July 2015 Archive

Assessing potential is a difficult task, but is becoming more important than ever. Hiring or promoting the wrong person can be costly both in terms of your bottom line and for team morale. Not only is it important to hire the right person, but retaining the right employees is essential because the cost of replacing someone can be up to 150% of a person’s salary.

The 2015 PAN Assessment Use Report breaks down how the use of assessments in 6 different industries can help mitigate these concerns.

Click here to learn more!  

You probably know that hiring a worker with a long commute can be a risk — but you may not realize just how badly a commute can impact retention. 

According to research by Evolv, an employee engagement software developer, workers with commutes longer than 30 minutes were 92% more likely to jump ship.

Factors you must weigh

But of course, you don’t want to rule out a good candidate just because he or she has a long commute.

To help you in the decision-making process, Dr. John Sullivan an HR and talent management consultant, in an article he penned for TLNT.com, noted steps employers should take to evaluate if a commute should factor into a decision to hire a person:

• Identify positions affected by long commutes. Perform an analysis to find out which of your positions have been most impacted by long commutes. Example: Workers in lower-paid positions are more likely to be affected by long commutes than higher-paid employees.
• Look at the commute, not the distance. More factors need to be considered in a commute than just how far away a worker lives. You’ll also want to consider traffic and total commute time.
• Schedule interviews during rush hour and ask about the drive. This gives employers and applicants an idea of what the day-to-day commute would be like and how stressful it may be.
• Look into flexible work options. Giving workers flex scheduling, subsidized transit or telecommuting options can reduce the effect of a long commute. What can you offer?

Remember that $36K penalty the IRS felt the need to remind everybody it would impose on employers that tried to give employees untaxed funds to purchase healthcare coverage? Well, there’s now hope that some employers won’t have to worry about this after all. 

That’s because legislators re-introduced the Small Business Healthcare Relief Act in both the House (H.R. 2911) and the Senate (S. 1697).

The timing of the legislation is significant because the penalty phase for stand-alone HRA usage kicked in on July 1, 2015.

If passed, the bill would provide an exception to Obamacare regs and allow some small businesses to use pre-tax dollars to help employees purchase healthcare benefits on the exchanges, as well as other out-of-pocket medical expenses. This is a tactic some employers were planning to take in lieu of providing their employees with health insurance under Obamacare’s employer mandate.

Put another way: The Small Business Health Relief Act would allow some firms to use stand-alone HRAs, plans that contribute un-taxed money to an employee to pay for insurance premiums.

Fewer than 50 workers

Specifically, the bill would:

• ensure small businesses and local municipalities with fewer than 50 employees are allowed to continue using pre-tax dollars to give employees a defined contribution for healthcare expenses
• allow workers to use HRA funds to purchase health coverage on the individual market and for qualified out-of-pocket medical expenses if the employee has qualified health coverage, and
• protect employers from being financially penalized for providing this cost-sharing option to employees.

The problem with stand-alone HRAs

Initially, stand-alone HRAs seemed like a logical Obamacare strategy for many small firms. But the IRS was quick to point out that stand-alone HRAs not only violated the healthcare reform law but that the agency could also slap firms with a $100 per day, per employee fine for setting up such a healthcare arrangement.

And that $100 per day penalty had the potential to grow to a $36,5000 annual per employee fine.

According to the feds, stand-alone HRAs are prohibited because stand-alone plans with set limits (the maximum amount of money the company promises to contribute) violate the Affordable Care Act’s ban on lifetime and annual limits.

To avoid penalties, employers do have some alternatives to stand-alone HRAs, such as:

• offering “integrated” HRAs, which are HRAs that are combined with an employer’s group health plan, and
• increasing employees’ taxable income to help them purchase insurance on their own, which many firms feel is cheaper than sponsoring a group health plan.

A version of this article was published previously on our sister website, HR Benefits Alert.

A lawsuit that was just filed provides a powerful reminder of ADA protections some employers — and especially their managers — may not have known about. 

Have you heard of discrimination by association? It’s illegal under the ADA.

The ADA describes it as:

“excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association …”

Translation: You can’t take an adverse employment action against an individual because he or she may have to care for — is closely linked — to a disabled individual.

Employer sued

The EEOC just filed a lawsuit against New Mexico Orthopaedics Associates, P.C., accusing it of discriminating against an individual because of her association with a disabled individual — her daughter.

While the case hasn’t been decided yet, it provides a clear-cut example of what’s not allowed under the ADA — as well as what the EEOC is on the lookout for.

The EEOC is accusing the employer of terminating Melissa Yalch’s temporary job assignment and failing to hire her for a full-time permanent position as a medical assistant because, ostensibly, Yalch may need to take time off work to care for her daughter — or because caring for her daughter may hinder her job performance in some way.

Such actions, if proven to be true, amount to disability discrimination, according to the EEOC.

The agency filed suit against New Mexico Orthopaedics in U.S. District Court for the District of New Mexico after first attempting to reach a pre-litigation settlement through its conciliation process.

EEOC Albuquerque Area Director Derick L. Newton had this to say about the associational discrimination protections of the ADA:

“This provision of the ADA — offering protection to persons treated adversely because of their relationships with individuals with disabilities — is a unique and integral part of our enforcement efforts.”

The Americans with Disabilities Act Amendments Act so expanded the definition of a disability that just about anything’s considered a disability these days. Just not what this employee was trying to sell to a California court. 

Meet Michaelin Higgins-Williams. She was a clinical assistant at Sutter Medical Foundation.

About three years into her employment, Higgins-Williams visited her doctor complaining about stress caused by interactions with her manager and Sutter’s HR team.

The doctor diagnosed her with adjustment disorder with anxiety.

As a result of the diagnosis, Sutter granted Higgins-Williams a stress/disability-related leave of absence under California’s Moore-Brown-Roberti Family Rights Act and the FMLA.

When Higgins-Williams exhausted her leave allotment, she returned to work. But all was not rosy.

She quickly received a negative performance evaluation from her manager. Higgins-Williams also claimed that she began to be singled out by her manager for performance problems.

About a month after she returned to work, Higgins-Williams requested additional time off as an accommodation for her disability. Sutter approved additional leave for her.

Transfer requested

Shortly before Higgins-Williams was scheduled to return to work, her doctor submitted a status report to Sutter stating that Higgins-Williams needed to be transferred to another department and be supervised by a different manager. The doctor also requested additional leave for Higgins-Williams, which was granted.

Roughly two months after that, Higgins-Williams’ doctor requested an additional month of leave. The doctor also requested that following the additional month of leave, Higgins-Williams be placed in a light duty position.

After this request, Sutter informed Higgins-Williams that:

• her doctor didn’t provide any info as to when she’d be able to return to her position
• there was no information to support a conclusion that additional leave as an accommodation would help her return to her position, and
• without either of those two pieces of info Higgins-Williams would be terminated.

When the doctor failed to provide that info, Higgins-Williams was fired.

Disability discrimination?

Following her termination, Higgins-Williams sued claiming disability discrimination, failure to engage in the interactive process, and failure to provide reasonable accommodation under California’s Fair Employment and Housing Act (FEHA).

FEHA is a law that closely mirrors the ADA in terms of the protections it provides to disabled individuals. The FEHA, however, is much more lenient (in employees’ favor) than the ADA when it comes to determining what’s a disability and what isn’t.

For Higgins-Williams to have a case, the court — California’s 3rd District Court of Appeal — first needed to determine whether or not she was disabled.

Its verdict:

“An employee’s inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of the employee’s job performance does not constitute a disability under FEHA.”

This ruling has to be music to employers’ ears. Just when it was starting to look like courts would allow anything to be considered a disability for which employers need to seek reasonable accommodations, this court draws the line.

The court said an inability to work under a particular supervisor didn’t quit reach the relatively low bar an impairment must reach to be considered a disability. The court even surmised that simply having an inability to do a job could be enough to qualify someone as “disabled,” but Higgins-Williams wasn’t plagued by an inability to perform her job.

So her lawsuit was tossed.

Cite: Higgins-Williams v. Sutter Medical Foundation

The stakes for the already daunting task of ACA reporting have just been raised, and it’s all thanks to a new law you may not have heard much about.  

The law we’re referring to is Trade Preferences Extension Act, which was recently signed into effect by President Obama.

Buried in the law is a provision that significantly increases the penalties for iviolating the reporting requirements of the Affordable Care Act (ACA).

$3 million or more

Under the law, the IRS can slap firms with increased penalties for failing to file the ACA reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) or for filing those forms with incorrect or incomplete info.

The per-form penalty is now $250 , which is more than double the original $100 fine. Those penalties will be capped at $3 million (up from $1.5M).

If the issue is due to intentional disregard, then the per-form fine will be $500 and there is no cap on the penalties the employer can rack up.

Like many ACA penalties, IRS said that it won’t impose penalties if firms can prove they made a good faith effort to comply with the 2015 reporting regs. But an “untimely” filed form won’t meet the good-faith requirement, the IRS said.

The good news

So how do employers feel about the increased penalties. Maybe not as bad as you’d think — at least according to new research.

Just a few years ago, the stress of complying with the many components of the healthcare reform law seemed to put even the most steady execs in a panic. But those days seem to be a thing of the past.

You know how important clear and thorough documentation is. But your managers may be another story. 

Thankfully, employment law attorney Allison West has some steps managers can use to make documenting performance issues less painful — and more defensible if ever brought up during a lawsuit.

West recently shared these steps at the SHRM15 Conference & Expo in Las Vegas.

What managers need to do

Specifically, West said that for it to help — not hurt — employers in court, managers need to make sure their documentation touches on these seven points:

1. The unmet expectations. What goals, policies or standards has the employee not met?
2. The behavior that needs to change. It’s important managers keep their observations of the employee’s conduct objective.
3. The employee’s explanation for the behavior. It’s important that documentation reflect the worker’s side of the story. Not only does it show fairness, but it also helps keep workers accountable for their behavior.
4. The action plan going forward. This doesn’t have to be as detailed as a performance improvement plan, West says. But it should include what steps the worker plans to take, as well as what the manager will do to help the employee improve.
5. How much time the worker has to correct the problem. West recommends managers set realistic, but short intervals to follow up and gauge progress.
6. Any consequences that will result if the problem persists. Be clear, but use punishment sparingly, West says.
7. The results of follow-up meetings with the worker. You want to address whether or not the employee has made any progress toward improvement.

A 330,000-employee corporation just decided to scrap yearly performance reviews. Think it might be time for your organization to do the same?  

Pierre Nanterme, CEO of consulting giant Accenture, recently told the Washington Post, “We’re going to get rid of [annual reviews]. Not 100 percent, but we’re going to get rid of probably 90% of what we did in the past. It’s not what we need. We are not sure that spending all that time on performance management has been yielding a great outcome.”

The problem with the old process? “Performance is an ongoing activity,” Nanterme said. “It’s every day, after any client interaction or business interaction or corporate interaction. It’s much more fluid.

“People want to know on an ongoing basis, am I doing right? Am I moving in the right direction? Do you think I’m progressing? Nobody’s going to wait for an annual cycle to get that feedback. Now it’s all about instant performance management.”

He said that “[F]or the millennium generation, it’s not the way they want to be recognized, the way they want to be measured. If you put this new generation in the box of the performance management we’ve used the last 30 years, you lose them.”

‘We’re done with that’

So how’s the new program going to work? “At the end of the day, you need to give some evaluation. You need to give a compensation increase,” said Nanterme. “But all this terminology of rankings — forcing rankings along some distribution curve or whatever — we’re done with that.

“We’re going to evaluate you in your role, not vis-a-vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about you. How are you performing now, and do we believe you are prepared to move to another role? We are getting rid of all this comparison with other people.

“My philosophy has always been very simple: You need to be relevant to your clients, not the other way around. It’s the same thing with your people. You need to be relevant to them. I’m not going to impose on the millennial generation something that is not the environment in which they want to develop and grow.

“It doesn’t mean we’re going to be easy—that we’re not going to measure, to evaluate. We’re going to do all of this, but we’re going to do it in a very different way.”

A shift in focus

Accenture isn’t the first mega-employer to change its performance review philosophy. According to the Post, Microsoft did away with its rankings nearly two years ago. Adobe, Gap and Medtronic have also transformed their review process.

The consulting and accounting giant Deloitte recently announced a new program in which rankings would disappear and the evaluation process would progress over the year, the Post story said. Deloitte is also experimenting with using only four simple questions in its reviews — two of which simply require yes or no answers.

Is this trend going to catch on in small- and mid-sized firms? If you’ve made changes to your performance evaluation process, tell us about it in the Comments section below.

 

 

There are a lot of employees who are stuck in a mindset that makes it hard — or nearly impossible — for them to accept new challenges. And that, as you know, is bad for running a business. 

It’s not all their fault; genetics plays a big role. But research has shown there are two words that can shake them from this mindset:

“Good effort.”

Let us explain.

Pope Ward, senior VP at Melcrum, a business communication consultancy, recently stumbled upon some interesting research conducted by Standford professor Carol Dweck.

Dweck is a renown researcher in the field of social psychology, and has said people fall into one of three “mindset” categories:

• 40% have a fixed mindset — meaning they get a thrill from doing what they already know how to do, and they view mistakes as judgments of their intellect. They back down from challenges.
• 40% have a growth mindset — meaning they enjoy stretching themselves, and they view mistakes as learning opportunities. They embrace challenges.
• 20% fall somewhere in between — meaning they’re somewhat apprehensive to take on new challenges.

Dweck says these mindsets can take root at an early age. Example: Dweck offered preschoolers the choice to redo an easy jigsaw puzzle or try a harder one.

She said those with a fixed mindset chose to sick with the easy one, while those with a growth mindset went with the harder one.

People can be reprogrammed

All of those employees who back away from accepting difficult new assignments, they’re your fixed mindset people.

The good news is their mindset can be changed.

The key: letting employees know that performance is based on their effort — and not just their results.

You see, to the fixed-mindset preschoolers Dweck studied, a job well done was finishing the puzzle — an outcome grounded in results.

Meanwhile, the growth-mindset preschoolers didn’t think simply finishing the easy puzzle was a job well done — what mattered was personal growth.

Make employees feel like a job well done is grounded in effort, and you start to break down their aversion to new challenges, the research suggests.

This was borne out in a second study Dweck conducted. She subjected two groups to a test. The first group was then praised for its results. The second was praised for its hard work and effort in taking the test.

Results: The first group rejected subsequent opportunities to take on a challenging task. In the second group — the one praised for effort — 90% of the test takers embraced a new challenge.

Finding a balance

Of course, business is dependent on results, not just effort. So the challenge for HR and managers is finding the appropriate balance between evaluating employees based on the two.

Based on Dweck’s research, if the goal is to push employees to embrace challenging new roles and assignments, it would be wise to consider adjusting how feedback is communicated to employees so they know the company highly values effort.

One way to do this would be to recognize employees who’ve demonstrated commendable effort, even if there aren’t hard results to measure yet, or if the outcome wasn’t quite as successful as hoped.

Cite: “Why your approach to employee engagement may be wrong,” by Pope Ward, Melcrum blog.