August 2012 Compliance and Culture Newsletter

“How people can have ‘the way of success’ shown to them, visible to their naked eye, even the principles behind what they are seeing, and still not copycat it, not do it, or even perversely do the opposite?” —Dan Kennedy

This issue discusses:

• Editor’s Column: Honest Terminations
• Six Steps to Help Prevent Data Theft
• HR Internships Make Sense
• How to Build a ‘Learning Organization’
• Smoke, Smoke, Smoke That Cigarette!
• The HR Executive of the Future

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

Please click here to view the newsletter in PDF.

Editor’s Column: Honest Terminations

I’ve had the opportunity to answer more than 3,000 “hotline calls” in the past 10 years. On many of those calls, the employer wanted to know if they’d be sued for terminating someone.

After representing hundreds of employees during my litigation career I can tell you that “how” an employer fires an employee has a lot to do with an employer’s propensity to get sued. Here are some guidelines to consider:

• Don’t create a lie to make the terminated employee feel good. Recently I received a hotline call which described how an HR consultant working with the company advised them to lie about the reason for the employee’s termination by claiming that it was a “layoff.” Horrible advice! The problem with this approach is if the employee ends up suing you for whatever reason you’ll then have difficulty proving that poor performance, etc. was the reason for their termination. Telling employees the truth is the best way to stay out of the courtroom — and don’t ask HR people legal questions that require a lawyer’s judgment!
• Don’t underestimate how traumatic the event will be for the terminated person or tell them how tough it was on you. Yes, it’s tough for you, but guess what? It’s even tougher on them and their family. Feeling bad yet?
• Don’t lose sleep over the termination. Where did management fail this employee? Did the relationship begin with a bad hire? If you’ve done everything you can to be responsible to the employee, then you should have no fear or other negative emotion associated with letting them go. Terminating poor performers allows them to work someplace where they’ll have the opportunity to perform better. It also relieves the burden on your remaining employees. Again, if you have any concerns, what is the source of those concerns?
• Don’t embarrass the employee. Try not to terminate them in front of the rest of the team, make a scene of their walking out of the office, etc. Terminate in a dignified manner, even if the employees have been less than dignified themselves. You don’t have to stoop to their level. If the employee is belligerent or obnoxious, do what you must to calm the situation and protect yourself.
• Don’t turn the termination into a one-hour conversation. By now there should be no surprises. Employees should have known that if they didn’t improve their performance they would be off the bus. Don’t negotiate or sympathize — just let them go.
• Don’t make promises you’ll regret. In a well-known case, a school concerned about the employee’s backlash (he claimed he was falsely accused of sexual harassment) offered a letter of recommendation on which a subsequent employer relied. As it turned out, the employee was once again accused of sexual harassment. When the victims of this alleged sexual harassment sued the new employer, they cross-complained against the previous employer for misrepresentation. Don’t be that previous employer!
• Finally, don’t try to buy off terminated employees with a release for two weeks of severance — all this will do is invite them to see a lawyer. Don’t offer a release when you fire employees for poor performance or because you’re in fact in an economic downturn. They don’t deserve the former and you can’t afford the latter!

If you’re an HR That Works Member, follow the Pre-Termination Checklist.

Six Steps to Help Prevent Data Theft

An excellent article in Corporate Counsel lists these guidelines to help minimize the risk of preventing data from walking out the door:

1. Ensure that employees sign confidentiality and invention-assignment agreements on the first day of work, if not before.
2. Provide meaningful training.
3. Gain control of remote-access and data-protection policies.
4. Set up data protection and employee mobility restrictions affect incoming and outgoing employees.
5. Let laptops cool off before allowing the IT department to repurpose them.
6. Don’t rely on only unpredictable non-competition covenants alone.

I encourage you to read the entire article here.

HR Internships Make Sense

The May 2012 issue of HR Magazine has a special report on how to create an HR internship. I have constantly preached the importance of HR managers delegating less valuable activities so that they can focus on more strategic areas. Having an intern is the perfect way to perform this handoff!

Other benefits of internship include:

• Provides a powerful recruitment tool
• Decreases turnover
• Contributes to positive branding
• Stresses altruism
• Improves employee morale
• Helps generate new ideas
• Adds social networking know-how

These young people usually earn $10-$15 per hour. Although it certainly helps to have interns do some grunt work, you’ll also want to give them challenging assignments and developmental training.

You can find interns by word-of-mouth, going to your local SHRM chapter, local schools, college career centers, or by visiting www.internships.com.

How to Build a ‘Learning Organization’

According to Wikipedia, “a learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself.” This concept was popularized by Peter Senge in his excellent book The Fifth Discipline. No, it’s not an old rock group; Senge ran a think-tank at MIT Sloan School of Management. His Fifth Discipline Fieldbook provides a manifesto that companies can use to build a learning organization.

According to Senge, there are five main aspects to a learning organization. Let’s discuss how each of those might apply to the HR equation.

1. Systems Thinking. This means that HR doesn’t operate in a bubble, but rather in concert with other aspects of the system. Understand how HR affects everything in your business from operations to sales, marketing, customer support, and so on. A strategic HR manager will take a cross-disciplinary approach when it comes to their HR practices, training, etc.
2. Personal Mastery. This means you commit yourself to the process of learning. How many books have you read in your area of expertise during the last year? Do you receive trade publications, attend trade conferences, network with your peers, and look for additional learning outside of your expertise? Do you make sure everyone else at your company is engaging in personal mastery?
3. Mental Models. Basically, this means the assumptions or framework in which each of us operates. To become a learning organization we have to challenge these models, and HR must be part of this conversation. A classic mental model in the HR arena is the management of performance evaluations. In most organizations, this model is more than 50 years old, meaning that it’s time to retire it. What new model can you develop that will generate integrity, trust, and better performance?
4. Shared Vision. All business authors stress the importance of this factor. Jim Collins emphasized it in his Good to Great book, as did Senge in The Fifth Discipline. How is HR helping to push out and market your organization’s vision? How are you making it “visual”? For example, if I walked into your company would I know what your vision is without having to ask about it? If not, start working with the marketing department and engage in some internal” branding” of the vision.
5. Team Learning. As the saying goes, none of us is as smart as all of us. How can we create vigorous dialogues in which we all learn from each other? I encourage you to go to the five-minute video I did on a very powerful team learning process that anyone can facilitate.

In growing your business as a “learning organization,” you’ll probably need to deal with obstructions. Opposition might come from individuals trying to protect their turf, one department not wanting to communicate with another, a lack of empowerment among leaders or employees — or an organization that’s just too big to share information fully (Senge suggests a cutoff point of 150 employees). Cultural dimensions can also impede the learning process. What barriers have you identified to building a knowledge organization? What strategies do you have to get past these blockages? If you have yet to do so, I encourage you to pick up a copy of Senge’s The Fifth Discipline as well as The Fifth Discipline Fieldbook.

Smoke, Smoke, Smoke That Cigarette!

About one in five Americans still smoke. Most employers want to eliminate smokers not only from their workplace, but from their payrolls as well. In researching this article I found statistics estimating the annual additional cost to a company of a smoker at $3,000 to more than $12,000 — a costly proposition! On the other hand, trying to terminate, or not hire, smokers raises three questions: 1) Will state laws prevent you from doing so? 2) Does your policy follow the guidelines of such federal laws as ADA and HIPAA? 3) Will it really be worth the effort?

Not hiring, or terminating employees who smoke offers companies these advantages:

• Lower incidence of heart disease, asthma, lung cancer, and other diseases among employees, thus lowering company Group Health insurance rates.
• Less absenteeism and shorter breaks, increasing productivity.
• Reducing conflict between smokers and non-smokers.

The cons:

• You’ll reduce the job applicant pool by 20% to 25%.
• You might offend some of your best workers.

What’s more, state law might prohibit this practice. Twenty nine states and the District of Columbia have laws that prevent employers from discriminating against employees for using tobacco products. (A number of these states exempt people in the firefighting and health professions). Although California, Colorado and New York don’t specifically prohibit this practice, they do protect workers against discrimination for engaging in any lawful activity outside the workplace.

According to the website www.ash.org, which I highly recommend, many of these laws are “toothless and easily avoided.” I encourage you to check out this site, which does an excellent job of identifying relevant state statutes, as well as the loopholes in them.

Although smoking and alcohol use are not protected per se, the health impacts they generate might be. For example, you might be able to terminate an employee for smoking, but not for having lung cancer as a result of smoking. HIPAA allows you to “penalize” smoking employees, but limits the penalty to 10%-20% of their health insurance premiums.

There’s the argument that this is Big Brotherism at its worst: Creating a slippery slope that can lead to restrictions against the food we eat, the beverages we consume, having high cholesterol counts, etc. Plenty of smokers who abide by the company’s policy not to smoke in the workplace are highly effective employees. Do you really want to terminate workers of this caliber? Finally, this quote from a woman about how many people feel about smoking hits the nail on the head. She said, “It’s a stupid choice, but it’s a personal choice.”

The HR Executive of the Future

HR has an exciting future with incredible opportunities — yet most companies undervalue it. As Kevin Cope’s Business Acumen Webinar stresses, if you want to have a more profitable HR operation, you’ll have to be unique. To meet this goal, you’ll need HR managers that have these 10 characteristics (listed in alphabetical order):

1. Adaptable. We’re going through a period of accelerating, meaning that change is happening faster than ever. This means we need to adopt new practices quickly. Chances are that if you’ve been doing anything in the same way for the past 10 years, it’s out of date today. Adaptability happens in real time. You can’t think on it, plan on it, have a committee, produce a plan, etc. You just have to adapt, now! For example, have you adapted to today’s performance management realities — or are you using the same ridiculous performance management approach that didn’t work 10 years ago?
2. Collaborative. We need the IQ and EQ of the entire team. Today we collaborate around projects and activities, rather than job titles. To collaborate, we have to communicate, produce vigorous dialogues that result in action. Collaboration does not mean consensus — it means input from all.
3. Constant learner. To earn more, you must learn more. To learn more, you must train more. Whether you’re in an organization with five employees or 5,000, you must out-educate the competition. How do you make it easy for everyone from the owner to the rank-and-file to educate themselves? Do you provide employees with on-demand access to training materials? Do you give them CDs that they can listen to in the car or MP3s they can upload to their players? Have you taught them about the factors that drive profitability at the company?
4. Cross-disciplinary. Don’t limit collaboration to your own circle of influence — reach out beyond that. To what extent have you collaborated with your marketing director to help with internal branding? Have you spoken with the CFO to help understand the bottom-line impact of HR practices? Zappos requires new HR executives to start out by working in the warehouse taking customer orders and support calls, so that all of their executives have a cross-disciplinary view of the workplace.
5. Designer. Daniel Pink’s book, A Whole New Brain, which discusses how we’re moving to the right side of the brain, includes design as one of the factors. Think about it: One reason why Apple products are so popular is because of their design, not just their functionality. To what extent can you be a designer of your environment, your internal brand, your culture, and workflow? Pick up a few design magazines and ask yourself how you can apply this thinking to human resource practices. You’ll never know the answer until you go through this exercise.
6. Expert in time management. Most executives and employees get zero time management training and yet it’s the greatest stressor they face. Make sure you that you, and your workforce, get time management training (HR That Works has an excellent Training Module). Good time management involves 1) knowing where your time goes; 2) identifying where it should be going; and 3) determining how to replace low-value work and bring on higher value work. Although this isn’t rocket science, it requires discipline to implement. For example, how much time do you lose to distractions (an e-mail from a friend, an article in the New York Times or a Facebook page)? Because the amount of information is doubling approximately every 500 days, without time management discipline you’ll be twice as distracted as ever!
7. Innovator. When you think of human resources, does innovation jump to mind? Of course not! To become an innovator, you need be a good observer of your current environment and “think outside the box.” As mentioned earlier, pick up a magazine on design, sales, or business in general and ask how any of the principles discussed could apply to HR. Dr. Deming taught that profound knowledge comes from outside a system because the system can’t understand itself. Your breakthrough thinking in HR will come from outside the HR field, not within it. HR That Works members should take a look at the Creativity Checklist and Employee Suggestion Form. HR also has the opportunity to get everybody else to the company engaged as innovators as well.
8. New-media savvy. To what extent are you using social media tools to help empower the HR function? To what degree do you use social media outlets such as Facebook, LinkedIn, and Twitter to help build a dialogue at your company? How do you employ tools such as YouTube videos to attract, retain, and motivate workers?
9. Motivator. The last thing HR needs is to manage an endless series of dramas. A better approach would be to find a way to empower, engage, and motivate the workforce. For example, how effective are your retention policies? Are you getting the biggest bang for the buck? Are you addressing people’s psychological needs? Have you surveyed workers to determine what their emotional drivers are?
10. Technologist. It has become easier and easier to build database management programs, whether it’s for sales, finances, operations, or human resources management. Years ago there were a dozen or fewer human resource information systems (HRIS); today, there are hundreds and they’re increasingly available to smaller companies. How can you use technology to manage data more effectively? In an information society, well-managed data is essential. What tools can help drive performance management and what tools will you use for strategic HR purposes (of course we think HR That Works is the best!).

Form of the Month

How Would You Rate Your HR Practices? (PDF) – Evaluate your HR department in nine areas to find potential problems.

Podcast

Click here to to listen to this month’s newsletter podcast.

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© 2012 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

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