Covered Diversity

Most of us would be quick to acknowledge the value of diversity in our business.  More perspectives means more creative ideas and stronger business performance.  If our company culture values conformity that can stifle the value of diversity.  This article specifically addresses the issue of religious diversity and the fact that so many feel they need to cover their true identity “often based on a real or perceived stigma. For example, an “out” gay employee may refrain

 

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Law Room

Uncovering Religious Diversity in the Workplace

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Holiday Accommodation

According to the EEOC, “refusing to accommodate an employee’s sincerely held religious beliefs or practices” is seen as religious discrimination “unless the accommodation would impose an undue hardship”.  If an employee, or employees, request time off for holidays which are not observed by your organization, consider your response carefully.  Then website linked below provides some great information for you to consider as you determine your path forward.

 

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EEOC

What you should know about workplace religious accommodation

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Flexibility is Highly Valued

In addition to retention, your benefits package can help you attract top talent and win their acceptance even if they could get a higher salary elsewhere.  When competing with larger organizations, your flexibility can set you apart. The study cited in this Harvard Business Review article provides insight into the sort of low cost high impact benefits you may want to consider. Click the link at the bottom of the page for access to the article.

 

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“…after health insurance, employees place the highest value on benefits that are relatively low-cost to employers, such as flexible hours, more paid vacation time, and work-from-home options.”

Harvard Business Review, February 15, 2017

The Most Desirable Employee Benefits

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Creative Approach to Improved Retention

Reduced turnover is one advantage of a well-crafted benefits program. Be creative and you can find low cost, high value benefit options. This SHRM article highlights one company’s success implementing wellness programs and realizing a 23% improvement in employee retention. Click the link at the bottom of the page for access to the article.

 

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“‘Our average tenure is over seven years with an 80 percent retention rate, while the industry average is about 65 percent to 70 percent,’ Frey said.”

SHRM, October 23, 2017

Nontraditional Wellness Benefits Improved Firm’s Engagement and Retention

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Corporate Social Responsibility Programs

When you think about employee benefits, think beyond traditional insurance products. Today’s employees highly value involvement programs in addition to intangibles such as social responsibility and anything that can be seen as “giving back”. Click the link at the bottom of the page for access to a great Forbes article which provides some excellent support for this concept.

 

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“Roughly 82% of U.S. consumers actually consider corporate social responsibility when deciding what services and products to buy and from where. Similarly, a survey of millennials’ work habits indicates that 86% of Generation Y workers greatly value their companies’ corporate social responsibility programs and would quit their jobs if those programs started to slip.”

Forbes, June 8, 2017

How Community Involvement Programs Can Grow Your Business

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Can A Company Fire Someone For Being Racist?

YES! Yes you can. But proceed with caution.

The news out of Charlottesville is disheartening and tragic. While the physical and emotional wounds may heal over time, the stain of racism persists leaving many to question what they can do and how they should respond. This includes employers who feel that employees who affiliate themselves with racist or other controversial positions/movements can negatively impact the company by hurting productivity or tainting their brand. I’ve included a link to an article in The Atlantic below dealing with a movement to expose employees who were involved in this event and exert pressure on employers to fire them. In this post I will review some of the considerations when it comes to responding to employee’s political views and activities. First let me point out that I am addressing private employers only, there are different rules in the public sector. Also, there are special considerations with regard to political activity if you live in California, Colorado, New York, North Dakota or Washington DC. Those states (and a district) have laws specifically related to employment action based on Political Affiliation or Political Activity. In every other state the At-Will-Employment doctrine would apply. Having said that, here are some questions to ask yourself before walking your employee out.

 

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1) Is there a legitimate business reason for your decision? Simply firing someone because you disagree with them, while possibly legal, may have other negative impacts on your business like reduced morale, lower productivity, difficulty recruiting, etc.

2) Would you take this action if the employee involved was your best employee? All things being equal, consistency is a great defense against a claim of discrimination. Be sure that the precedent you set with a termination decision is something you would be happy to apply even if your best employee were involved.

3) Might their expression be considered “protected concerted activity”? If an employee raises their political view, or participates in a political activity in the context of a complaint related to their compensation, benefits or other terms and conditions of employment then that may be protected under the National Labor Relations Act. In that case, terminating the employee may be unlawful.

4) Is there anything else going on with this employee? If an employee has filed an EEOC complaint against the company, is out on FMLA leave, has engaged in union organizing activity or is in some other way “protected” from retaliation you are still within your rights as an employer to hold them accountable for performance and take other actions which are in no way motivated by those factors. However, the appearance of retaliation may be all that’s needed to motivate the employee to file a charge which you must then defend.

5) Does your employee handbook limit your options? If your employee handbook guarantees a progressive disciplinary process, or states that terminations must be “for cause” then you may need to follow that process before making the decision to terminate.

Let me stress that I am not an attorney and this is not intended as legal advice. I personally have no problem employing and working with people with whom I disagree. However, there are some beliefs which are so far beyond the pale that I would not stand for them and would quickly remove those who subscribe to them from my business. Overt racism is one of those and it is my opinion that firing a racist will make my business stronger. If you find you are in a position to make that decision review these questions, seek legal counsel if there are any sticking points and then proceed with confidence.

The Atlantic, August 14, 2017

Is being a White Supremacist Grounds for Firing

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Three Critical Questions For Evaluating Your Compensation Strategy

A solid compensation strategy is necessary for both attracting and retaining talent.  Compensation goes beyond salary and you may find that it’s worth your time to investigate modern benefits which can give your company an edge in the marketplace.  Your strategy is particularly important right now as the labor market remains very competitive, and even more so for the best talent.  It’s tempting to think that pay rates are not important, but that would be wrong.  It’s true that you cannot and should not try to buy loyalty.  But ensuring your base and total compensation packages are market competitive is critical to recruiting and retention.  Your people are receiving calls, likely while they are at work, and if you’re paying below market your talent may be low hanging fruit for recruiters who can lure them away based on pay alone.  Behavioral economic principals support the concern many managers have when it comes to paying a new employee more than current staff.  Perceived fairness is very important in maintaining morale and employees will often be upset if they know or believe a peer earns more than them.   Compensation discussions are wrought with emotion and managers rightly focus on maintaining internal equity.  That is why a good compensation strategy will not only ensure competitiveness but also address the emotional, functional and social needs of every individual.

Does that mean the answer is to remain stingy with new hire compensation rates?  I do not believe it is.  While it is possible to sell the value of company culture, fringe benefits and other differentiating factors to potential candidates, the best candidates know their value and are unlikely to seriously consider options which are below market.  Another reason this is not a winning strategy is that the workforce, in particular Millennials, is extremely resourceful when it comes to researching information on the internet.  While the information they find may not always be accurate and may not take regional and industry factors into consideration, it IS the information they have and it shapes their expectations.  This is why it’s very important to know what information is available and to train your managers and front line leaders to have discussions regarding pay.  It is also important to involve your managers and front line leaders in the compensation discussion, allowing them to have input with regard to how limited increase budgets are distributed.  To the extent that they understand the process and feel the decisions are arrived at fairly they will be better able to defend them to their employees.

 

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It is a common perception in the workforce that the only way to get a significant increase is to change employers.  I have seen employees receive 10%, 20% and higher increases by moving from one company to another because their companies limited increases to an arbitrary 3% or something like that while the labor market saw significant inflation resulting in the employee earning far less than others in his or her field.  In some cases the disparity is gender based, and addressing the pay gap has become something of a “hot topic” recently.  It remains true that, on average, women are paid less than their male counterparts for comparable work.  Many organizations are working to resolve this and it should be part of your compensation strategy as well.  According to an article published by Huffington Post (http://www.huffingtonpost.com/2015/03/13/gender-wage-gap-close_n_6863314.html) this process could take decades if proactive action is not taken to rectify historical inequities.  While it is true that several factors impact these calculations, it’s critical that your compensation strategy take all of them into account while being careful to separate fact from fiction and ensure that all pay decisions are objectively fair.  This is true regardless of the cause of the disparity.  Inequity related to gender, age or tenure with your organization is still inequity.

We all know that salary and benefits are typically the largest line item on any company’s budget.  That is the most compelling reason to have a clear compensation strategy.  Only then can you evaluate if you are truly getting the best return on your investment in human capital.  Here are three critical questions to ask yourself as you evaluate your compensation strategy:

  1. Do you know the labor market rates for the positions you are responsible for? Do your research and be careful not to discount the data just because it doesn’t align with the compensation levels of your current employees.  Doing that is a sure fire way to ensure your staff are “low hanging fruit” for recruiters looking to steal your best people.
  2. Do you have a “benefits philosophy”? How does your benefits offering align with your company’s Vision/Mission/Values? For example, if your company says it values work/life balance with a focus on family do you offer paternity leave?  Are employees discouraged from taking vacation time or are your PTO/vacation policies overly complicated or restrictive?  By aligning your benefits philosophy with your V/M/V you will be better able to select from the infinite number of benefit options available in the marketplace.
  3. Do you know what your employees value and how they perceive your compensation/benefits offering? Remember, compensation and benefits have strong emotional components.  Employees determine their own value, in part by comparing their compensation to what they believe others like them receive.  This is not limited to their coworkers, but includes family and friends with whom they discuss such issues.  If you don’t know their perceptions I strongly encourage you to ask them.

Strategic alignment and transparency are critical to the success of any HR initiative.  As is the case with operations, finance, sales, engineering and all other functions, if they aren’t focused on the same goal success becomes extremely difficult.  Because your people are the single most significant influence on your company’s success and compensation is one of the most significant factors in attracting and retaining top talent you can’t afford to leave it up to chance.

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How to Limit Unemployment Liability

While unemployment benefits vary from state to state, there are some actions all employers can take to limit their liability and prevent unwanted increases in unemployment insurance rates.

The short answer to how you can limit unemployment liability is to follow the advice I received from a business coach: be slow to hire and fast to fire.  You’ll know quickly if someone’s not cutting it.  I address this issue in more detail in a separate blog post.  The bottom line is, you shouldn’t drag out the decision to release a new employee who isn’t cutting it.

 

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So how does terminating someone quickly limit unemployment liability?  No matter how long you have an employee on board, you may have some unemployment liability.  However, it depends in which quarter they earn wages.  Here’s how it works:

When an employee files an unemployment claim the Unemployment Office will reach out to the most recent employer for information on why they were terminated to determine if they are eligible for benefits.  It’s important to be diligent in responding to this information request so the benefit decision will be made based on the correct information.  If the employee is released because they just didn’t work out then they likely will qualify for benefits.  However, if they quit voluntarily or are released due to Gross Misconduct they may not qualify.  When an employee fails to qualify for benefits your company’s liability is zero for that employee.  As you’ll see below, even if you aren’t a chargeable employer at the time they are discharged, you could be chargeable in the future so be sure all relevant information is provided the Office so only eligible employees will receive benefits.

If the employee is eligible for benefits then the Unemployment Office will look back at the first 4 of the last 5 quarters to determine the employee’s base wages and resulting benefit eligibility.  Some states look at the average weekly wage for the full 4 quarter period, others take an average of the two highest earning quarters.  Whatever the calculation used, employers will be responsible for the employee’s unemployment benefits based on the portion of base period wages earned at their company.

So, if an employee is hired in Q1 of 2017 and terminated in Q2 of 2017 the benefit base period is Q1, Q2, Q3 and Q4 of 2016 (the first 4 of the 5 quarters immediately preceding the employee’s termination).  In that case the most recent employer would not be chargeable for any of the benefits because wages were earned outside of the base period.

However, if the employee is terminated by their next employer in Q1 of 2018 then the benefit base period is Q4 of 2016, Q1, Q2 and Q3 of 2017.  In that case your company would be chargeable for the proportion of wages earned while working for you.  Assuming the employee earned flat wages in each quarter and worked all of Q1 and Q2 of 2017 for your company, your liability would be 50% of the benefit amount.

As you can see, if a failing employee is released quickly then the percentage of base period wages attributable to your company will be reduced and therefor your company’s unemployment liability will be reduced.

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Slow to Hire, Fast to Fire

Hiring employees is a big deal, so don’t make the decision lightly.  I recommend a requisition process which is robust, requires that hiring managers make the business case for the headcount add (or replacement) and requires appropriate management approval.  As an independent small business owner I lack the internal infrastructure for that sort of approval process so when I was considering adding a position recently I sat down with a business coach to talk it through.  This is my way of forcing some analysis and making me justify the add before giving myself final approval.  The guy I was talking to was very helpful, and when we were done he threw out this gem: Be Slow to Hire & Fast to Fire.

This is good advice for every business, but even more so for small business.  Think of it this way, your company’s culture determines your customer experience and ultimately impacts your ability to stay in business.  The culture is the combined attitude, personality and values of all your employees.  When a new person joins the team they will impact your customer experience either for good or for bad.  The extent of their impact is directly related to the size of your team.  A company with 500 employees can absorb a bad hire better than a 30 person organization can because that new person represents only .2% of your culture.  That same new hire in a 30 person business represents 3.3% of the team.

 

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So what does it mean to be “slow to hire”?  It means you should be picky.  Hold out for the right person.  If you take the time up front to define exactly what that means you will be in a good position to act quickly once the right person is identified.  You should also identify an assessment which will validate what your gut is telling you.  This is a good way to counter personal biases and ensure that only job related criteria are used in making the final hiring decision.

“Fast to fire”, on the other hand, means you should set high standards and hold all employees, including new hires, to those.  This required that you define 30/60/90 day goals for new hires, with realistic objective measurements to define success.  It also requires that you review their performance with them constantly.  Let them know if they are on the right track or not.  If they are not, work with them to develop countermeasures to get back on track.  If an employee does not get back on track quickly and remain on track consistently then you should be quick to let them go.  As with any termination decision, it should be handled in a professional and respectful manner and should not be a surprise to the employee.  Take the time to get your documentation in order, but dragging the process out is far too costly to your business.

The cost of dragging out a termination decision includes lost productivity, morale impact on other employees, and the longer you wait the greater that employee’s impact will be on your culture.  Since your culture determines your customer experience, it’s critical to move failing employees out of their roles quickly.  This will also impact your liability for unemployment benefits, a subject which will be more fully explored in another bog post.

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3 Lessons From Fox News – The Bottom Line Impact of Culture

Bill O’Reilly was a cash cow for the FOX News network.  I say “was” because the New York Times and other outlets are reporting the fact that dozens of advertisers are withdrawing their support of the star and refusing to air ads on his show due to allegations of sexual harassment.  In fact some organizations have pulled their advertising dollars from the FOX network entirely.  His antics are nothing new.  A video of his epic meltdown more than 25 years ago made the rounds on YouTube in 2010.  I have included a link to the incident at the end of this article, but be warned, there is explicit language in the clip so you may not want to play it in your workplace.  While this meltdown was not sexual in nature, it was certainly abusive and unprofessional.  Add to this the fact that the former chairman of Fox News, Roger Ailes, was accused of sexual harassment, an issue which has yet to be fully put to rest, and a picture begins to emerge of the culture at the network.  Leadership allowed inappropriate behavior to persist without challenge.  It’s not my place to determine if actual laws were broken, but even if no laws were broken we can say with certainty that rude and unwelcoming behavior was condoned and it made many employees uncomfortable.

Now, think of the ideal workplace for you, the culture where you would be most productive and happy.  Does that environment include leaders or co-workers who belittle you, act unprofessionally and refuse to stop when you make them aware that you’re uncomfortable?  Yet leaders allow this sort of behavior to go unchallenged every day.  There are a number of reasons for this of course.  These sorts of discussions are uncomfortable.  The behavior may be seen as harmless banter unless someone makes a formal complaint.  By far, the most common reason I hear for excusing this sort of behavior is a fear that a great performer will get upset and leave.  I have had clients and managers tell me that clamping down on inappropriate joking in the workplace will have a negative impact on morale.  Yet when I ask them if THEIR morale would be positively impacted if THEY were on the receiving end of unwelcome harassing behavior the answer is obviously no.  Culture matters and it impacts your bottom line.

For the foreseeable future the labor market is going to be tight.  It’s particularly tight for the best talent because those folks have options.  If you’ve been involved in a recruiting effort then you know that it’s time consuming and expensive.  When you include indirect expenses like management time investment, productivity loss, training investment, etc., the cost of turnover can be from 1 to 4 times the employee’s annual salary (depending on the level and complexity of the position).

 

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If your company’s reputation in the labor market is poor you may experience another drain on profitability, the inability to attract the best talent.  If you have to “settle” for a less than ideal candidate then you pay the price for that as well.  Either you will have to inflate your salary to attract top talent or you will have to settle for someone with fewer options.  In either case your bottom line will suffer.

So what’s the best way to impact your bottom line?  Attract and retain top talent.  This requires that you establish and maintain a work environment which respects everyone.  Here are 4 strategies to accomplish just that:

  • Set High Standards – This applies to leaders and every employee in the company. WHAT employees accomplish is extremely important and should be closely and fairly monitored.  If they aren’t driving results they should be counseled immediately and offered assistance to get back on track.  But, success “at any cost” should not be tolerated.  HOW employees accomplish their goals should also be monitored and have an impact on their performance and potential ratings in the company.
  • Take Action – Waiting for a “formal complaint” before addressing behavior which is inconsistent with your company values and/or policies sends a message that it’s OK so long as everyone keeps their mouth shut. Employees may feel it’s a waste of time to speak up and instead vote with their feet, or worse… they may file a hostile work environment claim against your company.  Avoid that liability and follow through on your Duty To Act when you become aware of any safety hazard, violation of the law or violation of your company policy.
  • Be Consistent – Inconsistency looks like discrimination. Rules of conduct and the expectation that every employee will be treated with respect must apply to every employee at all times.  If you aren’t sure what the appropriate course of action is, don’t guess.  Talk to your company’s HR Department of Legal Counsel.

These are the lessons from Fox News.  Managers can impact the bottom line by protecting the culture.  This involves setting high standards of conduct, taking action when those standards are violated, and consistently holding all employees accountable.  If you haven’t done this in the past let me offer you some encouragement.  Leaders can effect culture change, and there is no time like the present.  The longer you let the culture drift the harder it will be to get back on track.  It may make sense to get outside help if you find it’s difficult to articulate the culture change strategy or to stay consistent in implementing it.  However you choose to address the issue, the risks to your company of doing nothing are many and may include lost productivity, turnover and possible legal charges.  But where there is risk, there is also the potential for great reward.  Think of it this way, if someone had counseled Bill O’Reilly 25 years ago and held him consistently accountable to live the stated values of his employer it could have saved the FOX network millions of dollars!

Bill O’Reilly’s Inside Edition Melt Down

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