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AN EMPLOYEE REFERRAL SYSTEM THAT WORKS

By Your Employee Matters

Although referral programs can provide a valuable source of new workers, many employees are reluctant to provide referrals because they’re afraid that they’ll take the blame if the new hire doesn’t work out.

Here are a few ways to reduce this fear:

Provide a worthwhile financial incentive for referrals. Money can do wonders to overcome the fear of embarrassment.

Consider a mix of contests, raffles, etc. in addition to cash making referrals more fun and competitive.

Think in terms of the new employee’s “lifetime” value. If a worker can earn the company $50K per year for an average of three years, how much would you be willing to invest to get this return? If you pay recruiters 10% to 30% of the new hire’s annual salary, does it make sense to pay an employee only 1 or 2% for a referral?

Space out the referral bonus in quarterly payments, based on specific benchmarks. For example, you can give an initial payment for the referral, a second if the employee is hired, another one at six months, and the final one on the new hire’s anniversary date.

Train employees on how to approach prospects and make it easy for them to tell the prospect your company story. Give them a pamphlet, some type of document, or a web page link that defines the business and the opportunity the position offers the prospect.

Finally, measure the program’s results on a regular basis so that you can keep improving it.

EDITOR’S COLUMN: 10 PERSONNEL MANAGEMENT CHALLENGES FOR CEOS

By Your Employee Matters

Over the years, I’ve had the chance to do hundreds of three-hour workshops for CEOs about personnel practices. In light of this experience, I’d like to share 10 challenges that CEOs and executives face when it comes to personnel management.

The difficulty in finding new talent. The good news is that most of these employers expect to do more hiring than firing this year. The challenge is that most of the good employees are already taken. Perhaps the biggest mistake is thinking that you find these people, as opposed to attracting them. To attract talent, you have to position yourself as an employer of choice – a great place to work. Companies such as Costco, Southwest Airlines, and my beloved In-N-Out Burger do this so well that they don’t need to go find anybody.

Problems in retaining top talent. This is the flipside of the conversation above. In the marketplace of talent swapping, some companies will win, while others lose. To what degree do you have a philosophy, strategies, and tools to make sure you are retaining top talent? Do you understand why people either come to work for you (through a post-hire survey) or why they leave you (an exit interview)? Do you tap into their opinions and concerns with surveys, focus groups, and one-on-one conversations? Remember: Turnover is contagious.

Lack of managerial leadership. When we run 75 miles an hour and promote people into management, chances are that this happens with little or no training. Fact is, half of managers in your industry are above average and half are below average. Guess who gets more training? You need to train managers in business acumen, communication, basic compliance, team building, and systems understanding. Most important, they need training in time management so that they can spend 80% of their time adding the value they can – and only 20% doing administrative tasks.

Low employee engagement. This is easy to understand when we’ve just gone through a difficult recession, which has limited raises, cut benefits, and stunted growth opportunities. On top of that, it feels that we have a federal government that fosters an us vs. them mentality with the workforce. Perhaps the question for leadership is “how can we help our employees?” How can we help them become more productive so they can grow in their careers? How can we help them find greater meaning in the work they do every day? How can we help them gain more control over the direction of their career? As Shakespeare stated so eloquently, “To work we love with delight we go.” What would it take for your employees to love the work they do every day?

Failure of management to benchmark or improve performance. Performance management is one of my favorite subjects. To begin with, do you have a specific goal for improving performance? Sure, you want sales to increase by 10%, but do customer service reps, the receptionist, and the CEO have a goal to increase their specific performance by 10%? The next question is: What are you trying to improve? What aspect of performance is most important? If you have a high growth company, perhaps what matters most is quick hiring, onboarding, and training performance. If you’re a restaurant, perhaps your food is great but your wait staff is abysmal. Focus on your strategic objective.

Here’s a question I encourage everyone to ask those who report to them and, if you’re the one doing the reporting, to ask yourself: “What are the three most important things this employee does every day?” What good is a performance management approach if you can’t be on the same page as this question? When you have determined this, ask: “How would you know if you were doing your job well without having to ask me or without my having to tell you?” Once the employee can answer this question to your mutual satisfaction, you have legitimate benchmarks. The question then becomes: How can you improve? What training, resources, support, etc. do you need to supply this employee so they can perform at their best? Remember, as both Peter Drucker and Dr. Deming said: Nine out of ten employees want to do a good job every day; it’s the system they find themselves in that creates problems.

Misaligned compensation, benefits, and incentives. Here’s another of my favorite subjects. Exactly why do you have healthcare, 401(k) or other benefits? Do they help you to hire better talent? If so, how would you know? Do benefits help you retain talent and improve performance? How would you know? If these benefits don’t tie into your strategic objectives, the chances are that you’re wasting many of them – and at a hefty price tag. I’ve begun working with a genius who is turning the benefits sales process on its head. By running algorithms of employee data and healthcare expenses, he can define the optimum benefit mix for an employer, which it then takes to the marketplace – as opposed to the marketplace telling the employer what plans are available for their demographics. Finally, how benefits are managed can impact productivity. For example, sick pay can actually grow healthcare expenses and reduce productivity. Not surprisingly, San Francisco and now Portland actually require employers to offer sick pay. How about providing wellness pay or paying people for being at work? Bear in mind that any incentive you use has both negative and positive consequences.

Failure to execute strategic initiatives. We live in a rapidly shifting business environment that requires us to manage change quickly and successfully. If you haven’t done so, please watch the recorded webinar I did on Change Management and have your entire management team do the same. (If you don’t have access to HR That Works, let me know and I’ll send you a link to it). The webinar makes two major points: First, one of the traps of the hero is over-commitment. This holds true of both individuals and the company as a whole. When we over-commit, we tend not to live up to our commitments – which generates mistrust. Secondly, strategic initiatives require buy-in. Just as in sales you want to make the purchase the buyer’s idea, when it comes to change management, you want it to be the idea of your supervisors and employees. Give them some ownership of the idea and you’ll find them onboard with it. Because change will remain a constant, we’ll need to keep, coaxing, encouraging, and inspiring each other towards growth. When we stop the over-commitment and focus on execution, we’ll keep growing the bottom line.

Finding time for management. Too many executives and managers mismanage their use of time so badly that they’re on overload and unable to take on any growth objectives. Most top CEOs I know take at least a few days a month away from the job so that they can work on the business instead of just working in the business. Google is smart enough to allow its employees to do this one day a week. As Stephen Covey reminded us in the Seven Habits of Successful People, you need to keep sharpening the sword. Everyone in your company needs to understand and execute time management techniques. I’ve produced an HR That Works Time Management Training Module that can help you and your managers with this.

Lack of commitment to or interest in human resources. I realize that many business owners and executives feel that HR is boring, or worse. They didn’t have to know anything about it to start a business. Even though they often have little or no idea on how to run an HR department or function, in one-on-one meetings with their peers in Vistage, executives usually describe personnel issues as the major challenge facing them. The fact that employee relations just isn’t their thing provides an incredible opportunity for HR professionals to offer the expertise needed.

Failure to understand the bottom-line potential of HR. Business owners are revenue animals who often don’t see personnel practices as generating revenue. This has been a long-standing uphill battle for HR. There’s a reason why Fast Company magazine years ago published an article, “Why I Hate HR.” In reality, many companies have great HR practices which form the foundation of their bottom line success. For example Jack Welch stressed the importance of HR practices as an economic driver in his years at GE. In fact, he’s still talking about it.

If you own, run, manage, or advise a company, addressing these HR challenges provides a unique competitive advantage!

CALIFORNIA COURT PERMITS NOVEL SEXUAL HARASSMENT CLAIM

By Your Employee Matters

In Ventura v. ABM Industries, the employer was a janitorial service company that, according to the lawsuit, had a group of managers who drank on the job, touching and sexually harassing their female subordinates. Finding that that the defendants had engaged in threats of violence, the jury awarded the plaintiffs compensatory damages, plus a $25,000 civil penalty and $550,000 in legal fees.

What’s unusual about this case is that, instead of pursuing a sexual harassment claim, the plaintiff, sued under a California statute prohibiting hate crimes against protected categories such as sex. My guess is that the statute of limitations had passed for a traditional sexual harassment claim. The court rejected the defense argument that this statute does not apply in the workplace. The decision included a statement about the ratification of employee conduct that has significance for every employer:

“An employer may be liable for an employee’s act where the employer either authorized the tortuous act or subsequently ratified an originally unauthorized tort. The failure to discharge an employee who has committed misconduct may be evidence of ratification. The theory of ratification is generally applied where an employer fails to investigate or respond to charges that an employee committed an intentional tort such as assault or battery. Whether an employer has ratified an employee’s conduct is generally a factual question.”

The bottom line: An employer who faces evidence of wrongful employee conduct must do everything possible to discipline the wrongdoer (including termination, if warranted) or risk being accused of “ratifying” the misconduct. If the Ventura case had been brought as a traditional sexual harassment claim, the company would have automatically been deemed to have ratified the misbehavior because the perpetrators involved were managers.

FEDERAL APPEALS COURT AFFIRMS SUMMARY JUDGMENT IN DISABILITY DISCRIMINATION CASE

By Your Employee Matters

In Lawler v. Montblanc, the Ninth Circuit Court of Appeals affirmed the trial court’s order granting summary judgment in favor of an employer where the evidence was insufficient, as a matter of law, to substantiate claims for disability discrimination, retaliation, and harassment. Montblanc North America, LLC (“Montblanc”) makes jewelry, timepieces, and other luxury products that it sells wholesale and in boutique stores. Montblanc employed plaintiff Cynthia Lawler as a manager at a store with a staff of six employees. Her duties included hiring, training, and supervising sales staff; administering stocking and inventory; cleaning; creating store displays; and preparing sales reports, all of which could only be performed in the store. The store earned one-third of its annual revenue between the Friday after Thanksgiving and January 2nd. Lawler worked between 60 and 70 hours per week during the holiday season.

On June 30, 2009, she was diagnosed with arthritis, for which her doctor recommended that she limit her work to twenty hours per week. On July 23, 2009, she requested a twenty-hour work week. On July 29, 2009, Montblanc requested that Lawler provide information regarding the nature, severity, and duration of her impairment, and what accommodations could be provided for her to perform the essential functions of her job.

A few days later, she fractured her foot in connection with her arthritis. Her doctor recommended that she not return to work until September 2, 2009. When Lawler returned to the store to fax the necessary paperwork to Montblanc’s Disability insurance company, the company’s President, Jan-Patrick Schmitz, arrived for a routine inspection, during which he criticized her non-work attire, disapproved of the merchandise displays, became angry when she tried to explain the displays, and made her walk around the store (during which time another employee stepped on her injured foot). Schmitz then requested a detailed report: when Lawler explained that she could not meet his request because she was on leave, he responded “you will do it or else.”

On August 11, 2009, Lawler sent a letter to Montblanc’s human resources representative expressing her concerns about Schmitz’s “abrupt,” “gruff” and “intimidating” behavior toward her during his store visit. The human resources representative did not investigate the allegations.

On September 2, 2009, Lawler’s doctor recommended an extended leave of absence until January 5, 2010. Montblanc requested a reasonable accommodation from the doctor that would permit her to resume her regular duties, and for a date on which she could return. The doctor replied that Lawler’s status had not changed, and that she had to remain on leave until January.

On October 31, 2009, Montblanc terminated her employment, explaining that it was essential for a manager to be in regular attendance at the store, and that because she would be unable to return to work until January, she needed to be replaced.

Lawler sued for disability discrimination, retaliation, harassment, and intentional infliction of emotional distress. The trial court granted summary judgment for Montblanc, and the Ninth Circuit affirmed.

In affirming the discrimination claim, the court held that Lawler was not able to do her job “with or without reasonable accommodation,” because she admitted that her disability made it impossible for her to fulfill the duties of a store manager, regardless of an accommodation. As such, she could not meet her burden to prove that she was “qualified for the position,” an essential element of her claim.

The court also affirmed the retaliation claim, holding that Montblanc had a legitimate reason for terminating Lawler’s employment: she could no longer perform her duties as a store manager during the most critical time of the year. The court similarly affirmed summary judgment on her harassment claim, concluding that Schmitz’s conduct (criticizing Lawler’s work attire and the displays, and requesting the report) did not constitute “harassment” as a matter of law because his actions related exclusively to store operations and personnel management.

Finally, the court affirmed summary judgment on Lawler’s claim for intentional infliction of emotional distress, holding that Schmitz’s alleged “gruff,” “abrupt,” and “intimidating” conduct did not exceed the bounds tolerated in a civilized community, and simply related to business operations and her performance as a manager.

Article courtesy of Thomas Ingrassia of Petit Kohn (www.pettitkohn.com)

SHIFT WORK POSES HEALTH CHALLENGES

By Your Employee Matters

I ran across a study by the BMJ Group that analyzed the health impacts of shift work (non-daytime schedules) on cardio-vascular “events.” Shift work was found to increase the risk of a heart attack by 23% and to account 7% of all heart attacks. The conclusions of the study bear repeating

What’s already known

    • Shift work is associated with an increased risk of hypertension, metabolic syndrome, dyslipidaemia, and diabetes mellitus.
    • Disruption of circadian rhythm might predispose shift workers to vascular events; however, there’s no organized systematic synthesis of all types of vascular events.

What this study adds

  • Shift work is associated with myocardial infarction, coronary events, and ischaemic stroke; although the relative risks are modest, risks attributable to population are high.
  • These findings seem to be robust and insensitive to publication bias, quality of study, and socioeconomic status.
  • Conversely, shift work is not associated with increased rates of mortality (whether from vascular causes or overall).

The study carries these lessons for employers:

  1. Make sure that employees are aware of the health dangers posed by shift work and take steps to efforts to mitigate their effects. Preventive activities – such as proper diet and exercise, curbs on smoking, and minimizing other stressors – while important for all your employees, take on even greater significance for shift workers.
  2. Review your obligations under workers comp, ADA, FMLA and regulations if an employee suffers any of these ill effects.

ANGER MANAGEMENT AND THE ADA

By Your Employee Matters

I recently answered this hotline question:

Question: Can an employer request/require an employee to seek counseling/therapy for anger management issues that affect their ability to perform their job?

Answer: Absolutely! In general, the ADA does not cover personality traits such as irritability, poor anger management, impulsivity, and poor judgment. What’s more, short-term conditions, such as the anger that many people experience from the actions of a co-worker, are not qualifying disabilities. As you might guess, employees have argued that their anger is related to a disability. The question then becomes can you, or should you, have to accommodate it! If, in fact, anger is related to a disability such as PTSD (http://askjan.org/corner/vol03iss02.htm), an amputation or other severe injury, or a symptom of many other disabilities (http://askjan.org/media/atoz.htm), the question still remains of whether you can accommodate it.

The science is not always clear on whether anger is a covered disability (http://www.ncbi.nlm.nih.gov/pubmed/1468908). The answer varies on a case by case basis (everyone loves that answer). I would begin with a referral to your EAP provider, if you have one. You might also consider counseling and coaching.

Also, remember that an employer has an obligation to create a safe workplace and can use a “direct threat” defense under the ADA. As one court stated: “Such a requirement would place the employer on a razor’s edge – in jeopardy of violating the Act if it fired such an employee, yet in jeopardy of being deemed negligent if it retained him and he hurt someone.”

According to the ADA when considering the risk of harm:

“People with mental disabilities cannot be excluded based on general, stereotypical assumptions about dangerousness. Any threat must be based on sound medical judgment and objective evidence of factors, such as the duration of the risk, the nature and severity of the potential harm, the likelihood that harm will occur, and the imminence of the harm. Of course a person with a disability must be able to perform the essential job functions with or without reasonable accommodations in order to be covered by the ADA.”

To learn more about accommodating anger issues, go to JAN. Also watch our recent Webinar on Accommodating Mental Disabilities.

As a final note, be sure to take mental disabilities seriously. A California jury recently granted a $21 million dollar verdict because an employer fired an employee who claimed that she had anxiety attacks, without making any effort to accommodate her. Don’t be that employer!