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HR Tips and ArticlesThe following tips and advice are intended to give new ideas and remind us of proven techniques in human resource management. Check back for more in the future. You can get these articles first by signing up for the e-mail newsletter. Examining Pharmacy Benefit Managers Retirement Benefits Innovations Programming Recreation for all Shifts Controlling Raging Prescription Costs A Short Course in Human Relations The Brave New World of E-HR in the 21st Century
Life Support
The New Deal
Giving Time to Grieve
Salary and Benefits Administration
Stories
A New Twist on the Census
Parenting Programs Take Off Arbitrator Reinstates Insubordinate Worker Be Ready When Key Employees Leave The High Cost of Wrongful Discharge Fighting Absenteeism With Well Pay
With benefit packages shrinking, voluntary benefits are booming. However, employers should be wary of jumping on the bandwagon without doing enough homework. Companies can run into trouble when they claim too much credit for these packages. The difference between announcing a plan and endorsing it can be a fine line. Here are some suggestions to help a company avoid running into trouble:
CFO, 253 Summer St., Third Floor, Boston, MA 02210
Getting Out the Vote
With the continuing economic uncertainty, what can a rewards planner do to ensure that pay practices match company and work force needs? Perhaps the answer lies in getting back to compensation basics. Rewards planners are being called upon by senior management to show the bottom-line value of new Human Resources programs. To get the most from rewards dollars, HR should make it a priority to direct pay to the key employees who make the business a success. The rewards planners need to assist senior management in defining and executing a key-talent attraction and retention strategy that provides the most return on investment. Making variable pay and lump-sum awards work effectively is a priority, especially for a company with a limited budget. Variable pay provides the agility and versatility an organization needs to acknowledge changes on a regular basis. Workspan, 14040 N. Northsight Blvd., Scottsdale AZ 85260.
Determining return on investment (ROI) of disease management programs is difficult - but not impossible. Part of the difficulty comes from health plans that are unwilling to share claims data. Employers need to keep tabs on plans that administer disease management programs so they can access the necessary claims data to measure ROI. Once employers have the data, deciphering the information into something usable is the next hurdle. Third-party administrators may help; but the best way is for the employer and the health plan to work together. However, it may not be easy to calculate savings. Employers should strive for "soft savings," such as decreased absenteeism and improved morale and productivity rather than hard numbers in lower health care costs. Employee Benefit News, Thomson Media, One State St., 27th Floor, New York, NY 10004.
A growing number of companies are trying to show employees the link between their job performance and the company's financial success by initiating a flexible incentive program. This is a compensation strategy that highlights the link between employees' best work and the company's best performance - and rewards people accordingly. One of the major components in designing the program is showing each employee how his or her job contributes to the overall success of the business. Another important element is deciding whether the rewards should be based on company, individual, or team performance. To ensure that an incentive program works well, employers must be sure to clearly communicate the plan to employees. To prevent discouragement, employees must understand that they are unlikely to see results overnight. HRMagazine, 1800 Duke St., Alexandria, VA 22314.
The idea of mentoring is as old as Greek civilization: An experienced advisor letting a younger colleague draw on his or her knowledge and understanding. But today's mentor tends to be an independent person from outside an organization, who is willing to say openly the things a colleague might be reluctant to bring up for various reasons. Ideally, an external mentor should provide a challenge to fixed ideas, help the executive explore alternatives, and help evaluate core values and their impact on personal style. Top executives are often loathe to show weakness in public. Therefore, having a mentor allows an executive to reveal doubts, talk about stress, or discuss worries. In other words, an external mentor can be an emotional lightning conductor. As globalization grows, chief executives and directors are feeling the pressures of both physical and mental isolation. Part of a mentor's job is to keep reminding the executive of the world "out there". HR World, 67 Wall Street, Suite 2411, New York, NY. 10005-3101.
Keeping up with employees' every-changing information (such as address, salary, and benefits' package) can be quite a challenge for a Human Resources manager. With Internet-based programs, the job can be made easier. Packages such as Employease are attractive for several reasons. There is no hardware or software to purchase, install, update, or maintain because the program is accessible via Internet and updates are automatic. Employees can go into the program, check their personal information, and modify their accounts. The message is transmitted to the HR manager, who then approves the changes and sends a confirmation message back to the employee. HR managers note a saving in time and money, and a dramatic cut in paperwork. Employees also benefit, since the program is accessible through a Web site, making it possible to access information at work or at home. Small Business Computing, 158 W. 56th St., Third Floor, New York, NY. 10019.
A streamlined process combines all of a company's benefits and Human Resources policies into one package, thereby cutting red tape and putting the emphasis on returning the employee to work faster. The focus is removed from determining whether the injury or illness occurred on or off the job and gives the employee a central location for paperwork. For the employer, this allows easier access to information, thus eliminating duplicate forms and/or phone calls. Initiating an integrated benefits plan can be done in stages, depending upon a company's preferences and organizational readiness. Total integration combines disability plans with health care and workers' compensation. Employers gain through elimination of employee down-time, lost wages and productivity, while employees gain through a simplified process. ACA News, 14040 N. Northsight Blvd., Scottsdale, AZ. 85260.
The final IRS COBRA regulations took effect at the start of 2000. Benefits managers should review their companies' COBRA procedures to be sure they are in compliance with the new regulations, and to see if they can streamline their COBRA programs. Some of the areas affected by the new rules are: health care flexible spending accounts; core/non-core benefits distinction; part-time employees; dropping coverage in anticipation of divorce; and mergers and acquisitions. Since some of the IRS proposals are still pending, benefits managers are urged to review all regulations and determine if their COBRA procedures need to be changed. Benefits & Compensation Solutions, 70 New Canaan Ave., Suite 211, Norwalk, CT. 06850.
With unemployment rates low, many companies are taking their recruiting practices to the Internet. One main advantage is cost: Internet listings are cheaper than classified ads and have longer shelf-lives. Another main advantage is that on-line recruiting attracts many qualified applicants because job candidates using the Internet come from a wide range of backgrounds. But there is a drawback to recruiting via Internet: competition. Therefore, companies must be creative in placing their ads. One suggestion is to take a diversified approach and cast a wide net. Another idea is to find alternative posting sites, such as the on-line counterparts of traditional magazines. And don't be hesitant about recruiting. Some experts believe the window of opportunity for landing a hot job prospect is less than one day after a resume has been posted. Benefits & Compensation Solutions, 70 New Canaan Ave., Suite 211, Norwalk CT. 06850.
Broadbanded Salary Structures became all the rage, at least in the literature and on the consultant/guru rubber chicken circuit in the '90s. This was a huge swing of the pendulum from compensation programs featuring a zillion narrow pay grades -- an even greater swing when one considers the Texas-sized "career bands" that some companies adopted. After all the hype, it turns out that not that many organizations thought broadbanding is their silver bullet. At the close of the 90s, a Wyatt survey of 1,300 companies found that less than one in ten used broadbands. If one removes the larger companies from the survey (5,000 employees or more), only 6% to 7% used this approach. Is broadbanding another passing fad? A few companies find that it works for them, but most are redesigning their structures to allow pay ranges to reflect the market. The trend is toward common-sense salary structures, with plenty of room to compete for talent and continue to reward stars without busting through a pay grade ceiling. A lot of lessons have been learned the hard way. Now comp. folks can move on to other challenges. by Gerry Stern and Yvette Borcia, Partners,
Stern & Associates
The newest sport among global corporations is poaching executives. Study after study has shown that executives around the world are ready to jump ship at the drop of a better offer. Sometimes, that offer is a new car; sometimes, it is a new house. Software firm Cisco Systems goes so far as to send free pizza to student dorms with a note inside saying "Good Luck" and giving the company's Web site address. In some countries, poaching is done more softly. For instance, recruiters in Portugal show up in restaurants where top executives go for lunch. And in China, an Australian passport can be the incentive to change jobs. Whatever the carrot at the end of the stick, companies are urged to stay alert. Adding new perks, promoting people before they get the chance for something better, and staying in touch with top executives may be just the trick to keeping key personnel. HR World, 67 Wall St., Suite 2411, New York, NY. 10005-3101.
A key contributor to high absentee rates is poorly designed benefits plans. Too many unscheduled absences can burden employers financially, and not tracking absences can send employees the wrong message regarding missed work. One way to reduce the number of unknown absences is through a paid-time-off (PTO) program, which combines days off, such as personal time, vacation, and sick days, into a "bank". The bank provides employee flexibility and reduces administrative paperwork. But there are areas which should be resolved before initiating a PTO. For instance: How much notice does an employee need to give before using time from the bank? How much time will be paid into the bank? Will supervisors or long-time employees be given more time? Benefits & Compensation Solutions, 83 East Ave., Suite 210, Norwalk, CT 06851.
Line managers frequently find themselves in the dark about their companies' pay structure, which puts them in a difficult spot when interviewing potential employees. A recent survey of compensation managers found a significant gap between what line managers know and what they felt they should know. The survey reported that line managers were most familiar with pay rates for new employees but, overall, were unfamiliar with areas such as how those rates compared to competitors, how the rates are calculated, and details of the companies' systems of pay grades and ranges. The survey concluded that line managers should receive training in the basics of job pricing. A line manager should also be able to properly explain bonuses and incentives, the survey found, since a line manager is the company's representative to the employees. A well-informed line manager can be the person to clinch a deal in hiring or retaining good employees, according to the survey. ACA News, American Compensation Association, 14040 N. Northsight Blvd., Scottsdale, AZ. 85260.
Proper handling of negative publicity within a firm often keeps disaster from occurring. When staff hears news from an outside source, the result can be confusion, fear, and instability, which later manifests itself as low productivity and poor customer service. Yet, in times of crisis, informing staff is usually the last thing on a manager's mind. Complicating the issue is the Internet, which allows for a crisis to be known worldwide in a matter of minutes. Therefore, it is imperative for managers to move quickly to decide how the information is distributed and to whom. It is vital to inform employees as soon as possible before rumors begin. In some situations, cultural differences must be addressed in delivering the news. Executives need to be prepared for misunderstandings. But honesty is usually the best policy. HR World, 67 Wall St., Suite 2411, New York, NY. 10005-3101. Examining Pharmacy Benefit Managers As prescription drug use increases, so does the need for closer scrutiny of pharmacy benefit managers (PBM) and their plans. Large cost increases usually draw the attention of finance officers. But there is also a need for outside examination of prescription drug claims and PBM service on a regular basis. For instance, some PBMs try to influence a doctor's decision on prescribing one drug brand over another. Routine audits would uncover such a practice. However, PBMs often resist audits, claiming their contracts don't allow outside firms to examine their records. Companies have a responsibility to their employees to audit and monitor benefit plans to ensure that they are being operated in a fiscally sound manner. Audits also allow companies to be sure they are receiving services appropriate for their employees' needs. It is very difficult for plan sponsors to effectively audit their own PBMs. However, there are ways a company can avoid problems. Employers can implement a three-tiered copayment policy that encourages use of generic drugs over brand names. Employers can also talk regularly with service providers to ensure that the benefits are in place and working effectively for their company. Employee Benefit News, 40 W. 57th St., 11th floor, New York, NY. 10019.
In today's highly competitive market, companies are working hard to come up with perks to compliment the traditional benefit packages. For instance, 3Com's Santa Clara, CA., office has brought in members of the San Francisco Symphony to perform for employees on their lunch break. And Boston-based Circles offers a reward program that gives employees certificates that can be traded for such gifts as weekend getaways and housecleaning. Flextime is becoming mainstream, as are "meditation" rooms with reclining chairs and recreation rooms with video games. One reason for this trend is that American workers are spending more time at the office than any other industrialized nation. To prevent burnout, employers are offering programs to help employees balance personal and professional interests. Even executives are receiving more perks. The most-desired perk among top-level executives is a health club membership. More and more companies are giving employees paid time off to volunteer in their communities. According to the Points of Light Foundation, 20% of the companies offering this perk report a 50% participation rate. Other nontraditional benefits gaining in popularity include on-site elder care, pet services, and family outings. Employee Benefit News, 40 W. 57 St., 11th floor, New York, NY 10019.
There is a direct link between executive pay levels and corporate performance, according to a recent survey of CEOs at 302 large public companies. This is especially good news for shareholders, since returns at companies where executive stock ownership is high far surpass those of other companies. The greater the financial stake a CEO has in the company, the more likely he or she is to act in the shareholders' best interest. Senior management, however, comes under much closer public examination than the general work force. This greater scrutiny brings greater risk. Therefore, higher compensation packages usually are offered. The projection is that executive pay packages will level off, and that pay for performance will filter down into the organization. It is interesting to note that the American practice of offering stock options and ownership is taking hold in compensation packages for European CEOs. ACA News, American Compensation Association, 14040 N. Northsight Blvd., Scottsdale, AZ 85260.
Retirement Benefits Innovations With younger workers thinking advancement opportunities are more important than job security and older workers more concerned with job security, the need for a variety of retirement options is obvious. Retirement plan sponsors are faced with trying to meet the needs of these diverse groups. Plan sponsors must play an active role in redesigning pension plans to accommodate both groups. One way to attract younger workers is a cash balance plan. As a rule, such a plan establishes a "paper" account, into which an employer contributes a percentage of pay based upon the employee's age and/or length of service, and an interest credit. This type of plan is attractive to employees who change jobs in mid-career. The traditional pension plan is usually more beneficial to an older employee, since retirement benefits are most often based upon a worker's final average pay. Conversion to a cash balance plan often means lower benefits. This can be overcome by "grandfathering" older employees. Conversion from traditional pension benefits to a cash balance plan needs to be carefully explained by the employer and investigated by the employee. Companies that accommodate the shifting face of the work force will be better prepared for the demographic changes expected. ACA News, American Compensation Association, 14040 N. Northsight Blvd., Scottsdale, AZ 85260.
"Comparable worth", which focuses on the value that different jobs have to an employer, is being supported by the federal government as a way to combat gender-based pay discrimination. However, to develop a comparable worth system, a reliable method needs to be developed to judge when completely different jobs have comparable value. To implement comparable worth, the government would artificially set pay levels for jobs it deems comparable. This concept goes against the American free market economic system, which allocates society's scarce resources according to supply and demand. Despite this, the Clinton administration is supporting the comparable worth concept. Therefore, human resources professionals should be aware of potential problems within their organizations. Firms that find themselves being scrutinized by the Department of Labor should seek legal or consulting help, and not let the investigating agency "bully" them. HR News, Society for Human Resource Management, 1800 Duke St., Alexandria, VA. 22314.
Programming Recreation for all Shifts Recreational programs - including athletic facilities, teams, and discounted merchandise and tickets - should be available to the workers on the graveyard shift as well as to the 9 to 5 staff. While budgetary restrictions may make that ideal unattainable, recreation program administrators should do what is possible to offer something for everyone. Some companies have midnight bowling teams. Some open work-out rooms and other facilities over extended hours so all shifts have at least some opportunity to use them. Employee stores at certain plants are open early one day a week to give the night shift a chance to do a little shopping after work. Off-shift workers are destined to remain at a disadvantage with respect to recreational programs, but a few small efforts will give them a chance to use the benefits if they really want them. Employee Services Management, 2400 So. Downing, Westchester, IL 60153
Controlling Raging Prescription Costs
A Short Course in Human Relations The six most important words: The five most important words: The four most important words: The three most important words: The two most important words: The most important word: The least important word:
The Brave New World of E-HR in the 21st Century
Life Support
Some tips applicable to all executives on what to do at their next contract negotiation: 1) Make sure the contract has an "out-clause" and a change of control agreement to keep you financially covered in the event of ouster from the company. 2) Require a bonus for signing a new agreement; if signing with a new company, make sure the new company can match the previous company's incentive package. 3) Ask for participation in the company's stock options. 4) Sign a shorter contract -- three years instead of the standard five. 5) If married, make sure the company will provide relocation services for your family (and job placement services for you spouse if he/she works). 6) Demand that the contract not have a non-compete clause. 7) Make sure that your demands are within reason. Chief Executive, 733 Third Avenue, New York, NY 10017.
Employers should have a bereavement policy that is emotionally supportive of the employee. Companies usually are at a loss for words for the employee who has suffered a loss. What an employer should do is encourage the employee to talk openly about his/her grief, as soon as he/she is ready to talk about it. Another aspect that a bereavement policy should have is being flexible enough for the employee to cope with his/her grief. One of the issues faced in developing a bereavement policy is the time allotted for bereavement. 90% of companies have a bereavement time-off policy separate from sick leave. Just how much time off should be given for bereavement is a policy that varies from company to company. Another flexibility issue is the definition of "immediate family". Some companies still hold to the traditional definition of immediate family (e.g. parents, children, spouse). Others have expanded their definition in reaction to changing social values (e.g. friends, domestic partners, other people not related by blood or marriage). This policy varies from company to company. HR Magazine, Society for Human Resource Management, 1800 Duke St., Alexandria, VA 22314.
The United States Census Bureau will be allowing people to check more than one ethnicity box on the 2000 census, which could cause trouble for human resources departments by complicating equal opportunity employment report compilation. Census re-classification could mean that employer data will need to be reconfigured to conform to the new census guidelines, creating a financial burden. Suggestions for dealing with the revised census include: placing people who check off more than one box into the largest nonwhite category in their region; moving those same people into the smallest racial group; counting a person once for each box he or she selects; and having employees fill out a form for EEO purposes that would indicate multi-ethnicity without revealing specifically which ones. Employers look favorably on the last option, but the Office of Management and Budget have yet to decide which option to utilize. Until a definite solution to dealing with the new census option is reached, human resources professionals should make themselves active in the debate, and should also budget their departments for potential employee data reconfiguration. HR Magazine, Society for Human Resource Management, 1800 Duke St., Alexandria, VA 22314.
Some companies accommodate employees who are also working parents. Many companies see working parents as invaluable resources in terms of productivity and company loyalty, and will help them in any way they can. For example, Johnson & Johnson holds monthly meetings with working-parent employees to receive feedback on the company's child-care policies. Even though many companies offer child-care facilities, other companies are going the "extra mile" to help their parent employees. Some, like InfoMart of Marietta, GA, will let working parents take paid time-off to volunteer at their children's schools. Also, while InfoMart does not provide child-care facilities, they encourage working parents to bring their children to work. Other companies, like Eli Lilly and Co., have set up a "summer camp" program (in conjunction with the YMCA) for employees' children during summer months when babysitters are scarce. These policies relieve some of the stress of being a working parent, in turn making the parent a better employee. HR Magazine, Society for Human Resource Management, 1800 Duke St., Alexandria, VA 22314.
Shifting Pay Incentives
Be Ready When Key Employees Leave The loss of a key employee can put management in a serious bind unless preparations have been made in advance. Prior to the separation, a plan should be in hand for selecting and training a qualified replacement. Ideally, key employees who are looking around, for whatever reason should be identified before they act. Informal conversations about their views on company procedures can be revealing. When supervisors feel certain employees are unhappy or considering career options, they may want to sit down and rough out their options should Employee X resign. Perhaps the most helpful tool in minimizing the effect of losing a key employee is the rotating file. Every supervisor should keep a file of applicants who performed well in interviews, but could not be placed at the time they applied. By continuously interviewing applicants, even when a department has no openings, supervisors can maintain a list of qualified replacements. Some companies have found a pool of ready replacements in their own personnel. By encouraging a high degree of interdepartmental communication, companies can produce workers who are sufficiently familiar with operations to fill vacated positions. Cross-training on a regular basis will further ease job transitions. Another strategy involves testing possible replacements by asking them to fill in when key employees take vacation time. This should be done with the knowledge of all parties concerned. Supervisory Management, Trudeau Road, Saranac Lake, NY 12983.
Unionization elections are now being won more frequently by management than by the unions, the reverse of past trends. The methods used by companies to fight unionization were explored in a recent survey. Four types of management practices found to be common to anti-union efforts were: personnel management practices designed to promote good morale; defensive tactics to complicate unionization procedures; measures to detect organizing activities; and the election campaign. Employee selection procedures can help, it was found, if people with experience in union settings are avoided. As for barriers to union organizers, the only significant factor was restrictions placed on solicitation of employees. The other popular measures examined include informing employees that management wishes to retain the non-union status of the workers (employed by 57% of respondents); restriction of access to lists of employees (21%); and establishment of plants in non-union locations. Two methods of detecting unionization activities showed a significant relationship to election results: review of employee complaints; and training supervisors to detect organizing activities. During the actual campaign, successful efforts are likely to be directed by a general manager with the help of an outside consultant. A number of communications channels had significant results with firms which used a variety of methods having the best record. Speeches, posters, personal letters, payroll messages, handbills, and movies were all significant factors. Campaign issues that could be advantageously discussed include the personal disadvantages of union membership (most effective) , the possibility of strikes, the negative image of the labor movement, and the employer's good points. Compensation was not found to be an important issue. Personnel Administrator, 30 Park Drive, Berea, OH 44017.
Employees at a number of companies can now get cash refunds if
they use less than their allotted health care funds. In an effort to control mushrooming
health care costs, the companies are giving workers a health care "account" each
year. If the account is not used up by claims, the difference goes to the employee.
Fighting Absenteeism With Well Pay Companies that have "reversed" their sick pay programs are reporting valuable benefits. By offering incentives for days worked ("well pay") rather than compensation for a set number of absences, employers can significantly reduce absenteeism. Companies seeing decreases of more than 30% are not uncommon. Wellness pay, particularly when used as part of a larger wellness program, can also improve employee morale by showing that the company is concerned about the health of its people. Creative Management, 817 Broadway, New York, NY 10003.
Rumors are as much a part of any business organization as supervisors and workers. The grapevine can be a valuable means of communication, but it can also be a source of dangerous gossip and unrest. Many experts see a need to respond to rumors, but others believe that, by repeating the rumor, even in denying it, management further spreads false information. On the opposite end of the spectrum are those who suggest a strong attack on harmful rumors about company operations. When companies are contemplating controversial moves, it is often best to publicize the situation before rumors can get started. Effective communication is indispensable in combating rumors; one large firm even has a rumor hotline that responds to employee inquiries. Employee publications are being used in many places to dispel specific rumors and promote the idea that rumors are frequently unfounded. Today's Office, 645 Stewart Ave., Garden City, NY 11530.
Top level executives who make major policy decisions affecting most or all of the workforce often feel they should not be expected to explain their reasoning. When an unpopular edict appears, bad feelings strikes, dissension in management, and irreparable damage to human resources development programs can result. By offering an explanation for a key decision, you can sell the idea and defuse a potentially explosive situation. For an even better presentation of a major decision, announce the need for a change before the decision is made, outline the problem and solicit input. Then, even if the final decision is unpopular, subordinates will react with greater understanding of the situation and fewer feelings of shock and betrayal. Supervision, 424 N. Third St., Burlington, IA 52601. |
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