Thanksgiving Day Greeting
A special greeting at
Thanksgiving time to express
my deepest wishes for a happy
and healthy Thanksgiving Day
and a joyous holiday season.
Expanding Employee Benefits
As the end of the year approaches, it’s the perfect time to begin planning your benefits program for next year. If you’re like most companies, you probably still are operating within a tight budget. And yet you realize that your employees have been working hard. You’d like to ensure that you retain your top talent and have programs in place to attract more talent as the need arises. So what can you do? Here are some ideas for no-cost and low-cost benefits and perks to consider.
- Direct deposit. Providing your employees with the option of having their check automatically deposited to their bank account saves them time and often results in additional perks from their bank for them.
- Credit union membership. There’s no cost to the company and many benefits to the employee.
- Amusement park/local attraction discounts. You can sign up at no charge as a company for employee discounts.
- Community hours. Offer your employees a certain number of paid hours off to spend in community service at their favorite charity or their child’s school.
- Wellness programs. Weight-loss challenges, group walks at lunch, activity-tracking competitions.
- Lunch & Learn events with guest speakers. For example, financial planners, estate planners, nutritionists, etc.
- “Green” initiatives. Ride your bike to work day, eWaste recycling, contests for the best “green” ideas.
- “Fireside chats.” Open forums with the president and management team for employees to ask questions and learn more about the company and its direction.
And here are some additional ideas…
- Discounts through the company’s wholesale supplier
- Service Awards (5, 10, 20 years)
- Informal wellness programs and classes paid for by the company
- Paid membership for professional organizations related to the job
- Company sponsored lunches or socials
- Dry cleaning services subsidized by the company
- Free coffee, tea, fountain drinks, lunches
Benefits over and above those required by law contribute to the company culture, show the employees you care, and help in attracting and retaining talent.
November 6 – Election Day – Time Off for Voting
Just a reminder that the General Election is Tuesday, November 6. As an employer, you are required to give employees who do not have sufficient time outside of work time off to vote. Here is the requirement according to the California Secretary of State website.
Employees are eligible for paid time off for the purpose of voting only if they do not have sufficient time outside of working hours to vote. The intent of the law is to provide an opportunity to vote to workers who would not be able to do so because of their jobs.
Voting hours are from 7am to 8pm.
Employees can be given as much time as they need in order to vote, but only a maximum of two hours is paid. Employers may require employees to give advance notice that they will need additional time off for voting. Employers may require time off to be taken only at the beginning or end of the employee’s shift.
Completing the Termination Checklist
When an employee terminates – whether voluntarily or involuntarily – there are a number of activities you need to complete to facilitate the transition for both the employee and the company, and to ensure that all legal requirements have been met. These activities fall into four general categories: wage and salary; benefits; other forms; and company property to be collected. It’s a good idea to have a standard checklist that you use with every terminating employee to make sure you don’t forget anything.
As I mentioned last month, if you are terminating an employee for performance issues, be sure that you have written documentation that describes the issue(s), the steps taken to resolve the issue(s) and the results. Even though California is an “at-will” state, detailed documentation is your best defense if a legal action transpires. When in doubt, please speak with a California employment attorney when you are terminating an employee for performance issues.
Here are the items that need to be completed for all terminating employees:
Final payments:
- Final paycheck/stub. If you fire an employee you must pay them immediately. If an employee quits without notice you have 72 hours to issue their final check. If they give at least 72 hours notice you must pay them immediately on termination.
- Any outstanding expense reports must be paid on termination.
Benefits –related notices to provide (if applicable):
- COBRA benefits coverage information should be sent to the departing employee’s home address.
- COBRA Notice to Plan Administrator or Cal-COBRA Notice to Carrier
- HIPPA Notice
- Health Insurance Premium (HIPP)Notice (California only)
- Stock Option Closing Statement
- 401(k) plan information should be sent to departing employee’s home address
Other Items/Forms to provide:
- Copy of the Non-Disclosure/Confidentiality Agreement or Policy (Best Practice)
- Notice of Employment as to Change in Relationship (California only)
- Form 2320 For Your Benefit (California only)
Examples of property to be collected:
- Building and desk keys
- ID/security badge
- Laptop, software, hardware, etc.
- Cell phones
- Company tools and equipment
- User ID/passwords (voicemail, computer)
- Files and other miscellaneous items
Be sure to remove the departing employee’s access to email, the network, the company intranet and any other programs or proprietary information meant solely for the use of employees. Also, ensure that you have their most recent address and contact information (phone, email) for W-2s and any other follow up communications. Ask them to contact you in the event they move prior to year end.
As a best practice, if the employee voluntarily quits, you may want to conduct an exit interview to learn more about their experience at your company.
Dealing with Employee Performance Issues
As a manager, dealing with employee performance issues may be one of your most difficult yet important leadership responsibilities. Because it’s difficult, many managers put off taking action (or avoid it altogether) hoping that the issue will resolve itself or the employee will leave. This delay can have a negative effect on team morale, customer satisfaction and the success of the organization overall.
Difficult tasks become easier when you approach them with a plan or process. Here’s a 5-step process for addressing performance issues.
- Set clear expectations. Be sure that you have clearly communicated your expectations to each of your employees. This includes expectations related to their job duties as well as attendance, behaviors, interactions with others, status reporting, attire (if applicable), etc. These should be documented in the Employee Handbook and job description, but it’s also your responsibility to ensure that the employee understands them. Clearly defined expectations will support your actions when performance issues arise.
- Document and discuss performance. Giving regular, productive feedback to both your good performers and problem performers is essential. When there’s a problem, address the issue head on. Review your expectations with the employee and ask for ideas about how he or she can improve. Document incidents relating to the issue(s), including date, time, description and impact. If it gets to the point where you have to let the employee go, it’s essential that you have clear and timely documentation to support the termination.
- Explore and evaluate the cause. Poor performance may be rooted in any of a number of causes. Perhaps the employee has some personal issues that are affecting his or her work. Maybe there’s a new aspect to the position that requires additional training. Or maybe the employee was just a bad hire. It’s important that you have a discussion with the employee to identify the cause, and then determine the appropriate course of action.
- Develop a plan. Once you’ve clearly conveyed to the employee that there’s an issue and have reviewed your expectations, it’s time to develop a plan. The plan or PIP (Performance Improvement Plan) should be in writing and be focused on specific, sustained improvement. It should identify a time period for the initial improvement (typically 30 days) and state the consequences if improvement is not made and sustained. Be sure to ask the employee for input on what he or she will do to improve. The employee needs to make the commitment. It’s also a good idea to set up checkpoints within the time period of the plan, for example, a weekly check-in during the 30-day period.
- Take action. Once the plan is in place, be diligent about the periodic check-ins and ongoing feedback. Continue to document. Provide the appropriate praise and encouragement when you see improvements.
Of course, the optimal outcome is if you can turn the employee around and he or she becomes a productive member of your team. But we all know that’s often not the case. If the employee cannot improve or is not willing to improve or was simply a bad hire, then the best action for you, the employee and your organization is to let the employee go.
Next time: Completing the Termination Checklist
Employee or Independent Contractor? Misclassification Can Be Costly
Do you have “independent contractors” working for you? Have you thoroughly researched and analyzed their relationship with your company to ensure they are contractors and not employees? Many employers see an economic advantage in hiring independent contractors versus employees. With independent contractors employers do not have to pay payroll taxes, the minimum wage or overtime, or reimburse them for business expenses incurred in performing their jobs. Additionally, employers do not have to cover independent contractors under workers’ compensation insurance, and are not liable for payments under unemployment insurance, disability insurance, or social security. However, if you treat an employee as an independent contractor, it can be a very costly mistake.
Earlier this year California passed Senate Bill 459 adding a new Labor Code 226.8, which imposes penalties of from $5,000 – $25,000 for “willful misclassification” of an employee as an independent contractor. These fines are in addition to any employment taxes and insurance found owing.
There are a number of resources that provide guidance in determining the appropriate classification.
California’s Employee Development Department’s (EDD) Employment Determination Guide provides a Worksheet on Employment Status that includes a battery of questions that will help you determine classification. The IRS uses 20 factors to evaluate the validity of independent contractor classifications:
- Level of instruction
- Amount of training
- Degree of business integration
- Extent of personal services
- Control of assistants
- Continuity of relationship
- Flexibility of schedule
- Demands for full-time work
- Need for on-site services
- Sequence of work
- requirements for reports
- Method of payment
- Payment of business or travel expenses
- Provision of tools and materials
- Investment in facilities
- Realization of profile or loss
- Work for multiple companies
- Availability to public
- Control over discharge
- Right of termination
More information about each of these factors is in the IRS publication. As always, consult with your tax advisor or an employment attorney for specific questions about classifications.
Exempt or Non-Exempt? A Very Important Question…
Companies large and small struggle with the issue of whether to classify an employee as exempt, i.e., exempt from overtime, or non-exempt. A common misconception among employers is that if a person is salaried, rather than hourly, they are exempt, and thus not entitled to overtime pay. This is not true! Whether a person is salaried or hourly is not the determining factor. Another frequent misunderstanding about exempt vs. non-exempt has to do with titles. Having a job title that appears to fit into one of the exempt classifications is not enough.
Also, California law differs from federal law in a number of areas. If you have employees in California, be sure you are adhering to the California Labor Code, because it provides broader protection for employees and thus trumps the FLSA (Fair Labor Standards Act).
Defining Exempt Status
In California, employees may be exempt from overtime pay rules if:
1. They are engaged in work which is primarily intellectual, managerial or creative, AND
2. They are paid a monthly salary equivalent to at least two times the state minimum wage for full time employees (40 hours per week)
Employees who meet these criteria are generally classified in one of the three exempt classifications: Executive, Professional, or Administrative. Unless a job falls into one of these exemptions, an employer must pay overtime. In California, non-exempt, hourly employees are entitled to overtime pay for any hours worked over 8 in a day and over 40 in a week.
Another important distinction between FLSA and the California Labor Code is that an employee must be “primarily” engaged in intellectual, managerial, or creative work for 50% or more of his or her work time. California law focuses on the amount of time the employee spends on his or her specific duties, while the federal law focuses on the “primary duty” or the reason for which the employee was hired.
Another common misconception is that employees who are paid commissions are automatically exempt. This is also not true. Although there is an exemption for sales people who “customarily and regularly work more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities,” there is no exemption for inside sales people.
What Does This Mean to YOU?
Employers should keep in mind that in California if the employer fails to compensate an employee for overtime pay, the employer is subject not only to the unpaid wages, but to liquidated damages in an amount equal to the overtime wages, interest, the employee’s attorney’s fees, and costs.
Always assume employees are nonexempt unless they clearly meet the job duties of an exempt position and will earn at least two times the current minimum wage on a monthly basis.
How to Avoid the Pitfalls
I recommend thoroughly reviewing job duties and responsibilities vis a vis the provisions of the California Labor Code prior to classifying a position as Exempt or Non-Exempt. Also, the Department of Industrial Relations has a great website. You can visit their site to learn more about overtime regulations in California.
If you are not experienced in determining exempt and nonexempt status, or if you are unsure about the status of a particular position, ask competent employment law counsel familiar with California regulations to review your determination.
5 Tips for Giving Feedback Effectively
As a supervisor or manager, one of your responsibilities is developing your people. And one of the best ways to do this is by giving regular feedback. Let your employees know when they’re performing well and let them know when improvement is needed. Too often we wait for the official performance review process before giving feedback. This significantly reduces the impact of the feedback – whether positive or constructive – and in cases where improvement is needed can often prolong and increase the impact of undesirable behaviors. Here are 5 tips for giving feedback effectively.
- Make it timely. Saying “thank you” or “good job!” soon after an employee has done something extra encourages them to continue. Likewise, discussing performance issues “in the moment” helps reestablish expectations and initiates the improvement process sooner rather than later. If you allow a performance issue to continue without bringing it to the employee’s attention he or she may not even realize it’s a problem.
- Be consistent. Be sure you’ve communicated expected performance levels and behaviors to all your employees and then give feedback consistently based on those expectations. This will prevent the appearance of favoritism.
- Make it clear. Use the SIE format – Situation, Impact, Expectation. State the situation – “Being at work on time is essential for us to be able to meet the needs of our customers. You’ve been late three mornings in a row.” State the impact – “When you’re late, others have to make your deliveries which impacts the schedule.” State the expectation – “I expect you to be at work and ready to start deliveries by 8:00 am every day.” When employees understand the adverse impact of their actions they’re much more likely to change them.
- Write it down. Writing down employee issues serves two purposes. First, it provides the paper trail necessary to prove you have a valid reason for corrective action or termination. Second, it holds the employee accountable for their actions. See my special report for some additional tips on documenting performance feedback.
- Own it. Feedback needs to be about something you’ve observed, not something you’ve heard second hand, and it should never be delivered when you’re angry or upset. Also, find a private place to have your developmental discussion.
Both positive and constructive feedback should be given in the spirit of recognizing people for what they achieve, and helping them be the best they can be.
Mentoring Programs – Low Cost – High Impact Employee Development
One of the most frequent complaints on employee satisfaction surveys is lack of training and development opportunities. Yet, when budgets are strapped, training and development is often the first thing to go. The result is that employees don’t see a means to move forward and either become disengaged or go elsewhere. One way to help employees grow in their careers and thereby stay engaged is to create a mentoring program. A mentoring program is typically a low cost way to retain employees and encourage employee development.
A mentoring program involves matching a less experienced employee or manager (mentee) with a more experienced employee or manager (mentor) for guidance and development. In most mentoring programs mentees do not report to their mentor, which often allows a relationship where the mentee can be more open and candid about issues and concerns.
There are different schools of thought about the process for matching mentors and mentees. Some recommend that the pairings be allowed to evolve naturally. Others ask for volunteers to participate and then manually match mentors and mentees based on function and/or location. Others use software tools to do the match.
Whichever method is used, most participants would agree that there are multiple benefits for both the mentor and mentee. Mentors build their leadership and communication skills and often attribute to the experience an enhanced or revived motivation for their role or the business. Mentees develop new skills and corporate knowledge and learn how to navigate their career. Talk to any CEO and he or she will credit at least one mentor with helping them get to where they are.
If you are thinking about developing a mentoring program, here some tips to help it succeed:
- Select mentors who are positive role models and enthusiastic about the program.
- Establish clear expectations for the mentoring partnership, such as minimum number of meetings, length of partnership, who is responsible for initiating meetings and driving the relationship, etc.
- Include at least one check-point to evaluate the relationship.
- Encourage mentors and mentees to create specific goals for the partnership.
- Orient mentors with best practices and guidelines around goal setting, giving feedback and basic relationship skills such as open communication, active listening, being accessible, building trust, sharing knowledge and ideas, and working together to resolve differences.
- Develop a process for obtaining and incorporating feedback from both mentors and mentees about the program to ensure continuous improvement.
I had the privilege of starting a mentoring program many years ago. The program was very successful and we were able to track the progress of the participants. By the end of the 6-month pilot program, we had several mentees get promoted to different jobs. Another mentee decided to go back to school to obtain a masters degree. Another mentee decided to make a lateral transfer to different position that would provide the experience he needed to achieve a promotion. The mentors also benefited from the program. They felt more engaged and motivated in their jobs. They were very proud of their mentees and the progress they saw.
Have you considered developing a mentoring program? If so, please share your tips below on what has worked and what to avoid. What are your best success stories?
Attract and Retain Talent with Total Rewards Programs
As companies look at new ways to attract and retain top talent, a growing trend is the development of “Total Rewards” programs. These programs combine traditional health benefits and compensation features with additional no-cost or low-cost “perks” that both recognize talent and contribute to the company culture.
Consider how incorporating some of the following into what you offer employees might enhance your “attraction” rate and keep your employees loyal and happy!
No- cost ideas
- Community service projects – such as Habitat for Humanity or Food Drives for Second Harvest Food Banks – to build engagement and teamwork
- Wellness programs – weight-loss challenges, group walks at lunch
- Employee credit union
- Bring your pet to work day
- Potlucks
- Lunch & Learns with guest speakers – financial planners, estate planning, wellness
- “Green” initiatives – ride your bike to work day, e-Waste recycling
- “Fireside chats” with President and management team – informal, open forum for employees to ask questions and learn more about where the company is heading
Low-cost ideas
- Service Awards (5, 10, 20 years): Plaque and gift certificate
- Adopt a charity (employer matches contribution)
- Day off to volunteer at a non-profit of their choice
- Company-sponsored lunch or social
- Commuter reimbursement or subsidy program
- Company-sponsored holiday party or sports event
- Discount programs – amusement parks, theater tickets
- Dry cleaning services subsidized by the company
- Free coffee, tea, fountain drinks
- Informal wellness programs and classes paid for by the company
- Paid membership for professional organizations related to job
Please feel free to share your ideas about your total rewards strategy by leaving a comment below. Also, contact me if you are interested in learning more about developing and implementing a total rewards program or other ways you can attract and retain top talent that won’t break the bank.
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