March 2011 Compliance and Culture Newsletter

“Skills don’t last a lifetime. They depreciate. Any company has to recognize that not only is the human capital of their employees a major asset, it is also a depreciating asset that needs continuing investment.” – Gary Becker, Noble Laureate in Economics

This issue discusses:

• Editor’s Column: Create an Emotionally Efficient Workplace
• The EEOC’s Web Site Keeps Improving
• The Workforce Trends that Matter Most
• Recession: Good For Some Things – Not So Good For Others
• Who Checks on What?
• What I Learned from Scientific American Mind this Month
• Pre-Employment Inquiries

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

Please click here to view the newsletter in PDF.

Editor’s Column: Create an Emotionally Efficient Workplace

The bottom line goal of most business is to make money. Well-run businesses make their money more efficiently and last longer than their competitors (Southwest Airlines offers a perfect example). Michael Gerber taught us in The eMyth that we should build our business as if we’re going to franchise it. Dr. Deming taught us about systems, systems, systems. Theoretically, we want to rid our organizations of any unnecessary or wasteful dramas. Ideally, we’d cut out all the nonsense and become increasingly productive. Workers would support each other as team members and continually educate themselves because that’s the smart and logical thing to do. That makes sense, doesn’t it?

As Mr. Spock on Star Trek never fully grasped, much of what goes on in organizations today is nonsense! As I state in my workshops, “If it doesn’t make sense, don’t try to make sense out of it!” Every day we bring to work an emotional self that needs drama and connection in order to express itself. Shrewd executives and managers realize the power of tapping into this need, rather than trying to control or dampen it. They know that while systems are important, people are not robots and their emotions need, demand, and deserve attention.

We should address this emotional need by creating great employee experiences – and do so with as little energy, effort, or dollars as possible. At first, this thought might seem Scrooge-like. However, it’s far from that. Any marketer will tell you the importance of trying to get the highest return on marketing dollars by creating great client or customer experience as efficiently as possible. There’s absolutely no reason not to apply this principle toward motivating your workforce too!

There’s a two-step approach to getting this right. The first is to identify the basic needs of each group of employees. The easiest way to do so is through understanding Maslow’s Hierarchy of Needs (click here to watch my quick video on it). After identifying these needs – in a sense, understanding your marketplace – analyze your efforts, using the formula of cost, ease, and impact, just as a marketer would. For example, a marketing firm might determine if they want to use a direct mail approach or telemarketers. They can identify the cost of each approach, evaluate the ease or difficulty of implementation, run test studies to identify the impact, and then roll out the more efficient program, while continually testing to improve it. A perceptive employer will take the same approach when marketing to its employees. What’s the cost of the program? How difficult will it be to implement it? What will its impact be? You can easily identify the first two and survey for the third, eliminating any guesswork.
Consider two examples. In the first, I recommended that one of my clients, who was going through difficult times, assemble a “fun committee” to balance out the negative dramas with some positive ones. I suggested that the company contribute $10 per employee per week toward this committee. The employees could implement any program they wanted, as long as they followed the “formula.” They decided that they were either going to provide healthy lunches every Friday or wash people’s cars at the end of every other Friday. The cost was the same for both programs, as was the ease of implementation. The carwashes won out over the lunches 2 to 1. Now that’s a 100% and enormous distinction when it comes to the ROI of those dollars!

In the second example, the owner of a temporary construction firm told me one of his employees wanted a full-blown Health insurance program, understanding that he would have to pay a portion of it. Up to that point, the owner had provided employees with a medical services discount card that cost him $50 per month. Of course, he was shocked when he saw Health insurance would cost him and his employees roughly $300 per month each! When confronted by the high expense of these plans, he decided to give me a call before he made any decision. I began by asking him how many employees had made this request. He told me it was only one. Based on a hunch from the first example, I suggested that he ask his employees (almost every one being someone who drove his truck to work every day), if they’d rather have a co-pay medical plan that would cost them $300 a month or have their trucks washed for free every Friday. As you can probably guess, these employees preferred having their trucks washed (there’s a reason that most of them were temporary workers). This solution saved the business owner thousands of dollars, and created some very happy employees, driving home with a clean truck every Friday.

The bottom line: Bring good strategic thinking to your soft stuff, as well as the hard stuff. Building great employment relationships is essential if you want to have a great company.

The EEOC’s Web Site Keeps Improving

Although I certainly disagree with some of the EEOC’s agenda, it’s important to point out what they have done right. One of those things is using their website to provide information. Of course, the primary purpose of the commission is, and must be, protecting workers. However, they – and the DOL, OSHA, NIOSH, JAN, and others – have also done a better job of getting info out there for employers. You’ll find this directory at the bottom of the site’s home page (www.eeoc.gov). The fact that more EEO claims were filed in 2010 than ever, and the apparent EEOC agenda of generating even more claims, should put all employers on notice. We’ll continue to share great government-related content and provide our Members with strategies, tools, and support to avoid destructive and expensive employee claims.

The Workforce Trends that Matter Most

According to the U.S. Bureau of Labor Statistics, the workforce is getting older, more ethnic, more temporary, less unionized, and more sophisticated. The BLS expects the highest growth in the areas of private educational services (2.4%), health care and social systems (2.3%), professional and business services (2.1%), and construction (1.7%). All other sectors had less than 1% growth expected during the next nine years.

What really matters is the workforce trends that relate to your business. For example, if you’re in the utility industry, which is expecting a negative growth rate, how will you be able to attract talent? If, on the other hand, you’re in health services, how will you retain your highly valuable employees?

Prudent business owners and HR executives should consider how these trends will impact them during the next five years. I believe that the single most important trend you will face is the continued fading of control as a management model in today’s workplace. It’s difficult to control bright people when they can easily work for themselves should they choose to do so.

Recession: Good For Some Things – Not So Good For Others

An interesting SHRM post-recession workplace report showed that the recession had a highly negative impact on employee morale and financial concerns but actually had a positive effect on competitiveness, retention, efficiency, and creativity. Big surprise. My two cents: We should be worrying about morale, finances, competitiveness, retention, efficiency, and creativity in any economic environment. By the way, HR That Works offers a variety of tools to help with each of these concerns.

Who Checks on What?

The December HR Magazine shared these statistics from a SHRM survey:

• Companies doing criminal background checks? 73% all, 19% selectively, 7% no
• Companies doing credit background checks? 13% all, 47% selectively, 40% no
• Companies conducting pre-employment drug testing? 55% all, 17% selected, 21% no

As with most SHRM surveys, most of the companies surveyed are very large. Usually less than 15% are the size of our Member base. Nevertheless, where does your company fit in this? We’d advise you to do criminal background checks and drug tests on everybody, and credit background check on everybody you’re allowed to by law. This will eliminate exposing yourself to unnecessary risks.

(Note: The EEOC is severely restricting credit background checks on a disparate impact basis. Work with our partner, www.globalhrresearch.com to get it right!)

What I Learned from Scientific American Mind this Month

One of the ways we can get great ideas in HR is to read outside the field and ask how that learning applies to managing people. Here are a few articles from a recent Scientific American Mind that provide insight:

1. “Any Excuse for Busyness.” According to this article, people who find reasons to occupy their time with activity rate themselves as happier. I’m always amazed at how people waste time when they’re waiting in the airport, flying, sitting on a bus, or driving. I find that this time provides a wonderful opportunity to learn, making the hours fly by while I become that much smarter.
2. “Beware Your Beverage.” This study concludes that people judge alcohol drinkers as less intelligent, even if they themselves are drinking at the time! A word to the wise: If you’re trying to get a job, advance up the corporate ladder, or close a deal, a sparkling water with lime will do fine.
3. “When Mom Has Favorites.” This article argues that children who receive unfair treatment versus their siblings are more likely to grow into depressed adults. Now those adults are working for you and have become highly sensitive to unequal treatment. Because they’re adults, they can actually do something about it, such as filing a discrimination claim. In addition, the favored children (insert employee) can experience guilt about their preferred status, extra demands from parents (insert boss), and resentment from siblings (other employees). Bottom line: Watch out for the unintended consequences of playing favorites.
4. “The ‘Me’ Effect.” One of my Top 10 favorite business books, Leadership and Self-Deception, reminds us how we can deceive ourselves into believing that we make more positive deposits than we do negative ones. According to recent research, most people do not know what their own “trait-affected” presence is. “It’s not very easy to detect, because you don’t actually get to see what the world is like when you’re not around,” says Noah Eisenkraft. The article reminds us that each person gives out a vibe – what the researchers call a trait-affected presence – that affects everyone they come in to contact with in the same way. So much so that “certain emotions (such as discouragement, frustration, and stress) — are affected as much by who you are interacting with as by who you are.” So not only can we deceive ourselves about being discouraging, our very essence can have this affect on people.
5. The article, “Their Pain, Our Gain,” points out that we actually enjoy each other’s misery. The Germans use the word schadenfreude to describe that small, private rush of glee in response to somebody else’s misfortune (i.e., it’s blasting snow where I grew up – and I’m so glad to be in the sunshine). When measured in the brain, this feeling is similar to the satisfaction from eating a good meal. The researchers posit that humans probably developed the instinct to notice, and profit from, the weakness of their competitors. When groups feel schadenfreude it can become more potent and invidious, driving deep-seated prejudices that can lead to harmful, even violent behavior. That’s why Alfred Cohen reminded us to beware of schadenfreude in his book, The Case Against Competition. Competition, whether focused on an external or internal adversary, can have negative effects if not managed properly.
6. “What Makes a Good Parent?” As with the previous article on parenting, this one also applies to management. Here’s the Top 10 list, beginning with the most important:
   1. Love and affection
   2. Stress management
   3. Relationship skills
   4. Autonomy and independence
   5. Education and learning
   6. Life skills
   7. Behavior management
   8. Health
   9. Religion
   10. Safety

   For example, although we might not use the word “love” nor be openly affectionate at work, we certainly can have a deep, healthy respect for the other person. We can realize too that they have their weaknesses, as we have ours. As another example, owners have the right to share their religious conviction, but not in a way that’s disruptive or discriminatory. Each of these other factors relates directly to managing performance, motivation, and teamwork.

7. “Dunbar’s Number.” Revolutionary biologist Robert Dunbar argues that our brain has limits on how many people we can truly keep within our social group. The maximum is about 150 people. Of course, this takes different types of relationships into account. At one end of the spectrum, we have a core group of people we talk to once a week. At the other end, we have acquaintances with whom we speak about once a year. This makes me question someone who brags that they have 5,000 people on their Facebook page.
8. Perhaps the most interesting article in the magazine had to do with a meeting of the minds between top-end psychologists and magicians – including some from Las Vegas that we all know. Here’s a summary of the conclusions:
   • Humans have a hard-wired process of attention and awareness that’s “hackable.”
   • When people focus on one thing, their brains automatically suppress everything that happens around them. Magicians have devised a number of techniques that exploit this “tunnel vision.”
   • People can pay attention in various ways. Magicians exploit “top down” or deliberate attention by, say, asking a person to scan a book. They capture “bottom up” attention with distracting displays, such as doves fluttering out of a hat. Magicians will have you focus on one big thing while they go about doing a number of smaller things underneath your radar.
   • Interestingly, if an action seems to have an obvious purpose, such as adjusting your hat, an audience generally won’t notice that the magician has moved to put something under that hat. The best con of course, is the most natural one.
   • When magicians do their verbal patterning, they aim to generate an internal dialogue in your mind – a conversation with yourself about what’s taking place. This results in a great deal of confusion. It slows your reaction time and leads you to second-guess yourself.
   • Many magicians introduce delays in the method behind a trick and its effect to prevent you from linking the two. They call this “time misdirection.”

The bottom line: Beware of tricksters using these techniques!

If there were ever a magazine that will stretch your thinking, this one is well worth a subscription. Go to www.scientificamerican.com/mind.

Pre-Employment Inquiries

Although it’s not binding on employers, a recent informal discussion letter from the EEOC about the use of criminal records as an employment-screening tool reminds us that employers must be careful when making certain inquiries during the pre-employment phase. Here are 10 tips from the letter:

1. Ask questions related to the applicant’s qualifications. The purpose of an interview is to obtain sufficient job-related information to make an informed employment decision. Questions that aren’t job-related will be viewed as suspect, particularly if they appear to have an impact on a protected class.
2. Be careful about questions regarding outside activities. Questions about an applicant’s membership in clubs, organizations, or about hobbies, if not job related, can be problematic if they reveal information about protected characteristics.
3. Don’t ask about familial status or intentions. The EEOC will assume that the purpose of such inquiries is to screen out individuals who answer “incorrectly” and that the questions will have a discriminatory impact on women.
4. Avoid asking about child care arrangements. This is an area of questioning that might screen out female applicants. However, it’s entirely proper to present the specific job schedule and ask all applicants whether they can regularly comply with this schedule.
5. Stay away from physical and mental health inquiries. It is illegal to ask an applicant questions that relate to health or medical conditions, with one exception: If an applicant’s apparent disability legitimately calls into question his ability to perform a job, the person may be asked how he would perform the job, with or without a reasonable accommodation.
6. Age is not a permissible inquiry. The Age Discrimination in Employment Act makes it illegal to discriminate based on an applicant’s age. It’s best to avoid all inquiries, such as when an applicant attended or graduated from school, because such an inquiry might reveal her age.
7. Don’t ask about discrimination charges or lawsuits. It’s illegal to retaliate against a potential employee for complaining about discrimination. Failing to hire someone because of his answer to this question might imply that your company engages in unlawful retaliation.
8. Avoid asking about prior Workers’ Compensation claims. It’s illegal for an employer to discriminate against someone because of Workers Compensation claims that they have filed.
9. Arrest record inquiries are improper. The EEOC and courts have held that questions about arrest records can have an intimidating effect on members of certain minority groups and can’t be justified by business reasons. Although questions about an applicant’s criminal convictions are legal, take convictions into account in the hiring decision only if they’re related to the job in question.
10. Be careful with post-offer requests for information. Wait to obtain certain types of information until after you have made an offer of employment. For example, you may require pre-employment medical examinations post-offer, so long as you make this requirement of everyone in the same job classification. Ask for information for insurance and benefits purposes, which may include personal characteristics and familial status, only after hiring.

Note: HR That Works members can use our post-offer fit-for-duty tools and watch Don’s webinar on Getting Pre-Hire Physicals Right.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

Form of the Month

Hazard Assessment Checklist (PDF) – Use this form to check for hazards common to most environments.

(HR That Works Users can access this form in Word format by logging on to the site).

Podcast

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