From the Ground Up, The Performance Appraisal

We all know how important a PA process is even if the annual process is about as much fun as a root canal.  It's a necessary evil for all businesses.  Employees need formal feedback.  When they don't have it they feel ignored. If they feel ignored, do you think they'll be motivated to go the extra mile?  Probably not.

Now, take a company with 100+ employees that has no PA program in place, and the fun begins.  The entire PA process has to be developed from the ground up. 

Process:  What type of process should be used?  An on-line appraisal?  Paper-based appraisal?  Electronic or manual tracking program?   What type of rating system will be used?  Should a software program be purchased?

Manager Training:  The value of the PA process.  Legal aspects.  Manager PA preparation.  Conducting the PA.  Rater Errors.  Setting Goals/Objectives.  What are the do’s and don’ts of the PA?  And, most importantly, what is the definition of leadership? 

Timing:  Focal/Common Review Dates or Anniversary Review Date?  What are the pros/cons of each?  What option is best for the organization?  For the employees?   Will the performance appraisal process be tied to annual compensation increases?

Assessment:   What are the competencies that should be addressed?  Adaptability?  Analytical skills?  Conflict resolution?  Dependability?  Motivation?  Teamwork?  Will the competencies be different for salaried and hourly employees?

Objectives:  Develop a training program for the managers.  Discuss SMART objectives.  Why are objectives necessary?  What are the company goals?

Performance Improvement Plan:  Develop a process that will tie to the PA.  Train managers in the proper application and development of a PIP.   Discuss potential liabilities in a PIP.  Can I have different completion dates for different employees on a PIP?  What if the employee doesn't successfully complete the PIP? 

Salary Increases:  Merit increase?  Equity pay adjustment?  Discretionary pay increase?  COLA?    Do the managers require training in identifying the different types of increases?  Develop an approval and reporting process for any compensation adjustment.  Are there salary bands in place?  Do we need to develop competitive pay bands? 

The above are just a few of the issues that will need to be addressed.  And I'm sure the list will grow!

The Obesity Epidemic

The Economic Impacts of Obesity in the Workplace.  Quite a title isn't it?   A 2010 article, it's currently making the rounds via HR Benefits Alert and other HR advisories.  The article cites medical costs, productivity costs, transportation  costs and human capital costs as areas of potential economic impact.

In that same year, 2010, the CDC released it's findings that in 2009 - 2010, 35.7% of U.S. adults were obese. That's 78 million U.S. adults (41 million women and more than 37 million men over the age of 20).  Prior to those findings, in 2009 the CDC launched a website called "LEANworks" as part of a campaign to work with employers to reduce workplace obesity. (LEAN = Leading Employees to Activity and Nutrition.) The website provides an obesity cost calculator for the employer. Using data provided by either the benefits personnel or human resources, the calculator allows an employer to estimate obesity related costs.  Shocked?  In Japan, companies use BMI (body mass index) as an evaluation tool for employment and dismissal.

The CDC released a report in which they indicated that an estimated 42% of Americans will be obese by the year 2030.  According to the American Health Association, if current trends in the growth of obesity continue, total health care costs attributable to obesity could reach $861 to $957 billion by 2030.  That would account for 16% to 18% of U.S. health expenditures.

Statistics or studies, fact or fiction, there's a tremendous amount of information out there that deals with obesity.  Yes, obesity is a concern.  But what about the human cost? Obesity exacts a tremendous price on overweight individuals. Chronic health problems. Psychological suffering.

There has long been the belief that poverty and obesity go hand in hand.  There's no doubt that we need to make healthier choices.  But sometimes that's easier said than done (as my mother would say).   A family on a reduced/limited income has tough choices to make.  They can feed a family of 4 at McDonald's for a lot less than it takes to buy the ingredients to fix a nutritious meal for those same 4 family members.

Is the rising tide of obesity linked to rising food prices?  Basically, one of the primary reasons that lower-income people are more over-weight is because the unhealthiest and most fattening foods are the cheapest.  Between 1985 and 2000, the inflation-adjusted prices of fruits and vegetables increased by an average of 40%.  The price of soft drinks fell by almost 25% during the same time period.  (The American Journal of Clinical Nutrition recently reported that $1 can buy either 1200 calories of potato chips, 250 calories of vegetables or 170 calories of fresh fruit.) 

Obesity is a concern.  And yes, there may be an economic impact to your workplace.   From the Human Resources angle, what about weight discrimination or bias?

Weight discrimination is largely ignored, but it is a serious issue.  The Citizens Medical Center in Victoria, Texas recently instituted a new policy.  This new policy requires that an employee's physique "should fit with a representational image or specific mental projection of the job of a health care professional."   I'm sorry - what?The medical center will require new employees to have a  body mass index of less than 35. 

This policy may cause outrage, but whether or not it's legal remains to be determined. The hospital is going to have to establish job related reasons for excluding employee candidates with a body mass index above 35.  And, how is the hospital going to actually determine the candidates body mass index? 

Weight discrimination is one of the last types of bias that is, for the most part, legal.  Michigan is the only state with laws on the books prohibiting weight discrimination. 

For those that are interested, a Gallup-Healthways Well-Being Index Report indicated that the national obesity rate dropped to 26.1 percent in 2011 from 26.6 the prior year.  A slight drop, but a drop nonetheless.  In this same report, Gallup identified the most and least 5 obese states in the U.S.  For the second year in a row, Colorado had the lowest obesity rate at 18.5% (the only state below 20%).  West Virginia had the highest obesity rate since 2008, at 35.3 percent.  Texas didn't show up on the report.  So, I guess we're doing alright!

Employee Learning

Training Magazine released its annual list of the top 125 companies that support employee learning and development.  In the top spot was Verizon, followed by Farmers Insurance in the number 2 spot, and then Miami Children's Hospital, Mohawk Industries and McDonald's, respectively.

Some of the statistics reflected in Training Top 125:

• The average number of full-time and part-time trainers was 232 and 395, respectively.
• Some 97 percent of applicants use employee satisfaction surveys, and 98 percent use competency maps and personal/individual development plans.
• Only 64 percent tie managers' compensation directly to the development of their direct reports.

Yes, employers are training. But training is not the same as learning.

Gallup reports that 49% of employees are not actively engaged and that 18% are actively disengaged.   The American Society for Training and Development (ASTD) reports that companies spend $1,067 per employee (2.7% of payroll) to deliver an average of 32 hours of formal training annually.   Are you investing training dollars in employees that have no positive impact to your bottom line?    Remember, you can't force employees to learn, they have to choose to learn.   And if they're not engaged, where is your ROI?

Companies need to invest in their human capital. And where is your best ROI?   It's your top employees.   The best results in training are achieved when employees have the ability and the interest in improving their role.  So identify your top employees and train them! 

Employee Training and Adult Learners

The Chief Learning Officer Business Intelligence Board (BIB) analyzed survey findings last year and found that "65 percent of learning executives indicated they continue to use classroom training as the primary learning method for developing soft skills."   Based on those surveys, classroom-based ILT (instructor lead training) remains the primary delivery method used overall, regardless of the type of skill being developed.

For a moment let's discuss in-house training and it's advantages.  There are cost savings, you can adjust the training around your schedule, and you can address employee specific needs.  However, there are also some disadvantages.  Employees may be more prone to accept training ideas from someone other than a co-worker.  Is there a potential to pass on existing inefficiencies or perpetuating poor business practices?  Will employees take the training seriously? 

With all of the above being said, one real question remains.  Do you know your audience?  Adult learners can't be threatened, coerced or tricked into learning something new. They can be ordered into a classroom and asked to take a seat, but they can not be forced to learn. 

Have you ever noticed that adults do not group by age or sex, but by experience in a learning environment?  Adults bring prior experience and knowledge with them to a training environment, as well as attitude and behavior.

Studies show that adults who are motivated to seek out a learning experience do so primarily because they have a use for the knowledge or skill being sought.  The adult learner is most interested in information and ideas that solves problems that they are presently faced with, information that can be applied immediately.  

As an adult, we all come from different educational and experiential backgrounds.  We learn at different speeds and through different methods.    Some of us learn through sight (visual learner), some of us through touch (kinesthetic) and some us us through hearing (auditory).  Then, there are those adults that learn from a combination of styles.  No matter what the style, there is usually  a clear preference for one.

• If you are a visual learner, you learn best through graphics, or reading.  You may have difficulty in focusing while listening to the explanation.
• If you are a kinesthetic learner, you learn best through hands-on experience. By being a "doer."
• As an auditory learner, you learn best when things are explained. 

When preparing a training program for adults, you need to be flexible.   Adults often decide for themselves what is important to be learned and they expect what they are learning to be immediately useful. 

The six most frequently mentioned attributes adult learners expected of effective instructors were as follows (Donaldson, Flannery, and Ross-Gordon 1993, P. 150):

• to be knowledgeable.
• to show concern for student learning.
• to present material clearly.  Is the message scrambled?  Are facts provided in logical order?  Do they appear unrelated?
• to motivate.
• to emphasize relevance of class material.
• to be enthusiastic.  Are you speaking too softly?  In a flat voice (monotone)?

How many of you have sat through a seminar and just had the instructor drone on and on?    Was the program truly effective?  Was there any value to the employee?

A truly effective training program will:

• use a variety in training methods and media (role play, case study, training games, group exercise). 
• use repetition.
• allow for feedback, allowing the student to recall the information and ask questions.
• provide small doses of information (don't overwhelm them).
• present the student with the ability to use the information immediately.

In closing, always take the time to audit your training program, the "subject matter expert" providing your training, and the effectiveness of the training material.

  

 

 

 

On-Line Education

I'm a sucker for learning.  For information.  Back in May when I read that various colleges would be offering free on-line learning classes, I jumped at the opportunity.     Enrolling through Coursera, I began participating in the class "Health Policy and the Affordable Health Care Act" offered through the University of Pennsylvania.  With the complete understanding that there may be some bugs in this process, I over-looked the bad video, problems obtaining homework assignments, etc. and have just hung with it.  And, I have to admit, it's getting better. 

Coursera, through its partnership with 16 universities such as Duke, Princeton, Stanford, and Caltech, offers 100+ on-line classes.   Classes in Economics, Health, Math, Statistics, and Business to Humanities and Medicine.  Even a class on equine nutrition through the University of Edinburgh!   There is something here for everyone.  And it appears as though Coursera will continue to increase its catalog of classes.  The University of Illinois recently announced that it will be partnering with Coursera to offer free on-line classes.  And, the University of Washington will be offering 12 to 15 on-line for-credit classes via Coursera later in the year. 

While the non-credited, open-to-the-public classes are free, there may be a fee attached to cover instructor-enhanced on-line discussions or video chats.  Coursera is exploring certificates that would be branded with the university's name and sold to the student.  While they won't count towards a university credit, they would signify the completion of a course or minimum level of performance.

Coming in fall 2012 will be edX from Harvard and MIT.  They'll be throwing their academic hats into the on-line learning ring with an initial offering of 5 on-line classes.

I'm currently enrolled with Duke for two additional classes over the next 12 months: "Think Again: How to Reason and Argue" and "A Beginner's Guide To Irrational Behavior."    With class content like "How to Spot An Argument" or "How to Mess Up An Argument" I just couldn't resist! 

Distance learning is great.  Whether to brush up on new skills or learn some new facts (like how to argue), you can't go wrong.

Final Pay

Contrary to popular belief, employers are NOT required by Federal law to give former employees their last paycheck immediately.   However, states may regulate the timing of final pay so employers are always cautioned to check their state regulations.

In Texas, the timing of final pay is regulated by the Texas Payday Law, Section 61.014.  Under the Texas Payday Law, the timing of final pay is based upon the circumstances of the employees termination.   Did the employee resign or was the employee terminated?

In those situations where an employee voluntarily resigns, quits, retired or other wise leaves employment voluntarily, the final pay is due on the next regularly-scheduled payday following the effective date of resignation.  However, if the employee is laid off, fired, or in any way involuntarily separated from employment, the final pay is due within six (6) calendar days of the discharge.

 

States differ with respect to the handling of final pay.  For instance, in California if an employee is fired, s/he must receive their check immediately.  If the employee quits, s/he must receive their final check within 72 hours.  For Connecticut, final pay is due on the next business day if the employee is fired.

 

One of the most frequent questions I am asked pertains to withholding funds from an employee due to loans, cost of company equipment, etc.  As an employer, legally you can NOT make such a deduction unless you have the employees written authorization prior to making such a deduction.  Additionally:

• Depending on the state where you and/or your employee reside, there may be additional restrictions.
• Even where deductions are authorized, the employer may not reduce the worker's final check below the applicable minimum age.

In closing, carefully check your state laws to ensure that you handle an employee's final pay properly.

Moonlighting

As a result of these tough economic times we are seeing more and more employees working a second job.  Recent statistics released by the U.S. Department of Labor's Bureau of Labor Statistics show that 5 percent of Americans held multiple jobs in May 2012.  Can an employee's “moonlighting” create serious problems for an employer?  Can a company restrict an employee’s right to work a second job? 

Oftentimes employers prohibit employees from holding second jobs.  In some instances, the employer can lawfully prohibit or severely limit employees working second jobs.  Specifically those jobs that are medically, emergency or safety related. 

Outside employment can be cause for disciplinary action if the following occurs:

1.     Dishonesty (the employee is taking sick leave to work a second job.)  Recommendation:  Prohibit outside work during normally scheduled business hours.

2.     The second job is negatively impacting the employees’ performance, attendance.  Recommendation:  Prohibit any outside work that interferes with the employee’s job performance. 

3.      There is a violation of a non-compete. 

4.      There is a disclosure of company information.

Creating a separate “moonlighting” policy can be beneficial for your organization.  However, keep in mind that many state laws protect employees’ lives and their ability to make a living.   Focus on the legitimate, employment-related concerns to create and enforce a “moonlighting” policy.

Emotional Intelligence (Attitude Counts)

Is an employee's attitude more important than his/her skills?  A study by Leadership IQ found that 46% of new hires are either fired or disciplined within their first 18 months.  And in a staggering 89% of those cases, the reason for the action isn't incompetence, but attitude; poor motivation, bad temperament, or emotional issues.  Sometimes it's not about ability - it's about attitude.  Depending on what you read, sometimes the employees with attitudes aren't aware that there is a problem - it's just their way.  Is there a communication issue?  Sometimes it's not what is said, but the manner in which it is said.  So, is it a style issue? 

Your new hire has excellent skills, training and education.  And yet, they are not successful.  Perhaps the missing part of this success equation (High IQ = significant academic performance, professional and personal success) is Emotional Intelligence.

In a 2011 survey, CareerBuilder found that 34% of hiring managers placed a greater emphasis on Emotional Intelligence (EI) when it came to hiring or promoting employees.  71% of hiring managers valued EI in an employee more than IQ.  59% would not hire someone with low Emotional Intelligence.

Emotional Intelligence is an individuals ability to perceive, control and evaluate emotions.  It is the area of cognitive ability involving traits and social skills that facilitate interpersonal behavior.  It brings compassion and humanity to work.  It affects how we manage our behavior, navigate social complexities or make personal decisions.  It is our ability to use awareness of emotions to stay flexible and positively direct behavior.

To ensure that your new hire has what it takes to be successful, it's important to incorporate testing for Emotional Intelligence during the interview process.  What's the benefit of hiring an employee who can't recognize how their behavior impacts (or alienates) their supervisor, co-workers or customers?  As a manager, you need to identify those candidates that have well-developed emotional and social skills and who understand how their words and actions influence their colleagues. Where possible, incorporate behavior testing in your interview process.  Take the time to identify:

• The candidates' self-awareness and ability to self-regulate; 
• Their ability to learn from mistakes; and, 
• Their ability to read other peoples emotions and understand the impact of their behavior on their colleagues.

In closing, what's your Emotional Intelligence?

 

 

 

 



Non-Competes in Texas

June 24, 2011 the Texas Supreme Court changed the landscape for employee non-competes and non-solicit agreements (Marsh USA, Inc. and Marsh & McLennan Companies, Inc. v. Cook).  Under these new changes, the Texas Supreme Court found that a non-compete covenant contained in a stock option purchase plan to be enforceable - an outcome that was previously contrary to Texas law.  Prior to Marsh, most lawyers believed that financial incentives or money would never support a non-compete.

Non-competes continue to grow in popularity as unemployment and increased competition for the best employees become widespread.

If your organization uses a non-compete; please take the time to have an attorney review it.  Ensure that your restrictions are reasonable.  Courts typically disfavor agreements which restrict an individuals right to make a living.

TWC Unemployment Benefits

Beginning July 8, the maximum number of weeks of unemployment benefits will shrink from 73 weeks to 60 weeks.  The change was triggered by the state's unemployment rate falling below a three-month average of 7 percent.

Tier I emergency benefits last 20 weeks, followed by 14 weeks of Tier II benefits.  Currently, when those benefits have been exhausted, Texans can apply for Tier III emergency benefits, which provide for an additional 13 weeks. But that safety net is disappearing for anyone who exhausts Tier II benefits starting July 8.

Those who exhaust the Tier II benefits before July 7 may still be eligible for Tier III benefits.

For additional information, contact the Texas Workforce Commission!