Tag: HRI

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

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

Personnel Records: Sexual Orientation Changes

A recent Forbes article on the tax implications of infamous whistle-blower Bradley Manning’s planned transition from male to female also made me curious about the HR implications of such a change in an employee’s sexual orientation.  What started as a quest to find an answer to whether or not or when Personnel Records needed to be updated quickly became an interesting overview of the complexity of this issue.  While not always the last authority on any controversial human rights subject, the American Civil Liberties Union once again provides some general direction on how to handle an employee in an organization who has decided to change their sexual orientation from one sex to the other.

1. Are there laws that prohibit discrimination against transgender employees?

Yes. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington and the District of Columbia all have such laws. Their protections vary. For example, Nevada’s law bans discrimination in employment, housing, and public accommodations; Maine’s law covers those categories plus credit and education.

At least 150 cities and counties have passed their own laws prohibiting gender identity discrimination including Atlanta, Boise, Buffalo, Cincinnati, Dallas, El Paso, Indianapolis, Kansas City, Louisville, Nashville, New Orleans, and Pittsburgh. A list of localities with nondiscrimination laws that cover gender identity and/or expression is available at http://www.transgenderlaw.org/ndlaws/index.htm#jurisdictions.


2. Does an employee have to have undergone sex reassignment surgery in order to be protected by these laws?

No, they do not.


3.       Can a person change his or her name to reflect his or her gender identity?

Yes. In some states, through what is called “common law name change,” people may change their name simply by using the new name in everyday interactions. It is free and easy, but does not create the kind of solid paper trail needed to change identity documents.

The other way to change one’s name is to file a petition in court. Most judges will grant a name change so long as they are convinced that the petitioner is not trying to evade debts or the police.

In rare cases, judges have required a transgender petitioner to prove that he or she has undergone medical procedures that show an intention to live permanently in the gender associated with the name desired.


4. Can a person change his or her name and gender marker with the Social Security Administration?

Yes. To change his or her name with the Social Security Administration (SSA) and obtain a new Social Security card, a person needs to submit a court order reflecting the name change. SSA officially requires a surgeon’s letter in order to change a person’s gender marker in its records. However, a letter from a physician documenting that one has “completed all the recommended medical treatment” for “altering one’s body and appearance” or “a gender transition” is frequently enough.


5. Does the law protect a transgender person’s right to use the restroom consistent with his or her gender identity?

There’s no clear answer because very few courts have considered this question.


6.       If one spouse in a marriage transitions, is the couple still legally married?

Yes. A marriage is valid unless and until one or both spouses get a divorce or annulment.

Even without a divorce or annulment, legal problems can arise from a spouse’s transition. For example, employers have been known to refuse health benefits to a spouse who is now of the same sex as the employee. Likewise, when one spouse dies, the surviving spouse may have problems collecting inheritance or tax benefits restricted to married couples. There’s very little law at this point on these issues.

As you can see, not all questions have easy and straight-forward answers.  However, as it becomes more common for these situations to arise it is all the more important for employers to prepare general policies that reflect current Federal, State and Local law as well as the protect all employees from discrimination.  Furthermore, because many of the legal issues as it relates to employment have yet to be fully addressed by the legal system, it makes good business sense to seek out the advice of both Human Resource and Employment Law specialists.

The Small Business HR Resource

The HR Experts for Small Business

Affordable Care Act: Not Just for Large Employers

Many people think that The Affordable Care Act, Obamacare, is for large employers only. HRInsights is here to tell you that that notion is not entirely true. All part-time worker hours, regardless of number of bodies working, in one month divided by 120 (30 hours every 4 weeks) is equal to the number of full-time equivalents (FTE’s) in your organization. If you have at least 50 full-time employees and/or FTE’s in your organization, pay attention to the chart below. If you have less than 50 full-time employees and/or FTE’s but already provide health benefits, you could be eligible for tax credits.

What we’re really trying to say is … read the chart below (click to enlarge).

ACA Pay to Play Guidelines pic

4 Metrics to Predict Future Organization Success

HR leaders today face challenges in making the most of their human capital investment.  In order for organizations to be successful in today’s environment, HR will need to review and redesign professional tools and processes to be able to measure data and facts to ensure a competitive edge. HR leaders are challenged today more than ever to make sound business decisions.  For us and our leadership teams to make decisions, we need to have correct data and facts. But, we continue to struggle with the answer to, “What should we measure?”.

Historically, we have measured areas such as cost per hire, absenteeism, benefit cost per employee, and turnover rate. While these have been important, we should consider the future of our human capital investment and measure the areas that help us make decisions for today and growing into tomorrow. The areas measured on the past do not have predicative or strategic planning value.  These items only report the past HR activities but do not provide guidance as to what can or should be done to improve the effectiveness of HR for the organization.  As HR professionals, we need to develop forward-looking analytics designed to improve understanding of employee desires and engagement. These analytics are metrics that can be used to alter the HR strategy for better hiring and retention practices in the future.  Following are four metrics that an HR leader can consider for implementation and assistance with the forward facing view of human capital:

  1. Retention rate of employees in critical roles:  Which roles have the biggest impact on your organization’s success and which roles are the most difficult to fill?  What is the retention rate for each of these positions?  This information will allow you to see if you are spending money on repeating the recruitment of these roles.  Once you determine which roles are key and which have low retention, you can figure out the reasons for the turnover.  Is it the workload? Is assistance needed?  By understanding the reasons, you can develop an action plan to identify and retain good talent.
  2. Career progression metrics:  These can be metrics to measure the average amount of time in a position before a promotion or change in job title.  Many employees site career progression as key criteria when seeking other employment positions. Use these metrics to see how attractive your organization looks to prospective candidates.  This measurement can also be an indicator of the number of employees not being promoted or moved into other positions.   By determining the reasons, solutions can be implemented to ensure future candidates have the opportunity to advance, and may assist incumbents with mobility.
  3. Percent of employees that support organizational change:  Employees that do not support organizational change are not likely to stay.  Each time a substantial change is implemented, survey employees to see how they feel about the change.  If you find that change is not accepted within your organization, this could be a reason for turnover.
  4. Employee engagement index:If employees are not engaged and happy, they will ultimately leave an organization.  Find a way to measure engagement within your organization.  Many companies use an employee survey to measure happiness in a few areas within the organization.  By having this information, goals can be developed and specifics for causes can be derived from the survey questions.

Traditional HR metrics remain useful but not predictive for the future success of an organization as it relates to human capital and strategic decision making for HR.  With these four new metrics, you can take practical steps to improving future business outcomes.