a member of a protected class (sex, religion, color, national origin, race, disability, age) for "no reason," it will likely end up being a discrimination claim or a wrongful termination lawsuit, as it could appear that the real reason was discrimination.
The idea is that there is a reason for termination, and "no reason" is a pretext for a discriminatory reason. If an employee is fired without being given a reason, he or she is likely to presume the reason is illegal. The employee will feel wronged and will seek to right it, either by filing a claim with the EEOC or by seeking out an attorney.
Beyond the liability created by terminating for "no reason," the cost of turnover is significantly higher than the cost of retention. If you can address problems through disciplinary action and training, then that is the path to resolve them.
In short, it does not make good business sense to base terminations on stupid, bad, or no reason other than personal preference. It creates liability and costs the company money.
So, Why Mention It?
The knowledge of "at-will" employment is beneficial because it can alleviate an employer's fear relative to termination.
Looking at it from another point of view, what the "at-will" doctrine really states is, you cannot terminate an individual because of his or her color, religion, gender, age, disability, national origin, when an employee refuses sexual advances, or when the employee engages in a protected action such as trying to organize a union, complaining to the EEOC, or submitting a safety violation.
With those exceptions, termination is based upon employer or employee discretion, which is an important point to remember.
When Should I Utilize the "At-Will" Doctrine?
Ideally, a company would be able to address every conceivable problem through policy. It is just not feasible to do so, and even if you could, your employee manual would be overwhelming. Barring the possibility that your policy manual is thorough enough to cover every issue, you will likely have situations that arise which may warrant termination.
Even when an employee's performance is up to standards, and the employee has not violated any policies, he or she may still be negatively impacting the organization. Examples of this type of situation are when an employee does not work well with other employees, the employee's style of communication does not mesh with his or her supervisor's style of communication, the employee feels entitled, constantly complains, or has a generally negative attitude.
In the scenarios above, the employer may need to utilize the employment at-will doctrine as the reason for termination. Generally speaking, termination should be a "last option" and should follow orientation, training, searching for alternate solutions, and disciplinary action, with documentation of each step. When possible, employers should have the employee acknowledge in writing that each step was taken.
To provide an example, if an employer has a negative employee who completes her tasks, but complains about having to do them, the employer should address the issue by talking with the employee and documenting the conversation. Subsequent issues should likewise be addressed along with documentation of how they were addressed. If the problem continues, the employer can terminate employment, knowing that the company has a documented reason for termination if there is a need to defend the decision.
Remember Unemployment Costs:
One last thing to remember about utilization of the at-will doctrine is that terminating at-will does not prohibit the employee from obtaining unemployment wages. That being said, it is worthwhile to consider the negative impact the employee is having on the organization and determining if the cost of unemployment is worth removing the individual from the workplace.
Last Note:
Employers should embrace the employment at-will doctrine and provide constant reminders of at-will employment to employees throughout their policy manuals and any supplemental policy documents they distribute. By asserting that employment is "at-will," the employer maintains flexibility in making employment decisions.
In combination with the assertion of the at-will doctrine, employers should endeavor to help staff succeed, which includes orientation, training, and disciplinary action to address problems. Documentation is key when performing those duties, as it will help protect the organization if the employment actions are questioned.
Thursday, March 31, 2011
Wednesday, March 30, 2011
An Acronym the Fonz would Love: the ADAAA
Ok, perhaps I could have tried harder with that title. You win.
With the release of the final rule of the Americans with Disabilities Act Amendments Act (ADAAA) on March 24th, the EEOC has provided employers with regulations on how the ADAAA is to be implemented. Luckily, the final rule is scaled back from the proposed rule in several areas, most importantly in the definition of disability.
In the final rule, the EEOC stepped away from the idea that certain impairments would consistently meet the definition of a disability. Instead, the EEOC provided a list of nine "rules of construction" intended to help guide the determination of what constitutes a disability. The EEOC did provide examples of impairments that could easily be determined to be disabilities including epilepsy, diabetes, cancer, HIV infection, and bipolar disorder.
Here is a link to the EEOC fact sheet on the final rule: http://www1.eeoc.gov//laws/regulations/adaaa_fact_sheet.cfm?renderforprint=1
Here is an updated link to the final rule: http://www.federalregister.gov/articles/2011/03/25/2011-6056/regulations-to-implement-the-equal-employment-provisions-of-the-americans-with-disabilities-act-as#p-3
The Nine Rules of Construction:
- Section 1630.2(j)(1)(i): Broad Construction; not a Demanding Standard - The term "substantially limits" is to be construed broadly, with the intent of expansive coverage as opposed to being a demanding standard.
- Section 1630.2(j)(1)(ii): Significant or Severe Restriction Not Required; Nonetheless, Not Every Impairment Is Substantially Limiting - The impairment and limitations should be compared to most of the general population to determine if it is in fact a disability.
- Section 1630.2(j)(1)(iii): Substantial Limitation Should Not Be Primary Object of Attention; Extensive Analysis Not Needed - Employers should focus more on compliance as opposed to whether an individual's impairment substantially limited a major life activity.
- Section 1630.2(j)(1)(iv): Individualized Assessment Required, But With Lower Standard Than Previously Applied - Employers must assess each individual to determine if the impairment substantially limits a major life activity.
- Section 1630.2(j)(1)(v): Scientific, Medical, or Statistical Analysis Not Required, But Permissible When Appropriate - It is not necessary for employers to utilize a scientific, medical, or statistical analysis when determining whether or not the impairment substantially limits a major life activity.
- Section 1630.2(j)(1)(vi): Mitigating Measures - Employers should not consider mitigating measures (with the exception of ordinary eyeglasses and/or contact lenses), including whether or not measures exists, but the individual refuses to use them. The EEOC provides examples of psychotherapy, behavioral therapy, and physical therapy to the list of mitigating measures employers should not consider in determining if there is a disability.
- Section 1630.2(j)(1)(vii): Impairments That Are Episodic or in Remission - Employers should remember that even if the impairment is in remission or is episodic, it still may be considered a disability if it would substantially limit a major life activity when active.
- Section 1630.2(j)(1)(viii): Substantial Limitation in Only One Major Life Activity Required - If the impairment only substantially limits one major life activity, it is sufficient to be considered a disability.
- Section 1630.2(j)(1)(ix): Effects of an Impairment Lasting Fewer Than Six Months Can Be Substantially Limiting - Employers should remember that even transitory or minor impairments may be significant and could be "sufficiently severe" and thus warrant disability status.
Expansion of the definition of “major life activities” through two non-exhaustive lists:
—The first list includes activities such as caring for oneself, performing manual tasks,seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working, some of which the EEOC previously identified in regulations and sub-regulatory guidance, and some of which Congress additionally included in the Amendments Act;
—The second list included major bodily functions, such as functions of the immune system, special sense organs, and skin; normal cell growth; and digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions, many of which were included by Congress in the Amendments Act, and some of which were added by the Commission as further illustrative examples.
With the release of the final rule of the Americans with Disabilities Act Amendments Act (ADAAA) on March 24th, the EEOC has provided employers with regulations on how the ADAAA is to be implemented. Luckily, the final rule is scaled back from the proposed rule in several areas, most importantly in the definition of disability.
In the final rule, the EEOC stepped away from the idea that certain impairments would consistently meet the definition of a disability. Instead, the EEOC provided a list of nine "rules of construction" intended to help guide the determination of what constitutes a disability. The EEOC did provide examples of impairments that could easily be determined to be disabilities including epilepsy, diabetes, cancer, HIV infection, and bipolar disorder.
Here is a link to the EEOC fact sheet on the final rule: http://www1.eeoc.gov//laws/regulations/adaaa_fact_sheet.cfm?renderforprint=1
Here is an updated link to the final rule: http://www.federalregister.gov/articles/2011/03/25/2011-6056/regulations-to-implement-the-equal-employment-provisions-of-the-americans-with-disabilities-act-as#p-3
The Nine Rules of Construction:
- Section 1630.2(j)(1)(i): Broad Construction; not a Demanding Standard - The term "substantially limits" is to be construed broadly, with the intent of expansive coverage as opposed to being a demanding standard.
- Section 1630.2(j)(1)(ii): Significant or Severe Restriction Not Required; Nonetheless, Not Every Impairment Is Substantially Limiting - The impairment and limitations should be compared to most of the general population to determine if it is in fact a disability.
- Section 1630.2(j)(1)(iii): Substantial Limitation Should Not Be Primary Object of Attention; Extensive Analysis Not Needed - Employers should focus more on compliance as opposed to whether an individual's impairment substantially limited a major life activity.
- Section 1630.2(j)(1)(iv): Individualized Assessment Required, But With Lower Standard Than Previously Applied - Employers must assess each individual to determine if the impairment substantially limits a major life activity.
- Section 1630.2(j)(1)(v): Scientific, Medical, or Statistical Analysis Not Required, But Permissible When Appropriate - It is not necessary for employers to utilize a scientific, medical, or statistical analysis when determining whether or not the impairment substantially limits a major life activity.
- Section 1630.2(j)(1)(vi): Mitigating Measures - Employers should not consider mitigating measures (with the exception of ordinary eyeglasses and/or contact lenses), including whether or not measures exists, but the individual refuses to use them. The EEOC provides examples of psychotherapy, behavioral therapy, and physical therapy to the list of mitigating measures employers should not consider in determining if there is a disability.
- Section 1630.2(j)(1)(vii): Impairments That Are Episodic or in Remission - Employers should remember that even if the impairment is in remission or is episodic, it still may be considered a disability if it would substantially limit a major life activity when active.
- Section 1630.2(j)(1)(viii): Substantial Limitation in Only One Major Life Activity Required - If the impairment only substantially limits one major life activity, it is sufficient to be considered a disability.
- Section 1630.2(j)(1)(ix): Effects of an Impairment Lasting Fewer Than Six Months Can Be Substantially Limiting - Employers should remember that even transitory or minor impairments may be significant and could be "sufficiently severe" and thus warrant disability status.
Expansion of the definition of “major life activities” through two non-exhaustive lists:
—The first list includes activities such as caring for oneself, performing manual tasks,seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working, some of which the EEOC previously identified in regulations and sub-regulatory guidance, and some of which Congress additionally included in the Amendments Act;
—The second list included major bodily functions, such as functions of the immune system, special sense organs, and skin; normal cell growth; and digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions, many of which were included by Congress in the Amendments Act, and some of which were added by the Commission as further illustrative examples.
Monday, March 28, 2011
GA Law Update
Senate Bill 40 - Requirement to use Federal Work Authorization System:
If passed, Senate Bill 40 will require every private employer in the state to use the federal work authorization system to verify the employment eligibility of every new hire within three (3) business days of hiring and to retain documents demonstrating that verification for at least five (5) years.
The first violation will be met with a written warning from the Georgia Department of Labor, but additional violations will receive civil fines and potential revocation of the company's business license.
There is opposition to the proposal based upon the impact to employers.
House Bill 87 - Illegal Immigration Reform and Enforcement Act of 2011:
This bill is similar to Senate Bill 40 in that it requires employers to use the E-Verify system. This bill applies to all private employers of five (5) or more employees.
Violations could be prosecuted as criminal offenses.
Senate Bill 104 - Hiring of Day Laborers:
In a similar measure, Senate Bill 104 would bar the hiring of day laborers throughout Georgia.
The bill would make it illegal for an occupant of a motor vehicle to attempt to hire and pick up passengers for work at a different location, if the motor vehicle is blocking traffic, as well as for a person to enter the motor vehicle (i.e., both the driver and the workers are in violation).
It also prohibits a person who is an unauthorized alien to knowingly apply for work, solicit work in a public place, or perform work.
Other News - OSHA Citation:
OSHA cited a Georgia Contractor for willfully exposing a workers to being trapped and buried by a trench collapse and serious safety hazards.
The company, George Grading and Hauling, Inc., faces $64,750 in penalties for the violations, with $49,000 of that being for one willful violation. The remaining portion is for five serious citations, such as allowing employees to work in a trench with overhead hazards and without personal protective equipment, not supplying a safe means of exit from the trench, allowing employees in the trench too close to materials overhead, allowing materials to be placed too close to the trench creating the possibility that they would roll back into the excavation, and insufficient inspection of the trench to ensure safety.
If passed, Senate Bill 40 will require every private employer in the state to use the federal work authorization system to verify the employment eligibility of every new hire within three (3) business days of hiring and to retain documents demonstrating that verification for at least five (5) years.
The first violation will be met with a written warning from the Georgia Department of Labor, but additional violations will receive civil fines and potential revocation of the company's business license.
There is opposition to the proposal based upon the impact to employers.
House Bill 87 - Illegal Immigration Reform and Enforcement Act of 2011:
This bill is similar to Senate Bill 40 in that it requires employers to use the E-Verify system. This bill applies to all private employers of five (5) or more employees.
Violations could be prosecuted as criminal offenses.
Senate Bill 104 - Hiring of Day Laborers:
In a similar measure, Senate Bill 104 would bar the hiring of day laborers throughout Georgia.
The bill would make it illegal for an occupant of a motor vehicle to attempt to hire and pick up passengers for work at a different location, if the motor vehicle is blocking traffic, as well as for a person to enter the motor vehicle (i.e., both the driver and the workers are in violation).
It also prohibits a person who is an unauthorized alien to knowingly apply for work, solicit work in a public place, or perform work.
Other News - OSHA Citation:
OSHA cited a Georgia Contractor for willfully exposing a workers to being trapped and buried by a trench collapse and serious safety hazards.
The company, George Grading and Hauling, Inc., faces $64,750 in penalties for the violations, with $49,000 of that being for one willful violation. The remaining portion is for five serious citations, such as allowing employees to work in a trench with overhead hazards and without personal protective equipment, not supplying a safe means of exit from the trench, allowing employees in the trench too close to materials overhead, allowing materials to be placed too close to the trench creating the possibility that they would roll back into the excavation, and insufficient inspection of the trench to ensure safety.
Do Something...Even if it is Wrong!
By: James Barlament
My dad has a lot of sayings. One of them he used to say to me in frustration: “Do something, even if it’s wrong.” I heard that one a lot on Saturday mornings when I’d rather be asleep than outside mowing the lawn. He was an Army man, and that’s an old Army adage. It basically means don’t freeze up in the face of pressure; doing nothing is much worse than making a mistake.
This mindset is not restricted to grunts in the trenches making snap decisions in the face of a real enemy. We see it in government policy every day. Americans do not elect politicians who choke. Those in charge must seem to be always moving forward, solving problems with actions, even if these are blind actions that may or may not work.
I fundamentally disagree with my dad’s saying, and to be fair, he doesn’t agree with it either. After he retired from the Army, he became a financial manager and investor. I have a Master’s degree in history, and I’m now a researcher and program evaluator. I love spontaneity, but not when making decisions that will affect the future of an organization.
In my line of work, I come across a lot of highly motivated people who follow the mentality implied by my dad’s saying. They are doers, busy bees, go-getters, men and women of action. They are Mack trucks of industriousness, and I’m a road block or weigh station. I once did a presentation on the relationship between evaluator and evaluatee, and one of the major conflicts between the two parties comes from the fact that we, the evaluators, slow the evaluated down. We keep them from doing.
A few years ago, my team was asked by a government agency to evaluate its largest organization, which had existed for 25 years with multiple moving parts. On the surface, it was performing at a high level, meeting at least 85% of its milestones and objectives annually; however, on close inspection, all of the benchmarks were predicated on meeting volume numbers: “We will perform x task for x number of people”; “We will distribute x number of fliers to x number of people”; “We will conduct x number of surveys with x number of people.”
I was encouraged by the surveys. I asked, “Have you ever analyzed this survey data to see if your programs are working?” “No,” was their answer. I asked where they stored this survey data, thinking that it would be in an Excel chart or, hope against hope, SPSS or SAS. A woman led me out to a storage unit behind their facility where I was introduced to the most enormous set of filing cabinets I’d ever seen: 12 foot high drawers upon drawers of pre and post surveys from every class, rally, training or outreach event the organization ever conducted since 1984. I was floored and immediately despondent. They had been doing and “actioning” for 25 years without pausing to reflect on the effectiveness of the programs. Evaluation tools were mere check marks on a milestone chart. If a new issue in the field came up, they invented a new program to address the problem and found a new drawer for its surveys.
My colleagues and I sat down to make an action plan, and we quickly came to a decision about the giant filing cabinets: no way were we or anyone else going to climb through that massive amount of data. We needed a baseline, so we requested surveys from the last three years of each program, which we converted to SPSS files to analyze the data. What we found was not surprising: surveys from all individual programs showed increases in knowledge, attitudes, and behaviors from pre tests to post tests; however, there was a year-to-year level of stagnation in overall success. This stagnation resulted from using the same surveys for 25 years without modification and from performing programs that had never been pared down or strictly examined for strengths and weaknesses.
Currently, the updated surveys conducted by this organization are more applicable and entered directly into a database. Plans to begin online surveys are in the works. Programs conducted by the organization are more streamlined and productive, with increasingly high survey success rates. Coincidentally in the last two years, the organization has hired new employees who are dedicated to data-driven approaches to self-assessment and who have contributed much to the joy of my evaluation team. The milestones and objectives are now based on judging the quality, not the quantity of their programs.
“Do something, even if it’s wrong” might work on the battlefield. Sometimes the wrong decision may work because the enemy won’t be expecting it. But, if you are afforded the time to self evaluate and think before acting, take it. Careful research, planning, and experimentation lead to good evaluation and good decisions.
========================================================================
This is a guest post by James Barlament, an HRCT preferred provider for Programs Analysis.
Mr. Barlament received two degrees from the University of Georgia, finishing a Master of Arts degree in the History of Science in 2005. He has authored and co-authored several articles, publications, and presentations and has presented his work at numerous state, national, and international conferences.
My dad has a lot of sayings. One of them he used to say to me in frustration: “Do something, even if it’s wrong.” I heard that one a lot on Saturday mornings when I’d rather be asleep than outside mowing the lawn. He was an Army man, and that’s an old Army adage. It basically means don’t freeze up in the face of pressure; doing nothing is much worse than making a mistake.
This mindset is not restricted to grunts in the trenches making snap decisions in the face of a real enemy. We see it in government policy every day. Americans do not elect politicians who choke. Those in charge must seem to be always moving forward, solving problems with actions, even if these are blind actions that may or may not work.
I fundamentally disagree with my dad’s saying, and to be fair, he doesn’t agree with it either. After he retired from the Army, he became a financial manager and investor. I have a Master’s degree in history, and I’m now a researcher and program evaluator. I love spontaneity, but not when making decisions that will affect the future of an organization.
In my line of work, I come across a lot of highly motivated people who follow the mentality implied by my dad’s saying. They are doers, busy bees, go-getters, men and women of action. They are Mack trucks of industriousness, and I’m a road block or weigh station. I once did a presentation on the relationship between evaluator and evaluatee, and one of the major conflicts between the two parties comes from the fact that we, the evaluators, slow the evaluated down. We keep them from doing.
A few years ago, my team was asked by a government agency to evaluate its largest organization, which had existed for 25 years with multiple moving parts. On the surface, it was performing at a high level, meeting at least 85% of its milestones and objectives annually; however, on close inspection, all of the benchmarks were predicated on meeting volume numbers: “We will perform x task for x number of people”; “We will distribute x number of fliers to x number of people”; “We will conduct x number of surveys with x number of people.”
I was encouraged by the surveys. I asked, “Have you ever analyzed this survey data to see if your programs are working?” “No,” was their answer. I asked where they stored this survey data, thinking that it would be in an Excel chart or, hope against hope, SPSS or SAS. A woman led me out to a storage unit behind their facility where I was introduced to the most enormous set of filing cabinets I’d ever seen: 12 foot high drawers upon drawers of pre and post surveys from every class, rally, training or outreach event the organization ever conducted since 1984. I was floored and immediately despondent. They had been doing and “actioning” for 25 years without pausing to reflect on the effectiveness of the programs. Evaluation tools were mere check marks on a milestone chart. If a new issue in the field came up, they invented a new program to address the problem and found a new drawer for its surveys.
My colleagues and I sat down to make an action plan, and we quickly came to a decision about the giant filing cabinets: no way were we or anyone else going to climb through that massive amount of data. We needed a baseline, so we requested surveys from the last three years of each program, which we converted to SPSS files to analyze the data. What we found was not surprising: surveys from all individual programs showed increases in knowledge, attitudes, and behaviors from pre tests to post tests; however, there was a year-to-year level of stagnation in overall success. This stagnation resulted from using the same surveys for 25 years without modification and from performing programs that had never been pared down or strictly examined for strengths and weaknesses.
Currently, the updated surveys conducted by this organization are more applicable and entered directly into a database. Plans to begin online surveys are in the works. Programs conducted by the organization are more streamlined and productive, with increasingly high survey success rates. Coincidentally in the last two years, the organization has hired new employees who are dedicated to data-driven approaches to self-assessment and who have contributed much to the joy of my evaluation team. The milestones and objectives are now based on judging the quality, not the quantity of their programs.
“Do something, even if it’s wrong” might work on the battlefield. Sometimes the wrong decision may work because the enemy won’t be expecting it. But, if you are afforded the time to self evaluate and think before acting, take it. Careful research, planning, and experimentation lead to good evaluation and good decisions.
========================================================================
This is a guest post by James Barlament, an HRCT preferred provider for Programs Analysis.
Mr. Barlament received two degrees from the University of Georgia, finishing a Master of Arts degree in the History of Science in 2005. He has authored and co-authored several articles, publications, and presentations and has presented his work at numerous state, national, and international conferences.
Is Turnover Bad? Hire Slow/Fire Timely
A few weeks ago in my FastTrac class, we reviewed the edict "Hire slow and fire fast."
I have heard it before, and while I understand the message, I prefer to alter it slightly:
Hire slow and fire timely.
Why the Change?
I have seen managers who are too quick to terminate. If you have seen my blog on HR Metrics, you know the cost of turnover contains many factors. The costs add up quickly, and if they can be avoided, they should be avoided. If training can help improve deficiencies, training beats termination.
That being said, there is certainly a point in an employment relationship when it is time to terminate, and when that point has been reached, then it is (say it with me) "time to terminate."
Back to the Edict:
The edict is valuable on two fronts. The first is that by hiring slowly we can improve our decision making process and thereby reduce the likelihood of turnover. We can use various tools, such as pre-employment testing, structured interviews, and background checks to ensure we have a good fit for the position and for our company. Through realistic job previews, we can help the applicants make informed decisions regarding the employment relationship. If everyone goes into the relationship with "eyes wide open," we increase the chances of success.
The second is that when an employment relationship reaches the "time to terminate" stage, we are well served to take action. I have seen it many times; companies are scared to terminate. The trepidation may be based on the fear of a lawsuit, but it also may be an aversion to the act of terminating an employee.
Termination is the most difficult part of being in human resources or owning a business. Some people are not phased by it, but personally, I find it heartbreaking to tell a person he or she has lost a job. It is a devastating blow and an emotional exchange.
Regardless, the cost of not terminating can be more problematic than turnover.
The Cost of Not Terminating:
It would be nice to say that the cost of not terminating is 20% higher than the cost of turnover. Of course, the cost of not terminating is more difficult to calculate due to the intangibles. Still, low preforming employees and disgruntled employees have a negative impact on the company. It may be through lowering overall productivity, creating errors and waste, or through the impact on other employees.
A company at which I used to work had an employee who was known to do nothing. The company wanted to terminate her for more than a year before she was actually terminated. Her direct supervisor was against it, and he had significant power in the company. She barely worked 30 hours a week but would come into the office on the weekends, clock in, and do her homework for school in order to stay full-time and keep her benefits.
She was a nice person. It was tough to recommend her termination, but it was obvious that her cost exceeded her value. Other employees worked hard and resented that she was not held to the same standard. Office politics became front and center, and other employees went from gruntled to disgruntled (yeah, I know gruntled is not a word).
The Employee Equity Solution:
Luckily, the office was small enough, and the majority of management was trusted enough that we did not see the "employee equity solution" employed. The "employee equity solution" is based on the idea that an employee wants to feel equity with regard to his or her position. Equity, in this situation, is based on the feeling that pay is equal to the amount of work the employee does. Employees seek to find an equitable ratio of pay to work (pay/work). This is generally measured against other workers both internally and externally.
In the "employee equity solution," the employee adjusts his or her level of work to ensure that there is equity. So, if employee A gets paid X and does Y level of work, then employee B adjusts the level of work to achieve the ratio of X/Y.
When employee A is an under-performing employee who should be terminated, employee B will reduce his or her work level. Now the company has two employees who should be terminated for lack of performance.
Is Turnover Bad?
Not always. In the scenario above, terminating employee A is good. A bad employee can have a negative impact on the organization as a whole. When I recommend termination to an employer, a common response is the cost of unemployment. My response is that the cost of unemployment beats the cost of paying this individual to create new standards for minimal performance.
Turnover should be avoided, and it can be through good hiring practices, training, and on-going support. Still, there are times when termination is the answer. When that time comes, it is important to take timely action.
I have heard it before, and while I understand the message, I prefer to alter it slightly:
Hire slow and fire timely.
Why the Change?
I have seen managers who are too quick to terminate. If you have seen my blog on HR Metrics, you know the cost of turnover contains many factors. The costs add up quickly, and if they can be avoided, they should be avoided. If training can help improve deficiencies, training beats termination.
That being said, there is certainly a point in an employment relationship when it is time to terminate, and when that point has been reached, then it is (say it with me) "time to terminate."
Back to the Edict:
The edict is valuable on two fronts. The first is that by hiring slowly we can improve our decision making process and thereby reduce the likelihood of turnover. We can use various tools, such as pre-employment testing, structured interviews, and background checks to ensure we have a good fit for the position and for our company. Through realistic job previews, we can help the applicants make informed decisions regarding the employment relationship. If everyone goes into the relationship with "eyes wide open," we increase the chances of success.
The second is that when an employment relationship reaches the "time to terminate" stage, we are well served to take action. I have seen it many times; companies are scared to terminate. The trepidation may be based on the fear of a lawsuit, but it also may be an aversion to the act of terminating an employee.
Termination is the most difficult part of being in human resources or owning a business. Some people are not phased by it, but personally, I find it heartbreaking to tell a person he or she has lost a job. It is a devastating blow and an emotional exchange.
Regardless, the cost of not terminating can be more problematic than turnover.
The Cost of Not Terminating:
It would be nice to say that the cost of not terminating is 20% higher than the cost of turnover. Of course, the cost of not terminating is more difficult to calculate due to the intangibles. Still, low preforming employees and disgruntled employees have a negative impact on the company. It may be through lowering overall productivity, creating errors and waste, or through the impact on other employees.
A company at which I used to work had an employee who was known to do nothing. The company wanted to terminate her for more than a year before she was actually terminated. Her direct supervisor was against it, and he had significant power in the company. She barely worked 30 hours a week but would come into the office on the weekends, clock in, and do her homework for school in order to stay full-time and keep her benefits.
She was a nice person. It was tough to recommend her termination, but it was obvious that her cost exceeded her value. Other employees worked hard and resented that she was not held to the same standard. Office politics became front and center, and other employees went from gruntled to disgruntled (yeah, I know gruntled is not a word).
The Employee Equity Solution:
Luckily, the office was small enough, and the majority of management was trusted enough that we did not see the "employee equity solution" employed. The "employee equity solution" is based on the idea that an employee wants to feel equity with regard to his or her position. Equity, in this situation, is based on the feeling that pay is equal to the amount of work the employee does. Employees seek to find an equitable ratio of pay to work (pay/work). This is generally measured against other workers both internally and externally.
In the "employee equity solution," the employee adjusts his or her level of work to ensure that there is equity. So, if employee A gets paid X and does Y level of work, then employee B adjusts the level of work to achieve the ratio of X/Y.
When employee A is an under-performing employee who should be terminated, employee B will reduce his or her work level. Now the company has two employees who should be terminated for lack of performance.
Is Turnover Bad?
Not always. In the scenario above, terminating employee A is good. A bad employee can have a negative impact on the organization as a whole. When I recommend termination to an employer, a common response is the cost of unemployment. My response is that the cost of unemployment beats the cost of paying this individual to create new standards for minimal performance.
Turnover should be avoided, and it can be through good hiring practices, training, and on-going support. Still, there are times when termination is the answer. When that time comes, it is important to take timely action.
Thursday, March 24, 2011
Unintentional Discrimination
I wish the flu discriminated against me. I caught the flu last week, and I am not sure if you know, but it is taxing. In some ways, I think the flu does discriminate. It is this type of discrimination that many employers engage in. The unintentional kind. Disparate Impact.
Two Forms of Discrimination:
There are two forms of discrimination. Disparate Treatment is what most people think of as discrimination. An example of Disparate Treatment is when an employer only makes Hispanic applicants take literacy tests. The employer is intentionally selecting out a group and treating the people in the group differently.
Many employers will say, "Oh, we don't discriminate." They may even genuinely believe it. However, they may also fall victim to the second type of discrimination, Disparate Impact.
Disparate Impact (or Adverse Impact) is when an employment practice has the effect of negatively impacting a protected group at a higher rate than that of a non-protected group. This is calculated using the 80% rule.
The 80% Rule:
The 80% rule looks at the ratio of the impact. Let's look at pre-employment tests to draw the example. Company A has a pre-employment test for its janitors. As a result of the tests, 50% of the white male applicants are hired and 20% of the black female applicants are hired. To determine if Disparate Impact exists, we divide 20%/50%, which gives us 40%, which is clearly below the 80% rule.
Using the flu as an example, the flu impacts the young and the elderly at significantly higher rates. I don't have the numbers to do the calculation, but we might be able to prove that the rate violates the 80% rule. Too bad the EEOC does not regulate the flu.
Disparate Impact in Employment:
Anyway, as it applies to employment, employers should be aware that even those programs with the best intentions can create liability. It is important to consider the impact of the actions as they relate to protected classes.
I once had a facility administrator who wanted to create a rule where no one with an arrest record was hired. Unfortunately, this has been viewed as potentially discriminatory, as minorities are arrested at a far higher rate than non-minorities, and arrests are not equivalent to convictions.
The administrator did not intend to discriminate, nor was he a racist, however, had he implemented this rule, the company may have been guilty of discrimination.
Tools:
Fortunately, the EEOC has provided tools to help with this.
Here is the link for the Employment Tests and Selection Procedures Fact Sheet:
http://www.eeoc.gov/policy/docs/factemployment_procedures.html
Here is a link to the Uniform Guidelines for Employee Selection Procedures:
http://www.uniformguidelines.com/uniformguidelines.html
Both are useful in ensuring good faith compliance with discrimination laws.
Two Forms of Discrimination:
There are two forms of discrimination. Disparate Treatment is what most people think of as discrimination. An example of Disparate Treatment is when an employer only makes Hispanic applicants take literacy tests. The employer is intentionally selecting out a group and treating the people in the group differently.
Many employers will say, "Oh, we don't discriminate." They may even genuinely believe it. However, they may also fall victim to the second type of discrimination, Disparate Impact.
Disparate Impact (or Adverse Impact) is when an employment practice has the effect of negatively impacting a protected group at a higher rate than that of a non-protected group. This is calculated using the 80% rule.
The 80% Rule:
The 80% rule looks at the ratio of the impact. Let's look at pre-employment tests to draw the example. Company A has a pre-employment test for its janitors. As a result of the tests, 50% of the white male applicants are hired and 20% of the black female applicants are hired. To determine if Disparate Impact exists, we divide 20%/50%, which gives us 40%, which is clearly below the 80% rule.
Using the flu as an example, the flu impacts the young and the elderly at significantly higher rates. I don't have the numbers to do the calculation, but we might be able to prove that the rate violates the 80% rule. Too bad the EEOC does not regulate the flu.
Disparate Impact in Employment:
Anyway, as it applies to employment, employers should be aware that even those programs with the best intentions can create liability. It is important to consider the impact of the actions as they relate to protected classes.
I once had a facility administrator who wanted to create a rule where no one with an arrest record was hired. Unfortunately, this has been viewed as potentially discriminatory, as minorities are arrested at a far higher rate than non-minorities, and arrests are not equivalent to convictions.
The administrator did not intend to discriminate, nor was he a racist, however, had he implemented this rule, the company may have been guilty of discrimination.
Tools:
Fortunately, the EEOC has provided tools to help with this.
Here is the link for the Employment Tests and Selection Procedures Fact Sheet:
http://www.eeoc.gov/policy/docs/factemployment_procedures.html
Here is a link to the Uniform Guidelines for Employee Selection Procedures:
http://www.uniformguidelines.com/uniformguidelines.html
Both are useful in ensuring good faith compliance with discrimination laws.
Monday, March 14, 2011
The Impact of Incentives
Shame on me for going through with this. I know better than to quote Wikipedia...but here goes, caution to the wind:
According to Wikipedia, an incentive (in economics or sociology) is any factor (financial or non-financial) that enables or motivates a particular course of action or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way.
What is most interesting about incentives to me is that the impact is not always intuitive.
Take the section of Freakonomics that discusses the issue of late pick-ups, which negatively impacted a day care. The day care instituted a penalty of $3 per child for late pick-up. The result was an increase in the number of late pick-ups.
While late pick-ups were an issue before, many parents felt guilty about it. There was a disincentive for these parents. They did not want to feel guilty, so they did not leave their kids after the normal pick-up time. However, once the penalty was put in place, their guilt was negated. They could pay the $3 and feel guilt-free, quite a deal.
This is a great lesson. Setting incentives can be counter-intuitive.
Consider the adage, "That which gets rewarded, gets done."
Let's look at the explicit portion of that statement, which essentially is that if you reward a behavior, it will be done. The lesson here is that you want to set incentives that align with company goals and encourage behaviors beneficial to achieving those goals.
Now consider the implicit part: that which is not rewarded may not get done. We must consider both sides when setting incentive plans. Let's put it in story form to illustrate the point...(nice allusion to a previous post, right?).
Tom owns a store that sells high-end electronics, large HDTVs, home theaters, the works. He creates an incentive program that rewards the highest dollar total of sales at the store. At the end of the month, his sales have increased and things look good. However, he sees a decrease in repeat customers. He finds out the store down the block provides a much higher level of customer service, talking with clients to determine their actual needs, consulting with clients to ensure an optimal set-up, and even recommending less expensive products if necessary. Tom's sales people were only concerned with making the sale and moving on to the next customer. Tom incentivized sales in the short-term at the loss of long-term relationships with clients.
Similarly, when designing an incentive program for your company, you need to not only look at behaviors you want to incentivize, but also consider the other behaviors that are not getting reinforced. It is important to determine if those behaviors are necessary as well.
According to Wikipedia, an incentive (in economics or sociology) is any factor (financial or non-financial) that enables or motivates a particular course of action or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way.
What is most interesting about incentives to me is that the impact is not always intuitive.
Take the section of Freakonomics that discusses the issue of late pick-ups, which negatively impacted a day care. The day care instituted a penalty of $3 per child for late pick-up. The result was an increase in the number of late pick-ups.
While late pick-ups were an issue before, many parents felt guilty about it. There was a disincentive for these parents. They did not want to feel guilty, so they did not leave their kids after the normal pick-up time. However, once the penalty was put in place, their guilt was negated. They could pay the $3 and feel guilt-free, quite a deal.
This is a great lesson. Setting incentives can be counter-intuitive.
Consider the adage, "That which gets rewarded, gets done."
Let's look at the explicit portion of that statement, which essentially is that if you reward a behavior, it will be done. The lesson here is that you want to set incentives that align with company goals and encourage behaviors beneficial to achieving those goals.
Now consider the implicit part: that which is not rewarded may not get done. We must consider both sides when setting incentive plans. Let's put it in story form to illustrate the point...(nice allusion to a previous post, right?).
Tom owns a store that sells high-end electronics, large HDTVs, home theaters, the works. He creates an incentive program that rewards the highest dollar total of sales at the store. At the end of the month, his sales have increased and things look good. However, he sees a decrease in repeat customers. He finds out the store down the block provides a much higher level of customer service, talking with clients to determine their actual needs, consulting with clients to ensure an optimal set-up, and even recommending less expensive products if necessary. Tom's sales people were only concerned with making the sale and moving on to the next customer. Tom incentivized sales in the short-term at the loss of long-term relationships with clients.
Similarly, when designing an incentive program for your company, you need to not only look at behaviors you want to incentivize, but also consider the other behaviors that are not getting reinforced. It is important to determine if those behaviors are necessary as well.
Thursday, March 10, 2011
HR Metrics - The More You Know.
On Tuesday I attended the AASHRM monthly meeting featuring JoAnn Corley. The meeting was great, and there were plenty of take-aways. In fact, I am sure they will crop up in a few HRCT blogs in the future.
The take-away that I want to attach to this blog is the need for HR professionals to demonstrate more business acumen. While business acumen covers a wide array of knowledge and skills, one area where we can improve our contribution is by using metrics.
HR Metrics are a way to demonstrate both the value of good HR programs as well as HR's strategic contribution to the organization. Practitioners can use HR metrics to justify business action. By developing, implementing, and monitoring a solid HR Metric program, companies can make more informed decisions with regard to their HR programs.
Let's consider one area where we can use HR Metrics. Turnover.
It is well established that turnover is costly, but just how costly is it to your organization? How do you explain the cost of turnover to your CFO?
Do you say "it costs more to hire a new employee than it does to keep an employee," or, do you quantify as many aspects of turnover as possible and provide a dollar figure associated with that cost?
I say the latter is probably a better approach.
When considering the cost of turnover, think about the following costs: The cost of administrative functions related to termination such as handling exit interviews, handling unemployment submission, terminating benefits, and sending letters of termination; the cost of unemployment compensation realized in higher premiums for most employers or direct cost for reimbursing employers; severance pay.
Don't forget vacancy costs. Are you incurring more overtime to fill the space? What is the impact to revenue with one fewer employee? Are higher paid employees filling the void?
Oh, and replacement cost, like the cost of advertising. Then there are administrative costs related to hiring a replacement, like the time spent sifting through applications/resumes and interviewing.
If you want to hire for the long-term, you have to consider the cost of pre-employment testing, including background checks and drug testing. Also, you may want to do aptitude tests or personality tests to bolster your chances(you don't want to have to hire again in less than a year!)
Now that the replacement is hired, let's include the cost of training. Training can be formal, such as a training program, certification, or even just orientation. It can also be informal, such as the time spent learning processes and procedures on the job. Don't forget the variance in productivity in a new employee and one who has been at the job for a while.
I will add one final consideration. In my experience, first year employees have the highest rate of on the job accidents. It could be inexperience or unfamiliarity with the work environment, but I have seen it hold time and again. So, perhaps adding in the additional exposure with regard to workers compensation is of value.
Some of these costs will be easy to obtain. Others require a little more digging, and others will be speculation. Rest assured, formulas can be created to give you a pretty good idea of what the cost is.
The point is, the more you understand what costs are associated with an action, the easier it is to justify preventing it.
Preventing it may take the form of better hiring procedures. If you increase the cost of the hiring procedures through better testing, structured interviews, and utilizing talent search firms, you may end up reducing the amount of turnover and thus saving the company money.
Maybe prevention takes the form of better incentive programs designed to prevent voluntary turnover. While I will admit it is rare, I have seen employees leave for an additional $.25 per hour. On the flip side, I have had an employee turn down $4 more per hour (nearly 25% of her wage) because she felt valued by the employer. Creating incentive programs is not just about pay; it is about finding what motivates your employee. Savvy HR professionals can find the proper incentive, then justify it by comparing the cost of the incentive to the cost of turnover.
I think the point is made, and it is not just for HR professionals. JoAnn Corley said it pains her when she hears that HR is the step-child of the organization. The reason for that is that HR is still viewed by most as a cost center of the organization. Maybe it is, but it is still a necessary part of the organization. By using HR Metrics, we can show the value of sound HR programs and contribute to the strategic success of the organization.
The take-away that I want to attach to this blog is the need for HR professionals to demonstrate more business acumen. While business acumen covers a wide array of knowledge and skills, one area where we can improve our contribution is by using metrics.
HR Metrics are a way to demonstrate both the value of good HR programs as well as HR's strategic contribution to the organization. Practitioners can use HR metrics to justify business action. By developing, implementing, and monitoring a solid HR Metric program, companies can make more informed decisions with regard to their HR programs.
Let's consider one area where we can use HR Metrics. Turnover.
It is well established that turnover is costly, but just how costly is it to your organization? How do you explain the cost of turnover to your CFO?
Do you say "it costs more to hire a new employee than it does to keep an employee," or, do you quantify as many aspects of turnover as possible and provide a dollar figure associated with that cost?
I say the latter is probably a better approach.
When considering the cost of turnover, think about the following costs: The cost of administrative functions related to termination such as handling exit interviews, handling unemployment submission, terminating benefits, and sending letters of termination; the cost of unemployment compensation realized in higher premiums for most employers or direct cost for reimbursing employers; severance pay.
Don't forget vacancy costs. Are you incurring more overtime to fill the space? What is the impact to revenue with one fewer employee? Are higher paid employees filling the void?
Oh, and replacement cost, like the cost of advertising. Then there are administrative costs related to hiring a replacement, like the time spent sifting through applications/resumes and interviewing.
If you want to hire for the long-term, you have to consider the cost of pre-employment testing, including background checks and drug testing. Also, you may want to do aptitude tests or personality tests to bolster your chances(you don't want to have to hire again in less than a year!)
Now that the replacement is hired, let's include the cost of training. Training can be formal, such as a training program, certification, or even just orientation. It can also be informal, such as the time spent learning processes and procedures on the job. Don't forget the variance in productivity in a new employee and one who has been at the job for a while.
I will add one final consideration. In my experience, first year employees have the highest rate of on the job accidents. It could be inexperience or unfamiliarity with the work environment, but I have seen it hold time and again. So, perhaps adding in the additional exposure with regard to workers compensation is of value.
Some of these costs will be easy to obtain. Others require a little more digging, and others will be speculation. Rest assured, formulas can be created to give you a pretty good idea of what the cost is.
The point is, the more you understand what costs are associated with an action, the easier it is to justify preventing it.
Preventing it may take the form of better hiring procedures. If you increase the cost of the hiring procedures through better testing, structured interviews, and utilizing talent search firms, you may end up reducing the amount of turnover and thus saving the company money.
Maybe prevention takes the form of better incentive programs designed to prevent voluntary turnover. While I will admit it is rare, I have seen employees leave for an additional $.25 per hour. On the flip side, I have had an employee turn down $4 more per hour (nearly 25% of her wage) because she felt valued by the employer. Creating incentive programs is not just about pay; it is about finding what motivates your employee. Savvy HR professionals can find the proper incentive, then justify it by comparing the cost of the incentive to the cost of turnover.
I think the point is made, and it is not just for HR professionals. JoAnn Corley said it pains her when she hears that HR is the step-child of the organization. The reason for that is that HR is still viewed by most as a cost center of the organization. Maybe it is, but it is still a necessary part of the organization. By using HR Metrics, we can show the value of sound HR programs and contribute to the strategic success of the organization.
Friday, March 4, 2011
Storytelling as Management Tool
I am not sure this is news. Nonetheless, I think it is valuable. Oh well, let's just say, if you have not heard, then it's news to you.
People enjoy hearing stories to make technical knowledge more palatable.
I know, I know. Your mind is blown. How do I do it? Such esoteric truths brought to light. You're welcome.
I am loathe to admit it, but I learned many of my lessons about being a good person from family centered T.V. sitcoms such as Family Ties, Growing Pains, and The Cosby Show.
When we hear a story, we align ourselves with the protagonist. The story helps to streamline information and provide a context by which we can understand the lesson. Following our hero through the story makes the lesson more memorable than just hearing the lesson.
Treat your employees fairly is a lesson. I could say it a thousand times, and managers would "get it" but may not truly understand the subtleties of the lesson.
If I tell a story about how a manager was unintentionally treating an employee unfairly, and it resulted in a lawsuit and the manager's dismissal, I bet it takes hold. A manager who has followed the path of innocence to downfall is more likely to apply the lesson when dealing with employees.
Treat your employees fairly is a relatively basic concept. Storytelling can also help to explain relatively complex concepts as well. Too often lessons get lost in translation. By breaking down concepts into manageable terms with context, employees are better able to digest the lessons.
Another benefit of storytelling is that humans tend to listen and to be more receptive to stories. Would you rather listen to a lesson or a story? Think about books like The One Minute Manager or A Fish Story or Who Moved my Cheese? - these books teach lessons through the power of stories. These are classics in management. You can read them in a few hours and walk away ready to improve your workplace. If you have not read any books of that nature, I encourage you to try one. They are low-cost (both monetarily and in terms of time).
I will note the peril of basing management decisions on books like those listed above. I recently read an article by Robert J. Grossman, a contributing editor of HR Magazine, regarding the gap between academic research and management practices. The article backed the benefits of storytelling, but acknowledged that it can be at the cost of missing out on substantial findings in the academic world. In the article Murray Dalziel, Director of the University of Liverpool Management School, is quoted as comparing these types of books to eating fast food. He said, "it's good to a degree, but too much can be deadly."
The counter argument presented in the article is that academia should take a lesson from these books and present their research by coming up with better stories.
Thus the point stands. These books are useful in that they are story-driven and thus more easily incorporated and remembered.
What is the take-away here?
Storytelling is a useful tool when leading your organization. You can use it to initiate action, communicate what your organization is about, transmit your brand, share knowledge or teach a lesson, transmit organizational values, or lead a team.
People enjoy hearing stories to make technical knowledge more palatable.
I know, I know. Your mind is blown. How do I do it? Such esoteric truths brought to light. You're welcome.
I am loathe to admit it, but I learned many of my lessons about being a good person from family centered T.V. sitcoms such as Family Ties, Growing Pains, and The Cosby Show.
When we hear a story, we align ourselves with the protagonist. The story helps to streamline information and provide a context by which we can understand the lesson. Following our hero through the story makes the lesson more memorable than just hearing the lesson.
Treat your employees fairly is a lesson. I could say it a thousand times, and managers would "get it" but may not truly understand the subtleties of the lesson.
If I tell a story about how a manager was unintentionally treating an employee unfairly, and it resulted in a lawsuit and the manager's dismissal, I bet it takes hold. A manager who has followed the path of innocence to downfall is more likely to apply the lesson when dealing with employees.
Treat your employees fairly is a relatively basic concept. Storytelling can also help to explain relatively complex concepts as well. Too often lessons get lost in translation. By breaking down concepts into manageable terms with context, employees are better able to digest the lessons.
Another benefit of storytelling is that humans tend to listen and to be more receptive to stories. Would you rather listen to a lesson or a story? Think about books like The One Minute Manager or A Fish Story or Who Moved my Cheese? - these books teach lessons through the power of stories. These are classics in management. You can read them in a few hours and walk away ready to improve your workplace. If you have not read any books of that nature, I encourage you to try one. They are low-cost (both monetarily and in terms of time).
I will note the peril of basing management decisions on books like those listed above. I recently read an article by Robert J. Grossman, a contributing editor of HR Magazine, regarding the gap between academic research and management practices. The article backed the benefits of storytelling, but acknowledged that it can be at the cost of missing out on substantial findings in the academic world. In the article Murray Dalziel, Director of the University of Liverpool Management School, is quoted as comparing these types of books to eating fast food. He said, "it's good to a degree, but too much can be deadly."
The counter argument presented in the article is that academia should take a lesson from these books and present their research by coming up with better stories.
Thus the point stands. These books are useful in that they are story-driven and thus more easily incorporated and remembered.
What is the take-away here?
Storytelling is a useful tool when leading your organization. You can use it to initiate action, communicate what your organization is about, transmit your brand, share knowledge or teach a lesson, transmit organizational values, or lead a team.
Wednesday, March 2, 2011
Merit Increases Projected to Rise!
A survey by Towers Watson indicates employers are looking to provide the biggest merit increases since the start of the financial crisis.
I think it will surprise most people to know that the projected increase is 3%.
Typically, when I speak to friends and family about their annual increases, they feel slighted by less than 10%. The national norm has been around 3% for as long as I have been doing compensation reviews. According to an article by Stephen Miller, editor of SHRM, the largest merit increases from before the crisis were 3.5% to 4%.
Still, the increase to 3% from 2.7% in 2010 is substantial and is definitely good news.
In addition to the uptick in merit increases, companies are beginning to thaw wage and hiring freezes. The percent of companies expecting to implement wage freezes is also down, although they hover around 12-13%.
I think the best news is that hiring freezes are thawing with 42% of survey respondents planning to hire for positions requiring critical skills, 40% planning to add professional and technical workers, and 25% planning to hire sales and hourly workers.
I think it will surprise most people to know that the projected increase is 3%.
Typically, when I speak to friends and family about their annual increases, they feel slighted by less than 10%. The national norm has been around 3% for as long as I have been doing compensation reviews. According to an article by Stephen Miller, editor of SHRM, the largest merit increases from before the crisis were 3.5% to 4%.
Still, the increase to 3% from 2.7% in 2010 is substantial and is definitely good news.
In addition to the uptick in merit increases, companies are beginning to thaw wage and hiring freezes. The percent of companies expecting to implement wage freezes is also down, although they hover around 12-13%.
I think the best news is that hiring freezes are thawing with 42% of survey respondents planning to hire for positions requiring critical skills, 40% planning to add professional and technical workers, and 25% planning to hire sales and hourly workers.
Tuesday, March 1, 2011
Settle or Defend? Spend $25k to save $50k? I choose doing things right and saving even more.
I was recently sharing some HR war stories, and I was reminded of this anecdote.
I was contacted by one of my managers regarding an employee who was to be terminated for attendance issues. The manager supplied me with the employee's record, which included previous disciplinary action for attendance matters. The disciplinary action was perfect. It referred to the dates of the incidents and policy. It cited the next step in the disciplinary action process, should the employee have another offense. The disciplinary action forms were signed by the employee and the manager.
It seemed cut and dry. I approved the termination. The employee signed the termination form and did not mention any concern or dissent with the decision.
A month later, I received a letter from an attorney representing the employee asking about why her workers' compensation claim had not been filed. I opened an investigation into the matter only to determine that she had not filed a workers' compensation claim. I forwarded the letter to our attorney and provided all supporting documentation including her personnel file and my memo regarding the review of her termination. I also filed her claim with out workers' compensation carrier.
Within two weeks, the attorney contacted us again, claiming we terminated her to prevent paying her workers' compensation claim. This was absolutely untrue, but her allegations created a convincing case. She claimed that she reported her injury to her supervisor. The supervisor claimed she had no knowledge of the report.
The former employee's attorney stated that she wanted $25,000 as a settlement.
I contacted our attorney, and she advised that we should settle. I could not believe it. I take those kinds of accusations personally. I always strive to do the right thing by all parties. I did not want to pay the money and thereby admit wrong-doing.
Our attorney laughed and told me not to take it personally. She assured me we had taken all of the correct steps but admitted that the cost of defending this claim would be much higher than paying the settlement. She said it could cost us as much as $50,000 to defend the claim.
It was not my money, and I would have preferred to pay the lawyer $50,000 than to pay $25,000 to someone who falsely accused us of violating her rights. I brought the situation to our in-house counsel and our CFO for review. They agreed with me and thought our case was strong enough to defend. In stead of settling for $25,000, we offered to settle the matter for $1,000, and considered it a nuisance matter.
The ex-employee counter offered for $5,000. We held firm at $1,000, and she accepted. It pained me to offer her even that amount. Still, it beat $25,000 or $50,000.
Despite no mal intent or wrong-doing on our part, the situation would pass the prima facie test and we could have faced significant cost, either through settlement or attorney fees. Luckily, we had sufficient documentation to support our decision and we were able to settle it as a nuisance matter.
The moral here is that even when you try your best and take all the appropriate steps, you can still be exposed. I refer back to the three edicts of HR: Fair Treatment, Consistency, and Documentation. They are your best defense!
I was contacted by one of my managers regarding an employee who was to be terminated for attendance issues. The manager supplied me with the employee's record, which included previous disciplinary action for attendance matters. The disciplinary action was perfect. It referred to the dates of the incidents and policy. It cited the next step in the disciplinary action process, should the employee have another offense. The disciplinary action forms were signed by the employee and the manager.
It seemed cut and dry. I approved the termination. The employee signed the termination form and did not mention any concern or dissent with the decision.
A month later, I received a letter from an attorney representing the employee asking about why her workers' compensation claim had not been filed. I opened an investigation into the matter only to determine that she had not filed a workers' compensation claim. I forwarded the letter to our attorney and provided all supporting documentation including her personnel file and my memo regarding the review of her termination. I also filed her claim with out workers' compensation carrier.
Within two weeks, the attorney contacted us again, claiming we terminated her to prevent paying her workers' compensation claim. This was absolutely untrue, but her allegations created a convincing case. She claimed that she reported her injury to her supervisor. The supervisor claimed she had no knowledge of the report.
The former employee's attorney stated that she wanted $25,000 as a settlement.
I contacted our attorney, and she advised that we should settle. I could not believe it. I take those kinds of accusations personally. I always strive to do the right thing by all parties. I did not want to pay the money and thereby admit wrong-doing.
Our attorney laughed and told me not to take it personally. She assured me we had taken all of the correct steps but admitted that the cost of defending this claim would be much higher than paying the settlement. She said it could cost us as much as $50,000 to defend the claim.
It was not my money, and I would have preferred to pay the lawyer $50,000 than to pay $25,000 to someone who falsely accused us of violating her rights. I brought the situation to our in-house counsel and our CFO for review. They agreed with me and thought our case was strong enough to defend. In stead of settling for $25,000, we offered to settle the matter for $1,000, and considered it a nuisance matter.
The ex-employee counter offered for $5,000. We held firm at $1,000, and she accepted. It pained me to offer her even that amount. Still, it beat $25,000 or $50,000.
Despite no mal intent or wrong-doing on our part, the situation would pass the prima facie test and we could have faced significant cost, either through settlement or attorney fees. Luckily, we had sufficient documentation to support our decision and we were able to settle it as a nuisance matter.
The moral here is that even when you try your best and take all the appropriate steps, you can still be exposed. I refer back to the three edicts of HR: Fair Treatment, Consistency, and Documentation. They are your best defense!
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