Incentivizing executives and employees alike

21 Aug

Executive compensation is often linked to company performance.

Companies are increasingly turning toward alternative methods of incentivizing top performers and executives. By incorporating some form of long-term incentive (LTI) program into their employee management systems, companies are able to reward major players in the business by linking performance with salaries. This was the same theory behind stock options. However, Human Resource Executive Online reported that the question of whether these LTIs are actually linked to performance or not is actually uncertain.

A recent study by Towers Watson reported by HRE Online shows that in the 430 participating companies, the successes and failures in the marketplace were fairly broad, while the payouts received from LTIs to executives were narrow. In other words, whatever system is being used to make these awards to major company impact-makers is not yet completely in alignment with the actual performance of the business.

"For pay mix, the shift away from stock options to performance-based LTI vehicles may limit LTI's upside potential over periods of strong performance," the study said, according to HRE Online. "[This suggests] that performance-plan thresholds [and significant levels of restricted stock] may protect awards [at companies performing at a lower level of success.]"

Other ways to reward employees
Companies that seek to retain talent not only at the executive level but in lower levels as well can look to perks. According to CEO.com, perks are a great way not only to reward workers and keep people from leaving the company, but businesses can also establish culture through the perk selection.

Google, for example, features nap pods for those who want to sleep. This is part of its strategy of making its employees feel valued through quirky things like do-it-yourself espresso bars and an in-house barber shop. Other companies have done this on a smaller scale through choices like bagel Fridays and free coffee.

Incentives at companies can also have to do with what the company's business is. They can additionally be methods for encouraging wellness or other good worker behavior. For example, Caesars Entertainment, a casino in Las Vegas, gives specially earmarked cash to its workers, who can use the money to gamble. It also offers free meals in the employee dining room. Bally Technologies, a company that builds Casino gaming machines, offers subsidies for local gym memberships, as well as tuition reimbursement for going to college.

Having perks for your workers doesn't necessarily have to cost money. Some companies throw in-office parties, which don't have to cost much, while others offer a happy hour or a poker night.

Small companies can benefit from employee management systems

20 Aug

HR management software can make the HR department more efficient.

Surprisingly, even small businesses can benefit from HR manager software. According to Small Business Computing, the typical number of workers in which companies begin to receive a return on their investment after buying software like this is 50 employees.

It may seem counterintuitive that a company buying potentially expensive software would actually save money instead of lose it, but what must be remembered is that human resources management is an area where companies can't afford to make mistakes. There are too many regulations and numbers to keep track of for a company to safely believe it's keeping track of the federal rules as they change – not to mention ensuring every dollar of insurance and each hour of paid time off is accounted for properly.

SBC reported that smaller companies benefited from their human resource management system software primarily because of its time-saving features. Instead of using a spreadsheet and paperwork, which can take hours of time for a human resources office that is better focused elsewhere, companies can invest in a system that makes human resource planning simple and effective.

Employees will also appreciate the ease of applying for paid time off. Without an online system in place, someone would have to send an email, and an HR professional would have to take a look at the spreadsheet to see how many hours the employee has and whether he or she can take the time off or not. Instead, with a computer system, everything is streamlined into one system that automatically shows all the information an employee could want about his or her hours and paid time off, allowing for greater transparency.

What to keep in mind when using an automated HR system
Many larger companies make the mistake of relying too heavily on automated technology for something like assigning shifts for employees. This can be a problem because computers can never be made fully aware of what someone has in his or her schedule that is a special circumstance. According to Quartz, Starbucks introduced a schedule automation device that accidentally gave a woman named Janette Navarro, who has a young son to care for, the hours between the store closing and the store opening. This meant she would stay until the store closed and open it the next day, which resulted in a great deal of trouble. The situation was only resolved when Starbucks took a more proactive stance and allowed supervisors greater control over schedules.

Smaller companies may not have to worry about this issue as much because employees might have a closer relationship to the HR department. The key takeaway is that companies must always have a human component behind the machine to care for issues that crop up and can't be predetermined through a system's algorithms.

Benefits of HR systems
SBC wrote in a separate article that one of the major benefits of HR management software kits is they increase productivity. For example, a feature of some software is it can restrict the websites employees can visit, so they will stop going on Facebook or Twitter, and stick to the business at hand. However, SBC said this can backfire, as employees may become disgruntled or find ways to game the system.

Two approaches to management and HR

19 Aug

IKEA's focus on management and HR working together enables its success.

Management and human resources work together at IKEA, according to HC Online, and this allows the company a greater level of success than it otherwise would have enjoyed.

The plan to integrate HR and management was something planned from the beginning.

"Thirty years ago, [IKEA founder Ingvar Kamprad] never imagined or constructed an organization of 'HR' people, but rather outlined a philosophy that put the growth of people and the growth of the business on an equal footing," IKEA HR Manager Jessica Murphy explained in an interview with HC Online.

Human resources are linked with management in a number of ways at IKEA. One such way is by having weekly meetings in which the two sides exchange ideas.

Why companies hate HR
This goes against many other leaders in the business field, who have written articles describing a desire to get rid of HR or change it in some way, according to Forbes. The theory is that HR is based on a collection of different regularity experts, people who are good at employee management systems and people who know how to use payroll software programs. In other words, the whole thing is unrelated to the act of managing people and making money, and therefore should be outsourced.

The two approaches – IKEA's approach and the one described by Forbes – show the discrepancies that can happen when companies don't understand what HR does. If a company's management doesn't know HR, then the human resources team must be sure to communicate this. HR is about much more than doing paperwork.

Handling ADA during the hiring process

19 Aug

Disabled workers provide many benefits to companies that seek a more diverse workforce.

The American Disabilities Act is something that everyone involved with human resource management should know about. In a recent trial reported by Business Law Review (BLR), a nurse sued her hospital over an ADA matter, and although the trial was initially dismissed from court, she is asking for reconsideration.

According to BLR, Denise Riley alleged she had cognitive disabilities that limited what she could do on the job. Her employers gave her a negative review and then fired her. She filed suit, saying she was covered under the ADA. However, the court decided that under the ADA and the ADA Amendments Act of 2008 (ADAAA), employees can allege they have been discriminated against only because of an impairment. Additionally, the state of Pennsylvania is particularly strict about the standards of someone's disability when filing an ADA lawsuit.

According to the court, Riley had not explained the degree of her disability thoroughly enough to say whether she had truly been fired because of her condition. As such, her explanations were insufficient for proving she had a disability.

What must be taken from this story is that the ADA and ADAAA are broad in theory, but when applied on a state-by-state basis, disability claims and lawsuits related to them can sometimes require a very strict definition of disability.

Hiring for disabilities
Hiring people who are disabled can often bring more diversity to a company. This is part of strategic human resource management. When many different people come from different backgrounds and experiences, companies benefit from having a greater depth and breadth of understanding. There are some things that must be kept in mind when it comes to hiring people with disabilities, however.

The Small Business Association explains there are tax benefits to hiring legally disabled people. These come in the form of credits that off-set taxes. Along with this comes the responsibility for providing your disabled workers with reasonable accommodations, such as wheelchair access and a suitable working environment. Companies are not legally required to do anything but provide reasonable accommodations, which means that people with disabilities must "enjoy equal employment opportunities" as workers without disabilities.

The U.S. Department of Labor also has methods for ensuring those with disabilities are given equal opportunities in the hiring process. These can include forming partnerships with disability-related advocacy groups, along with posting job announcements in disability-related magazines or newspapers, websites and job fairs.

Internships and mentoring programs for disabled youth are also options for companies that want to recruit those with disabilities.

Legal issues to consider when hiring persons with disabilities
One thing companies should do, whether they choose to actively hire the disabled or not, is to avoid anything that the ADA and ADAAA would consider discriminatory in the hiring process. According to Fisher and Phillips LLP (FP), a legal firm that works with employers on legal cases having to do with the hiring process, many companies want to hire disabled workers but are unsure if they can do their work with appropriate reasonable accommodation. However, these companies are afraid to ask the candidate certain questions for fear of violating the law.

"A 'qualified' individual is one who satisfies the requisite skill, experience, education and other job-related requirements of the employment position the individual holds or desires, and who, with or without reasonable accommodation, can perform the essential functions of such position," FP wrote.

This means companies can ask a disabled candidate any questions they would ask a candidate who is not disabled. However, they cannot ask anything they wouldn't ask a candidate without disabilities. A good way to begin the hiring process, in this case, would be to begin creating a list of essential functions for the job, and then asking all candidates if they can do these essential functions.

How to control absenteeism

12 Aug

Being absent from work too much can bring down a company's bottom line.

Absenteeism in the workplace can be a dangerous thing. It harms a company's bottom line and makes it difficult to get work done. Additionally, firing someone for long absences can be tricky because of labor regulations. There are other ways of handling absences in the workplace that might help companies avoid having to fire someone and risk a lawsuit. The Small Business Administration offered some points of advice for handling an employee who has been absent for too long.

The first thing is to assess the situation from the employee's point of view. Is he or she gone from work for a good reason? Is this person getting his or her work done and just wants to have a different schedule that is more conducive to the kind of life he or she lives outside of the office? In such a case, it may be time to discuss whether or not to simply negotiate for flextime. Otherwise, consider other employee engagement ideas.

Human Resources Executive Online reported that sometimes when employers come into the office early and see someone come into the office later in the day and then work until later as well, the employer will unconsciously have a bias against that person because he or she will be perceived as being lazy. This may not be happening in the case of someone who regularly comes into work late and leaves early, but employers should consider every possibility.

There may be a better option for the employee than leaving work and building up unpaid days
Under the Family and Medical Leave Act, employees can take time off for a number of reasons, and there are other legally-appropriate ways to miss work, such as maternity leave or extended sick leave. If the employee is not made aware of these options, he or she may simply be unsure of how to take appropriate steps to miss work under these rules.

That being said, according to Forbes, absenteeism can lead to major costs at the office. After giving the employee time to explain and if the employee simply feels disgruntled or doesn't like the work, then firing that person may be best for the company.

One way to prevent absenteeism before it starts is by giving employees plenty of incentives that keep them healthy, such as wellness programs and benefits tied to days spent on the job. For example, if an employee has vacation days that are remaining on the clock after the year is over, then allowing some to carry over might encourage people to come into work more often.

New ways to help employees save for retirement

11 Aug

Employees need to prepare for their retirement plans.

Many companies have switched to defined contribution pension programs by now for employee 401(k)s. There are still things that can be done on the payroll management side to make things better for employees without costing too much effort on behalf of the company. For example, many businesses have started programs that automatically increase employee contributions to the 401(k) every year. This can cost money because it requires that HR directors work with payroll management software, but the end result can ultimately boost worker morale, according to Human Resources Executive Online.

A survey by American United Life Insurance Company, a subsidiary of OneAmerica, indicated that 55 percent of the 7,545 retirement plan participants surveyed indicated they would prefer if companies automatically increased their pension contributions.

"With non-stop family, health and life events and changing financial obligations over the course of one's life, saving for retirement can easily fall to the bottom of the priority list," said Marsha Whitehead, vice president of marketing for OneAmerica. "Automatic features can help plan participants easily increase their retirement contributions and not get distracted by other financial matters."

Why it is beneficial for employees to increase their yearly pension contributions at a certain rate
Because of inflation and additional responsibilities like kids and caring for elderly parents, it often helps to put a little extra away as one becomes older and grows with a company. People don't often know exactly how much they will need at the start of their careers, when they are sometimes just out of school and may not know enough about pensions and the time value of money.

According to Whitehead, the companies that do offer gradually increasing contributions to 401(k)s tend to do it either as an opt-in program or an opt-out program. Many of the companies that use the opt-out program find more of their employees stay with the original plan instead of opting out. For example, when people opted in at T. Rowe Price, a finance company with such a program, the number of people who chose the program turned out to be 8.3 percent of employees, according to an internal survey. In comparison, 64.7 percent stayed inside the opt-out version of the pension plan.

Other ways to save for retirement
According to the Wall Street Journal, there are also versions of 401(k) programs that offer the possibility higher returns than ordinary pension plans: These are called managed accounts. Under these programs, a professional investor is managing someone's retirement savings to try to maximize value in a more personalized way. The Journal cited information from the Government Accountability Office that found these programs often charge a fee that can outweigh the benefits of a slightly higher return and lower risk than a traditional 401(k).

Whatever a company chooses to offer its employees for pensions and retirement savings, it should be as transparent as possible. Some companies might consider sending out emails or giving seminars about financial advice if people seem clueless about what a pension plan is or how it works.

HR executives fear additional federal regulations

11 Aug

Ensuring compliance will help companies avoid lawsuits.

A recent study by Littler Mendelson showed that although those in charge of human resource management remain concerned about the Affordable Care Act, their biggest fear has now become increased regulations by the federal government.

According to HR Morning, some of these fears might be due to the added regulations this year having to do with the Family and Medical Leave Act (FMLA), along with increased monitoring of employee/contractor misclassification.

In a separate survey by Arthur J. Gallagher & Co. reported by Business Insurance, the same fears of regulation cropped up, although 63 percent of respondents were also concerned about the rising cost of health care benefits programs.

How to deal with the FMLA
The fears that a government agent will perform an audit of a company's compliance with FMLA rules are well-founded, according to HR Benefits Alert. The federal government has recently grown much more nit-picky about what it considers a violation of the FMLA.

However, companies can prepare themselves by knowing in advance what the feds have begun looking for in particular. Typically, what happens is a company will mistakenly do something it believes is unrelated to the FMLA, and the federal government, upon auditing the company, will find a connection. In one case, a company would fire employees who did not fill out their medical histories in a timely way. However, the medical histories included questions that were not considered permissible to ask in accordance with FMLA rules.

In another case, a company failed to provide someone with notification of her FMLA rights after asking for leave to take care of a very ill child. Additionally, the company fired the woman for taking too much time off, even though this leave was permissible under FMLA. In a separate example, a company fulfilled an FMLA request to take leave, then failed to return the employee to his job because he wasn't told he needed to complete a fitness-for-duty medical exam in order to come back to work.

Finally, one company failed to allow an FMLA request to pass because the worker was standing in loco parentis, meaning she was acting in the place of a parent. When a woman was fired for taking time off to take care of her niece, she was acting in place of a parent, but her FMLA request was denied.

It is likely the above companies did not intentionally try to game the rules, but even simple oversights can cause costly lawsuits. It is always more effective to pay attention to a company's employee management system to ensure compliance and prevent problems before they happen. Whatever human resource solution a company uses, it must ensure these are compliant with the most recent interpretations of the federal law.

Telecommuting now a part of reasonable accommodation

8 Aug

Working from home may become more common after a recent ruling.

A recent decision by the U.S. Court of Appeals for the 6th Circuit has recently expanded the number of companies that must offer telecommuting as a reasonable accommodation to employees who otherwise wouldn't be able to work from the office, according to Talent Management.

A suit filed by the Equal Employment Opportunity Commission against Ford Motor Company, argued that in the case of workers who are otherwise able to work from home in a fully-functional capacity but who cannot work at the office much of the time because of medical or other conditions, companies should allow those employees to work from home as part of the government's ruling on reasonable accommodation.

According to the ruling, "the 'workplace' is anywhere that an employee can perform her job duties," Talent Management reported.

Working from home as an option
Those in a position for recruiting should keep in mind that telecommuting may become much more prevalent now, and making the option available for everyone may be a good idea. A study by Staples indicated that 65 percent of employers who permitted their employees to work from home reported their employees were happier. Thirty-three percent also reported there were fewer cases of absenteeism.

"Not only does telecommuting lead to a happier workforce, it's also a critical benefit to have from a recruiting standpoint," said Paul Mullen, vice president of technology solutions for Staples Advantage. "Employers who are flexible and support their staff with the tools they need to telecommute have a definite recruiting advantage."

Setting up a telecommuting system for the office could mean integrating more employee self-service programs in the workplace, as well as using technology such as cloud-based computing software to allow easy access to work wherever a person may be doing business.

Introducing big data to an HR program

6 Aug

Big data is becoming a major part of HR.

Using big data to select candidates is quickly becoming the new norm in the human resources field. Many companies are building human resource information systems that can scour the internet and find resumes. The software can analyze people based on things such as where they went to college and how much work experience they have. In the end, the software can make an estimate of how well such a potential candidate would work for a certain company.

A tool like this expands the reach of an ordinary hiring advertisement because HR professionals can even find people who have never heard of a company and include them in the pool of candidates used for human resource planning.

People analytics
The fancy word for this new way of doing HR is people analytics, according to The Washington Post. It means using big data to find correlations with various fields and job requirements. Some of the results might be surprising. According to the Post, for example, there is no correlation between being a skilled programmer and going to college. In fact, many skilled programmers didn't go to college. People analytics can determine this by looking at major companies and the backgrounds of the programmers who work there.

Using computers to determine whom to hire may seem like a less-than-ideal way of doing human resource planning, but according to the Post, a quarter of the people who get hired through the traditional process of posting a resume to a job site and then coming in for an interview last at their companies for less than one year.

HR professionals are using these new software programs to turn this number around so the vast majority of hires stick with a company for the long term.

Advice for those seeking to build a big-data HR program
Enterprise Apps Today recently offered some advice for those seeking to integrate big data into their existing human resource systems. The basic idea is to start small and figure out a way to bring data analysis into the equation slowly.

Big companies can take advantage of a large hiring budget to hire statisticians to crunch numbers on a larger scale. If a company can afford it, building a dedicated big-data team not only for the hiring process but also for analyzing performance of existing employees might be a good idea. Smaller companies may want to start with preexisting software and work their way toward further incorporation of data analysis as workers gain experience working with the specialized computer programs.

Enterprise Apps Today specifically advocates using software for smaller companies, since these packages often come with the advice of a dedicated team who will help human resources staff integrate data-based solutions software through an information hotline.

"Vendors have spent years developing vertical-specific online services and tools to help their customers make the most of their data, which means they're ready to use and already designed to help specific kinds of businesses," said Chad Carson, co-founder and vice president of products at Pepperdata, a company that makes big-data software.

The bottom line is for companies to take it slow and thoroughly understand each step of their integration of big data into the ordinary business of running human resources for a company.

Hiring in the post-recession world

2 Aug

Contracting work on a temp-to-hire basis can help employers find the right employees.

Temporary workers may make up to 20 percent of the workforce by 2022, according to a study by PricewaterhouseCoopers cited by CIPD. PwC indicated it believes those in charge of employee management are reaching a crossroads because more employees are changing their minds about what they want from their careers . People are beginning to telecommute and request hours that are different from the usual 9 to 5. As a result, 24 percent of strategic human resource management companies responding to PwC's survey reported they are actively planning to change their workforce initiatives to reflect what employees want.

The result is that temporary workers will take on more responsibilities than they might have in the past. Additionally, it means hiring permanent workers will also change as companies use different tools to choose their workers, including hiring from pools of temps.

Finding permanent talent through contract labor
Companies are looking for qualified workers to fill niche positions in their companies, but these talented individuals are becoming harder to find, according to Chris Martin, senior vice president for enterprise solutions at Randstad U.S. in an interview with Human Resources Executive Online.

"The war for talent is over, and talent won," said Martin. "So now you're seeing companies looking at every potential stream to hire qualified individuals."

Companies are therefore hiring more contract workers to fill positions that might otherwise have gone to permanent hires. But these positions are often temp-to-hire, which means employers can shop around for the best fit for a job before committing to a single employee.

"In 2012, less than 11 percent of our openings started as contract-to-hire – in which the company states at the outset that it's looking for someone to eventually hire permanently," Martin said  "This year, through July, we're at 19 percent."

The benefits of temp-to-hire
In general, human resource planning teams have much to gain through hiring a contract worker full-time. There is a longer period for determining the employee's ability to fit into the corporate culture, along with his or her general ability to do a job well. Sometimes, employees are on their best behavior for the first month or so, but eventually they let their guard down and reveal how they will likely behave if they were hired permanently. This can reveal the employee more fully than a short interview and contacting past employees.  By taking its time, a company can help to avoid hiring people who wouldn't do well with a long-term role.

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