Have a Disaster Contingency Plan for Your Business?

In reviewing countless articles and blogs predicting workplace trends for 2014, one struck HRInsights as relevant, timely, and very actionable:

Be prepared for disaster—both natural and otherwise.

-Rieva Lesonsky, CEO of GrowBiz Media


Whether you believe in global warming or not, the ever-increasing frequency of natural disasters and extreme weather conditions means businesses need to be prepared.  West Virginia (water supply disruption), California (fire), New Jersey (hurricane), and Colorado (flood).  And, these were just in the last 2 years.  Don’t just consider how a disaster or extreme weather could affect you (and your employees), but also how it might impact customers and suppliers.  If you did not have safe water or a reliable supply of energy or if your employees could not make it to work, do you have a back-up plan?

The “otherwise” disasters referenced above are man-made disasters which include incidents of workplace violence and, as another example, the accidental death of a key employee.  With the incidence of workplace shootings seemingly on the rise (or at least the media attention to it), it’s important to take employee complaints seriously. Develop a plan for dealing proactively with conflicts and communicate a plan to deal with the worst-case scenario.  Also, remember to review important company policies at least once a year with your employees, including a brief review of the Disciplinary Action Procedures, and update your succession plans during every annual organizational audit.


The HR Experts for Small Business

UPDATE 2014: New and/or Changes to Illinois Labor Laws

Below are highlights of certain federal law developments occurring in Illinois that will affect employers in 2014.  Please make certain that you are in compliance.

  • Workplace Violence Prevention: Effective January 1, 2014, employers with five or more employees will be permitted to take proactive steps to protect employees from workplace violence, harassment, and stalking. Employers will be able to apply for an order of protection against disgruntled workers who have made a documented threat against the business or another employee. Employers are required to provide an affidavit that there is a credible threat of violence against the workplace or an employee to apply for an order of protection.
  • Protection of Social Media Accounts: Effective January 1, 2014, an amendment to the Illinois’ Right to Privacy Act in the Workplace Act will go into effect. Since January 1, 2013, the Act has prohibited employers from requesting or requiring that employees or applicants provide passwords or related social media account information, or provide access to their profile on a social networking website. The amendment limits the scope of the Act’s prohibition on requesting or requiring access to social media accounts. Following the amendment, employers will be permitted to access professional accounts where the employer has a “duty to screen employees or applicants prior to hiring or retain employee communications as required under Illinois insurance laws or federal law or by a self-regulatory organization” as defined by the Securities Exchange Act. A “professional account” is defined by the Act as an account, service, or profile used or accessed by a current or prospective employee for business purposes of the employer. Employers will still be prohibited from requesting or requiring access to personal accounts unrelated to any business purpose of the employer.
  • Legalization of Medical Marijuana: Effective January 1, 2014, registered users suffering from a “debilitating medical condition” will be allowed to purchase medical marijuana from state-licensed dispensaries. Employers may not penalize employees for their status as patients who are qualified and registered to purchase medical marijuana, unless failing to do so would cause the employer to lose monetary funding under federal law. However, employers retain the right to restrict or prohibit the use of marijuana in the workplace and may implement and enforce a drug-free workplace policy, provided the policy is enforced in a non-discriminatory manner. Employers also may adopt reasonable policies regarding the consumption, storage, or timekeeping requirements regarding the use of medical marijuana.
  • Prevailing Wage Records Requirements: Effective January 1, 2014, contractors and subcontractors performing work on public works projects are required to keep payroll records, either electronically or on paper, of all workers employed on the project for at least five years (increased from three years) after the last payment on the contract.
  • Concealed Weapons Law Developments Following last summer’s adoption of the Illinois Fire Concealed Carry Act, employers seeking to prohibit individuals from bringing concealed weapons onto their private property are required to post a sign to that effect at building entrances. The Illinois State Police recently released proposed rules regarding the sign, which consists of a white background and a depiction of a handgun in black ink with a circle (of four inches in diameter) around the handgun depiction with a diagonal slash across the firearm in red ink. No text or other marking is contained in the sign, except the reference to the Illinois code section 430 ILCS 66/1. The sign must be posted clearly and conspicuously at the entrance to the property. A template of the approved sign is available here: https://ccl4illinois.com/ccw/Public/Signage.aspx
  • Same-Sex Marriage Recognized: Effective June 1, 2014, same-sex marriage will be recognized in Illinois. Same-sex and different-sex couples will be entitled to the same benefits, protections and responsibilities of civil marriage.

The HR Experts for Small Business

Employee Healthcare Costs Are Under Your Control

Most of the recent discussion on healthcare reform in the US has focused on its implementation and the impact that it will have on the workplace and particularly that of small businesses.  Debate will likely continue to rage on many elements of the Affordable Care Act (ACA) such as penalties, tax credits and exemptions.  However, what remains fact is employers’ ability to reduce healthcare costs and to accelerate important performance outcomes through a deliberate focus on improving employee engagement and well-being.  Like many of you, when I hear “Employee Engagement”, my eyes glaze over and I get really sleepy.  But, the facts are consistent and clear:

Happy Workers = Lower Healthcare-Related Costs = More Profits

According to Gallup’s State of the American Workplace, 1) engaged workers lead healthier lives, 2) employees with high wellbeing have lower healthcare costs, and 3) engaged and healthy employees are more resilient and agile.  What this means for the employer: 1) less sick days, 2) improved on-the-job performance, and, 3) lower overall medical costs.  The Gallup report states, “Although some supervisors might expect employees to compartmentalize their work lives and their personal lives, great managers know that the whole person comes to work and that each employee’s wellbeing influences individual and organizational performance.”  The authors go on to suggest an approach to improving the workplace environment behind these 5 actions:

  1. Make wellbeing an organizational strategy – much like other organizational outcomes.
  2. Communicate a commitment to wellbeing consistently in all of the programs that the company offers.
  3. Hold your direct reports accountable for wellbeing programs available to employees.
  4. Consider how to embed activities to increase wellbeing in individual development plans and goals.
  5. Set positive defaults for making healthy choices.

While they often deflect this advice as consul only for larger organizations, small business owners can define equally practical initiatives under each of the above 5 actions that can be implemented easily on a much smaller scale.  Don’t avoid the reality!


The HR Experts for Small Business

Let’s Yank the ‘Rank and Yank’ System

I have communicated before my dislike for “Neutron Jack” Welch’s “rank and yank” system of performance management.  Microsoft’s abandonment of its own forced ranking process that subscribed to Welch’s sour approach hopefully signals its end for good.  The continual renewal of the corporate ranks by casting aside the “bottom 10%” of the employee roster seemed so simple.  In fact, it was too simple and short-sighted (and a bit inhumane).

A good performance management process sets realistic expectations between a manager and an employee.  If those expectations are met, then the employee keeps his/her job.  If those expectations are not met, then the manager needs to course-correct with appropriate training and support or make the difficult decision to terminate employment.  In this system, I can easily imagine organizations where, because of good management over time, all of the employees are performing well or as expected.  Why then force out 10% of the able-bodied work force?

One of the Welch system’s greatest flaws is simply the costs associated with turning over 10% of the GE workforce every year.  That’s 30,000 employees every year!  Beyond the recruiting costs, there are also on-boarding and training costs as well as more intangible costs associated with the slowing down of projects as newer employees get up to top speed on internal practices and protocols.

I say “good riddance” to forced ranking as an employee management tool.  It was about time other large and influential companies recognized it for what it is – wrong.


The HR Experts for Small Business

Are You Certain You Own a “Small” Business?

It might make sense to strike “small” as a descriptor for any business.  National Public Radio (NPR) has been running a series on small business which has left me thoroughly confused as to what the definition of small business is.  In her NPR segment “Small Businesses: Big Concerns and High Hopes” (9/24/13), Marilyn Geewax states,

“In reality, small firms overwhelmingly are made up of individuals working alone — they are freelance writers, lawn mowers, consultants and housecleaners. U.S. Census Bureau says 3 out of 4 firms have no payroll, and collectively, they account for only 3.4 percent of all business receipts.  But while most of the nation’s roughly 28 million firms have no workers, about 6 million do hire, fire and pay people. Of those, roughly 5 million really are small, with nine or fewer workers.  That leaves those approximately 1 million firms that hire at least 10 people, but not more than the 500 — keeping them within the Small Business Administration’s usual definition of ‘small’.”

However, according to the Small Business Administration (SBA), a small business is one that is independently owned and operated, is managed for profit and does not dominate over the competition.  The SBA also says that the maximum number of employees in a “small” business can vary from 500 – 1500 depending on the industry.  The SBA’s definitions of “small” are important because they help determine which businesses are eligible to get special loans or loan guarantees. It can also determine who can bid on government contracts that are set aside for small business. The SBA’s work also helps inform other parts of the government that have programs aimed at small firms.

Take, for example, the new health care law. Employers with 50 or more full-time workers have to either provide health insurance or pay a penalty. Even 50 is not a standard measure across the federal government.

So if the government cannot agree on the definition, then why should I get hung up on it?  Good question.


The HR Experts for Small Business

FLSA Take-Away

“We will not rest until the (FLSA) is followed by every employer, and each worker is treated and compensated fairly.”

– U.S. Labor Secretary Hilda Solis announcing a 33% staffing increase in investigators.

A BusinessWeek report says Fair Labor Standards Act (FLSA) lawsuits have “exploded nationwide,” and that “because wage-and-hour laws have been so widely violated, undetonated land mines remain buried in countless companies.”

Don’t make these pay-related mistakes!

  1. Wrongly classifying employees as exempt versus overtime,
  2. Paying hourly employees incorrectly for their travel time,
  3. Failing to retain payroll records for the right amount of time,
  4. Improperly paying staff when you closed the office during that last snow storm, or
  5. Violating the “rounding law”.

All it takes is one employee filing one complaint.


The HR Experts for Small Business

Employee Communication

Today’s pearls of wisdom about employee communication come from Peter Economy (not kidding) of Inc.com from his article 5 Ways to Get Your Employees to Speak Up.  Business is best served, meaning profit-wise, if the work environment is conducive to sharing thoughts and ideas.  It is not rocket science, but the plethora of articles and blogs on the value of good communication seem to indicate that there are more managers who just don’t seem to get it.  Mr. Economy’s rules:

  1. Make it safe to communicate.   Roughly translated – don’t make your employees feel like idiots when stating their ideas.  Quite possibly, they may have a good point.
  2. Create new approaches to communication.  This does not mean instituting new codes or introducing the concept of sign language.  Rather, establish new forums where employees can be made to feel comfortable speaking up.  Ever hear of a Town Hall Meeting?
  3. Encourage and reward honest and open dialogue.  Money is not necessary.  Sometimes just a heartfelt “thank you for thinking of the company” will do perfectly fine.
  4. Criticize constructively, not destructively.  See my point in rule #1.  Teach.  Don’t destroy.
  5. Build team communication.  Chances are that if you work hard on rules 1-4 then this will follow.

It’s possible that certain managers and business owners don’t want feedback.  That’s not ideal, but at least don’t ask for feedback and encourage open communication if you really don’t mean it.  Happy communicating!


The HR Experts for Small Business

Retirement Parties Are Not That Much Fun!

Some people who support the calls for “small government” are likely cheering the wave of retirements of senior federal agency employees.  This is the wave of Baby Boomers which has been cascading through the years toward retirement with only a brief delay in their departure caused by the uncertainty that came with the recent depression.  The federal workforce has gotten older very quickly.  In 2000, only 94,000 federal employees were above the age of 60.  Twelve years later that figure almost tripled to 262,000.  80,000 of these workers, or about 5% of the entire federal workforce, are expected to exit by the end of this fiscal year.  Good news for small government advocates.  But, maybe not good news in general when you consider the knowledge and experience that is leaving as well.  In her article which appeared in The Washington Post, Lisa Rein writes:

“Among those who are leaving are also many with expertise that cannot easily be replaced: for instance, nuclear physicists at the Energy Department and a large cohort of air traffic controllers who were hired three decades ago.  In some corners of government, the challenge is acute.  By 2016, 42 percent of the Department of Housing and Urban Development workforce will be eligible to retire.”

The graying of the Federal Government is also happening at businesses on Main Street.  Are employers preparing themselves adequately to manage the loss of experience and knowledge?  Far too often small businesses overlook basic succession planning – proactively identifying future personnel needs – and the consequences can be quite a serious disruption to on-going operations.  Furthermore, business leaders should not let high unemployment levels lull them into a false sense of security.  There is no quick and dirty replacement for unique knowledge and years of experience.

What do small businesses do?  Have a Plan B.  Prepare to prevent disruption.  Create a Mini-Succession Plan.  Big organizations do this as a rule; so should small business owners.  That is, for each employee and position, have answers to these questions:

  1. “How do we find a replacement?”
  2. “Where do we find a replacement?”
  3. “How long will it take to get a replacement?”
  4. “Who will train the replacement?”
  5. “Who can fill the position in an emergency?”

If the company has answers to these questions, then great!  Likely, many do not.  At a minimum, plans should be developed for employees who have retirement time horizons already.  Begin the process, and one is well on their way to keeping the company up and running if any employee leaves for whatever reason.  Just a tip; review Succession Plans once a year to keep them up-to-date.

The HR Experts for Small Business

The HR Experts for Small Business



Racial Bias Costs Merrill Lynch $160 Million

12 current and former black brokers of Merrill Lynch were awarded a large settlement in a racial discrimination class-action lawsuit against that firm, one of Wall Street’s biggest.  The brokerage house had been accused of creating a hostile work environment and of having allowed discrimination in hiring, promotion and pay.  It is hard to imagine that of approximately 14,000 financial advisors today only 2% are black; in 25 of the 50 states there are no black brokers.  But beyond the statistics, what’s wrong here?

The Merrill Lynch Board of Directors is ignorant or stupid.  That is what is wrong.  If they claim ignorance, then I hope that they have replaced their most senior HR management with professionals who actually have a clue.  Even average managers understand that a diverse workforce usually leads to better business performance.  New HR management should immediately establish a Diversity Council comprised of cross-functional leaders to spark the charge.  What they should do?  It’s not rocket science, but taken to lengths see the below extract for practical ideas and initiatives from an article by Michele E. A. Jayne and Robert L. Dipboye [Human Resource Management, Winter 2004, Vol. 43, No. 4, Pp. 409–424 © 2004 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com)].

Sample Diversity InitiativesDon’t be stupid or ignorant about diversity.   Ask our HR Experts for more advice at www.hrinsights.com.


The HR Experts for Small Business

Could More Accurate Performance Reviews Have Prevented Maj. Hasan from Committing the Fort Hood Shootings?

Probably not.  But the reports may help Major Nidal Malik Hasan avoid the death penalty.  According to a recent article in the Chicago Tribune (8/26/13) by Molly Hennessy-Fiske, the Army psychiatrist convicted of killing 13 and wounding 30, had recently received a “glowing” performance evaluation (full report) from his immediate supervisors.  They wrote that Hasan “has unlimited potential” and that “he will certainly develop into a superb Soldier, scholar and Army physician”.  And, they go on to state, “Hasan is a bright and thoughtful officer who has contributed a great deal”, and his “unique insights into the dimensions of Islam to include belief, culture and moral reasoning are of great potential interest and strategic importance to the U.S. Army.”  Hasan’s reviews could very well have been accurate.  Why?

Performance reviews are not intended to be psychological profiles but rather evaluations of job performance against agreed upon objectives.  And, within that context, Hasan may indeed have been a solid performer.  Supporting comments by his rater cite specific examples of his initiative in co-leading and co-chairing projects, and other remarks indicate that Hasan completed the requirement of the degree program “on time and with above-average scholastic performance”.  On the whole, while any review can be inflated in its appraisal, one has to give the benefit of doubt that the rater gave careful consideration and time to completing this one part of the U.S. Army’s performance management process.

Bear in mind that Annual Employee Evaluations are only one part of an effective performance management program, the others being:  1) Setting and Clarifying Expectations, 2) Giving and Receiving Feedback, and 3) Coaching.  Hasan may actually have been a soldier who “Meets Expectations”.  To the extent that the resulting documentation is accurate, his job performance records may help to persuade the jury of 13 officers that convicted him to spare his life.  For that to happen, only one juror has to agree.

The HR Experts for Small Business

The HR Experts for Small Business