Tag: HR That Works

June 2014 Compliance and Culture Newsletter

“Why fit in when you were born to stand out?” – Dr. Seuss

This issue discusses:

  • Editor’s Column: So Who Will Get the Raise?
  • The Art of Networking
  • EEOC Releases White Paper on Retaliation Law
  • General Safety Obligations for Employers
  • Fundamentals of ADA Accommodation
  • Growing Concerns about Employee Retention
  • Employee Challenges with Online Privacy
  • Attorney Gets Caught in a Conflict of Interest
  • Question of the Month

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

Please click here to view the newsletter in PDF.

Editor’s Column: So Who Will Get the Raise?

Last year the consumer price index increase was 1.6%. It is scheduled to be closer to 2% in 2014. Therefore, if an employee wants to get ahead in life they need to get a raise of at least 2%

According to a survey by Towers Watson Data Services employers are planning to increase wages an average of 2.9% in 2014. These increases won’t be distributed evenly. Those employees considered to be top performers or in top demand will receive the lion’s share.

Employers can make a big mistake by looking at their historical compensation patterns. Perhaps the most important question to ask is “what would you have to pay to hire that employee today?” It is the marketplace, not your compensation scheme, which defines a fair day’s pay.

Before anyone gets a raise they should be asked to explain how they’ve added more value to the company. One reason we designed the form Why I Deserve a Raise. When you think about it, a raise should be given any time an employee has added new value and you’ve got the cash flow to afford it. Waiting around for an annual comp discussion is yesterday’s thinking.

The Art of Networking

An excellent article in the December issue of Success Magazine talked about the “Monchu Method” of networking. This methodology requires only 20 minutes a day. The essential steps are:

  1. Map your Monchu – These are people you:
  • Want to help succeed
  • Feel you can help succeed
  • Care about who can use the help of people you know
  1. You serve your Monchu 20 minutes per day by:
  • Spending 10 minutes reaching out to people you think you can help by providing any assistance, advice, or resources you can offer.
  • Spending 5 minutes asking people whose feedback you value some questions that would help you better understand your next step in business.
  • Spending 5 minutes introducing people you know among your circles.
  1. Begin a communication flow – very simply, you go first.
  2. Give first – This is the ancient wisdom of “give and you shall receive.” In Robert Cialdini’s book Influence he talks about the emotional power of receiving a gift and the desire to reciprocate. Tap into this need.
  3. Build a daily habit – That means you put 20 minutes on the calendar and make no excuses for not doing it. Daniel Goleman say, “For leaders to get results they need three kinds of focus: Inner focus, which attunes us to our intuition and guiding values. Other focus, which enhances our connection with people in our lives. And outer focus, which lets us navigate the larger world. A leader tuned out of his internal world will be rudderless; one blind to the world of others will be clueless; those indifferent to the larger systems in which they operate will be blind-sided.”

EEOC Releases White Paper on Retaliation Law

Since 2007 retaliation has been the fastest growing of all EEO claims. Roughly 42% of all new claims filed allege some form of retaliation. The EEOC released a white paper on retaliation law written this past summer. It is clear they are not in favor of the “but for” standard set forth in the US Supreme Court case of University of Texas Southwestern Medical Center v. Nassar.

It is instructive to understand some of the factors considered when deciding if an action is retaliatory:

  1. An action is considered retaliatory if there is adverse treatment, which they define as an action “reasonably likely to deter protected activity by the individual or other employees.” (A broad standard.)
  2. Direct evidence of a retaliatory motive may be any policy or statement made by the employer that facially shows a bias against a protected group and is linked to the adverse action.
  3. Evidence of temporal proximity of the adverse action to the protected activity (usually interpreted as one to three months afterwards).

Employers will continue to be pressured by employees who fail to perform but when pushed to do so claim unequal treatment based on some form of discrimination. Every action after that will be viewed under a microscope.

General Safety Obligations for Employers

OSHA laws apply to every workplace. Here are the primary employer responsibilities according to OSHA:

Employers must provide their employees with a workplace that does not have serious hazards and follow all OSHA safety and health standards. Employers must find and correct safety and health problems. OSHA further requires employers to eliminate or reduce hazards first by changing working conditions rather than just relying on masks, gloves, ear plugs or other types of personal protective equipment (PPE). Switching to safer chemicals, enclosing processes to trap harmful fumes, or using ventilation systems to clean the air are examples of effective ways to get rid of or minimize risks.

Employers must also:

  • Inform employees about hazards through training, labels, alarms, color-coded systems, chemical information sheets and other methods.
  • Keep accurate records of work-related injuries and illnesses.
  • Perform tests in the workplace, such as air sampling required by some OSHA standards.
  • Provide hearing exams or other medical tests required by OSHA standards.
  • Post OSHA citations, injury and illness data, and the OSHA poster in the workplace where workers will see them.
  • Notify OSHA within 8 hours of a workplace incident in which there is a death or when three or more workers go to a hospital.
  • Not discriminate or retaliate against a worker for using their rights.

Note that if you are in the states listed below you must also comply with state laws and regulations. To get more info go to OSHA, your state OSHA site, or the BNA State Law Summaries on HR That Works.


Fundamentals of ADA Accommodation

wheelchairGiven the ever-expanded concept of what constitutes a disability, employers will continue to face an ever-growing compliance challenge. Here are some basics to be remembered:

  1. Knowledge of the need to accommodate an employee can come from numerous sources including a work comp claims manager, a company supervisor or manager, HR, the employee themselves, a union rep, a doctor, poor performance, simple observation, or some kind of hotline call.
  2. To have a good process, it must be laid out step-by-step with supporting documentation.
  3. Be interactive. Remember the rule that the first to give up on the dialogue process generally loses.
  4. Have appropriate education and training. For example, HR could create a simple video to help employees with the accommodation process.
  5. Allow managers to engage in simple, easy, and quick accommodations.
  6. Proper documentation of all steps in the process.
  7. Ongoing communication, monitoring, feedback, and improvement.

The accommodation process begins with a needs assessment. This means a thorough review of the job description and duties and a clear understanding of the employee’s limitations, including potential absences, etc. Remember you can accommodate an employee by the following means:

  • Changing facilities or equipment
  • Job restrictions
  • Modifying schedules
  • Modifying a test, training, or policies
  • Offering vacant positions within their skill range
  • Offering temporary positions (the ADA does not require you to create a new position for an employee)
  • Support including readers, interpreters, or even dogs
  • A leave of absence
  • Any other idea that would generate a reasonable accommodation

Proper documentation of any undue burden

One of the biggest mistakes an employer makes is to assume in advance that an accommodation would create an undue burden. If the request is reasonable, the best approach is to let the employee try it and to be clear about performance standards. Document any shortcomings the accommodations may be causing and continue to communicate about ways to elevate them.

There is extensive material on the ADA on HR That Works including flow charts, checklists, forms, and policies to use. There is also training you can provide your managers (a good idea). Also, if you have more than 50 employees the FMLA may allow an employee who has serious medical condition up to 12 weeks of leave which they may use instead of accepting an accommodation.

Growing Concerns about Employee Retention

Over the years we have surveyed the thousands of companies that use HR That Works. Hiring somebody they can trust has been the number one concern of most companies. The second and third concerns have everything to do with the economy. Prior to the 2009 recession, employee retention was the second greatest concern with employee productivity being the third. Once the recession hit and everybody began hanging on for their dear lives, retention slipped into third place with productivity being the second greatest concern in the squeeze economy.

retentionIn last year’s survey retention climbed back into second place, once again indicating its bellwether position. Not only are employers concerned about retention, it’s hiding behind the fact they are having difficulty finding quality employees despite continued high unemployment levels.

More than ever, employers must do a good job of employee retention. The greatest factors in retaining your experienced employees are the opportunity for advancement and the relationship they have with their immediate boss. What it takes to advance an employee’s career should not be a mystery at your company. I encourage our members to go to O*NET and consider looking at their career ladder tools and modifying them for your organization. Don’t force employees to either guess about what the career ladder is or have to ask you to find out. Tell them. Let them know what the opportunities are and what skills and experience will be required for them to reach the next level. If you are at a smaller company, don’t let the lack of advanced job titles hinder career growth. Perhaps making up a new job title is better than telling an employee there is no room for advancement. There should always be room for advancement for excellent employees.

When it comes to the relationship with the boss, the question is simple: Does the boss spend any time showing the employee he or she cares about them? Most bosses are running for their lives and spend more time dealing with the dramas created by the 20% non-producers than nurturing their top talent. There can be no greater mistake. All of your managers should have a plan for how they will help increase the quality of relationship between them and their top performers. That plan should include discussing job performance, career advancement, and compensation opportunities.

HR That Works Members should use the How to Keep Great Employees Training Module with its related forms, audits, videos, and more. Look at this month’s Form of the Month: The Employee Retention Program Possibilities Spreadsheet which will provide plenty of ideas for a retention program.

Employee Challenges with Online Privacy

According to a survey by PEW Research Center of 792 Internet users there were the following statistics:

  • 21% had email or social networking accounts compromised or taken over by others without permission.privacy
  • 12% were harassed online.
  • 11% had personal information stolen, including Social Security numbers and credit card information.
  • 6% lost money in online scams.
  • 6% suffered damages to their reputation.
  • 4% were led into physical danger because of something that happened online.

Here’s a fact not mentioned by the survey: These are the same internet users that work at your company! Your employees are having these exact challenges. And, many times they spread to the workplace. If you haven’t already done so, watch the webinar or read the report on Social Media Risks. It would be a great employee benefit and smart management move to have your head of IT educate your workforce on how to prevent these risks.

Attorney Gets Caught in a Conflict of Interest

In the California case of Yanez v. Plummer the plaintiff, Michael Yanez, sued his former employer, Union Pacific, for wrongful discharge and their in-house council for legal malpractice, breach of duty, and fraud. To make a long story short, Yanez was working with another machinist (Garcia) replacing locomotive motors. While Yanez was operating a piece of machinery Garcia was injured while retrieving a dropped tool. Yanez provided two witness statements to management. The first was a short one which stated that the injured employee had slipped and fell on a concrete floor, soaked in oil and grease. When asked to create a longer written statement he said “I saw Bobby slip and fall down on an oil slicked floor.” In a deposition involving the injured employee’s workers compensation claim, Yanez admitted he did not see Garcia fall but only saw him after he had fallen. The corporate attorney gave Yanez no opportunity to explain the discrepancy between his deposition testimony and his second statement and the company’s attorney left him out to dry. Because of this conflicting testimony Yanez was fired for dishonesty.

The court stated that in this unique circumstance Yanez should have been informed by the attorney there was a potential conflict of interest. As stated by the court, “Evidence shows that Plummer played a substantial role, during Yanez’s deposition in the Garcia case, in uncovering the deception Union Pacific charged against Yanez’s and without that depositional testimony, Yanez would not have been charged with dishonestly, the deposition triggered the charge and the charge resulted in Yanez’s termination. This evidence presents a triable issue of material fact that but for Plummer’s alleged malpractice, breach of duty, and fraud, Yanez would not have been terminated.” The court refused to create a general rule that anytime an employee’s testimony could affect their job status there is automatically a conflict of interest.

What should a company do? The company should make sure its attorney informs any witnesses their representation could cause a conflict of interest and that if the employee wants to be represented while testifying in a deposition or court hearing or another matter by their own counsel they have the right to do so. Otherwise by requesting representation they should waive any conflict of interest.

Question of the Month

hiring-questionsQ: We have an employee who is on disability leave due to a workers compensation injury, and the employee is not eligible for FMLA/CFRA. Our organization began offering medical benefits in June of 2013, and this is the first instance where an employee on leave with medical benefits has not met the eligibility requirements for FMLA/CFRA. How long is the company required to continue the employee’s group medical benefits before offering COBRA?

A: The general rule is if the injured employee is not eligible for FMLA, a reduction in hours due to a job-related injury is considered a “qualifying event” for COBRA. Collective bargaining agreements and other employment policies may affect this right. It’s also a policy issue. For example, does your health plan/policy provide that only active employees are covered? You should review your health insurance contract regarding who is eligible for health insurance under the plan. If your plan and policies state that employees on a leave of absence will continue to have employer contributions made toward their health coverage, then you must comply with those provisions. Also, how you have treated other inactive workers in the past may be a factor.

Form of the Month

Retention Program Possibilities (PDF) – A laundry list of possibilities with an easy method for ranking their cost benefit.


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

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2014 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

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An HR Career Story

career-storyOnce upon a time there was an HR executive that really wanted to make a difference. For herself and the company. Over time she looked for unique strategies, tools, and motivation. One day a friend told her about what she felt was the best HR program ever—HR That Works. Because of the referral she signed up for a 30-day free trial and began digging around in the program. She quickly realized that HR That Works was different. It wasn’t just about what companies can’t do with employees; it was as much about the opportunity that lies in great HR. She understood the potential power of the HR That Works program and became a subscribing member.

Over the following year she took on a new strategic initiative monthly. She followed the HR That Works approach, including giving her CEO monthly progress reports. Fellow managers began to view her as a true resource and no longer called her the Dept. of No. Until finally one day, her CEO came to her and told her that she’s really picked up her HR game and without her having to ask, offered her congratulations… and a raise.

The End.


May 2013 Compliance and Culture Newsletter

“You’re off to great places, today is the day: Your mountain is waiting, so get on your way!” –Dr. Seuss

This issue discusses:

  • Editor’s Column: 10 Personnel Management Challenges for CEOs
  • Make Sure Volunteer Workers Carry Workers Comp
  • EEOC Credit Report Lawsuit Dismissed
  • 2012 EEOC Claims Near 100,000 Mark
  • An Employee Referral System That Works

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

Please click here to view the newsletter in PDF.


Editor’s Column: 10 Personnel Management Challenges for CEOs

Over the years, I’ve had the chance to do hundreds of three-hour workshops for CEOs about personnel practices. In light of this experience, I’d like to share 10 challenges that CEOs and executives face when it comes to personnel management.

  1. The difficulty in finding new talent. The good news is that most of these employers expect to do more hiring than firing this year. The challenge is that most of the good employees are already taken. Perhaps the biggest mistake is thinking that you find these people, as opposed to attracting them. To attract talent, you have to position yourself as an employer of choice – a great place to work. Companies such as Costco, Southwest Airlines, and my beloved In-N-Out Burger do this so well that they don’t need to go find anybody.
  2. Problems in retaining top talent. This is the flipside of the conversation above. In the marketplace of talent swapping, some companies will win, while others lose. To what degree do you have a philosophy, strategies, and tools to make sure you are retaining top talent? Do you understand why people either come to work for you (through a post-hire survey) or why they leave you (an exit interview)? Do you tap into their opinions and concerns with surveys, focus groups, and one-on-one conversations? Remember: Turnover is contagious.
  3. Lack of managerial leadership. When we run 75 miles an hour and promote people into management, chances are that this happens with little or no training. Fact is, half of managers in your industry are above average and half are below average. Guess who gets more training? You need to train managers in business acumen, communication, basic compliance, team building, and systems understanding. Most important, they need training in time management so that they can spend 80% of their time adding the value they can – and only 20% doing administrative tasks.
  4. Low employee engagement. This is easy to understand when we’ve just gone through a difficult recession, which has limited raises, cut benefits, and stunted growth opportunities. On top of that, it feels that we have a federal government that fosters an us versus them mentality with the workforce. Perhaps the question for leadership is “how can we help our employees?” How can we help them become more productive so they can grow in their careers? How can we help them find greater meaning in the work they do every day? How can we help them gain more control over the direction of their career? As Shakespeare stated so eloquently, “To work we love with delight we go.” What would it take for your employees to love the work they do every day?
  5. Failure of management to benchmark or improve performance. Performance management is one of my favorite subjects. To begin with, do you have a specific goal for improving performance? Sure, you want sales to increase by 10%, but do customer service reps, the receptionist, and the CEO have a goal to increase their specific performance by 10%? The next question is: What are you trying to improve? What aspect of performance is most important? If you have a high growth company, perhaps what matters most is quick hiring, onboarding, and training performance. If you’re a restaurant, perhaps your food is great but your wait staff is abysmal. Focus on your strategic objective.
    Here’s a question I encourage everyone to ask those who report to them and, if you’re the one doing the reporting, to ask yourself: “What are the three most important things this employee does every day?” What good is a performance management approach if you can’t be on the same page as this question? When you have determined this, ask: “How would you know if you were doing your job well without having to ask me or without my having to tell you?” Once the employee can answer this question to your mutual satisfaction, you have legitimate benchmarks. The question then becomes: How can you improve? What training, resources, support, etc. do you need to supply this employee so they can perform at their best? Remember, as both Peter Drucker and Dr. Deming said: Nine out of ten employees want to do a good job every day; it’s the system they find themselves in that creates problems.
  6. Misaligned compensation, benefits, and incentives. Here’s another of my favorite subjects. Exactly why do you have healthcare, 401(k) or other benefits? Do they help you to hire better talent? If so, how would you know? Do benefits help you retain talent and improve performance? How would you know? If these benefits don’t tie into your strategic objectives, the chances are that you’re wasting many of them – and at a hefty price tag. I’ve begun working with a genius who is turning the benefits sales process on its head. By running algorithms of employee data and healthcare expenses, he can define the optimum benefit mix for an employer, which it then takes to the marketplace – as opposed to the marketplace telling the employer what plans are available for their demographics. Finally, how benefits are managed can impact productivity. For example, sick pay can actually grow healthcare expenses and reduce productivity. Not surprisingly, San Francisco and now Portland actually require employers to offer sick pay. How about providing wellness pay or paying people for being at work? Bear in mind that any incentive you use has both negative and positive consequences.
  7. Failure to execute strategic initiatives. We live in a rapidly shifting business environment that requires us to manage change quickly and successfully. If you haven’t done so, please watch the recorded webinar I did on Change Management and have your entire management team do the same. (If you don’t have access to HR That Works, let me know and I’ll send you a link to it). The webinar makes two major points: First, one of the traps of the hero is over-commitment. This holds true of both individuals and the company as a whole. When we over-commit, we tend not to live up to our commitments – which generates mistrust. Secondly, strategic initiatives require buy-in. Just as in sales you want to make the purchase the buyer’s idea, when it comes to change management, you want it to be the idea of your supervisors and employees. Give them some ownership of the idea and you’ll find them onboard with it. Because change will remain a constant, we’ll need to keep, coaxing, encouraging, and inspiring each other towards growth. When we stop the over-commitment and focus on execution, we’ll keep growing the bottom line.
  8. Finding time for management. Too many executives and managers mismanage their use of time so badly that they’re on overload and unable to take on any growth objectives. Most top CEOs I know take at least a few days a month away from the job so that they can work on the business instead of just working in the business. Google is smart enough to allow its employees to do this one day a week. As Stephen Covey reminded us in the Seven Habits of Successful People, you need to keep sharpening the sword. Everyone in your company needs to understand and execute time management techniques. I’ve produced an HR That Works Time Management Training Module that can help you and your managers with this.
  9. Lack of commitment to or interest in human resources. I realize that many business owners and executives feel that HR is boring, or worse. They didn’t have to know anything about it to start a business. Even though they often have little or no idea on how to run an HR department or function, in one-on-one meetings with their peers in Vistage, executives usually describe personnel issues as the major challenge facing them. The fact that employee relations just isn’t their thing provides an incredible opportunity for HR professionals to offer the expertise needed.
  10. Failure to understand the bottom line potential of HR. Business owners are revenue animals who often don’t see personnel practice as generating revenue. This has been a long-standing uphill battle for HR. There’s a reason why Fast Company magazine years ago published an article, “Why I Hate HR.” In reality, many companies have great HR practices which form the foundation of their bottom line success. For example Jack Welch stressed the importance of HR practices as an economic driver in his years at GE. In fact, he’s still talking about it.

If you own, run, manage, or advise a company, addressing these HR challenges provides a unique competitive advantage!


Make Sure Volunteer Workers Carry Workers Comp

The California case of Diane Minish v. Hanuman Fellowship carries a valuable lesson for anyone involved with nonprofit organizations.

After Diane Minish, a volunteer worker with the nonprofit Hanuman Fellowship was accidentally thrown from a forklift, she sued the organization for negligence. Hanuman argued the exclusivity of Workers Compensation as a remedy, claiming that its Comp policy covered the plaintiff. Although Minish did receive comp benefits, she felt they were too low – and so she sued for more. As in many states, under California law, “private, nonprofit organizations are not required to provide [Workers Compensation] coverage for volunteers (see §§ 3700 [requiring coverage for employees]; 3352, subd. (i) [volunteers are not employees]), section 3363.6 allows them to do so if they choose.” Although the statute is awkward and disjointed, it provides, in essence, that a volunteer becomes a covered employee if the board [of the nonprofit] so declares in writing before any work-related injury.

Minish argued that she had not agreed to this arrangement:

“Plaintiff contends that under section 3363.6, a declaration rendering volunteers covered employees does not become effective unless and until an affected volunteer has notice of the declaration and voluntarily accepts Workers Compensation coverage before any injury. Thus, because the undisputed evidence establishes that she did not receive such notice and did not voluntarily accept Workers Compensation coverage before the accident, the Act was inapplicable. “

The court disagreed, ruling that

“Here, of course, without the slightest advance warning, Hanuman plunged Minish into the toils of the Workers Compensation system not only without her knowledge, but – as soon as she learned of it – very much against her will. Section 3363.6 does not explicitly require notice to volunteers that they have been deemed volunteer/employees. Nor does the statute provide that such status must be accepted by each volunteer individually…. In short, we reject the plaintiff’s claim that section 3363.6 imposes a notice and acceptance requirement.”

However, the court dismissed the argument that Minish was “estopped” from denying the exclusivity because of the fact that she used the Workers Comp system. So, although the suit will go back to court, chances are that she will lose in her attempt to claim negligence.

The bottom line: Whether you sit on a non-profit board, run a non-profit, or advise one, make sure you do what’s required under state law to make sure that your volunteers: a) sign liability waivers and b) get Workers Comp coverage. Doing so will help avoid an ultra-expensive negligence claim. Also, make sure that your insurance coverage addresses such claims where the doctrine of workers comp exclusivity does not apply.


EEOC Credit Report Lawsuit Dismissed

The EEOC received plenty of publicity from its 2010 lawsuit against Kaplan Higher Education (EEOC v. Kaplan Higher Educ. Corp., N.D. Ohio), alleging that the company’s use of credit reports as a factor in hiring decisions for financial aid positions had a discriminatory impact based on race and, thus violated Title VII of the 1964 Civil Rights Act. A federal district court dismissed the EEOC suit on January 28, 2013.

Kaplan did not track the race of its applicants, and was not required to do so. To show a discriminatory impact based on race, the EEOC hired expert “raters” to determine the race of applicants by pictures and other information, and thus evaluate whether Kaplan’s practice had a discriminatory impact. In dismissing the case, the court held that the commission failed “to present sufficient evidence that use of ‘race raters’ is reliable.” The court also chastised the EEOC saying that, “It is clear that EEOC itself frowns on the very practice it seeks to rely on in this case and offers no evidence that visual means is accepted by the scientific community as a means of determining race.” The court concluded that because EEOC’s expert “relied on data obtained by unreliable means … whether the jury could ultimately ‘correct’ the process employed by the ‘race raters’ is irrelevant.”

The court ultimately dismissed the case because the EEOC did not provide sufficient evidence to make its case.

Don’t be surprised if the commission keeps pursuing claims that the use of tests, credit reports, and other background checks has a discriminatory impact on blacks, Hispanics, women, and others. The EEOC will simply look for another case and try to correct the evidentiary issue that resulted in the dismissal of its claims against Kaplan.


2012 EEOC Claims Near 100,000 Mark

The Equal Employment Opportunity Commission handled nearly 100,000 claims in 2012. According to the commission’s press release, “The U.S. Equal Employment Opportunity Commission (EEOC) …received 99,412 private sector workplace discrimination charges during fiscal year 2012, down slightly from the previous year. The year-end data also show that retaliation (37,836), race (33,512) and sex discrimination (30,356), which includes allegations of sexual harassment and pregnancy were, respectively, the most frequently filed charges. The fiscal year 2012 enforcement and litigation statistics, which include trend data, are available on the EEOC’s website.

The press release added that:

“In fiscal year 2012, the EEOC filed 122 lawsuits, including 86 individual suits, 26 multiple-victim suits (with fewer than 20 victims) and 10 systemic suits. The EEOC’s legal staff resolved 254 lawsuits for a total monetary recovery of $44.2 million. EEOC also continued its emphasis on eliminating systemic patterns of discrimination in the workplace. In fiscal year 2012, EEOC completed 240 systemic investigations which in part resulted in 46 settlements or conciliation agreements. These settlements, achieved without litigation, secured $36.2 million for the victims of unlawful discrimination”

What the EEOC didn’t mention is that it’s backing off a bit on its aggressive litigation stance due to a combination of tight budgets and mixed courtroom results. For example, as mentioned in the previous article, a federal district court recently dismissed the commission’s well-publicized credit background lawsuit.

I for one, hope the EEOC focuses more on education and conciliation, rather than litigation.


An Employee Referral System That Works

Although referral programs can provide a valuable source of new workers, many employees are reluctant to provide referrals because they’re afraid that they’ll take the blame if the new hire doesn’t work out.

Here are a few ways to reduce this fear:

  • Provide a worthwhile financial incentive for referrals. Money can do wonders to overcome the fear of embarrassment.
  • Consider a mix of contests, raffles, etc. in addition to cash making referrals more fun and competitive.
  • Think in terms of the new employee’s lifetime value. If a worker can earn the company $50,000 per year for an average of three years, how much would you be willing to invest to get this return? If you pay recruiters 10% to 30% of the new hire’s annual salary, does it make sense to pay an employee only 1 or 2% for a referral?
  • Space out the referral bonus in quarterly payments, based on specific benchmarks. For example, you can give an initial payment for the referral, a second if the employee is hired, another one at six months, and the final one on the new hire’s anniversary date.
  • Train employees on how to approach prospects and make it easy for them to tell the prospect your company story. Give them a pamphlet, some type of document, or a web page link that defines the business and the opportunity the position offers the prospect.
  • Finally, measure the program’s results on a regular basis so that you can keep improving it.


Form of the Month

Workplace Violence Assessment Survey (PDF) – There’s no doubt that violence has raised its ugly head in the workplace. Here’s a form to help you assess the exposures at your company.



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


REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2013 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

November 2012 Compliance and Culture Newsletter

“Your playing small does not serve the world.” —Marianne Williamson

This issue discusses:

  • Editor’s Column: Time to Start Delegating
  • Raise the Financial Awareness of Your Employees
  • Accommodations Related to Commuting to and From Work
  • Automatic Transfer to Vacant Position May Be Required as Reasonable Accommodation
  • Anyone Not Stressed Out?
  • What is HPM?

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

Please click here to view the newsletter in PDF.

Editor’s Column: Time to Start Delegating

I can’t seem to say this enough: You need to stop doing things in order to grow in your career. This is true for me, you, and anyone else. How do you know when to stop doing something? When should you outsource it, delegate it, or ignore it completely? Here are some potential indicators:

  • You’re exhausted, burnt out, a piece of toast.
  • You’re spending more than 50 hours per week at the office and taking work home.
  • You spend more than half of your day doing low-value work. For example, if you make roughly $50 per hour, this means you spend more than half your day doing work worth $8 to $49 per hour.
  • You find yourself doing other people’s jobs for them. This means you clearly haven’t defined a standard operating procedure (SOP) for the job and its benchmarks.
  • The opportunity that lies dormant in your career is not being realized. This is true whether you are in HR, not in HR, or run the company! You know that there are cool, exciting, profitable things that can get done, but you’re not able to get to them.
  • You’re bored with your work. When you have these fantasies of quitting and moving on, you’re in a dangerous place. It’s time to figure out what excites you and delegate your way to reaching this position.
  • You’re not meeting the expectations of ownership. You’re not contributing to the bottom line as they had hoped because you find yourself mired in nonessential, non-strategic work.

In coaching HR executives, I stress that finding the first five hours of a week to delegate are the easiest. Put it this way: if I put you in a life or death situation that required you to stop doing five hours of work, do you think you could do it? Of course you could! Delegation is all about the choices we make. Think of it this way: Find five hours of low-denominator, nonessential, uncool work you do — and then delegate it, outsource it, or stop doing it altogether. You could probably find at least another two hours per week if you stop wasting time in social chat forums, online shopping, checking out scores, texting your friends, etc.

Make sure that the work you delegate is done properly. Don’t give it to someone who’s already overwhelmed, doesn’t have the talent, or lacks the understanding of how to do the job right. Make delegation a process, rather than an event.

Once you’ve found your initial five hours, hunt for an additional hour per month that you can delegate for the rest of the year. At the end of the year, you’ll have made a 16-hour a week difference in your work tasks. You should be able to keep at least two or three of those hours for yourself and focus the rest on adding value to your career and company.

Raise the Financial Awareness of Your Employees

“Think of saving as well as getting.” ̶ Benjamin Franklin

The past five years have been difficult for companies and employees alike. One in seven workers currently faces debt collectors. One in three is living paycheck to paycheck. The “true” unemployment rate remains above 15% and is unlikely to change in the near future. Because of today’s financial challenges, one in four employees don’t expect to retire by the time they turn 65. I believe that this figure is wishful thinking and will end up far higher.

What are we to make of these facts as owners and managers? My answer: Provide financial and accounting education to all of your employees — and don’t wait to do it! Ten years ago, companies began to realize that they couldn’t leave employees on their own when it came to managing their health. As a result, wellness initiatives exploded. It’s time for a similar explosion when it comes to this other malaise of our time: How we manage our money.

To create a financial education initiative in your business, I’d recommend taking these steps, all of which you can find on HR That Works:

  1. Make sure that management understands how the financial stress of individual employees affects the company as a whole. We did an excellent webinar on this topic with Coach George from Dave Ramsey’s organization. He gave the workshop Overextended: A Special Program on How the Personal Financial Stress of Your Employees is Impacting Your Business.
  2. Give employees a basic education in accounting. This is why we brought in the best teachers in the business — the folks from The Accounting Game. I would recommend having every employee watch their webinar; and then follow up with a workshop so that employees commit to taking action.
  3. Provide financial planning. On average, half of your employees don’t have a budget and half don’t have a retirement plan (probably the same half). The webinar Financial Planning 101features a member of the Certified Financial Planners Board sharing the fundamentals of good finance.
  4. Expose every employee to the concept of ownership thinking and open book management. Two of the best webinars for this are Jack Stack’s Great Game of Business and Brad Hams’ Ownership Thinking.
  5. Stress overall business acumen. To place employee financial education in its larger context, have every employee watch Kevin Cope’s webinar Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company.

I guarantee that doing all of the above will transform your workplace. You’ll see less stress, improved focus, higher profitability — and greater financial security for owners and employees alike. You can’t ask for much more than that.

Accommodations Related to Commuting to and From Work

A frequent question at the Job Accommodation Network is whether the ADA requires employers to provide accommodations for a disabled employee who has trouble getting to and from work because of his or her condition. A related question is whether it makes any difference if the employee’s only disability-related problem is the commute; if once at work, he or she has no problem performing the job.

The answer to the first question is “yes”; employers must consider some accommodations related to commuting problems. The answer to the second question is “no;” it doesn’t matter whether the employee is able to perform the job fully without the need for accommodations at work.

According to informal guidance from the ADA Policy Division of the Equal Employment Opportunity Commission, although employers don’t have to actually transport an employee with a disability to and from work (unless the employer provides this as a perk of employment), employers might have to provide other accommodations, such as changing an employee’s schedule so that he or she can access available transportation, reassigning an employee to a location closer to home when the length of the commute is the problem, or allowing an employee to telecommute.

The underlying reason why employers might have to provide such accommodations is that the employer usually controls employee schedules and work locations; so, when a schedule or work location poses a barrier to an employee with a disability, the employer must consider reasonable accommodation to overcome this problem. As with any accommodation under the ADA, when considering accommodations related to commuting, employers can choose among effective accommodation options and do not have to provide an accommodation that poses an undue hardship.

Linda Carter Batiste, J.D.
The Job Accommodation Network

Automatic Transfer to Vacant Position May Be Required as Reasonable Accommodation

A question that often comes up during the Americans with Disabilities Act interactive process is whether a disabled individual must be reassigned automatically to a vacant position as a reasonable accommodation, or whether a company can require the employee to compete for the position.

The federal appellate courts have split on this this issue. Although the courts have all acknowledged that an employer need not violate other important employment policies in order to provide a transfer; the question turns on what each court would consider a legitimate employment policy. Collective bargaining agreements and entrenched seniority systems are clearly such policies; however, a policy of hiring the best-qualified applicant is viewed differently by the different Circuit Courts that have addressed this issue.

The EEOC as well as the 9th, 10th, and D.C. Circuits, require automatic transfer, regardless of the relative qualifications of the disabled employee compared with other candidates for a vacant position. The 7th and 8th Circuits, on the other hand, have not required automatic transfer, holding that a reasonable accommodation offered the opportunity to compete for the position. However, the 7th Circuit recently took the unusual step of having the full bench review this position in EEOC v. United Airlines (although decisions are usually issued by a three-judge panel).

The full bench has now issued its decision to overturn its prior ruling in EEOC v. Humiston-Keeling on this issue. Now the law in the 7th Circuit states, as it does in the 9th, 10th and D.C. Circuits, that the ADA requires employers to transfer employees to a vacant position, provided that the transfer does not create an undue hardship, such as contravening a collective bargaining agreement or valid seniority policy. The Court specifically stated that a “best-qualified” hiring policy is not the same as a seniority policy.

At this time, the 8th Circuit remains the only federal appellate court to hold that automatic or mandatory reassignment is not required as a reasonable accommodation. However, because the 8th Circuit’s position was based on the 7th Circuit’s ruling in Humiston-Keeling, it has now become open to question.

For employers, this means that, even if it’s clear that a disabled employee can’t perform the essential functions of his or her position, you probably can’t just terminate the employment relationship. Rather you should review your open positions to determine whether there are any that the employee can perform (with or without accommodation); if the employee is qualified for the position, offer it even if the employee is not the best qualified person for the job. It’s also important to note that the EEOC takes the position that there are no geographic limitations on the open position, meaning that the company must consider positions at other company locations — even those in other states.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Anyone Not Stressed Out?

According to the National Institutes of Health, “We all have stress sometimes. For some people, it happens before having to speak in public. For other people, it might be before a first date. What causes stress for you might not be stressful for someone else. Sometimes stress is helpful — it can encourage you to meet a deadline or to get things done. However, long-term stress can increase the risk of such diseases as depression, heart disease, and a variety of other problems.”

To help your workforce find that healthy balance with stress, check out this excellent web site: http://www.nlm.nih.gov/medlineplus/stress.html — and the tools are free!

What is HPM?

Next year I’ll be speaking for the American College of Occupational and Environmental Medicine (ACOEM) on helping employers and employees manage the “Bermuda Triangle” (the intersection of Workers Comp Return to Work, the ADA, and FMLA). The ACOEM website has this to say about the concept of Health and Productivity Management (HPM):

“The American workplace continues to be at a crossroads. Global economic competition demands increased productivity; technology is rapidly influencing the dynamics of industries and marketplaces; and major demographic shifts are changing the face of the American workforce.

“At the same time, work-related illness and injuries continue to impose a tremendous burden. Each day, an average of 137 Americans die from work-related illness and an additional 17 die from work-related injuries. According to the National Safety Council, work injuries cost Americans more than $132 billion a year — or $970 per worker — in lost wages, lower productivity, higher health care expenses and other costs.

“Now a new factor — chronic disease — has entered the picture. As the percentage of older workers in the United States grows, it’s expected that chronic diseases such as diabetes and cancer will cost employers heavily, as they provide medical benefits for employees and absorb the costs of long and short-term disability claims. One study found that of the nation’s $2 trillion in medical spending, 75% goes toward care for chronic conditions.

“Caught in the middle of this continuously evolving workplace, employers grapple with a growing issue: The impact of worker health on company productivity. As the link between health and productivity has been studied a new discipline has emerged, known as Health and Productivity Management.

“Simply defined, Health and Productivity Management, or HPM, is a concept which directs corporate investment into interventions that improve employee health and business performance. It can also be described as the integrated management of health risks, chronic illness, and disability to reduce employees’ total health-related costs, including direct medical expenditures, unnecessary absence from work, and poor performance at work — also known as “presenteeism.”

“A growing body of evidence suggests that worker health can be measured and managed more effectively for increased profitability and organizational effectiveness. More and more employers have begun to embrace this concept, as the relationship between the health of workers and the bottom line of American business has become increasingly clear.

“Proponents of HPM view the workforce as human capital, which should be managed with the same level of focus and interest applied in the management of financial capital. They recognize the value of managing human capital by focusing on health in the workplace environment. With healthier employees, companies perform better.

“At the heart of the HPM process lies the measurement of workplace health costs, accurate evaluation of the factors that are driving those costs, and the creation of health enhancement programs and strategies for workers. Occupational and environmental physicians can play a pivotal role in helping the workplace understand these concepts and the relationship between health and productivity.

“HPM promotes better individual health, which in the long term improves the overall health of our nation and the stability of our health care system. HPM becomes a win-win, benefiting both the employee and the employer.

“The bottom line: good health is good business, and HPM helps achieve both.”
Just as you need to use lawyers to help prevent HR risks at the front end, you want to use doctors to help prevent Workers Comp and other risks. My longtime friend, Dr. Russ Dunnum in San Diego, has shown companies how to save millions in health and Workers Comp-related overhead. He has also helped many employees in the process.

I would encourage you to go to the http://www.acoem.org/ website to learn more about how to use doctors more effectively in the front end of your business.

Form of the Month

Vision, Mission, Goals Worksheet (PDF) – Use this document to help your employees get on board. It is important for leadership to define the “why” that’s in it for the employee.


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

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

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

California Passes Bill Preventing Social Media Account Access

While Maryland was the first state to pass a Social Media account access protection law, California now has one too and many states plan to follow. Here’s the statutory language:

SECTION 1. Chapter 2.5 (commencing with Section 980) is added to Part 3 of Division 2 of the Labor Code, to read:

Chapter 2.5. Employer Use of Social Media

980. (a) As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, e-mail, online services or accounts, or Internet Web site profiles or locations.

(b) An employer shall not require or request an employee or applicant for employment to do any of the following: (1) Disclose a user name or password for the purpose of accessing personal social media.

(2) Access personal social media in the presence of the employer.

(3) Divulge any personal social media.

(c) Nothing in this section is intended to affect an employer’s existing rights and obligations to investigate allegations of employee misconduct or employee violation of applicable laws and regulations.

(d) Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.

(e) An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.

To understand what all of that means I suggest you look at the bill analysis by both the Senate and Assembly labor committees.  Interestingly, the only opposition to the bill came from the securities and financial sector claiming it conflicted with obligations they have under Federal statutes. HR That Works Members should view the Social Media Training Module.

Getting Paid to Grow the Bottom Line

“Only mediocrity is sure of itself.” –Paulo Coelho

Last month I did a Workshop at the PIHRA convention in Anaheim with the above title. Here are some of the points I made in that workshop:

  1. Do you believe in HR? If you claim that you do, what risks are you willing to take on behalf of that belief? Asked another way, what would you do if you knew you couldn’t fail? If you have a deep faith in yourself and what you are capable of, are you demanding that you get the opportunity to make a difference? Or does that belief wallow in silence?
  2. This is the “story” of HR. But it doesn’t have to be your story! I’ve gone so far as to suggest HR executives call themselves anything other than HR! Queen for the Day is better. Or Chief People Officer, Chief Relationship Officer, etc. Fact is, no matter what you get paid or what you can accomplish, the very term “HR” makes an emotional connection which says: administrative.
  3. Because it has been so under-valued HR is a real opportunity! Most of the competition leaves this opportunity on the table very day. In large part because HR executives don’t know how to make a case for strategic HR. When I speak  to CEO groups I go over the math and ROI of HR so they get the investment opportunity. Fact is, in most companies the opportunity is worth at least 10% of annual payroll. So in a $2,000,000 total payroll company that means the opportunity is worth at least $200,000!
  4. timeThe number one excuse of those in attendance as the reason why they don’t engage in more strategic activity is TIME. Yet few of them have ever taken a time management course (P.S. there’s one on HR That Works I designed). When I coach HR and other executives the first thing I do is have them get crystal clear as to where their time is going and then get them to STOP doing 5 hours of low value work per week. That frees up 20 hours of opportunity time per month. Do you know where your time goes? What will you stop doing for 5 hours per week?
  5. If we want to get paid we have to understand business and money. One of the great Catch-22’s is the fact that many people in HR are terrible with numbers! Especially if they did not migrate into the role from accounting, etc. In addition, we have to learn how to talk to business owners in a way that gets their attention. Meaning we have to understand revenue and activity equivalents of HR costs. By attending the webinar listed at the end of this article, I’ll show you how to have that conversation the right way.
  6. When you think of HR do the words creativity, innovation, and fun come to mind? Or do you agree that 99.9% of HR is boring? Which implies…you may be boring?? (I dread the thought.) Again, it doesn’t have to be that way. Where’s your creative edge? What tests and experiments are you running? How robust is your suggestion system? How out of the box are ya? If you haven’t already done so, do yourself a super-big favor and read Gordon MacKenzie’s Orbiting the Giant Hairball. (P.S. Hairball means the policies and procedures people like HR create that can stifle organizations.)
  7. Do you have an HR plan? Unfortunately most small and mid-sized companies don’t.  Do you have a plan for your HR career? As the beautiful May Kay so accurately stated, “Most people plan their vacations better than their careers.” There is no substitute for good planning. Try building a house without one.  Or an HR department or career.  I am a big fan of rolling 90-day game plans that focus on one strategic objective a month. I also coach my clients to have daily game plans so that they make their day as opposed to everyone else doing it for them.
  8. Get fired up! What are you waiting for…a next lifetime? It is important to rediscover your BIG WHY’S and make a commitment to attaining them. Whether it be for the company, yourself, your family, your dream adventure, or anyone else you can make a difference with. Being fired up is an inside-out job. Don’t expect others to do it for you.
  9. Lastly, be prepared to ask for a raise. Not because you want one or need one but because you’ve added so much value that you deserve one. I know that many HR executives are intimidated by money and intimidated by asking for more of it. If you believe in yourself and know you can and make a difference then get paid what are worth or work someplace where you can be fully and financially actualized.

So, if you are one of those people who is not stuck on ordinary, I encourage you to view the HR That Works webinar recording on Getting Paid to Grow the Bottom Line.

New California Employment Laws Signed by Governor Brown

AB 1844 (Passed):  This bill would prohibit an employer from requiring or requesting that an employee or applicant disclose user name or password information for personal social media, or to divulge any personal social media.

Chapter 2.5. Employer Use of Social Media

980.  (a)  As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.

(b)   An employer shall not require or request an employee or applicant for employment to do any of the following:

(1)      Disclose a username or password for the purpose of accessing personal social media.

(2)      Access personal social media in the presence of the employer.

(3)      Divulge any personal social media, except as provided in subdivision (c).

(c)    Nothing in this section shall affect an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.

(d)   Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.

(e)    An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.

SB 1255 (Signed):  This bill would specify circumstances under which “injury” would be presumed to an employee as a result of an employer not providing wage statements, or providing incomplete wage statements.  Presumed injury would allow the employee to recover penalties and/or actual damage.  Presumed injury could be shown by the failure to provide a wage statement at all, or by the failure to include the employee’s name and last 4 digits of the social security number.  It could also be shown by failing to provide complete wage information, causing the employee to be unable to determine (from the statement alone) gross and net wages earned, deductions therefrom, and the name and address of the employer.

“An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.

AB 1744 (Signed, effective July 1, 2013):   This bill would require temporary services employers to include additional information on itemized wage statements for employees, including the rate of pay for each assignment, the name and address of the entity that secured the services and total hours worked for each entity.

AB 2103 (Signed): Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary.

AB 2674 (Signed):  This bill would amend section 1198.5 of the Labor Code relating to employee rights to inspect personnel files.  The bill would require employers to maintain employee personnel files for at least 3 years following termination of employment, and to permit current and former employees (or their designated representatives) to inspect and copy personnel records, within 30 days of a request to do so by the employee.  The bill specifies that an employer is not required to comply with more than 50 requests for copies of personnel records by a representative of employee(s) in one calendar month.


Labor Commission www.dir.ca.gov
Dept. of Fair Employment and Housing www.dfeh.ca.gov
EDD www.edd.ca.gov

And of course, HR That Works!

Free Wellness Resources

Since not every company feels they can afford a wellness program here are some excellent government and non-profit resources to pass on to your employees:

October 2012 Compliance and Culture Newsletter

“Your work is to discover your work and then to give yourself to it with all your heart.” —The Buddha

This issue discusses:

  • Editor’s Column: HR Survival
  • 1,500 Hours of Your Life … Wasted Away On Busywork
  • ‘Intentional Growth’ In Your HR Career
  • Watch Those Attendance Policies!
  • The Economy: Prepare for the Other Shoe to Drop

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

Please click here to view the newsletter in PDF.

Editor’s Column: HR Survival

An excellent article in the October Backpacker Magazine discussed five emotional aspects of preventing deadly threats. Although the “threats” facing human relations professionals might not be as extreme as dangling from a cliff, we’re certainly guaranteed a turbulent future. Here’s how the five emotional intangibles in the article might apply to the survival of HR:

  1. Assess risk – As the article asks, “What’s the worst thing that could happen if I do this?” Another good question to consider is “Whose judgment would I be concerned about if things didn’t work?” You should also ask, “What’s the worst thing that could happen if I don’t do this?” This gives a broader understanding of the risk. For example, the real risk that our economy can go south again would affect your entire company, as well as you. If the risk of the economy going south is greater than the risk of improvement — and the downside is extreme — have a contingency plan. How would HR help to manage a 15%-30% drop in revenue?
  2. Stay calm – The article recommends that you “Take control by forcing yourself to slow down.” When you’re used to running 75mph, it’s important to stop, breathe, and think. Give yourself the opportunity to find that safe, calm place for observation and reflection.
  3. Set priorities – According to the article, “You need to be able to survive the conditions you’re in. Assess your situation and determine your most pressing needs.” Not all HR risks are equal. For example, the risk of making a poor hire is perhaps the most serious in terms of frequency and severity. Another significant risk is failing to get rid of a poor performer or an employee who is sabotaging your brand on social media. What are the three greatest risks your company faces and what plan do you have for addressing them?
  4. Be a leader – In risky times, resist groupthink by discussing possible scenarios up front. Give each employee a specific assignment to focus on in risky times. What tasks can you assign to HR subordinates, other managers, or employees?
  5. Stay positive — According to the article, “A powerful desire to keep living leads directly to successful survival stories. You don’t have to be comfortable to survive this situation.” I can supplement this statement by adding “A powerful desire to be a strategic HR executive leads directly to successful career stories.”

Risk management is an exercise in logic and emotion. To reduce their exposures, HR professionals must use both.

1,500 Hours of Your Life … Wasted Away On Busywork

“Work can be a life-draining affair.” —Joseph Campbell

Effective time management is essential if you wish to be a successful HR executive — and have a life at the same time. According to CEO surveys, when HR professionals focus their time on administrative and compliance duties (positions in which one is particularly likely to say “no”) their companies don’t see them as being strategic partners to the business. The problem is that HR executives spend an average of only 25% of their time on strategic activities. From a career and company goals perspective, this is akin to orchestrating their own demise.

When I advise HR executives to manage their time more effectively by minimizing administrative and compliance activities, I get a variety of “reasons” why they don’t do so:

  • This simply has to get done.
  • Somebody has to do it.
  • I don’t have the time to delegate this right now.
  • There’s nobody else here to do it.
  • I’m not sure I would know how to delegate it properly.
  • I can’t manage the person to whom I delegated it.

These are all poor excuses that can block your career success.

Let’s think about some numbers. Suppose you spend an average of 10 hours a week managing payroll and other administrative tasks. Let’s say you earn $40 per hour (roughly $80,000 per year) and administrative tasks such as this are the least valuable work you do. In fact, it’s work that $20 an hour people can do. On the conservative side, every hour that you do this work, the company loses $20 an hour — which comes to $800 a month or $9,600 a year. If you put this same effort into doing $60 an hour strategic work instead, the company would gain $20 every hour — and you’d be in a far better position to ask for a raise.

Think about it: If you waste 10 hours a week for the next three years, that’s 500 hours this year, and 1,500 hours during the next three years of your life that you’ll never get back! What’s more, this waste will cost the company at least $30,000.

If you label your work as “A”, “B,” and “C” work, you should be spending 80% of your time on A work, 20% on B work — and zero time on C work. Otherwise, you’re spinning your wheels.

C work basically wastes time completely. It’s nothing you can delegate; it’s just something you should stop doing. B work is administrative and can be delegated or outsourced — such as payroll and benefits administration. Focus on A work: What the business needs and what you want to get great at doing. A classic example would be training in a company that’s focused on technological advances.

To determine where your time is going — and should be going — use this checklist:

A-Level Activities:

  • Meeting with the executive team to understand their vision, mission, value, goals, etc.
  • Studying and understanding the company’s strategic plans, financials, succession plan, markets, branding, and other operations.
  • Identifying the critical human resource needs for this organization (surveys, observation, focus groups, interviews, etc.).
  • Input into the company’s overall compensation plan, including pay rates, incentives, bonuses, rewards programs, etc.
  • Creating strategic plans and processes for carrying out top objectives.
  • Developing training plans to support implementation.
  • Input into the company’s overall risk-management plan, including assistance with the purchase of benefit programs, Workers Comp insurance, Cyber Liability insurance, and Employment Practices Liability insurance (EPLI).
  • Creating systems for hiring, performance, retention and compliance.
  • Facilitating creativity, branding, suggestion systems, etc.
  • Implementing any other company strategic objectives to which you can provide input.

B-Level Activities:

  • Payroll and benefits administration.
  • Implementation of hiring, performance, retention and compliance systems.
  • HRIS management.
  • Delivery of training.
  • Creation of employee handbook and executive contracts.
  • Personnel files management.
  • Attendance, vacation, and leave management.
  • COBRA administration.
  • Compliance posters and handouts.

C-Level Activities:

  • Employee dramas.
  • Meetings that go nowhere.
  • Doing any $10-20/hour work.

‘Intentional Growth’ In Your HR Career

Keeping with this theme, an excellent article by John C. Maxwell in a recent issue of Success magazine identifies the key factors in “intentional growth.” Here are my recommendations on using these factors to help yourself grow as an HR professional.

  • Start today. Your power lies in the present. Although it’s important to create strategic plans, you need to begin where you are. What will you do today to have a greater impact on your company and help you grow in your career?
  • Take complete responsibility for growth. I’m not a fan of blame or justification. As the Buddha stated, “What comes to you, comes from you.” Your HR career and its impact on the company is what you’ve chosen it to be — at least up to now. It’s your responsibility to grow your career and make bottom-line decisions where you work.
  • Learn from mistakes. I did a training program on Making Mitsakes (the misspelling is intentional). One of the best ways to prevent making mistakes is to “model” people who have been successful before you. For example, who are the most balanced, effective HR executives you’ve ever met — and what are they doing right? Chances are, if you do the same things they do, you will be equally successful.
  • Rely on hard work, rather than good luck. In this economy, you need to work both hard and smart. One important caveat: Don’t think that working longer hours than everybody else is smart.
  • Persevere long and hard. There are no quitters on the way to success. Expect bumps in the road. As I often state in my workshops, how we deal with what feels unfair to us determines our personal culture. People who adopt a survivor mentality, as opposed to a victim mentality, will come out on top.
  • Stick with good habits. The worst habit I see in managers is poor time management (see the article “1,500 Hours of Your Life … Wasted on Busywork”) How many of you have taken a disciplined approach to how you use your time? If you’re an HR That Works Member, take advantage of the Time Management Training Module.
  • Follow through, rather than talking big and doing nothing. It’s far better to get something done and then publicize it afterward, than to brag about what you will do and then trying to justify why you failed to deliver. As the saying goes, “Under-promise and over-deliver.”
  • Take risks. This is a real challenge for the HR community. Having coached many HR executives, I can tell you that most of them tend to follow the rules, rather than taking risks. I encourage you to read Orbiting the Giant Hairballby Gordon MacKenzie. By the way, the term “hairball” refers to company policies and procedures — something that HR is great at developing.
  • Think like a learner. Whether it’s from mistakes or study, life is one big learning lesson. To earn more tomorrow, you must learn more today. This holds true for both the individual and the company as a whole. To what degree are you enhancing your education?
  • Rely on character, as opposed to talent. Having integrity, doing what you said you were going to do, when you said you were going to do it, shows character.
  • Never stop growing. Don’t let yourself get comfortable for too long. You’re either growing or you’re fading. How would you describe what’s going on with you? Where do you have to coax, encourage, and inspire yourself to take the next step toward your growth?

None of this should come as news. It’s about taking action! As Maxwell reminds us, “Growth doesn’t just happen — not for me, not for you, not for anybody. You have to go after it!”

Watch Those Attendance Policies!

Every month we receive dozens of calls from employers asking whether they can terminate an employee with an attendance problem. In most circumstances, they have every right to do so — especially if there’s a well-defined attendance policy and the company holds other employees to a similar standard. Employers get in trouble when the attendance problem results from a work injury, disability, serious medical condition, pregnancy, or other protected category that impacts the employee or a family member. All too often, employers don’t ask why somebody missed work. In one case, an employer told us the employee was late for work on a repeated basis because she had been having flu-like symptoms and getting sick. The employer never asked what might be causing the problem. It turns out that the employee was pregnant. Terminating her would have been a huge, and costly, mistake.

The law does not expect employers to be doctors or psychiatrists. However, it does create a standard of liability that requires managers to determine, if there is a disability, serious medical condition, or pregnancy involved. In the end, a judge or jury will determine whether the employer met this standard.

In most circumstances, employers don’t face lawsuits for their compliance failures. But bear in mind that it only takes a single employee bringing a claim to expose you to hundreds of thousands of dollars in damages (not to mention legal costs). This is another good reason to make sure that your company purchases Employment Practices Liability Insurance. HR That Works Members should take advantage of the training modules and other tools on leave management.

The Economy: Prepare for the Other Shoe to Drop

Although I don’t pretend to be a financial expert, I have disciplined myself to learn basic accounting principles. The more financial news and literature I read, the more I want to pound my head. Here’s why:

The global economy remains shaky. The industrialized world, the U.S. included, has fallen deeply into debt. To maintain our affluent standard of living, we have mortgaged our countries, states, cities, and households. Debt is crushing us. Despite their best efforts, many nations will have to devalue their currencies eventually. Japan is one such example. In countries with aging populations (such as Japan, the United States, and Western Europe), demographic trends are upside-down. For the foreseeable future, fewer and fewer workers will be supporting more and more retirees, an unsustainable situation. Something will have to give.

Keynesian economists argue that we can keep going into debt because sooner or later we’ll have boom times and be able to pay off our obligations. For example, at the crest of the dot.com boom, governments were actually running surpluses and we thought we were rich. Those days are gone, at least for a while, until the demographics change once again.

I speak in front of many private company CEOs. Most of them are feeling shaky, even the ones with a positive cash flow. They don’t like the tea leaves either. Collectively they’re highly reluctant to put any of their cash into making investments, including hiring new employees.

Here’s why I’m sharing this gloomy prognostication: You need to prepare your company and clients in case the economy tanks by 10%, 15%, 20% or even more. I believe that such a downturn is only a matter of when, because I see no reason for things to be anything but “flat” at best.

To help prepare you and your clients for this economic crisis, I’d recommend that you follow these guidelines:

  • Change all the time. How do we continue to differentiate ourselves is the question we constantly ask ourselves at HR That Works. Being ordinary, being like your competition, being the same company you were five years ago, won’t cut it moving forward. When the shoe drops, your image needs to be progressive and forward thinking — and yet offer stability.
  • Generate a Plan B under which you can survive a 20% drop in revenue. It would be smart to scale this plan assuming a drop of 10% to 40%. If you don’t have the expertise to generate such cash flow projections on your own, you can easily find someone to do it for you on Elance. I did this for my company and it cost roughly $500. That’s money well spent. Knowing that you have a plan to address the worst that could happen offers great comfort.
  • Tighten up performance benchmarks to improve your performance in general. This is no time to stand for subpar performance because somebody has either been there for a long time, is related to someone, is very likeable, etc. Results are what matter.
  • Have your entire team watch The Accounting Game webinar on HR That Works. This is the best accounting webinar I’ve ever seen. Also, have the team watch Brad Hams’ Ownership Thinking. Bear in mind that Accounting is the course most often dropped or failed in college.
  • Conduct “what if …” workshops with your management team and employees. Remember, none of us are as smart as all of us!

The primary goal of risk management is preparation. Don’t let yourself get too comfortable — and thus vulnerable. Have a plan to keep well prepared in case the economy tanks again.

Form of the Month

Reasons People Leave (PDF) – Use this checklist as a starting point in understanding the causes of unwanted turnover.


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Employer is Denied Enforceability of Arbitration Agreement Found in Employee Handbook

In the California Court of Appeals case of Sparks v. Vista Del Mar Child and Family Services, the employee filed a wrongful termination complaint against the company after he complained of various employment practices he believed violated state and federal reporting and compensation laws. The defendant, intendant to compel arbitration based on a provision found in its employee handbook. The court denied enforceability stating that, in general, arbitration agreements in employee handbooks are non-enforceable. This is because they should be signed as a separate document, employee handbooks often state that they are not contracts, that they can be unilaterally changed, etc.

In California and elsewhere, employers are having greater and greater difficulty enforcing arbitration agreements to the point where you have to ask if it is worse than the fight before the fight. What sense does it make to try and compel arbitration if losing costs you $50,000 to do so?

If you have an arbitration agreement, remember to make sure:

  1. It is signed as a stand-alone document.
  2. It is specific to coverage rights waived and any process to follow.
  3. Get it reviewed by a lawyer. It may cost you a few hours of their time, but you are doing it to save many thousands if you do get sued.