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6 Tips for Developing a Performance Improvement Plan

As I’ve often said, performance management is an ongoing process not just an annual event. As such, when there’s a performance issue it’s important to deal with it in a timely manner. The goal should be – if possible – to turn the situation around and get the employee back on track versus terminating them. This requires a plan. Here are some tips for developing an effective Performance Improvement Plan (PIP).

Keep detailed documentation. When it’s clear that there’s an issue – the employee is regularly late, absent without an excuse, or submitting sloppy/incomplete work, for example – note the dates and description of the incidents. This will document a pattern of poor behavior and will serve as a backup in the event of a legal dispute down the road.
Have an informal performance discussion. Hopefully you are having regular one-on-ones with your employees. If so, that is the perfect time to clarify expectations and alert the employee that there’s an issue. Give the employee the opportunity to explain and to offer ideas for a solution. It may be that the issue could be resolved by a change in work schedule or additional training. Be sure to share the impact of the employee’s under-performance and that without improvement, the next step will be a formal PIP.
Create the plan. If the performance doesn’t improve after the initial performance discussion, it’s time to create a formal PIP. The plan should clearly describe the expected behaviors and specific goals – with deadlines – for achieving those behaviors. Goals should be SMART – specific, measurable, achievable, relevant and timely. Establish a reasonable timeline for the behavior change – long enough to determine whether the behavior change can be sustained, but short enough to take the next step (possible termination) before other people/processes are impacted by the poor performance.
Obtain employee’s agreement and signature. It’s essential that the employee commit to the goals on the plan. If possible, co-create the goals. If the employee feels they’ve had the opportunity to provide input to the plan they are more likely to follow it. As part of your documentation process, and to reinforce the formality of the PIP, get the employee’s signature.
Monitor performance. As part of the plan, schedule regular check-ins to discuss progress. Acknowledge any progress, and also remind the employee that you are looking for sustained improvement.
Formally close out the plan. If the employee fails to meet the expectations defined in the plan, the next step is determining whether termination is appropriate. If the employee follows the plan and shows the expected improvement, acknowledge that improvement and close out the plan. If the employee makes a good effort but doesn’t complete all the goals or you are unsure whether the performance will be sustained, you may want to extend or create a new PIP.

When it comes to Performance Improvement Plans, prevention is the best medicine. You will have fewer PIPs to write if you deal with performance issues in a timely manner, keep lines of communication open with your employees through regular one-on-ones, and are consistently clear about performance expectations.

When Hiring, Be Clear About Work Environment

One of the areas I help my clients with is performance management – both setting up performance management processes, and dealing with performance issues. Lately I’ve been finding that a number of organizations are struggling with issues related to new employees adapting to a small company work environment.

In small companies, where a gap in resources can make a huge impact, hiring managers are often so focused on filling the gap that they don’t take the time to go beyond simply matching qualifications to requirements. However, if they neglect to give the candidate a clear understanding about the work environment, they could be looking at performance issues down the road.

Take, for example, a candidate who is used to working in a large, structured organization, where roles are narrowly defined, and processes and procedures are well-established and documented. They are deeply knowledgeable about their own role, but have traditionally delegated to others responsibilities that don’t fall within the definition of that role. Unless they are told otherwise, when this candidate becomes an employee they may assume that it’s “business as usual.” I do my job and others do theirs.

A small company environment, however, is very different from a large, structured organization. People wear multiple hats, processes are often established on the go, and there are typically many things going on at once. The ability to prioritize is essential.

One of the most important components of effective performance management is managing expectations. This begins in the hiring process. As a hiring manager, help potential employees understand not just what the job requires, but also what working successfully in the company environment requires. Present them with realistic scenarios about what they might be asked to do in their role. Ask behavioral questions to determine how flexible they are, and how they prioritize. Ask them to describe a situation when they were asked to do something out of their job scope. How did they handle it? What was their comfort level?

Performance issues generally have one or more of these three root causes: 1) lack of ability, 2) lack of training or information, 3) lack of motivation. Do your best to avoid these by taking the time to ask good questions, and provide clear expectations during the hiring process.

If you need help with developing an effective hiring process, please contact me.

5 Budget-Friendly Employee Development Ideas

Surveys show that one of the key factors in keeping employees engaged and motivated is the opportunity to learn and grow. For small companies, however, who often have limited (or non-existent) training budgets, providing those opportunities can be a challenge. Yet there are a variety of ways you can develop your employees without a lot of expense. Here are five of them.

Cross-training. Consider putting together a program where employees cross-train each other. Not only will the “trainee” learn new skills and knowledge, the “trainer” will improve in their job by having to teach it to someone else. This also can build closer relationships in the organization and a better understanding of the company overall. When employees learn what others on their team and other teams do, they have a better appreciation of how all the roles fit together to keep the company operating. It can eliminate silos and increase organizational communication.

Internal skill sharing. Identify employees who are particularly skilled in an area and give them the opportunity to share their knowledge in a workshop or “Lunch and Learn.” This increases the knowledge of the participants, and gives the employee sharing the knowledge the opportunity to develop and improve additional skills – leadership, facilitating, organization, communication, etc.

Mentoring. Create a mentoring program or identify individuals who can coach others in areas where they’re struggling or want to develop. This is a great way to tap into the knowledge and skill base of your more experienced employees to ensure that your company mindshare gets transferred. And the beauty about mentoring relationships is that there are benefits to both mentor and mentee as they learn from each other.

Online courses/books. There are myriad free and low cost online courses available on a variety of topics from business knowledge to leadership skills to software. Books are another way to provide learning. Consider setting up a small library or book sharing program.

Special projects and stretch assignments. On-the-job training through a special project or stretch assignment can be very effective when combined with adequate management support and/or a mentor or coach. Have a special project coming up? Consider assigning someone who wants to develop leadership skills to head up the project.

Be sure that you include in your employee development program not just the job-related skills tied to your future needs, but also soft skills that have been identified as essential for the 21^st century: communication, emotional intelligence, collaboration, problem solving, and adaptability.

Recognize that the time spent in learning activities – whatever those may be – is an investment in the growth of the company and in the growth and satisfaction of employees.

“An investment in knowledge pays the best interest.” – Benjamin Franklin

Have You Reviewed Employee Goals Lately?

In most organizations, managers and employees start the year – or review period – by documenting goals and objectives. Unfortunately, however, those goals and objectives often get tucked away in a file somewhere not to be seen again until they magically reappear at the annual performance review. By then circumstances may have changed, or it may be too late to catch up on a goal gone astray.

A better option is to keep the goals clearly in view, and to have regular “check-ins” throughout the year to assess progress and make any adjustments needed. I’m going to suggest that if you haven’t already had a check-in you do it now!

Remember that performance management is a process, not just an event. You should have mini-reviews with your employees throughout the year to provide feedback and development coaching. This will help both you and your employees track accomplishments and address areas for improvement in a timely manner. There should be no surprises during the annual review.

When you set goals, be sure they are SMART goals. If the ones you set earlier this year were not, review them now to make sure they are Specific, Measurable, Achievable, Relevant and Time-bound. The “time-bound” component is another reason that you need to have regular check-ins during the year so you can keep track of the due date and assess what happened if something slips.

For employee goals to be effective and meaningful, they need to be tied to both organization and team goals. Employees are more likely to be motivated and engaged when they can see how their work impacts the organization as a whole. In our dynamic work environments organizational goals (and team goals) may shift as priorities change during the year, so be sure that during your periodic reviews you update employee goals to reflect that.

Communicate with your employees on a regular basis through informal meetings (e.g., weekly one-on-ones) and more formal quarterly check-ins. Provide support in terms of resources and guidance as they work on their goals. Are they having trouble getting the input, effort or approvals needed from others in order to complete the goal? Are there roadblocks? Use this as a coaching opportunity and work together to develop a path forward.

When goals are achieved, recognize the achievement. For especially challenging or stretch goals, spend some time with the employee discussing his or her approach, lessons learned, and/or things that could have been done differently.

Making the time to have period check-ins and dialogues about goals and development opportunities will help keep your employees engaged and contribute to organizational success.

New Ordinances Enhance Family Leave and Paid Sick Time

If you have employees in San Francisco, you should be aware of the new San Francisco Paid Parental Leave law, and amendments to the city’s paid sick leave law, both of which will go into effect next year.

Note that San Francisco, Oakland, San Diego, Emeryville, Santa Monica, and Los Angeles all have sick leave laws that vary slightly from the California law. If you have employees working in those cities, be sure to check with your employment counsel to ensure you are complying with the appropriate requirements.

Paid Parental Leave. This ordinance will require employers with employees in San Francisco to supplement California’s Paid Family Leave (PFL) so that employees received 100% of their gross weekly wages while on a parental leave of absence. PFL currently provides eligible employees with up to 55% of their regular wages, subject to a maximum weekly benefit of $1,129. Employees may receive these benefits for up to six weeks in a 12-month period. San Francisco’s law will require covered employers to provide additional wage replacement benefits of up to 45% of the employee’s wages, subject to the weekly maximum.

This law goes into effect on January 1, 2017 for employers with 50 or more employees; July 1, 2017 for employers with 35 or more employees; and January 1, 2018 for employers with 20 or more employees.

With the employee’s agreement, an employer may apply up to two weeks of the employee’s accrued vacation to meet their supplemental compensation obligation. If the employee does not agree to this, the new law gives the employer the right to choose not to provide supplemental benefits.

Also, employers must display a poster with information about the supplemental benefits and must maintain records of the supplemental benefits paid to covered employees for at least three years.

Paid Sick Leave. The amended San Francisco paid sick leave law, which goes into effect January 1, 2017, simplifies the sick leave pay calculation to match that of the California state law. For non-exempt employees, this means paying them for sick leave using either their regular rate of pay, or, a rate calculated by dividing total wages (excluding overtime) by total hours worked in the previous 90 days of employment. Exempt employees should be paid for sick leave at the same rate they are for other leaves.

The amended law will also prohibit an employer from requiring employees to take sick leave in increments of more than one hour.

Los Angeles also recently passed a sick leave ordinance. This new law allows employees working in the City of Los Angeles the ability to accrue and use up to 48 hours of sick leave. This is twice the amount provided by California state law. The ordinance went into effect on July 1 for employers with 26 or more employees, and will go into effect on July 1, 2017 for employers with 25 or fewer employees.

San Diego’s paid sick leave law went into effect on July 11 and provides employees with 40 hours of sick leave per year.

As with all changes in employment law, it’s important to update your Employee Handbook to reflect the latest requirements. Please contact me if you need help making these updates or would like to discuss a handbook review.

Update: Federal and State HR Laws

In my last blog I talked about the change in the minimum salary requirement for exempt employees that goes into effect in December. Here are some other HR-related legal updates that may also affect you.

State Disability Insurance eligibility waiting period. The waiting period for State Disability Insurance eligibility has changed for individuals who file a second disability claim for the same condition or a condition related to the initial claim. SB 667, which went into effect July 1, waives the 7-day waiting period for the second claim if it is filed within 60 days after the initial disability benefit period. The bill also extends to 60 days (from 14 days) the time between claims for the same or related cause or condition to be considered one disability benefit period.

Wage garnishment. SB 501, effective July 1, reduces the prohibited amount of an individual judgment debtor’s weekly disposable earnings that may be garnished based on a withholding order.

Electronic Unemployment Insurance reporting. Starting January 1, 2017, employers with 10 or more employees will be required to electronically submit their unemployment insurance reports to the Employment Development Department. Under the new requirements, employers must also remit contributions for unemployment insurance premiums by electronic funds transfer. The requirement will apply to all employers beginning January 1, 2018.

California minimum wage. SB 3, signed by Governor Brown in April, will increase California’s minimum wage annually, reaching $15/hour by January 1, 2022. For employers with 26 or more employees the minimum wage will increase per the following schedule:
January 1, 2017 – $10.50/hour
January 1, 2018 – $11/hour
January 1, 2019 – $12/hour
January 1, 2020 – $13/hour
January 1, 2021 – $14/hour
January 1, 2022 – $15/hour

Employers with 25 or fewer employees will be on a schedule one year behind the above schedule, reaching $15/hour on January 1, 2023.

In my next blog I’ll talk about changes at the county and city level. It’s important to keep your Employee Handbook up to date to ensure you are in compliance as requirements change. Please contact me if you are interested in a mid-year review of your manual.

New Overtime Rules Go Into Effect December 1

The Department of Labor has announced new federal regulations increasing the minimum salary that must be paid to qualify an employee as exempt from overtime. As of December 1, 2016, an exempt employee must be paid a minimum of $913 per week, or $47,476 annually.

The current California minimum annual salary for exempt employees is $41,660. This means that California employers with employees who are currently classified as exempt and earn between $41,660 and $47,476 will need to decide before December 1 whether to reclassify these employees as nonexempt, or increase their salaries to at least $47,476.

The duties tests for exempt classification have not changed. In California, a position may qualify as exempt if more than 50% of the work is administrative, professional or executive in nature.

In addition to increasing the minimum salary, the new federal regulations allow employers to count non-discretionary bonus compensation and certain other incentive pay for up to 10% of the minimum salary, and provide for automatic adjustments in the salary and total compassion levels for the exemption every three years, starting in 2020.

Misclassification of employees is one of the top three areas where employers are vulnerable to lawsuits. Be sure that you understand the duties tests, and check with your employment attorney if you are unsure how to classify an employee.

As a reminder, in California, employees may be exempt from overtime pay rules if:

They are engaged in work which is primarily intellectual, managerial or creative, AND
They are paid the required minimum salary. As mentioned earlier, this salary will be $47,476 as of December 1, 2016.

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.

Giving is a Year-Round Opportunity

We traditionally think about the winter holidays as the “season of giving.” Each November, as we give thanks for what we have, we are reminded to share with others through food drives, volunteering in the community, and making year-end donations.

But here’s the thing. Those who are in need have needs throughout the year. And the organizations who support them need your donations of time and money during the summer as much as during the winter. Giving is a year-round opportunity.

If you are moved to “give back” in some way over the next few months, here are a couple of organizations I work with that are making a significant difference for the people they serve.

Youth Science Institute (YSI) is a local nonprofit whose mission is “to inspire enthusiasm for science and a love for learning.” Did you know that in Santa Clara County, 32% of 5th grade students are failing science? In high poverty neighborhoods, the failure rate is as high as 90%. YSI addresses this issue by providing supplemental science education – life, physical, earth and social science – to nearly 30,000 pre-K to 6th grade students annually. Without supplemental science education from out-of-school providers like YSI, many students in Santa Clara County would not have a complete grade-level science curriculum. Math and science education are very important to keep the U.S. competitive in the global market. If you are interested in supporting science education, click here.

Puente is a nonprofit Community Resource Center serving the San Mateo County South Coast communities of Pescadero, La Honda, Loma Mar, and San Gregorio. Puente works with local communities to leverage resources that “foster economic prosperity and security, and that promote individual and community health and wellness.” In addition to advocacy and community resources, Puente provides adult education and youth leadership development.

Puente is currently holding a drive to collect backpacks and school supplies for students in the district from preschool to high school. A full backpack with supplies can cost as much as $100, a figure that is out of reach for many of the families Puente serves. You can help by making a donation or purchasing specific supplies from their online “wish list.” Puente has made it very simple to contribute.

You can help by:
1. Doing a drive among your circle of friends and family collecting what it is on their list.
2. Buying some school supplies directly from the drive site on Roonga where you can choose directly what you want to give from a box of pencils to 100 erasers.
3. Making a contribution online that Puente will use directly to buy school supplies from their list.
Thank you for your support!

The Multiple Benefits of Employee Vacations

Studies show that Americans are reluctant to take time off from work for vacations. In fact, one survey, conducted by global travel intelligence platform Skift, found that in 2014, 42% of Americans didn’t take a single day of vacation. Another survey by the U.S. Travel Association found that of those who did take vacation, four out of ten didn’t take the full amount available to them.

For some of those non-vacationers, the reason may be that they don’t receive paid vacation days. Nearly a quarter of U.S. companies offer no paid time off. For those who do have paid vacation, but don’t use it, they often cite as reasons: a heavy workload, lack of money to “go anywhere” and the perception that people who take time off are less dedicated. “They dread the pile of work awaiting them when they return,” according to one survey, “and feel that no one else can do what they do at the office.”

Although employers may welcome the sense of dedication and the workflow continuity, by not encouraging employees to take some time away they are actually doing a disservice to both the employee and the company.

Research shows that, for employees, time away from work:
• Improves overall health
• Increases creativity (new experiences, new scenery)
• Provides for quality time with family
• Ignites neural connections (increasing brain power – a good thing!)
• Increases productivity upon return to work

There are benefits for employers as well. Employees who take time away from work for rest and relaxation are happier, think more clearly, and are more engaged upon their return. Shawn Achor, author of The Happiness Advantage, says that “the greatest competitive advantage in the modern economy is a positive and engaged brain. When the brain can think positively, productivity improves by 31 percent, sales increase by 37 percent, and creativity and revenues can triple.”

As summer approaches, I encourage you to create an environment that supports vacation time off for your employees. Start now cross training employees, and finding other ways to cover work. Lead by example and take a vacation yourself! Actively encourage employees to take a vacation. Share the benefits of time off, and don’t allow the perception that those who take it are less dedicated.

“There is virtue in work and there is virtue in rest. Use both and overlook neither.” – Alan Cohen

Tips for Creating a Positive Summer Intern Experience

Summer internships can be a win-win opportunity for both the student and the employer. For students, it’s an opportunity to expand their knowledge and skills while gaining some work experience for their resumes. For employers, it’s an opportunity to build a pipeline for future talent needs and to create more awareness about your company. The key is making it a positive experience. Here are some tips.

Follow the Department of Labor guidelines regarding payment. If you hire paid interns, the same minimum wage and overtime laws apply to them as apply to your fulltime employees. With paid interns you have more flexibility in terms of the type of work you can have them do. If you hire unpaid interns, be sure you understand the California Department of Labor guidelines for determining whether the intern is entitled to wages. The DOL considers the following 6 criteria in determining whether an intern is entitled to wages in exchange for his or her services. An unpaid internship must meet these criteria:

The internship is similar to training that would be given in an educational environment
The internship experience is for the benefit of the intern
The intern works under close supervision of existing staff and does not displace regular employees
The employer derives no immediate advantage from the activities of the intern, and, on occasion, its operations may even be impeded
The intern is not necessarily entitled to a job at the end of the internship
The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

Be clear about expectations. The intern may have little or no work experience. Outline expectations, supervision, etc. Ideally, tie the work to their school curriculum (this is especially important for unpaid interns). Consider what tools, resources and training they might need to fulfill expectations and include that in your planning.

Assign a buddy or mentor. Interns are there to learn, so by definition they will have questions. Assign an experienced employee within the department where they’ll be working to be the “go to” person for their questions and concerns. Be sure that the buddy is a good representative of the company and the culture. Encourage them to take the intern to lunch at least on the first day, and to check in with them frequently during the first week when interns (or even regular employees!) often feel a bit lost.

Involve them. Interns with a good summer experience can be your best “ambassadors.” Invite them to company meetings, as appropriate, “Lunch and Learn” events, and team meetings where they can observe business in process, learn about your products and services, and have a more integrated experience.

Create opportunities for them to learn about their chosen field. Help interns set up “informational interviews” with selected employees who can provide them with practical guidance and “lessons learned” from their experience in the field.

Make it fun. Consider hosting a barbecue or breakfast or other special event during the summer where interns can mix with other employees and management in an informal environment.

Remember, every person who interacts with you and your business is a potential advocate or detractor. You know this about customers, but also keep it in mind when you are interacting with job candidates, temporary employees and summer interns. At the end of the summer interns will be going back to their respective campuses and relaying to other students (perhaps some of your future job candidates) the experience they had at your company. Be sure you make it a good one.