Meeting the Challenges of a Changing Economy

With the downturn in the economy, many companies are facing uneasy futures and uneasy employees. Many workers are grappling with concerns about layoffs, mortgages, and increasing food and fuel costs. Such times require, more than ever, a work atmosphere where management is up front, motivating and responsive to the concerns of employees—and Human Resources must be at the helm of this employee strategy plan. The plan is more than just platitudes (“We have an open-door policy”). It’s more than a few pot luck lunches or free movie tickets. The response plan is one where management is committed both to excellent employee production and to excellence in employee welfare. Here’s how to do it –

Talk the talk
One of the most frustrating things to employees, especially in hard times, is poor communication. The bad results this yields not only affects present employees but hinders recruiting efforts, as employees are less apt to recommend the company as an employer of choice. In these uncertain times, change is constant and managers who fail to discuss company changes will find that employees think the worst. Top management must be reminded that the old axiom “no news is good news” is, in reality, “no news is bad news.” So how should change be communicated? First, it is always best to explain the reason behind it. From there, explain the employees’ role in the change and involve them in the change process, actively soliciting their views on the best way to implement the change. This fosters a positive feeling among employees, even if the change is not welcomed by everyone. Where change is not announced beforehand, negative results will follow. The workforce will not actively embrace the change or stoically let the change happen “over” them. Either option makes change implementation extremely difficult.

Communicating change on a personal level is as important as announcing change itself. Many times, important changes are sent by e-mail. The ability to get employees’ first reactions is thus lost and so is management’s ability to make the best first impression. Regarding on-going communication, this should happen at least once every week or two weeks on the departmental level, and personal communication from the “top” should not be a bi-annual event. Not sure if employees are getting enough information? Ask them, they’ll tell you, but be prepared to respond. It’s always in everyone’s best interest.

Motivating employees in lean times
In today’s economy, businesses are searching more than ever for ways to improve their efficiencies. Striving for cost cutting results in more work being required from a fewer number of people. Such a demand calls for leaders who are effective in motivating employees to excel. Many managers and supervisors are too young to have had experience operating in bad economies and Human Resources must ensure that management has the skills and sensitivity to achieve its goals. Leaders who have strong motivational skills possess the following skill components:

• Being open to actually hearing employees is imperative for leaders. Small group discussions about how people are feeling allow frustrations to be aired and not held on to for months. Even small problems can develop into big management headaches down the road. What’s especially important for leaders is the ability not only to listen to what the complaint is, but to understand the degree to which the employee is emotionally involved. Gauging this emotional level and reacting appropriately tells the employee that not only the work is important, but they are as well.
  
  
• “Things may be tough out there, but…” Even in difficult times, good leaders talk about possibilities and goal achievement. They turn reasons why things cannot be done into team building group inquiries on how obstacles can be overcome. A concerted on-going reminder from leaders that success can happen focuses the group on finding the road that will lead them there.
  
  
• Focusing on personal expansion. Great leaders steer employees toward focusing on achieving things out of the ordinary, out of their personal comfort sphere. It is not enough to point employees toward a numerical goal and leave it at that. Achieving the goal must be communicated as self-achievement, a sense of self-realization that does not have to be obtained by strictly acting within the job description. Translating company success into achieving personal growth is always the best way to motivate.
  
  
• Recognizing the small steps lead to great accomplishments. When the leader appreciates on-going improvement, it tells the employee that they are on the right track and that the leader recognizes it. Moreover, it is just as important to recognize employees as people. This is where a comfortable work atmosphere and a great sense of humor really energizes a team. One of the most commonly sited attributes that employees note about a positive workplace is that “we laugh a lot in the department”. Great leaders never underestimate the value of laughter.
  
  
• Three ways to say thanks — public recognition is a very powerful reward. Praising the employee in front of their peers and superiors is the easiest, low-cost/high value incentive there is—and the memory lingers, especially if a top management representative was present. Small tokens also send a big message. Employee of the month awards, special parking spots, etc., all say, “You did a good job, and everyone knows it.” Special thank-you notes are another great, low cost motivator—and you can be sure the employee will keep the note. In other words, remember to say thanks—in a meeting, in a special note, or with some tangible reminder. Learning to say “thank you” is just as valuable a motivating skill as listening.
  

Employee friendly policies
If your company hasn’t re-evaluated its HR policies in light of the present economy, it’s time to do so. Especially during times when top talent is in demand, employee interests and needs must be addressed. Some of the policies that forward thinking companies have adopted or are strongly considering are:

• Flex time schedules allow flexibility with start and stop times. Many flex schedules are designed so that core business hours must be worked, but there is room to pick different start and stop times.
  
  
• Personal flex time or make-up time allows employees in California, to make-up time missed for personal reasons at straight time if made up within the same workweek. What many employers do not know is that even under present law, nonexempt employees can have individual alternative workweeks by doing make-up time each week. For example, one nonexempt worker could utilize the make-up time mechanism to achieve a 4 day/10 hour shift work week. Of course, this depends on the employer’s business needs, but it is worth considering if the business structure allows. The drawback of such an individual alternative workweek is that each week a make-up time slip must be filled out. Presently, there is a state bill, AB 510 (Benoit), that would allow a 4/10 alternative workweek on an individual employee basis without the need for the weekly make-up time paperwork.
  
  
• Another benefit that some employers are considering is an alternate summer schedule. These schedules allow for fewer hours worked during the summer season by giving Fridays off or making them half days. There are companies that allow this schedule only for exempt employees (where they work a lot of unpaid overtime), or they organize it on a departmental level where workers are excused on a rotating basis.
  
  
• Tele-commuting questions have recently spiked for Employers Group’s Consulting Helpline. Such arrangements can be found on a full time basis or on a partial week basis. Sometimes employers allow this on a project-by-project basis. Employers find this an extremely attractive recruitment and retention item.
  
  
• In keeping with employees’ desire for work-life balance, some employers are now using “bonus days” as a non-cash award. Such days are usually granted upon the achievement of some goal or to reward a particular fruitful business suggestion made, the “extra” days off are usually more valued than small gifts or prizes. More and more frequently, we see bonus days given as prizes raffled off during a company holiday party or special occasion. They are especially attractive to management as it is not a direct dollar cost outlay.
  

In tough times, perks matter. Small perks seem expendable when the company falls on hard times but when the “good” coffee is taken away, people can really feel under appreciated. The smart employer knows how to economize on travel meals and expenses, but is wise enough to recognize those small perks that everyone uses every day and that have wide visibility. In deciding what to cut, employers should consider the real expense and how many people use the perk. Additionally, the pain of cost-cutting measures can be lessened by planning periodic events where the company has small in-office celebrations. These are not that frequent, but they do tell employees “we care”.

Compensation
Keeping control of compensation costs is paramount in tough times, but it’s really a balancing act. On one hand, cost efficiencies must be achieved, but at the same time human capital requirements must be met. This is especially true in attracting and retaining the top talent that will help achieve the company’s strategic plan.

More and more HR executives say that top performers must be the priority when pay raises are considered. With the present financial constraints, more companies are applying forced rankings within departments. This method allows truly top performers to be rewarded and avoids across- the-department, set increases. It also sends a clear message that production and quality must increase in order to reap real rewards. Those industries that have the most trouble with this approach are government services and educational organizations. Other approaches that companies have taken toward controlling compensation include “spot” bonuses. These are granted for outstanding performance, such as working nights or weekends, or coming up with cost cutting measures. The advantage of these bonuses to the employee is that their performance is immediately recognized; they don’t have to wait until the end of the year. The advantage to the compensation budget is that the bonus is not folded into the base. Especially in times of low or non-existent merit raises, spot bonuses can be very effective. Additionally, they’re a great retention tool for talented employees.

Employees must meet specific requirements to qualify for California’s computer professionals’ exemption. In 2007, California computer professionals must have been paid a minimum of $49.77 per hour ($103,523 per year) to be exempt from overtime pay. In 2008, the minimum hourly rate for computer professionals to be exempt decreased to $36.00 per hour ($74,880 per year). Federal law in most other states only requires $27.63 per hour ($57,471 per year). Furthermore, the California computer professional must still be paid this hourly rate for all hours worked in the workweek. Employers frequently forget the latter point. It is essential that detailed time records be kept so that the employer has proof of meeting this requirement. Otherwise, employers can be liable for back overtime pay if duty and compensation requirements are not met.

Key employees, key to survival
Many analysts fear that the ongoing threat of recession will result in fewer jobs being created and more downsizing. Rather than having broad hiring goals, HR executives will prioritize on developing and retaining the right people. The right people come at the right price, which is usually high. Because of this human capital expense, experts agree that more attention will be paid to having people produce a high-quantity of high quality work. Such a demand will translate into HR placing heavy emphasis on performance measurement. Top performers will always be marketable, especially as job growth slows (again, fewer people doing more work). Therefore, in addition to performance management, HR will have to develop succession planning programs—something most companies are not doing at present.

As top talent will be more crucial than ever, employers will have to pay more attention to being an attractive organization to sign with and stay with. In order to achieve this, companies have to think beyond compensation to ensure that they “keep the keepers” and this effort starts at the recruitment stage. Business leaders begin to instill expectations during the interview process when they explain the position to the applicant. Immediately, the applicant forms an impression of both the position and the company. Successful companies attract talent by having a vision of where they’re going that can be explained, and outlined as to how to get there.

Contrary to traditional thinking, employees leave companies because of the work culture as opposed to compensation and benefits issues. This is especially true of the top talent. What is corporate culture? First of all, it is not the employee handbook, although the handbook can help develop it. Corporate culture is comprised of the unwritten rules of how to behave and what to spend one’s time on and it is shaped by the business leaders. A corporate culture that allows employees to be creative, feel empowered, and have fun is the hallmark of a successful company. The lack of laughter in a workplace usually marks the exodus of talented people. Beyond the workplace, corporate culture extends to the company’s view of employees’ personal lives regarding work/life balance.

Partnering is the key in keeping people involved and when practiced best it includes coaching employees and helping them to learn. If employees cannot enhance their skills, the talented ones will soon leave. Smart companies listen to employees and evaluate their individual goals. They ask employees what is important to them and then assign them to projects that fit those individual goals. Continual one-on-one mentoring by a seasoned superior is a vital part of this process. The importance of this special mentoring cannot be underestimated.

HR professionals will increasingly have to stay on top regarding the best way to manage talented workers. They will find that these employees are virtual, global, and feedback-hungry. Retention programs that don’t serve these characteristics are sure to fail.

Economics and the HR Professional
The changing economy will increasingly demand that HR professionals become more knowledgeable about the general business operations of a company. Those who fail to keep up to date with the business’ needs will soon fall behind. The HR practitioner who survives will learn the fundamentals of business and stay abreast of related trends. Most importantly, the successful HR professional will listen to employees and listen harder to line managers.

PHR/SPHR Certification
Just do it!

Being certified is different from simply completing a certification program. A certification program awards a recipient after completion of a specific area of study and it is not based on experience, nor does it include a sustainable professional designation like “PHR” or “SPHR”.

Lending credibility
A PHR- or SPHR-certified professional is set apart from their colleagues with public recognition of professional achievement; it helps those who are trying to establish themselves in the HR profession and works as a tool to assist in career advancement.

A question that I am asked quite often is if people really recognize the PHR or SPHR, and whether people really want me to have it for a promotion or next job. Yes. Most organizations that respect HR as a professional strategic partner value this designation. The PHR/SPHR also preserves a sense of knowledge that is broad and deep in all areas within HR. Even in cases where most HR professionals who have achieved the designation don’t recall all of the content acquired to past the test, there is this understanding that PHR and SPHR professionals know how to acquire and utilize resources available. For example, a PHR may not thoroughly understand all of the elements necessary to conduct an employee survey, but they will know the fundamental steps to analyze it.

Of course there are those employers who view HR as a “soft skill”. When this type of employer endeavors to hire an HR professional, they still have to ask “how will I know if this HR person has demonstrated skills in HR?” All things being equal employers prefer candidates with a PHR/SPHR because it shows that the candidate has shows exposure to principles and practices of the profession. Additionally, employers are generally willing to pay more for candidates that have earned a PHR/SPHR.

How to get it done
There are many pros to the decision to take the exam; however, what are some of the challenges that you will face? Most predominately, time. Let’s face it, most of us don’t have the luxury to stop working for the minimum three months time needed to study and prepare for the test. You are probably juggling at least a 40 hour work week, commute time, family and, oh yes, a life balance. I suggest taking a preparation class. Employers Group is again offering a PHR/SPHR preparation course in the fall. These classes offer the opportunity for you to prepare and organize your time effectively. According to HRCI, individuals who take a test preparation course are more successful than those who use other methods of preparation. Employers Group’s course is unique in that it marries self-study techniques with an in-class facilitator. In a classroom style environment, students are able to actually learn from each other. Most individuals have strengths in one body of knowledge, lending unique and profound insight that touches other students in a way that stays with them. Additionally, the classroom environment enhances the student’s learning ability. Employers Group’s highly interactive program encourages discussion representing diverse viewpoints. You will quickly reflect on what you already know and merge your knowledge with the new information required to be retained for testing.

Furthermore, a PHR/SPHR preparation course assists with organizing your time and leads to better studying habits. Students have a study plan that helps them organize their time more efficiently. Moreover, the Employers Group class offers a very helpful test taking preparation. The PHR/SPHR exam is just as much about knowledge as it is about test taking ability. Most students who struggle with confidence in taking tests find the test taking preparation component of the class extremely helpful.

The PHR/SPHR certification is an opportunity to aspire and acquire “career encouragement and enrich-ment” through smart study habits, such as enrolling in a preparation class to go forth and “just do it”.

Layoff and Plant Closure Requirements

In these difficult times, downsizing and restructuring are becoming more common. As such, it is more important than ever that employers be familiar with the various laws that apply in layoffs, plant closures, and relocations. On January 1, 2003, California’s Worker Adjustment and Retraining Notification Act (California WARN Act) became law, affecting more employees in more situations by providing protection to employees, their families, and communities by requiring California employers to give affected workers 60-days notice. Expanding the Federal Worker Adjustment and Retraining Notification Act (Federal WARN Act), California employers must now comply with both state and federal laws and be aware of the differences between the two. Below are the general provisions of the Federal and California WARN Act.

Are you a Covered Employer?

• The Federal WARN Act applies to employers with 100 or more full-time employees, who must have been employed for at least 6 of the 12 months preceding the date of required notice in order to be counted. Part-time employees are excluded from the count unless they have work at least 20 hours per week and have worked for more than 6 months during the past year. The Federal WARN Act will also apply if there are 100 employees (full-time or part-time) who, in the aggregate, work at least 4000 hours per week. To determine if an employer is a covered, employers will need review its records for the past 12 months to determine whether those currently not employed with the company must be counted. 29 USC§2101 & 20 CFR§639.
  
  
• In California, the WARN Act applies to a “covered establishment” with 75 or more employees (full or part-time) who must have been employed for at least 6 of the 12 months preceding the date of required notice in order to be counted. In order to determine whether the California law applies, employers must also review its records for the past 12 months to determine whether those currently not employed with the company must be counted. California Labor Code §1400.
  

What is a triggering event under the WARN Act?

• The Federal WARN Act is triggered by a mass layoff and/or a plant closing in any 30-day period.
  
  
  1. A “mass layoff” is employment loss of either (1) 33% or more of employees (with at least 50 employees affected); or (2) at least 500 employees, in any 30-day period. The term “employment loss” is defined as: (1) termination of employment; (2) layoff in excess of 6 months; or (3) a reduction in hours of work of more than 50% during each month of any 6 month period.
     
     
  2. A “plant closing” is the permanent or temporary shutdown of either (1) a single site of employment, or (2) one or more facilities or operating units within a single site of employment, if the shut down results in “employment loss” at the single site of employment during any 30-day period for 50 or more employees.
     
  3. Part-time employees are not counted when measuring these standards. A part-time employee is defined as an employee who (1) is employed for an average of less than 20 per week, or (2) has been employed on a full-time or part-time basis for less than 6 of the 12 months preceding the date on which notice is required. Seasonal employees may be considered part-time employees.
     
     
  4. Under the Federal WARN Act, if employment loss occurs on different dates are the result of separate and distinct actions and causes, and are not the result of an attempt to evade the requirements, a 30-day floating window is used. However, if employment loss occurs on different dates that are the result of separate but related employment actions, a 90-day floating window is used. Under the floating window rule, employers must look ahead and back (30 or 90) days to determine whether employment action (taken and planned) will, in the aggregate, reach the requisite threshold.
     
     
• California WARN Act is triggered by a mass layoff, relocation, and/or termination. Part-time employees are counted when measuring these standards. California WARN Act also does not have an “employment loss” standard as with the Federal WARN Act.
  
  
  1. “mass layoff” under the California WARN Act is defined as a layoff during any 30-day period of 50 or more employees at a covered establishment. A “layoff” is defined as a separation from a position for lack of funds or lack of work. California WARN Act does not specifically require separation of at least 6 months nor does it address reduction of hours.
     
     
  2. A “relocation” is defined as the removal of all or substantially all of the industrial and commercial operations in a covered establishment to a different location 100 miles way. The definition does not explicitly include a 50-employee standard.
     
     
  3. A “termination” is defined as the cessation or substantial cessation of industrial or commercial operations in a covered establishment. The definition again does not explicitly include a 50-employee standard.
     
     
  4. California WARN Act does not have a 90-day floating window. Under California WARN Act, a 30-day floating window is used.

What are my obligations if I am going to relocate my employees?

• Federal and California laws will generally apply to relocation of workers. California covers a broader range of situations. Under California WARN Act, “relocation” is defined as the removal of all or substantially all of the industrial or commercial operations in a covered establishment to a location 100 miles away.
  
  
• A relocation is not considered an employment loss if: (1) you offer, prior to plant closing or layoff, to transfer the workers to a different location within a reasonable commuting distance and (2) a break in employment does not exceed 6 months; or (1) the employer offers to transfer the employee to any other site of employment regardless of distance with no more than a 6 month break in employment; and (2) the employee accepts within 30 days of the offer or of the closing or layoff, whichever is first.

What is required in the notice?

• The same information must be provided under the Federal WARN Act and the California WARN Act. The notice must be written in an easy to understand manner. It is also encouraged to send notices in the native languages of affected workers. The contents if the notice must satisfy specific requirements set out in the regulations issued by the Department of Labor. The specific information that must be provided differs based on the recipient.

When must I notify?

• Under both Federal and California WARN Act, employers may not order a mass layoff or plant closing until the end of the 60-day advance notice period.
  
  
• Federal law requires that an employer provide written notice 60 days prior to the plant closing or mass layoff. Notice must be provided to affected employees or their union representatives, the state dislocated worker unit (the Employment Development Department, Workforce Services Division in California), and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. 20 CFR§639.1 (e).
  
  
• In California, an employer must give 60-days written notice of a plant closing, mass layoff or relocation. In addition to the notifications required under Federal WARN Act, in California, notice must also be given to the Local Workforce Investment Board, and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. California Labor Code §1401.
  

What are my obligations if I am going to relocate my employees?

• To notify employees, any reasonable method of delivery designed to ensure receipt of notice at least 60 days before a plant closing or mass layoff is acceptable (e.g. first class mail, personal delivery with optional signed receipt). If plant closing or layoff is postponed after notice has been given, the employer must send out new notices. If the postponement is more than 60 days, the employer must send out new notices meeting all of the WARN requirements. If the postponement is less than 60 days, the notice must be sent as soon as possible with information giving the reschedule date of termination.
  
  
• In the case of notification directly to affected employees, insertion of notice into pay envelopes is another acceptable option; however, a ticketed or preprinted notice regularly included in each employee’s paycheck or pay envelope does not meet the requirements.

What happens if I fail to provide notice?

• Violation of the Federal provisions is subject to civil penalty up to $500 a day for each day for failure to provide notice to local government unit. An employer is also liable to each employee for an amount equal to back pay and benefits for the period of the violations, up to 60 days, but no more than ½ the number of days the employee was employed by the employer. 29 USC§ 2104 (a). Attorney fees can also be awarded to the prevailing party.
  
  
• California WARN violations incur possible civil penalty of $500 a day for each day of violation. Employees may receive back pay to be paid at employee’s final rate or 3 years average rate of compensation, whichever is higher. In addition, employer is liable for cost of any medical expenses incurred by employees that would have been covered under a benefit plan. The employer is liable for period violation up to 60 days or ½ the number of days the employee was employed, whichever period is smaller. Liability can also be reduced in certain situations where wages were paid during the violation, voluntary and unconditional pays not required by law and premiums for health benefits or payments to certain benefit plans. California Labor Code §1403. Attorney fees can also be awarded to the prevailing plaintiff’s party.
  

This overview of the general provisions of the Federal and California WARN Act does not elaborate on complex events that may trigger additional employer obligations to provide notification under the Act. Please refer to California Employment Development Department for further details on the WARN Act at www.edd.ca.gov/eddwarm.htm, or contact a WARN Coordinator at (916) 654-8008. In addition, it is strongly advised that you review all plans and actions with your counsel prior to an anticipated layoff, relocation and or plant closing.

By Amy Lee,
Senior Consultant

Curbing the Loss of Your Institutional Knowledge

The labor market in California, and America at large, is at a precipice. Baby boomers, which still account for a significant percentage of our workforce, are at retirement age. The one generation willing to remain with the same employer throughout their careers is leaving and, along with it, the collective knowledge that comes from decades of experience working in the same job at the same institution. Regardless of what future generations have to offer, no measure of innovation or enthusiasm can replace what is lost when these employees leave.

What can we do to curb this drain of information? More specifically, what role should HR play in the process? Below we’ve listed a few considerations employers should take into account:

Cross-training
You should always have a back-up for those critical functions that would bring the company to a screeching halt were the individual responsible for performing them suddenly unavailable. Irrespective of retirement, there may be unexpected medical leaves, etc., that require someone to step in and fill that void temporarily. Moreover, employees with the power to bring operations to a halt (usually in coordination with an attractive offer from a competitor) can hold a company effectively hostage. Identify those areas where cross-training is critical to business operations, determine who should be selected for the cross-training, and budget the time and money to conduct it. You may even find that the shared knowledge between departments streamlines processes.

Mentoring programs
Particularly in professions where employees perform the majority of their work alone, employers favor mentoring programs to ensure those employees do not feel lost in the machinery of the organization. This is also a perfect opportunity for those boomers to pass information on to your less experienced staff. Consider those jobs for which mentoring programs would be appropriate and clearly communicate expectations to the participants. Tell the mentors they are imparting the wealth of information they’ve acquired to junior staffers and ensure the junior staffers appreciate the value of the information being communicated to them.

Partial retirement
Implementing a policy of allowing employees who would otherwise simply retire to gradually work toward the end of their career will likely be a win-win for both the employer and employee. The employer can buy time for the departing employee to train their successor and impart what information the employer requires of them, while the retiring employee can ease into retirement with the security of a paycheck to supplement other retirement benefits.

Telecommuting
Employers should also consider letting at least the most senior employees who have proven themselves the option to work from home or enjoy whatever additional job flexibilities their positions afford. If the alternative is for those employees simply to retire, the attraction of being able to work from home may afford the company the opportunity to hold onto that employee that much longer. As with any telecommuting policy, carefully consider all aspects before rolling it out (e.g., defining the workspace, issuing equipment and laptops, etc.).

Independent contractors
Many employers want to entice retiring employees to stay by converting them to independent contractors, but they don’t change the relationship, especially with regard to the amount of control the employer retains over that person. This can create significant problems. The employer and employee do not have the ultimate say when defining this relationship. If a government agency or the courts find the relationship to resemble that of an employer to an employee (based a number of factors), the agency or courts may redefine the individual as an employee. Don’t enter into independent contractor agreements lightly, especially with former employees.

For more information, please call Employers Group’s Helpline at 800.748.8484, option 2.

EG’s Evolving Member Benefits

It has been a little more than one year since a new management team was installed at Employers Group. We announced with significant commitment that change was imminent-that a new day was underway to place customer service and satisfaction as priority one. This article will encompass some retrospective accomplishments; however, for the most part the theme will be focused on the future and describing new critical initiatives already underway or commencing soon.

Back to basics
Our early assessment of the organization and the services EG provides indicated that for the most part, members are raving fans of EG. Whether an individual member was utilizing the Helpline, accessing our survey information, leveraging the library and reference services or taking training classes, satisfaction with EG was predominantly high. To better serve that “fan” base, we developed and implemented an account management structure that was centered on establishing and maintaining relationships with you and others in your organization. Each and every member is accounted for and owned by an EG Client Services Manager. By now, each and every one of you should have received some form of outreach and connection with your assigned EG contact. Whether through e-mail, voice-mail, or in-person visits, it was absolutely imperative that, at the very least, we initiated the beginning of a collaborative relationship with you and other members of your organization.

Awareness of available resources
Our studies also indicated that if you used your membership and were aware of the broad array of EG services, your satisfaction with your membership would increase. To that end, we will be developing new orientation materials that better describe all of EG’s services. These collateral materials will be provided to both new and existing members as we are well aware that there is turnover and new staff will need to be acclimated to the benefits of EG membership.

We redesigned the training catalog and adjusted the production logistics to be aligned with your budgeting and professional development planning needs. As you may recall, the training catalog was produced and distributed in the late January early February timeframe. For organizations on a calendar-year planning basis, our coursework and schedule was communicated literally months after your budget planning periods. With a twice-a-year production and printing schedule, if your organization is either on a calendar or fiscal year basis (July to June), we have hopefully placed in your hands a training curricula and schedule that can be easily incorporated into your budget decisions for professional development.

Listening up
We have also listened to you and your feedback. Many of you are familiar with and attend our annual Workplace and Employment Law Updates. Affectionately referred to as “WELUs,” these conferences address recent legislative, regulatory, or case law changes that impact employers on a day-to-day basis. During last Fall’s series, many of you commented that the tone and content was geared to the general and less experienced HR practitioner. This year, in addition to our WELUs, we will be holding our first HR Summit, in partnership with USC, which will be targeted toward the Sr. HR Executive and C-levels. This event is targeted for late Fall. Again, it is our commitment that we provide you with relevant content and contemporary updates to keep all levels of the organization up to date on trends and changes in the workplace and in employment law.

Our website has also received considerable feedback, both positive and negative. Candidly, EG’s website is a first-generation model that was on the cutting edge when first rolled out; however, due to recent changes in technology and innovations in information and knowledge sharing, our website and content are in serious need of an upgrade. We are commencing with an initiative to update the look and feel of our website and to provide you with an enhanced tool for managing your membership, ordering publications and registering for classes. Further, the current site is difficult to navigate and search for content. The website initiative will result in a user friendly site that is easier to navigate. Searches will not only access EG content, but all other existing content on the World Wide Web.

In addition to reviewing EG’s delivery of existing services, we also examined historical programs previously in place, but no longer significantly in our focus. A prime example of a program that effectively served and met the interests of members is advocacy. Historically, EG has had a presence in Sacramento, leveraging its extensive member and employee base (today, roughly 2,700 California businesses comprised of approximately 3 million employees). This presence included: legislative advocacy; working on bill and employment law policy changes and administrative advocacy; working with State government officials on its annual budget spending plan; and the development of compliance and oversight rules that regulate your business environment and operations on a daily basis.

Allowing the advocacy efforts to subside into nearly non-existent levels was a grave mistake. Hence, we are working diligently to restore EG’s advocacy program and re-assert our presence in Sacramento. We believe that an effective advocacy program will have to incorporate elements that mirror the framework and structure of the state of California-namely, the Executive, Legislative, and Judicial branches.

Legislative advocacy efforts
Each year, the Governor and the California State Legislature deliberate on thousands of legislative bills ranging in topics from education finance, homeland security, health care, and public safety. EG’s advocacy efforts will focus solely on employer-based legislative proposals. This specialization is still quite broad and will include legislative oversight and review of bills ranging from workers compensation to meal and rest periods, leaves of absence, employment discrimination, and civil rights. For this legislative session, EG is an active participant in seeking legislative change and relief relating to meal and rest periods. We know that current interpretations of the Labor Code create a confusing and conflicting environment for defining a meal period and what constitutes “providing” a meal period. For your businesses, the failure to appropriately comply could result in significant amounts of money for back-wages, penalties and fines.

In addition to the legislative activity, the Governor annually proposes, and the Legislature reviews and approves, a $100+ billion spending plan for your state government. This annual budget funds the infrastructure that provides the oversight, compliance, and enforcement of the myriad of regulatory and statutory regulations, rules, policies, and procedures encompassing topics as wide-ranging as sexual harassment, workplace discrimination, and payroll stub requirements. This past year, the State compliance and enforcement agencies focused on the underground economy targeting restaurants, car washes and other service oriented industries for wage, payroll record, and meal and rest period violations. In this administrative oversight arena, EG proactively identifies opportunities for developing regulations and rules that make sense. Specifically, EG contributed to the development of the AB 1825 regulations and also delivered administrative testimony to the Labor Commissioner regarding meal and rest periods. EG can also assist your business in responding to an administrative complaint, an active investigation, or a letter of non-compliance.

The remaining piece of the state government system is the Judiciary, where thousands of cases are heard each year in the local, appellate, and California Supreme courts. Through EG’s Legal Committee, which is comprised of the preeminent employment and labor law firms and attorneys in the state, we monitor and review the pending cases and the legal pleadings and filings that will impact employment law throughout California. The Legal Committee has developed and written legal, fact-based documentation ranging from letters of support to amicus briefs filed on behalf of employers. Recent cases to which the EG Legal Committee has been active contributors include: Kenneth Cole, Brinker, Walmart and Ralph’s. The case law and issues are widely divergent, ranging from PAGA, to wage and hour disputes, to certifying class-action status and responding to discrimination complaints.

Continuous improvement
Clearly, it has been a busy year and we’re hopeful that you’re cognizant of our many improvements thus far, and that they have resulted in an enhanced member experience. (Hopefully, you’ve experienced the streamlined renewal process, where we’ve significantly reduced the clutter and number of times you were contacted regarding your renewal.) We realize that we have still much to do, and we welcome your continued feedback regarding how we are doing, and what we can do better or provide to you in the future.

Finally, we are developing and hoping to launch this year a formal, structured customer satisfaction program. We want to know how we are doing across all of our lines of business - ranging from our Helpline, our consulting projects and our training courses. Each and every one of our associates will then be given a customer satisfaction goal they will be measured on and expected to meet in their annual performance reviews. We want to walk the walk and talk the talk – we are committed to continuously improving our services and our service delivery, as your complete satisfaction is our primary objective.

Newspaper Carriers Not Independent Contractors

A California Court of Appeal found that for purposes of workers’ compensation insurance, persons who delivered newspapers for a publisher were to be considered employees not independent contractors. The court determined that there was substantial evidence of the employee status, and supported the lower court’s findings. See - Antelope Valley Press v. Steve Poizner, as Insurance Commissioner, etc., et al (2008).

Antelope Valley Press (AVP) publishes newspapers in the Los Angeles and Kern counties. Carriers handle home deliveries, and are paid based on the number of papers they deliver. They are given about 20 free copies per day to leave at the homes of nonsubscribers. They are paid three cents for each free copy they distribute.

Carriers are required to deliver the papers in a safe and dry condition and must use yellow or white plastic bags if they cover the papers to prevent water damage. The free copies must be wrapped in AVP provided orange plastic bags to enable management to see that the carriers are actually delivering them. Once a week, AVP inspects the carrier’s routes for compliance. On Saturday mornings, the carriers deliver AVP’s free “Express” advertising publication. They receive three cents for each copy delivered, and are charged 23 cents for each copy not delivered. AVP requires and provides a red plastic cover for Express and checks carrier routes to assure proper delivery.

AVP also sells a monthly magazine-like publication called “Lifestyles” which is delivered by the carriers. They are required to use a white plastic cover for Lifestyles. AVP pays five cents for each copy delivered.
AVP delivers the papers to pickup sites, and sets the carrier’s delivery schedules. Carriers are charged $35 per hour, to guard against theft, if they are late to pick up the papers.

AVP collects the subscription fees from the customers. Carriers are not docked when customers fail to pay. They are, however, charged a $2.50 recording fee for each customer complaint for papers that are not delivered, damaged, or not delivered on time. The carriers also face substantial charges if AVP has to deliver the papers for an absent carrier.

Before becoming a carrier for AVP a person must agree to an annual form contract entitled “Independent Contractor Distribution Agreement.” The eleven page agreement contains an “Independent Contractor Status” paragraph which indicates that carriers are independent contractors and not employees of AVP. They are considered “self-employed, independent distributor[s].” The agreement makes it clear that carriers will not receive the benefits that AVP employees receive. Carriers are allowed to have other delivery work; but in an earlier administrative hearing an Administrative Law Judge (ALJ) found that there was no evidence presented to show that any of the carriers were or represented themselves as independent delivery businesses.

The ALJ found that “…there was an extreme disparity in bargaining position between the Carriers and AV[P]. What is also clear is that the Carriers wanted work, and they signed what they needed to in order to get it.” Additionally, the long small print contract was “drafted by sophisticated lawyers [and is] in no sense the product of arm's length negotiations, as might occur, for example, in hiring an independent contractor, specialized and sophisticated in the costs of his business, and able to garner trade from other actual and potential customers.” The ALJ noted that the terms in the preprinted contract were not negotiable including: “…the amounts of the complaint recording fee, the complaint redelivery fee, the uncorrected complaint fee and the fee for being late in picking up papers to be delivered.”

The California's State Compensation Insurance Fund classified AVP’s carriers as employees for purposes of the company’s workers' compensation policy. AVP then appealed the classification to the Department of Insurance's Administrative Hearing Bureau. The (ALJ) in the case determined that the carriers are employees for purposes of worker's compensation insurance. The Insurance Commissioner agreed with that decision.

AVP appealed and the trial court agreed with the ALJ's findings stating that they are supported by substantial evidence. AVP then appealed to the California Court of Appeals.

The court clarified that worker's compensation benefits cover employees for work related injuries. Independent contractors are not considered employees of the company contracting with the independent contractor. A person’s status, however, is not determined by merely stating a person is an employee or an independent contractor. “Moreover, workers' compensation law is liberally construed for the purpose of providing benefits to persons injured in their employment, and there is a general presumption that someone who provides services to another is an employee covered by that law. Thus, one who asserts that a person who provides services to him or her is not entitled to workers' compensation benefits has the burden of proving that such person is an independent contractor.”

Section 3353 of the California Labor Code defines a significant factor in determining an independent contractor status as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”

In deciding against AVP in this case the court also noted that the “…evidence does not demonstrate that the carriers are the contracting parties best situated to distribute the risk and cost of an on-the-job injury as an expense associated with delivery of AVP's publications. Evidence shows that 62 of the 170 carriers that had earnings from AVP in 2003 were between the ages of 19 and 29, and 56 of those 62 carriers earned less than $10,000 that year. Indeed, 130 carriers earned less than $10,000 that year. Only 30 carriers earned between $10,000 and $19,000, and only 10 carriers earned more than $20,000. After they pay their gasoline and car maintenance expenses associated with delivering AVP's publications, the carriers are even less able to distribute the risk and cost of injury as an expense of doing business. Indeed, the very concept of distributing the risk and cost of injury as a business expense necessarily requires that the carriers have other sources of business income which can be tapped for payment of health and income insurance premiums to cover potential on-the-job injuries to themselves. Yet, there was no evidence that any of the carriers have a delivery business through which they can distribute that risk and cost. In contrast, as a means of paying for workers' compensation insurance, AVP has the ability to make adjustments in the prices it charges the public for its publications and for advertising in those publications.”

Managing HR Costs with Employee Opinion Survey

With a restricting economy and higher-than-average unemployment levels, companies have the opportunity to draw from a growing talent pool. Though workforce reductions typically target less-than-average performers, stellar performers and top talent can still be identified and acquired in times of high unemployment.

Talented employees tend to remain in their jobs to “get by,” oftentimes waiting until a significant opportunity induces change. To retain and cultivate the existing talent base, companies may need to examine their long-term retention strategies. Career advancement strategies, training opportunities, wages, benefits, and other essential employee perks must all be reviewed, developed and enhanced, as they are bound to influence an employee’s decision whether to temporarily stay with the company while the economy improves, or stay and become truly engaged in achieving their potential.

However, with reduced HR capital budgets, before new benefits are introduced companies may be smart to examine exactly what benefits and employee perks are best suited for the company. Richer and better benefit packages do not necessarily change an employee’s level of satisfaction. In fact, according to information collected from the 2007 Employers Group California’s Best Places to Work program, employee satisfaction scores from companies with lower-than-average benefit and employee-friendly packages were just as high as the scores from employees of companies offering richer benefit packages.

Employee dissatisfaction and it’s impact on business and on the bottom-line should be addressed by companies who want to maximize their HR dollars. Consider that although on average companies spend 42% of their HR budgets in benefits and other employee perks, employee dissatisfaction is a common workplace problem. According to a 2006 report by the Conference Board, almost one of every four employees were dissatisfied with the way they were managed and an additional 17 percent felt undervalued by their employer. The same report found that almost 50 percent of employees who said they believe their company knows they are doing a good job stated that they do not feel they are given feedback on how their work contributes to the success of the organization. This detachment, according to the Conference Board study, found that 35 percent of employees who were identified as feeling “detached” from the company did not have enough confidence in the financial stability of the company to invest their own money.

Using Employee Satisfaction Surveys to Measure Employees’ Needs
Employers have increasingly started to use employee opinion surveys (EOS) as part of their employee relations strategy due to the need to identify and prioritize issues for action. For example, it is estimated that that in the 1980s, only 20 percent of companies were using employee opinion surveys. Today, 50% of the companies who participate in EG’s 2007 California’s Best Places to Work program reported using employee opinion surveys as part of their employee relations program.

By taking a proactive approach and continuously measuring employees’ “emotional temperature,” companies are providing positive internal conditions (i.e., quality customer service, quality products, etc.), which will ultimately lead to customer retention, lower turnover, and more focused HR programs that effectively impact the loyalty of the employee to the organization.

Employers should exercise caution in deploying an EOS as every employee survey raises expectations. Employees generally assume that if you ask them about matters such as whether they have the information, direction and tools to do their job effectively; whether the various departments in your organization cooperate; whether their manager is approachable and supportive; whether pay and benefits are satisfactory…, that you'll actually do something to address their concerns.

Employees are waiting not for memos or articles about the polling data but for responsive action quickly following the survey. If they don't perceive decisive changes after you solicit their heartfelt opinions, they take your message to really be: We're pretending to hear you. And we're ignoring you.

Surveys—especially short, focused ones—can be a superb management tool The true power of an employee survey lies not in the clever construction of proprietary “killer” questions, but rather in the effective follow-up-swift actions taken to positively address the concerns raised by the survey.

Of course, management input and support of the process is vital. If the EOS program lacks management commitment, the process may do more harm than benefit. Employees may view the process as another employee relations exercise meant to project a “caring” management style rather than a process for identifying and acting on employee concerns.

By effectively taking action, companies are likely to benefit from the behaviors displayed by engaged employees –those who believe, act and behave in accordance with the companies goals. Most veteran HR practitioners would agree that the true potential of an organization can be realized when the productivity level of individuals and teams is fully aligned and engaged in support of the goals of the organization.

Employers Group Trainers: What makes a great leader?

Last month, I posed this question to Employers Group’s five full-time trainers. Since they have been teaching leadership skills for years, what better group to ask! Collectively, they have delivered thousands of on-site and public seminars on countless leadership topics while interacting with front-line employees to top executives. Without collaborating with each other they were asked. . . “What do you think makes a great leader?” Here’s a synopsis of the feedback I received.

Doug Sjoberg, Senior Training Specialist, San Diego Area
A great business leader creates a work environment where followers never want to disappoint their leader. A great leader trusts followers, allowing them to do much of their work while encouraging them to develop new skills, knowledge, abilities, and behaviors. A great leader admits mistakes, apologizes when at fault, fixes the mistakes, and learns from them. They act with courage to face problems, seek solutions and involve followers in the discover of such solutions. A great leader is a good thing, and rare.

Kristine Schick, Training Specialist, San Francisco Bay Area
Somehow, we think that leadership is “bigger than all of us” and beyond our grasp. Much has been written on good or great leadership and opinions vary greatly. I believe the defining word to a good leader is “vision.” A good leader has to have the vision of where they want their team to go and quite specifically when and how they are going to get there. In generic terms, leaders need to: Pick a destination, develop benchmarking milestones along the way, communicate regularly and often, demand commitment of their teams, constantly measure progress, make corrections as necessary, and always have their eye on the end result. If you have ever planned a successful vacation, that experience demonstrated great leadership skills and is eerily similar to what a great leader must do everyday.

Susan Peahl, Training Specialist, Los Angeles Area
My favorite quote and I am not sure where it is from (apologies to the creator): “a leader is one who serves those who serve the customer.” While this is my favorite leadership quote, my personal quote would be, “People want the leader who serves while leading to the big picture.” As such, I elicited the help of class attendees from recent programs about the qualities of the leaders that they really loved and who they would gladly follow. Here is what I received (in no particular order). Great leaders: are modest, work hard and are hands on; provide feedback and direction; care about the organization and its people; get the big picture and articulate it to employees, earn respect and trust; work with and understand all levels of the organization; support others; reward when deserving; provide the necessary tools; point out errors and how to correct them; set a good example; are good communicators and visionaries; set goals; motivate; inspire; listen, and take input from others.

Mia Husfeld, Training Specialist and Helpline Consultant, Los Angeles Area
For most of us, when we look for a leader, we tend to look at the person at the very top, such as the CEO, President or any other high ranking executive. The reality, however, is that leaders are at all levels in an organization – down to the last person listed on the organization chart. To be a great leader, you must have desire for it. Once you have desire, you must showcase certain qualities. We all have probably heard that leaders are born, not made; however, I believe a little of both is true. Over the years, I have met some very inspirational people who, I feel, are great leaders and, surprisingly, none of them held high ranking positions. They inspired me in ways others could not. Great leadership qualities include: honesty, humility, confidence, loyalty, patience, accountability, the absence of judgment, listening skills, lead by example, appreciative and positive.

Dave Burkhart, Senior Training Specialist, Orange County Area
Leadership is not a title. It is an attitude. It is seeing what needs to be done and understanding that the leader cannot accomplish their tasks alone. Leaders recognize the importance of people. People are inspired by the passion of their leader because the leader is capable of articulating the importance of direction. People want to be a part of something great – something bigger than themselves. Effective leaders go beyond just the mechanics of making things happen, and communicate a compelling vision so that employees know why the mission is possible and readily step onto the “Northbound train.”

Helping build effective leaders
All-in-all, every individual has leadership skills, but with varying degrees of effectiveness. From poor to good, from great to exceptional, the true effectiveness is not really known by the leader, but by those that are led. How are your organizational leaders? What are their employees saying or inferring? At Employers Group, we tend to think that individuals may have a slight head start in their leadership abilities through in-born qualities and experience, but with the correct skill-building and reinforcing environment, every employee – and most certainly supervisory personnel – can get on track to become a better and better leader.

Keeping Cool: Strategies & Benefits of Anger Management

There are fairly good statistics on the number of people who suffer from anxiety, depression, and other emotional problems as well as the personal and economic costs associated with them. We do not, however, have reliable statistics on anger, though the incidence of “Road Rage” and other threatening public outbursts would indicate that it is an issue to contend with. Furthermore, while anxious or depressed individuals often seek out professional help, angry people rarely do. Our society often identifies anger as a normal, healthy emotion that should be expressed, not held in. It is considered a normal and expected response to a wide variety of events.

Some research in the past few years, however, has suggested that anger presents a serious threat to one's health; and my own professional opinion is that anger of all kinds is detrimental to mental well-being.

Held In or Let Out, Anger is Harmful
The conventional wisdom is that anger, if used constructively and expressed rather than held in, is a healthy emotion. But while it may sometimes look good and play well with our friends, anger is now known to be quite detrimental to us physically and psychologically.

Medical Concerns
Almost everyone remembers when the research about Type A personalities was made public. It showed that men who were controlling, workaholic, and intense are more likely than others to suffer from heart disease and other stress-related illness. In the October 27, 1997 issue of Archives of Internal Medicine, a top medical journal, a report by a Duke University research team filled in an important piece of previously missing information about Type A personalities. The team's question was, “What specific personality characteristic cause physical illness?” The answer it found: Anger. The Duke University study showed that cognitive/behavioral stress reduction sessions lowered the level of both anger and anxiety in patients with chronic heart problems, and that their physical improvement was related specifically to a reduction in their anger.

Furthermore, while it is generally agreed that holding anger in causes stress and physical illness, recent research shows that people who express anger often actually experience more physical symptoms and illness than those who hold their anger in.

Psychological Concerns
As a cognitive/behaviorist, I do not subscribe to the Freudian definition of depression as “anger turned inward.” However, I do believe that anger can be psychologically debilitating. People often see themselves as a being strongest and most assertive when they are angry. Actually, the opposite is true.

To be angry means that you have to see yourself as a victim—someone or something did something to you. You believe that you were treated unfairly, or that someone is not behaving properly toward you, or that traffic is making you late, and so on. Anger is often made more intense by feeling helpless, as well as victimized. Helplessness can result in depression and demoralization (the feeling that life has defeated you), and repeated anger damages our relationship with those closest to us. Anger toward others takes the form of criticism and can eventually erode the quality of a relationship.

The Mechanisms of Anger
Almost all instances of anger result from expecting and demanding one thing and getting something else. People, especially those who tend to be controlling, enter most situations with a list of expectations. The longer and more unrealistic the list of expectations and demands, the less likely they are to be met. We all know that the universe does not cooperate with our plans, but emotionally we behave as if we expect it to. For example, we get into our car, get stuck in traffic, and become angry. Or while waiting for a friend who is late, we get more and more angry.

My favorite story about anger involves a group of government office workers who were in one of my stress reduction courses. They were a very angry group. Why? Among a long list of grievances was the fact that the thermostat at their office did not work. It had not worked for four years, and attempts to repair it had all failed. For four years, some of these individuals were angry every day as soon as they got to work. In discussions, it became clear what was happening. On their way to work, in their car, on the bus, these people were repeatedly saying to themselves, “I hope the thermostat is working.” “Today is going to be hot, so that thermostat better be working.” As soon as they entered the building they would ask, be told that the thermostat was not working, and immediately become angry. This sequence of events is the same, no matter what the anger-producing situation. More often than not, anger is generated in repeated, predictable circumstances.

How is Anger Encouraged?
Provided their behavior is not too aggressive, angry people generally receive secondary gains from those around them. These social and personal factors reinforce the tendency to get angry.

We typically become angry when we believe that we have been treated wrongly or unfairly. As the “wronged party,” we feel that we are entitled to receive sympathy and even encouragement for our anger, and we often do. Being supportive, our friends and relatives will say that we are right, that the other person is wrong, and that we are perfectly justified in our anger. This is a positive reinforcement for most of us.

Anger is also rewarded when others, in an effort to avoid unpleasantness or confrontation, give in to us when we display anger. It is a convincing scenario, “I do not get what I am entitled to unless I get angry.” In addition, many people use anger as a cue to spur them on to action. This is common in unassertive people, who are usually reluctant to speak up to defend even their legitimate rights, unless they are angry. These individuals see anger as something that helps them determine when to take action when they believe they are being taken advantage of.

Learning to Be Less Angry
How can we learn to be less angry? One way is to change our expectations. In general, if you prepare in advance, anger can be eliminated from much of your life. Think about what you are likely to have to deal with when you visit your parents, drive to work, go to the bank, and so forth. Do not hope for the best or expect the worst. Expect what you are likely to get, based on your past experience. Say to yourself, for example, “I’m expecting that there may be a long line at the bank and not enough tellers.”

People fail to adjust their expectations in response to their experience because they believe (a) what they are expecting and demanding is reasonable and/or (b) that not getting angry is accepting a situation that is not acceptable. I would almost never argue with (a). Most people’s expectations are reasonable; but to continue insisting that they must be met when experience indicates otherwise is irrational. It is reasonable not to be blamed for things you did not do, but to expect and demand that you not be does not make as much sense.

However, I do take exception to (b). The goal should be to not get angry. If you can correct a situation by acceptable means, you should do so. Keep in mind that you must have realistic expectations about your attempts to correct situations that involve other people’s behavior or factors not under your control. Complaining to the Bank Manager should be done with an expectation that no matter what is said, there probably won't be an increase in the number of tellers on duty. What you can do is change banks or take other actions within your control if you find the situation unacceptable. But getting angry is not necessary or desirable, and is even unhealthy.

Stop telling yourself that it is awful or terrible that you have to wait on line, get caught in traffic, get treated unfairly, receive inferior service at a restaurant, etc.; they are merely unavoidable, if unfortunate, facts of life.