A Time for Transformative Communication

Editor’s Note: During the current uncertain economic climate people and businesses are facing these days, along with the decisions employers must make, nerves are tauter and employees are edgier than ever. I can think of no better time than now to present David Wolf’s premises about how transformative communication changes a company’s culture.

Imagine a scenario in which a supervisor unleashes his fury on an employee. He wanted those reports on his desk by noon. It’s 4:30 pm and he still doesn’t have them. In these situations, the employee will typically cower, suck it in, and build his own rage, till the pressure cooker explodes, perhaps at a co-worker. Or maybe the employee is the type to yell back or argue, or perhaps to desperately try to explain what actually happened, as the torrents of his supervisor’s hostility rain down on his head.

Statistics confirm my experience as a coach for individuals and businesses—hostilities and resentments in the workplace are on the rise. Close to 50% of workers in the United States report yelling and verbal abuse on the job. About one-tenth report physical violence and worry that their place of employment may not be safe. Economic pressures leading to more work to do, with less resources, time, and finances, contribute to increased frustrations, tensions, and even violence at all levels of organizations.

As an HR professional, your best way to effectively handle stressors is to focus on effective communication strategies. When we think of “communication,” it’s natural to first think about how we express ourselves—our ability to communicate our experience and ideas in a way that impacts people. Still, in my coaching and seminars, I usually begin with another element of communication—listening.

Learning to listen
A relevant saying for the workplace is that people don’t care what you know till they know you care. A great way to demonstrate that we care is to show we understand. For an angry person, or anyone in an emotionally charged situation, understanding can be like life air. If we get the wind knocked out of us, all we want is air. At that time, a pile of money, or our favorite meal, or a good joke doesn’t mean a thing. Similarly, sometimes what we most want is to be understood, and at such times good advice, an astute analysis, or even praise or reassurance won’t satisfy. If you notice that someone in the office, including yourself, is feeling misunderstood, consider that this could be the seed of growing tensions, hostilities, and resentment.

A technique to show that you have listened and understood is to mirror back in your own words what the person said and the feeling behind it. This is an invaluable skill to master—and to teach your employees. With reference to the scene at the start of this article, the employee might reflect, “I see that you’re angry with me because you wanted those reports by noon and you still don’t have them.” Empathic responses can go a long way toward diffusing hostility and creating a culture of genuine dialogue, as distinct from an atmosphere of simultaneous monologues. A dialogue is founded on commitment to understanding, as opposed to a pseudo conversation, which might be described as a vocal competition in which the one catching his breath is called the listener.

Several years ago I worked as a children and family counselor. On one occasion, an enraged father stormed into my office. “How could you tell the judge to keep my kid in foster care?” I could have yelled back, perhaps referring to his continued substance abuse or his irresponsibility in fulfilling his performance agreement. This would have likely escalated his fury. Or I could have calmly explained to him what he could do to get his child returned, which was the outcome that both of us desired.

I began with empathy, matching his intensity. “I know you are furious with me. You’re upset that I recommended to the judge to keep your child in foster care for another three months.” He continued his tirade, and I continued my attempts at showing understanding of what he expressed. After a few minutes, he did sense that I was not his enemy and that I cared about him and his son. His anger diffused through empathic listening and we were able to have a civilized and productive dialogue, during which I shared with him information about what he could do to accelerate the process of his child’s return. Once he knew that I cared, he began to care what I knew.

It’s important to distinguish between understanding and agreement. To empathically demonstrate understanding does not mean that you agree. Perhaps sometimes you consider the perspective and reaction of the other person justified, and sometimes not. Especially in those instances when we don’t agree, it’s especially helpful, albeit challenging, to suspend the expression of this disagreement and show that we understand what the person is saying and the emotion behind it. This entails really listening to what the other person is actually saying, rather than being preoccupied with what we are saying, inside ourselves, about what the person is communicating.

Research in labor-management negotiations indicates that when one party reflects back what the other party expresses, before saying what they want to express, problems are resolved twice as quickly. This may seem counterintuitive, because it would seem to take much longer to follow this process. When asked about this in company coaching or workshops that I conduct, I acknowledge that using the strategies of transformative communication does take longer—up front. In the mid- and long-term, though, it is quite efficient, because we circumvent difficulties that arise from lower-level communication.

Research has shown that in a multitude of professions, including police work, factory operations, business management, financial consulting, and sales, higher empathy correlates positively with better performance, results, and satisfaction. A study at a large polyester fiber plant demonstrated that empathy was the quality that most differentiated the most productive teams of workers from others. In the field of medicine, greater empathy correlates positively with more accurate diagnoses, higher patient satisfaction, and other desirable outcomes.

Courageous and considerate
Through high-level listening, we naturally create an environment where what we express is also respected, heard, and carefully considered. The ability to assertively express ourselves is essential for creating healthy boundaries in the workplace. Lack of such boundaries is a source of misunderstandings and anxiety. To teach employees an effective strategy for assertive expression, remember the acronym WIN.

What happened. When we express, especially in interpersonally delicate situations, it is important to differentiate between what happened and my reaction to or interpretation of what happened. For example, suppose your assistant agreed that he would deliver phone messages to you within two hours after he receives them, and at the end of the week you discover that there are half a dozen messages you still didn’t receive. We might think an expression of what happened is, “You are so irresponsible, unreliable, and inconsiderate." Actually, though, that’s not what happened. What happened is, “You agreed to get me phone messages within two hours, and this week there are at least half a dozen messages I haven’t received after several days.”

Inside feelings and thoughts. After stating what happened, an effective strategy for expressing ourselves is to use “I” statements to let the other person know how we feel. For example: “I am angry with you…I’m disappointed…I’m upset…,” rather than “you” statements, such as, “You are so undependable…If you do that once more…"

Needs and wants. Finally, we can state our needs and wants using “I” statements. For instance, “I’d like us to work cooperatively in a pleasant and trusting atmosphere. For this to happen, I need for you to honor your agreements to punctually get messages to me.”

Applying communication techniques such as mirroring and WIN sets the foundation for win-win outcomes. A win-win paradigm involves commitment to everyone being satisfied. This means that we invest the time to understand what constitutes a winning result for others, and that we know how to assertively express our vision, limits, and concerns.

Influence of environment
Mastery of communication contributes greatly to a supportive and nurturing office culture. Consideration of several other factors will also reduce unnecessary anxiety and workplace pressures. Esther Sternberg refers to "hierarchy stress," and describes common scenarios related to systemic hierarchical dynamics in organizations that generate high stress levels for persons at all levels of a company. She describes contributing stressors, such as cramped, noisy surroundings; an interpersonal atmosphere that relies on fear and disparagement to motivate; uncertainty of steady employment; inflexibility in scheduling; underlying assumptions of mistrust amongst and between employees, management and ownership; and lack of psychological or financial reward for good performance.

Of course, a certain level of stress is desirable, as it inspires us to perform in excellence. Just as some physical stress strengthens muscles, a degree of work-related stress moves us to increase our capacity for production. When a muscle has no chance for relaxation between periods of stress, however, it gets damaged. Thus, creating a work environment that addresses stressors in a balanced way facilitates everyone in the company to optimize productivity and experience satisfaction in doing so.

Management at the Volvo factory in Sweden found a high rate of heart disease, stroke, and dissatisfaction amongst assembly line workers. They introduced environmental modifications to reduce stress. This included physical adjustments as well as a structure that was much more empowering, and less repetitively mechanized, for the workers. Workers felt valued and respected, maladies decreased, and job satisfaction increased. Simultaneously, product quality increased. Win-win for everyone.

Be-Do-Have
Another important factor in lessening workplace pressures is to like what we do. If our job is aligned with our integrity, a source of meaningful purpose, then we will be more capable to handle challenging situations in a life-enhancing manner.

Much of the coaching I do in companies is internally focused, centered on development of intrinsic qualities that are conducive to career and life satisfaction. Often these efforts are geared toward shifting from a have-do-be to a be-do-have approach. Have-do-be might sound something like, “If I have a few hundred thousand dollars in the bank, and a house of a certain size, and a particular position in the company, then I’ll be secure, satisfied, and powerful.” Actually, this is a weak stance, because it assumes that I am intrinsically not secure, satisfied, and powerful.

If you shift to the paradigm of be-do-have, you know that to experience security, satisfaction, and power is not dependent on having anything external, because you inherently are secure, satisfied, powerful, balanced, vibrant, and confident. From that foundation you may choose to focus your energies toward obtaining a position or acquiring assets. In be-do-have, you choose happiness and security, rather than chase happiness and security. It might sound like this: Because I am happy, confident, and optimistic, I do excellent work and pursue meaning in my career, and this leads to increasing financial rewards.

I once had one of coaching clients focus on being patient and peaceful—qualities that were missing in his life, and which he wanted to cultivate. With earnest effort he connected with the patience and calm inherent to his being. During our following coaching session, he described with surprise that his supervisor had asked him to accept a position with increased responsibility, involving training others. The supervisor particularly mentioned that she offered the promotion because of his patience, and his ability to remain calm in stressful situations. Being patient and peaceful naturally resulted in acting in ways that patient and peaceful people act (in this instance a more rewarding career activity), and having things that patient and peaceful people have (in this example an increased income). That’s be-do-have.

When employees are using the tools and techniques of transformative communication, it creates a workplace conducive to handling potentially volatile work situations with composure and poise. Commitment to the interpersonal and self-development techniques of transformative communication converts conflict into cooperation in the company culture, and helps make “work” an enriching and inspiring place to be.

There is a proverb: If you love what you do, you’ll never have to work. My aim in teaching transformative communication through experiential seminars and personal and corporate coaching is to facilitate “work” environments where increasing numbers of people never have to work.

The 4 HR principles work
These four principles—honesty and integrity, standards, communication, recognition—have helped to create a worldwide organization of committed, hardworking, fulfilled employees. At McDonald’s, these principles have survived over its 53-year lifespan. Those who work within the McDonald’s system, for the most part, enjoy what they do, feel good about the product and services they perform, challenge each other to continue to improve, and find both reward and satisfaction in accomplishing these activities. That’s universal.

And these qualities can be applied to any size organization, group, or company. What’s more, they restore an element largely missing in business today: admiration for their company. When people like what they do and where they work, their potential is limitless.

Immigration Myths Dispelled

As an immigration attorney, I’ve come to realize that there are many myths among employers when it comes to immigration laws. I’ve gathered several of the most common ones for this article. It is my hope that this format will prove to be an easy overview.

Myth: We hired someone with a pending green card application and a work permit. He says all we have to do to ensure continued work authorization is to write a letter to USCIS confirming his employment.

Truth: New laws allow individuals who are far along in their green card application to change jobs, but: 1) the new job must be in the same or similar occupation as the job described in the pending application; 2) the last stage application must have been pending for 180 days; 3) it’s advisable that the second stage I-140 petition be approved. Bottom line: “It ain’t over till it’s over.” Until permanent residency is approved, there are many minefields that could derail the continued employment of these individuals.

Myth: Since there are no more H-1B numbers, we cannot hire any professional foreign workers.

Truth: New H-1B numbers for the current fiscal year (October 1, 2008 to September 30, 2009) have been exhausted, but other options for work eligibility include trans-fers of H-1Bs to different companies; H-1Bs em-ployed with non-profits; Free Trade nationals from Canada, Mexico, Chile, Singapore, and Australia; J-1 visitor exchange/trainee programs; U.S. companies that are foreign owned and eligible for E-1/E-2 treaty trader visas; O-1s for outstanding aliens; L-1s for transfers from overseas affiliates; and graduates of U.S. colleges who have 12 months of practical training after graduation, or an additional 17 months if employed in certain STEM fields and working for an employer who enrolls in E-Verify, a program that requires screening all new hires via the government’s database. STEM fields are those in the sciences, technology, engineering, and mathematics.

Myth: My employee’s employment authorization document is expiring, but she has applied for her new card and I can use the receipt for the I-9 update and get an automatic 90-day extension.

Truth: A receipt indicating that an individual has applied for initial work authorization or for an extension of expiring work authorization is not acceptable proof of employment eligibility. In most instances, only the new EAD will suffice. However, a receipt for a replacement work authorization document resulting from, for example, a lost U.S. birth certificate, U.S. passport, or alien card can be recorded on an I-9 and provide for 90 days of work authorization pending receipt of the replacement document.

Note: Even though work authorization has expired, the immigration regulations provide an automatic 240 days of continued work authorization while employer-sponsored applications (e.g. H-1B, L-1, TN) for extensions of work permits are pending.

Myth: One can purchase a company and acquire the predecessor company’s I-9s and have no immigration liability, as long as one treats the employees as new hires.

Truth: If one accepts the I-9s, one inherits the sins of the predecessor. It is prudent to conduct a careful review of the I-9s, including interviewing hiring managers, to determine full compliance with immigration laws. If the company employs professional foreign nationals on work visas, it is crucial to determine if continued employment is permitted and to determine potential liabilities.

Myth: When someone is hired off site, notarized copies of I-9 documents can be emailed or faxed to Human Resources for I-9 completion.

Truth: The I-9 attestation requires one to certify that one has seen the original of the documents, compared the documents to the individual and established that the documents appear genuine and relate to the person. When hiring at remote sites with no H.R. office, one can designate an agent, not necessarily an employee, to assist with I-9 completion.

Myth: As a Human Resources Manager, I am not civilly or criminally liable when management has told me to complete I-9s and hire workers whose documents I know to be false.

Truth: The government has been filing charges against H.R. managers, translators, union stewards, executive officers and anyone else whom they can establish engaged in a variety of activities such as making false attestations on I-9s, knowingly accepting false documents, and conspiring or aiding and abetting the employment of unauthorized workers.

Myth: Once an individual is hired and an I-9 is completed, there is no need to pay any further attention to the immigration status of that employee.

Truth: The law requires not only that one refrain from knowingly hiring an unauthorized alien but also refrain from knowingly continuing to employ one. An employer must ensure that temporary work authorization documents are renewed and must terminate the employment of someone when it gains actual or constructive knowledge that an employee lacks the right to work. Actual knowledge can occur from a “true confession” where an employee admits to being undocumented and seeks your assistance; and constructive knowledge can be gained, based on the totality of the circumstances, where one gains information that there is a high probability that the person is unauthorized and fails to act responsibly.

Myth: My employee is currently authorized to work, as her attorney has verified that her permanent residence case is in the final stages and pending approval.

Truth: Only the I-9 List of Acceptable Documents can be accepted as verification of authorization to work. A letter from an attorney does not satisfy this requirement, nor does the mere filing of an immigration application provide work authorization.

Holidays 101
- and How to Curb Abuse

This time of year our Helpline receives a number of questions about holidays. Below are the answers to the usual questions members ask.

1. Am I required to provide holidays?
No. Contrary to what employees may believe, private employers are not required by law to provide paid or unpaid holidays. The law states that employees must be paid for their time worked. If an employer requires an employee to work on a holiday, they are only required to pay them the regular rate and any overtime they perform. If, however, employers require employees to work on an observed holiday, see question 10 below.

2. Do I need a holiday policy?
If you plan on providing holidays, the answer is yes. Any holiday policy should be set forth in a written policy in an employee handbook, manual and/ or employee contract.

3. What should be included in my holiday policy?
Your policy should list all the holidays you wish to observe. Your policy should also include who is eligible for holidays. Employers are allowed to choose which employees are eligible as long as they avoid illegal discrimination. If your vacation policy is silent as to which employees are eligible, all employees will be eligible to receive holiday benefits. In addition, your holiday policy should address what would happen if the holiday falls on a weekend, if the holiday falls on an employee’s regular day off, if any employee is required to work on a holiday, if the holiday occurs while the employee is on vacation, and if the holiday occurs while the employee is sick. It is up to you as a company to decide how you want to handle these situations.

4. Must I provide the same holiday benefit to all employees?
No. As long as an employer avoids illegal discrimination, employers are allowed to offer different holiday benefits to different employees. Some common classifications are: exempt, non-exempt, full-time, part-time, permanent and temporary.

5. What are the most common holidays observed?
Designating a holiday is completely up to the discretion of the employer. However, the following is a list of holidays on which most state and federal offices are closed:

6. Can I impose a waiting period for new employees?
Employers may require new non-exempt employees to complete a waiting period before they become eligible for holiday benefits. If you do not have a waiting period, all new employees are entitled to holiday benefits from their first day. Waiting periods do not apply to exempt employees.

7. Can I require an employee to work the day before and after a holiday in order to receive the holiday benefit?
Employers may require non-exempt employees to work the day before and the day after, and/or be on an approved leave of absence to take advantage of the holiday benefit. This is generally done to prevent abuse by employees who take extended absences by combining their sick time with holidays. This does not apply to exempt employees.

8. How do I set the rate of holiday pay?
An employer has complete discretion to set the rate of holiday pay. The rate of holiday pay should be clearly set forth in a written policy. If employers choose to have paid holidays, the holiday pay may be equal to or less than the base rate of pay.

9. I have a holiday policy, but due to the downturn of the economy, I cannot afford to provide the benefits I set forth in the policy. Can I deny my employees their holiday benefit?
No. If an employer does not provide the holiday benefits they promised to their employees, they may face legal ramifications including, but not limited to, claims for unpaid wages and/or breach of contract.

10. Can I require an employee to work on a company-designated holiday?
While not suggested, yes, you can. Note that once an employer offers paid holidays, employees have a right to a paid day off. As such, if you require an employee to work on a company-designated holiday, the employee must be paid for their day’s work and an extra day’s pay for the holiday they missed, or provided a replacement holiday that can be taken at another time. The employer can designate when the replacement day must be taken. If the employee does not take the replacement day within the designated time, employers can require the employee to accept a day’s pay in lieu of the time off.

11. Do I need to provide special premium pay for employees who work on a holiday?
No. You certainly can choose to do so, but it is not required by law. Hours worked on holidays are treated like hours worked any other day of the week. The law does not require payment of overtime unless the work exceeds the 8-hour daily limit or 40-hour weekly limit. However, if an employer promised premium pay in a contract or company holiday policy, they must comply with their agreement.

12. Are employees entitled to holiday benefits when they are out sick or on vacation?
No. It is completely up to the employer to decide whether they will provide holiday benefits during these circumstances. However, if an employer decides to provide holiday benefits to employees on vacation, the employer must allow employees to take their unused vacation day at another time or pay them for their unused vacation day.

13. What are floating holidays?
Floating holidays are paid holidays that employees choose to take when they want. Floating holidays are treated like vacation days, in that they must be paid out at termination if they were earned. Like vacation, “use it or lose it” policies cannot be applied to floating holidays. Employers can state, however, that employees will not received additional floating holidays if they were not used the previous year.

14. Can I assign floating holidays?
Yes. Employers may assign floating holidays; e.g., July 5, 2008, the day after Independence Day. Note that assigned floating holidays do not need to be paid out at termination.

By Amy Lee
Senior Consultant

Interest and Penalties on UI Taxes

When most employers think about Unemployment Insurance, it would probably be about the basics: separation from employment, receiving and protesting claims for benefits, and going to hearings. There is another aspect that goes on all year, but comes to the forefront in November and December. That is when employers receive Benefit Charge Statements and Tax Rate Notices.

Now that they are in your possession, what do you do with them? You should compare the individual benefits, which appear on the charge statement, to the documents you have received for each claim. If anything does not match, you need to advise the Employment Development Department (EDD) of the discrepancy. You also need to strengthen your protest with supporting documents.

The Tax Rate Notice informs you of the percentage of your contribution for the coming year. This rate is effective with the first payroll of the New Year. The employer “should” do one thing with this document, and is “required” to do another. You should check the amount of contributions recorded, charges applied to the reserve account, and wages recorded. You must begin to use the tax rate, effective January 1st.

What happens if the payroll department, or payroll vendor, does not use the rate with the first payroll? What if this information never gets to the appropriate person and contributions are underpaid? If an employer, without good cause, does not pay the required contributions on time, a penalty of 10% of the amount of such contributions will be assessed by the state. The employer will also be subject to interest charges on those contributions at the adjusted annual rate and by the method established by the Revenue and Taxation Code. The interest is imposed from the date of the delinquency to the time of payment. In addition, the amount of each assessment will be subject to interest charges from, and after, the last day of the month following the close of the quarter or from, and after, the 15th day of the month following the close of the calendar month, for which contributions should have been made until payment is made.

Trying to claim someone is an independent contractor when they do not meet the criteria could result in a penalty equal to 100% of any contributions that would have been applicable to the paid wages. It is also behavior that can result in the issuance of a temporary restraining order against the perpetrator(s).

Wage reports must be filed within 15 days after service of written demand is made. Failure to file theses reports, unless good cause exists for not doing so, will result in a penalty assessed in the amount of $10.00 for each unreported wage item.

Failure to provide requested wage information related to extended benefits will be subject to penalties of $10.00 for each report.

Failure to comply with the various Code provisions that govern employment can result in penalties, fines and/or incarceration. Failure to file a report, return, or to supply requested information, or providing false information, can result in a civil penalty not to exceed $1,000, is a misdemeanor, the penalty for which is a fine not to exceed $1,000, or imprisonment not to exceed one year, or both. If false returns, reports or information are made with the intent to evade any tax, the punishment is incarceration not to exceed one year, or a fine not to exceed $20,000, or both.

Failure to withhold, or pay over any tax withheld, is a misdemeanor and can make the perpetrator subject to a fine of not more than $1,000, imprisonment of not more than one year, or both. Failure to collect, or truthfully account for and pay over, any tax or amount as required, in addition to other penalties, will result in a felony and a fine of not more than $20,000, incarceration, or both.

The EDD conducts employment tax audits to ensure businesses are complying with employment tax laws. Common reasons for a company to be audited are

• When a claim is filed there’s no record of the employees wages

• Issuance of 1099 Forms to workers being treated as independent contractors

• Failure to file payroll tax returns and/or pay employment taxes

• Information received from other agencies, businesses, or workers

• Certain industries that have a history of unreported workers

The specifics in this article pertain to California Codes and Regulations. Each state has its own regulations, as well as the federal government, when it comes to imposing penalties and interests. If in doubt about what action to take and when it must be taken, contact the appropriate government agency.

Keeping Your Best People in a Chaotic World

With the challenges facing many employers in today’s economic climate, retaining good employees is definitely a top priority. The following are tips to keep your talent during tough times.

Compensation and benefits
Everything starts with a competitive salary and benefits. Salary surveys are an important tool to ensure you are paying your key people the going rate. You can also benefit from attitude surveys about pay. Finding out how satisfied your employees are with your pay practices and benefits will be a good indicator of the percentage that are unhappy and looking for other employment. Further, employees in certain age groups will want different benefits and perks. For example, millennial employees will want vacation, holidays, and tuition reimbursement.

But, employers can reduce employee turnover in many other ways; in short, retention is dependent on the total work environment.

Manager/mentors
The bottom line in retention is employees quit bosses, not companies. The quality of the supervision an employee receives is critical to retention. People leave managers and supervisors more often than they leave companies or jobs. The perception that the manager plays favorites, or does not treat people with respect and dignity, is the leading reason employees look for other opportunities.

Employees who work for managers who double as mentors have clear expectations of what is required of them. They share a common picture of what constitutes success. They have open, two-way communication and understand the results they are trying to achieve. These managers provide frequent feedback and make the employee feel valued. Employees therefore feel empowered and have more self-confidence.

How do you ensure you managers and supervisors manage the employees in a way that increases retention? Make sure they have received training on how to effectively manage employees. Great managers are not born; they are trained in how to deal with difficult situations. Training! The best tool for developing managers and executives is 360 reviews. This gives the manager important feedback about how he is perceived.

Employee training
Training improves your ability to retain top talent. Employees involved in training are having two important needs met. One, they know the employer cares about them or he would not be investing in their future. Two, they are developing their skills. The company is investing money in development because the employee has high potential. Employers sometimes get stuck in the mindset that “I cannot afford to train right now because of the economic situation.” Improving your talent is, over time, going to reduce your costs and drive your business. Training equals engaged employees.

Balance work and life.
Unfortunately, many employers are not using current technology to provide employees with a balance between work and life. They worry about productivity when they can’t see their employees. Most organizations have the technology to allow employees to work from home, but do not. We need to use technology to allow employees to create flexible schedules, core business hours and work from home. Doing so creates a truly engaged workforce. This flexibility allows employees to mix family and work together. This situation creates a happy employee who is not looking for other opportunities. On the employer side, you get reduced expenses and increased productivity. Employees tend to work more hours from home without the distractions of the office environment.

Have FUN!
Creating an environment that fosters hard work along with having fun is conducive to retention. Have a potluck lunch for Halloween. Run a food collection drive every November. Put together a “Toys for Tots” drive for Christmas. Celebrate the achievements of the organization. People want to associate themselves with success. They can feel proud of the contributions of the organization, as well as being good corporate citizens. As an HR manager, encourage your senior executives to get involved in these activities; it signals commitment on their part. I have seen companies do all kinds of things to make it fun, from wearing you favorite football jersey, to a Hawaiian-shirt day. Giving people a chance to make friends is a great tool to retain people.

Recognition
Recognition is often an underrated tool of retention. It provides employees with a sense of belonging to a team. Recognition can take a couple of different forms depending on the size of the organization. Hold meetings with all the employees to recognize anniversary dates with the company. Or, try giving praise for employee contributions; this makes employees feel their efforts were worth it. When the CEO says nice things about an employee in front of everyone else, it’s priceless.

These are just a few tips on how to retain your top talent in this economy. Taking employee surveys will help you zero in on where to spend your time and money for the biggest impact. Identify the employees you cannot afford to lose and talk to them often to find out how it’s going.

The Outcome of the 2007-2008 Legislative Session

As of the midnight deadline on September 30, 2008, Governor Schwarzenegger either signed or vetoed the legislation presented to him at the end of the 2007-2008 Legislative Session. Of the 21 remaining employer-related bills left for him to consider, he only signed six and vetoed 15.

The state budget issue
The governor waited until the last day to act on most of the legislation (873 total bills) because he had threatened to veto everything if he had not yet been presented with a state budget he would approve. The budget was finally approved on September 19 – 80 days late! This led to public outrage due to the overdue funds that hospitals, day-care centers, schools, private suppliers and state departments did not receive; they had all gone without state money for the preceding three months. The final budget was a compromise the Governor could no longer delay, as the Senate and Assembly had enough votes to override his veto.

The latest news is that the Governor is calling for a special session of this year’s legislators. The budget deficit is already $3 billion, and even if a tax increase is proposed, it would (1) be a blow to the state’s economy, and (2) would not alleviate the need for cuts in services. Meanwhile, the Governor is going to Congress for help with a healthcare program for the poor, grants for public works projects, and extending unemployment insurance benefits. We are standing by to see what happens before the year is out. Regardless of the outcome, it is bound to further affect the cost of doing business in California—a situation we share with the rest of the nation.

Signed bills
The following bills were signed into law by the Governor:

• AB 10 – Overtime compensation for hourly employees.
  
  
• AB 2028 – Medical and psychological examinations for peace officers can be done after an offer of employment.
  
  
• AB 2181 – Workers’ comp return to work program: requires an insured employee to file a report with the insurer.
  
  
• AB 2570 – Unemployment insurance, Employment Training Panel (ETP). Unemployed persons may receive training.
  
  
• AB 3056 – Unemployment compensation: extends the “sunset” date from January 1, 2010 to January 1, 2015 for eligibility for training benefits.
  
  
• SB 1173 – Unemployment compensation: an employing unit that is motion picture payroll service extends the time from 30 days to 45 days from the date of quitting business to file a final return and report wages

Veto-happy
Of interest to employers (out of the total of 15 vetoes), please note the Governor vetoed the following bills:

• AB 437 – Statutes of limitation involving employer discrimination.
  
  
• AB 2279 – Employee use of medical marijuana.
  
  
• SB 840 – Single Payer health care bill (once again, he vetoed this bill).
  
  
• SB 1115 – Workers’ comp permanent disability/gender-as-causation-factor bill.
  
  
• SB 1717 – Senate President Perata’s workers’ comp permanent disability bill.
  

A month earlier, to California employers' relief, Assemblywoman Ma's sick leave bill (AB 2716) was held in the Senate Appropriations Committee. This means it was dead for the rest of the year. Most of us thought the bill would move out of the Legislature and be vetoed by the Governor, but apparently the potential cost of the bill and our strong business coalition lobbying effort worked sooner rather than later. It will most likely resurface in the 2009-2010 Legislative Session.

California's two-year 2007-2008 Legislative Session is now concluded. The new 2009-2010 legislative session begins on December 1.

For a complete listing of the outcome of all employer-related bills in 2008, go http://www.employersgroup.com/newsandlegislation/legislation/2008Session/
index2008Legislation.shtml

Ninth Circuit OKs Cash Balance Pension Plans

The San Francisco Board of Supervisors passed the Health Care Security Ordinance (HCSO) in 2006, which became effective in 2007. The ordinance requires employers in San Francisco to contribute to a city-administered health care plan. The Golden Gate Restaurant Association (GGRA) brought suit over the matter, claiming that part of the ordinance was covered by federal law – the Employee Retirement Income Security Act (ERISA). Recently the Ninth Circuit Court of Appeals found that the ordinance was not superseded or preempted by ERISA, see - Golden Gate Restaurant Ass’n v. City and County of San Francisco (2008). Employers with 20 or more employees must continue to make payments for employees who work 10 or more hours per week in San Francisco.

The San Francisco HCSO has two main parts: 1) the Health Access Plan (HAP) or “Healthy San Francisco,” and 2) the employer spending requirements. The HAP is a health care program administered by the city, which became effective in 2007. By August, 2008, 27,395 people were enrolled in the HAP. Persons who already have qualifying health insurance are not eligible for the HAP. The GGRA lawsuit opposes the employers’ required expenditures, and not the HAP.

In November, 2006, the GGRA asked the district court to determine that ERISA preempts the employer spending requirements and to issue a permanent injunction against enforcement of the provisions of the Ordinance relating to those requirements. In December, 2007, the district court agreed with the GGRA, and found that the employer spending was preempted by ERISA. The City had deferred implementation of the employer spending requirements until January 1, 2008.

In January, 2008, the Ninth Circuit granted the City’s motion for a stay of the lower district court’s decision pending resolution of the City’s appeal. Employers have been required to make quarterly health care expenditures since the stay was granted. In February, 2008, U.S. Supreme Court justice Kennedy declined a GGRA appeal to vacate the Ninth Circuit’s decision.

GGRA argued that ERISA preempts the ordinance because it creates a “plan” within the meaning of ERISA or because it “relates to” employers’ plans within the meaning of ERISA.

According the Ninth Circuit ERISA was: “Crafted as a compromise between employers and employees, … [and] has two primary purposes. First, from the perspective of employees and other beneficiaries of ERISA plans, ‘ERISA was passed by Congress in 1974 to safeguard employees from the abuse and mismanagement of funds that had been accumulated to finance various types of employee benefits.’ … ‘In enacting ERISA, Congress’ primary concern was with the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds. To that end, it established extensive reporting, disclosure, and fiduciary duty requirements to insure against the possibility that the employee’s expectation of the benefit would be defeated through poor management by the plan administrator.’ ‘Second, from the perspective of employers, [t]he purpose of ERISA is to provide a uniform regulatory regime over employee benefit plans.’ Uniformity of regulation eases the administrative burdens on employers and plan administrators, thereby reducing costs to employers.”

The court further noted that: “[N]othing in the language of [ERISA] or the context of its passage indicates that Congress chose to displace general health care regulation, which historically has been a matter of local concern.” There is a “…presumption that Congress did not intend ERISA to preempt areas of traditional state regulation that are quite remote from the areas with which ERISA is expressly concerned–reporting, disclosure, fiduciary responsibility, and the like.” Additionally, “ERISA pre-emption must have limits when it enters areas traditionally left to state regulation–such as the state’s ... regulation of health ... matters.”

Employer payments under the HCSO are not made directly to employees; they are made to the City. “But even if the employers made the payments directly to the employees, … those payments would not be enough to create an ERISA plan. Under the Ordinance, employers make the payments on a regular periodic basis and calculate those payments based on the number of hours worked by the employee. … [E]mployers make the payments ‘on a regular basis from [their] general assets.’ … The fact that an employer makes its payments to the City rather than to the employees confirms, if confirmation were needed, that the employer’s administrative obligations under the City-payment option do not create an ERISA plan. Under the Ordinance, an employer has no responsibility other than to make the required payments for covered employees, and to retain records to show that it has done so. The payments are made for a specific purpose, but the employer has no responsibility for ensuring that the payments are actually used for that purpose.”

The court likened the employer responsibilities under the HCSO to other federal, state and local laws, such as income tax withholding, social security, and minimum wage laws that impose similar administrative obligations on employers, yet do not constitute ERISA plans.

The court concluded that: “There may be better ways to provide health care than to require employers in the City of San Francisco to foot the bill. But our task is a narrow one, and it is beyond our province to evaluate the wisdom of the Ordinance now before us. We are asked only to decide whether... ERISA preempts the employer spending requirements of the Ordinance. We hold that it does not. The spending requirements do not establish an ERISA plan; nor do they have an impermissible connection with employers’ ERISA plans, or make an impermissible reference to such plans."

Educational Reimbursement Practices: Helpful Plan Guidelines

In Employers Group’s 2007 “California’s Best Places to Work” program, one of the areas used to identify the top companies was employee-friendly benefits. Of the many benefits companies reported, one stood out from the rest – Educational Reimbursement programs. The cost/benefit ratio is obvious; it attracts and incentivizes employees to learn new skills, and the employer gains high-caliber employees. To help companies that are considering the addition or modification of an education reimbursement program, this article will outline commonly asked questions and program features.

As with any other HR initiative, the first step in designing a well-rounded and financially sound program is to benchmark it against current industry practices and trends. Questions such as how much to pay, when to pay, time-off policies, and reimbursement requirements must be carefully considered, and answers should be addressed from both financial perspective and a practical one, i.e., what makes sense to your company? Designing a thorough and well-thought-out plan is critical. It can help your organization achieve maximum results without wasteful spending, as well as assisting your employees in meeting their long-term educational needs, which will, in turn, result in higher-quality employees.

According to Employers Group’s latest survey, educational reimbursement plans are a popular employer benefit: Almost two-thirds of companies have a reimbursement program. Larger employers and the financial services sector lead the way in providing the benefit at 85%, while only 55% of manufacturing companies and smaller companies are likely to do so.

Here are some top-line summary results to help design a basic plan. This information is based on data from the 175 California companies that responded to a January benefits and policies survey.

Eligibility
As to a waiting period, three out of every four companies require at least three months of employment before an employee is eligible to participate in the program, while one in every four requires employees to wait an entire year before being eligible. Immediate eligibility was reported by 22% of the companies.

Reimbursement figures
How to calculate the actual reimbursement amount varies considerably and depends on a company's size and industry. Typically, about 66% of companies reimburse up to 100% of all tuition costs depending upon the grade the employee receives. For example, an employee can receive 100% reimbursement if they earn an "A", 80% for a "B" and 70% for a "C".

A reimbursement cap is a popular method to control costs: almost 80% limit the total reimbursement to about $3,400 for their hourly office personnel and exempt personnel – a slight increase of $200 since the 2005 survey and an $800 increase from the 2003 survey.

Regarding reimbursement for non-job-related courses, more and more companies are allowing employees to take courses that may not pertain to their jobs. In the 2007 survey, about 35% of the companies reported reimbursement plans that allow employees to be reimbursed for courses that are not related to their jobs. This reimbursement practice has almost doubled since 2003, when only 18% of companies reported such a practice. By reimbursing employees for non-job-related courses, employers are betting that by increasing their employee-friendly benefit package, their retention rate of quality employees will also increase.

Time off
Another commonly asked question is whether to pay employees for taking time off to attend classes. On this issue, only 5% allow the employee to take time off with pay and 11% allow the time off, but without pay. Thirty percent of companies, however, did report that on special cases, the policy could be changed.

Payments and costs
Regarding when the payments are made, 75% of employers will wait until the course has been completed to reimburse the employee. Common costs generally reimbursed include tuition, books, parking, laboratory fees and supplies; costs that may not necessarily be covered include the cost of school activities, and travel time from work to school.

As with any survey summary, the above information represents overall figures and readers should use caution when applying them, as considerable differences were found between the different industry groups and organization sizes participating in the survey. For example, manufacturing and large-size firms tend to have more employee-oriented policies than other industries or smaller firms.

If your firm does not have a plan, or if the plan has not been updated in more than four years, we recommend that you contact us to obtain the full report. The report was released to all participants; non-participants may purchase the report by contacting Research Services at 213-765-3920 or at surveys@employersgroup.com.

Using an External Coach

Coaching is a great employee or executive development tool; however, because coaching itself has a mystique surrounding it, it is not used effectively or as readily as it should be. Since coaching can be delivered internally (supervisor to employee) or externally (external coach to executive), it is even more important to better understand how to effectively engage and make use of an external coach to support executive-level development.

What is coaching?
According to the International Coach Federation (ICF), "Coaching is a professional partnership between a qualified coach and an individual or team that supports the achievement of extraordinary results, based on goals set by the individual or team. Through the process of coaching, individuals focus on the skills and actions needed to successfully produce their personally relevant results."

As an example of what external coaching can be in an executive or senior-level context, coaching can be valuable for an individual who (1) needs to "break through" in an important area, (2) has difficulty moving forward with plans, (3) analyzes too much, (4) needs to improve relationships, (5) needs to get their team producing results, (6) needs to motivate direct reports of different generations, (7) wants to move to the next level of their "game," or (8) is an "A Player" who wants to examine what is standing in their way.

What coaching is not?
NCoaching is not therapy, counseling, or mentoring, and should not be used to "performance" someone out of the organization. Companies will often try to use a coach for performance discussions that should be commonplace between a manager and a subordinate, or the company uses it as a "last-ditch" effort before they terminate the employee. This is absolutely not the role of a coach. This is more a function of effective training for the supervisor.

Coaches should be used on a one-on-one basis to elevate skills and to make improvements in the "coachee" themselves, work groups they oversee or the organizations or departments that they lead. As you can imagine, a primary driver in any coaching relationship is trust, and as most everyone knows, trust is sometimes hard to establish. The coach's role should not be viewed as punitive, investigative or to infer performance consequences. The role of the coach is to ask questions, be an information-rich resource and provide direction that will lead to improved performance.

Essentials for identifying, engaging and utilizing an external coach:

• Engaging a coach – the coach is there to primarily help improve certain areas or improve performance. The coach can provide basic performance-oriented feedback; however, the employee who is being coached should have already received feedback directly from his or her supervisor. The coach should not be used in lieu of a supervisor’s duties.
  
  
• Explaining coaching – before beginning coaching, the process of coaching must be explained to the "coachee" in a positive way by someone in the organization (human resources, or the direct supervisor). If the "coachee" views it as negative, this perception will never be changed. The company should never position coaching as a legal defense.
  
  
• Meeting early and often – for maximum and positive impact, coaching should occur as early as possible and as regularly as appropriate. Without this, the impact may be negligible and may not be worth the investment.
  
  
• Selecting the coach – select a coach based upon his or her experience and personality. The rapport the coach establishes with the coachee will be the basis for establishing trust, and then building a comfortable working relationship.
  
  
• Providing information to coach – honestly explain all the reasons why the coach is needed, what has been done already, and involve the coachee's supervisor. Providing this up front will allow the coach to indicate whether coaching will indeed have an affect.



• Preparing for coaching – there should be no surprises and the coachee should be well-informed of what coaching is all about, commit to it and be willing to invest their own time outside of the one-on-one coaching time, which may include reading, assignments, practice and reflection.



• Defining the goals – clear goals should be established so success can be identified. There may be short-term goals and longer-term goals. As the coaching assignment continues, short-term goals may be accomplished that lead to longer-term goals becoming more apparent.



• Defining confidentiality – for trust to occur, there must be confidentiality between the coach and the coachee unless the he or she specifically agrees that the coach can give feedback to the company. Additionally, the two should meet privately and without distraction.



• Coaching a group – typically, this is involved when team cohesiveness is required, or if there are shared goals or responsibilities where individuals need guidance to stay on track.



• Ensuring success – short-term behaviors may be noticed pretty quickly; however, it is important to stay the course for long-term goals to be realized. Realize that each person is an individual and guessing a timeframe for success will likely lead to dissatisfaction with the coach and coachee. Coaching is a process and takes time. While we can experience results with each session, it is up to the individual and their level of awareness to make breakthrough change.



• Discontinuing coaching – coaching typically ends when (1) the intended results are realized, (2) the coachee no longer finds, or does not find, value in the sessions and wishes to discontinue them, (3) the paying company does not observe results in the expected timeframe or (4) the coach feels that the coachee will not make any more progress.



• Continuing the momentum of coaching – regardless of the reasons why coaching has ended, reinforcement should continue. Whether it is a performance dialogue with their supervisor, encouragement from human resources, or receiving resources from the coach via email.

The biggest obstacle with a structured external coaching assignment is maintaining ethical contact. Often, a company is paying for an employee's coach. Because of this arrangement, it is easily understandable that a company may want the results of the coaching sessions or assessments used during the coaching assignment provided to them to determine return on their investment; however, this is just a means to an end. This would breach the code of conduct and trust between the coach and the coachee. The true return on investment should be identified through changed behaviors, improved performance and acquired skills.

Helping Employees Cope with Stressful Times

2008 has been an unbelievable year of drastic changes in our world, and it is not over yet. The economy is the number one hot topic right now. Things we were able to predict are no longer predictable. Last year at this time, the Dow Jones reached an all-time high; just a few weeks ago, it reached an all-time low, causing panic everywhere. Have you opened your 401(k) statement? Or are you scared to see how much of your savings you’ve lost over-night? Established, well-known companies are going bankrupt, the housing market has suddenly come to a halt, California’s deficit, high credit card bills, huge layoffs and high gas and food prices are affecting all of us. Some people have lost their homes, and for others, their jobs are tenuous.

The instability of the crisis is scaring a lot of people. Most people do not like change, and yet they are facing it daily. People are changing their lifestyles to adapt. But those who cannot adapt are taking such extreme steps as committing suicide because they can’t handle the losses they are experiencing. Further, news reports indicate that child abuse, spousal abuse and substance abuse are also on the rise due to current events.

EAPs can help
As employers, we must be aware that some of our employees may be deeply affected because of their financial instability. A way to help our employees during difficult times is to offer them Employee Assistance Programs (EAP). EAPs are growing in popularity as a company benefit for employees. An EAP is an employee benefit program offered by many employers, typically in conjunction with a health insurance plan. Similar to health benefits, an EAP can help take care of your employees’ well-being. It is intended to help them deal with the personal problems that could impact their work performance and health.

EAPs generally include short-term counseling, assessments and referral services for employees and their household members. They offer free and voluntary consultations and assist in numerous areas including: counseling for stress, depression or anxiety; substance abuse and alcohol abuse; major life events, including births, accidents and deaths; financial or legal concerns; work-relationship issues; aid in elder caregiving, child care, and family/personal relationship issues; and referrals when needed.

Also, California requires that EAPs are delivering actual counseling services on a pre-paid basis for more than three sessions within any six-month period. They must have a Knox-Keene license, which is a specialty license for psychological services, and is mandated by the Knox-Keene Health Care Service Plan Act of 1975. The state’s Department of Managed Health Care regulates these licensed plans and acts as a watchdog for the consumer to ensure that the EAP plan has an appropriate level of tangible net equity to deliver services to plan members. Confidentiality is maintained in accordance with privacy laws and professional ethical standards. Employers usually do not know who is using their employee assistance programs.

If you don’t have an EAP program available for your employees, it would be wise to look into adopting one. These services can make a difference in the lives of your employees. It has been reported that substance abuse and mental illness cost U.S. companies billions per year. As a business, the cost benefit of using an EAP program will depend on how you utilize the program. The savings can be substantial. Some benefits employers have experienced include lower medical costs, higher morale and productivity, and reduced turnover and absenteeism.

If you do have an EAP program available to your employees, this is the time to promote it. Some of your employees maybe unaware that most of the services are free to them and their household members since it is prepaid by the employer. In many cases the employer contracts through a third-party company to manage the program, which acts as a reminder to the employee that all information is confidential. In some cases, the employer may advise the employee to seek EAP assistance, and with proper release forms, may obtain some information. But again, this only happens in very rare circumstances.

You might want to invite an EAP representative to come speak to your employees about the services they have to offer. They are a phone call away, 7 days a week, 24 hours a day, to assist your employees. Life is hard, but times are tougher now, so let’s help your employees get through each day. By lifting off some of the stress, they will be able to focus on their jobs as well as have a healthy outlook on life.