What is Lean Manufacturing?

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Lean Method and Six Sigma: What Is The Difference and Which Do You Need?

Lean Manufacturing concepts eliminate wasteful practices while delivering increased value to the customer, but what does that really mean? We spoke with Rick Bohan, training consultant for ERC, about what lean manufacturing is and the importance of it.

Lean manufacturing can be described differently depending on who you ask. It is a concept understood by many yet lacks an indisputable description. Below discusses a few of the different ways lean manufacturing is described.


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The Do’s and Dont's of Benchmarking and Performance Reviews

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The Do’s and Dont's of Benchmarking and Performance Reviews

In today's team and collaborative environment, having a performance review with employees is a great communication and evaluation tool. A survey conducted by SHRM in fall of 2012 shows that 74% of companies perform reviews annually, while 21% conduct reviews semi-annually. A small percentage performs them quarterly or ongoing.  

However, with most companies conducting some type of performance review, still 4 out of 5 U.S. workers are dissatisfied with their job performance review, according to a 2009 Reuters poll. So how can you conduct a review that will be beneficial, to both you and the employee?

We spoke with Tom Ault, Director of Technical Training at ERC, about how to use benchmarking to not only improve your organization’s measurement of the quality of policies, products, programs, and strategies, but how to make the employee more happy and comfortable with the process.
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Employment Applications: What to Include and What to Avoid

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Although resumes are a valuable addition to the hiring process, it is advised that employers still use employment applications because they can provide legal and practical advantages. Some companies even reject resumes and require all job candidates to complete the company’s application. 

Why an employment application?

The primary purpose of an employment application is to ask the right questions. Those are the questions that lead to the candidate that best fits your organization or has the greatest chance of success in the current open position; that means learning specifically what skills, training, experience, achievements and behaviors make that person the best candidate for the job.

The employment application is often the first contact a job seeker has with your organization. It is the beginning of the employment relationship. The information you request from a job applicant is different than the information you will request from hired employees.

Disclaimers

It is best practice for a company to include certain disclaimers and authorizations in the application form. To avoid a wrongful discharge legal suit, include an “employment at will” statement, along with a place for applicants to sign off on their acknowledgement of this statement. 

There are no federal or state laws that require a company to include an equal employment opportunity statement on their employment application, however including this statement confirms for the applicant that the company adheres to these employment practices.

Guidelines

An application should always include a section for an applicant's signature to attest that he or she has read and understands certain policies and procedures of the employer that are spelled out on the employment application. These frequently include the fact that the employer is an at-will employer, that the employer is an equal opportunity non-discriminating employer, and any other facts that the employer wants the applicant to read and understand on the employment application.

What to avoid

The application should avoid questions that may reveal that an applicant is a member of a protected class. This includes questions about religion, age, race, disabilities, medical history, gender, marital status, and national origin, etc.  Although many equal opportunity laws do not directly prohibit employers from asking such questions on an application, these kinds of questions may be used as evidence of an employer’s intent to discriminate, unless the questions asked can be justified by some business purpose.

Background Checks

Information needed to conduct background checks should be obtained on a separate form authoring the employer to conduct a check.

Some common questions to avoid are:

  • Protected Characteristics: Federal and Ohio employers are prohibited from making hiring decisions based on characteristics such as race, color, religion, sex, pregnancy, national origin, ancestry, age, disability, genetic information, veteran status, military status or any other characteristic protected by law. Although outside the definition of protected class of “sex” the EEOC now includes gender identity and sexual orientation within that classification. 
  • Date of Birth: If there is a state imposed minimum age for certain positions, it can be asked if the candidates meet the minimum age requirement , but avoid asking for date of birth. In addition to the date of birth, stay away from questions about specific graduation dates.  If educational background is important, ask for the name of the educational institution and the degree or credentials, but no dates.
  • Marital status: Discrimination based on marital status is prohibited in many states. Wait until an individual is hired to gather information on benefits and employment forms.
  • Emergency Contact: This information is only relevant once a candidate has been extended an offer of employment, and should not be requested on the initial job application. This type of inquiry may elicit information about familial status, marital status, a domestic partnership, or other associations unrelated to the applicants qualifications. 
  • Citizenship: Employers should not inquire on an application about an applicant's country of origin, but can ask if the applicant is authorized to work in the United States. 
  • Medical Information: Avoid asking questions related to a disability, amount of sick leave taken, or workers compensation history. Both FMLA and ADA prohibit discrimination and retaliation against applicants who have exercised those rights. An employer may inquire about these areas after it has offered the applicant employment if it makes the same inquiries of all applicants.
  • Criminal History:  Enforcement guidelines issued by the EEOC recommends that employers not ask about convictions on job applications. Federal law does not prohibit employers from asking about criminal history. But, federal EEO laws do prohibit employers from discriminating when they use criminal history information.

Using criminal history information to make employment decisions may violate Title VII of the Civil Rights Act of 1964, as amended (Title VII). The fact that an individual was arrested is not proof that he/she engaged in criminal conduct. Therefore, an individual's arrest record standing alone may not be used by an employer to take a negative employment action.

Many states and cities are enforcing “Ban the Box” laws which prohibit employers from asking about or considering an applicant’s criminal background until the later stages of the application process, such as the first interview or after a conditional offer of employment has been made.

By using an application, an employer can avoid a number of potential problems in the hiring process and promote a selection process that is fair to everyone. 

HR, compliance, termination, or compensation questions?

ERC has a team of HR Help Desk Advisors to provide timely and trusted answers.

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5 Popular Methods for Interviewing Candidates

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5 Popular Methods for Interviewing Candidates

The traditional hiring process for an employer consists of roughly three stages: collect resumes, conduct an in-person interview, and then offer the job to the most qualified candidate. However, today can be a completely different story.

More employers are using digital methods or video capabilities as a way to reduce costs and speed up the time it takes to hire a new employee.

Employers and potential hires are increasingly able to schedule, record, and review interviews via smartphone apps.

So what are some of the different ways employers are finding candidates and conducting interviews?
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6 Trends in Corporate Wellness and Executive Health

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Trends in Corporate Wellness and Executive Health

Workplace wellness programs continue to gain traction across the country as the benefits of these programs on employee health, wellness and productivity become more apparent. Evidence-based studies have demonstrated both physical and financial advantages to the employees and to their employers as wellness initiatives are introduced by corporations.

Creating a culture of health and fitness provides a competitive advantage when hiring new recruits and retaining current employees. Many prospective employees absolutely will consider the health and wellness programs offered by a corporation when considering a prospective employer.

We spoke with Dr. Buchinsky, MD and Dr. Adan, MD, from University Hospitals, about the trends in corporate wellness and executive health going on in today’s workplaces.
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The ACA Today: Where it Stands and How it Affects Employers

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When it comes to the Affordable Care Act (ACA), a lot of organizations have questions. Professionals may feel an uncertainty with how everything will work or cost when it comes to their health care needs. We spoke with Robert Klonk, CEO of Oswald Companies, about the ACA.

Client concerns regarding the ACA

“The biggest concerns regarding the ACA would have to be reporting, uncertainty, and costs,” says Klonk. “Every employer is being hit with a deluge of reporting requirements that are forcing them to look at technology alternatives to be able to handle reporting. It doesn’t seem to matter if the company is a smaller or larger group, reporting is quite burdensome.”

The uncertainty comes from the constant delays and changes to the ACA that has been unfolding since 2010.  It is difficult to plan properly when they keep changing the rules.

“The number one issue clients are worried about is cost,” says Klonk. “There is a tremendous amount of cost being shifted to employer plans, and there doesn’t seem to be a timeline of when it will end. Employers are doing everything they can to try to control costs, but yet continue to get hit with additional ACA costs.” These additional costs ultimately then ultimately get pushed onto employees which creates affordability issues.

The winners and the losers of the ACA

After speaking with Klonk, it was clear that there are both winners and losers when it comes to the ACA.

“Obviously, there is a certain percentage of the uninsured population that are winners. Specifically, the population that was eligible for Medicaid that was not signed up before, especially with the expanded Medicaid and the states that did so, since they were able to get coverage under the expanded Medicaid now rules.”

Klonk says there was also a decent portion of uninsured people today that were able to go on the exchanges and receive subsidies. With over 85% of the policies issued today having received a subsidy of some set; and some of them being quite substantial, they would be an obvious winner of the ACA.

Others that would be grouped in this category include poor performing employer groups. Even though they may have high claims, especially the under 50 life groups that are community rated, they will see their costs go down slightly.

Also, the government is a winner, says Klonk. “The government has more control, and with more control comes more power. If we continue to go down this path, the government will be able to control healthcare far more than any of us are going to be comfortable with,” says Klonk.

But who are the losers in all of this? Klonk says it’s the majority of employers.

“There is too much cost shifting going from the individual marketplace to the employer based marketplace. Also, employees of these employers are sometimes bearing the brunt of these increases.  Individuals who still want individual coverage, but are not eligible for a subsidy on the exchange, have seen dramatic price increases for some of their polices,” says Klonk.

“These were relatively healthy individuals under the old standard and would be underwritten based on the risks they brought; and then be priced accordingly. These individuals who would receive a good price are now paying quite a bit more because there is no underwriting, so they pay the penalty for it.”

Community rating

Currently, community rating is in effect for groups of 2-50 employees. As of January 2016, unless it is delayed again, that law will be expanded and the small group definition will go to groups of 2-99.

“Community rating is not performance based, but is more like socialization,” says Klonk. “Community rating brings everybody together and tries to bring it to the median. So if you are a healthy, young, high-performing group that has embraced wellness and performance based medicine, by going in the community rated pool, you will get dinged quite dramatically.”

However, what about the unhealthy groups that haven’t done anything over the past couple of years?

“Some will to see their costs increase,” says Klonk. “But others do have a chance of actually having rates decrease, because community rating brings everything to the middle. So the incentives go away.”

Klonk says this is the reason why you see a lot of self-insured pools cropping up. They can avoid the community rating of ACA. He also says this particular area, as it relates to community rating, scares him the most going forward because it takes away incentives for employers to keep their employees healthy.

“Over the last 15 years, we have worked so hard to incorporate things like on-site wellness plans, and if you take that incentive away from employers, many of them will not do it anymore,” says Klonk. 

The impact insurance carriers will see with the ACA

There is quite a few things that will impact the carriers, depending on the type of carrier that it is.

“Most of them are introducing some type of narrow network, some more narrow than others,” says Klonk. “In certain areas, it’s not a bad offering if they can try to reduce costs there, but in other areas they are limiting access to a lot of good quality providers. One of the challenges is they’ve somewhat reduced the incentives for some carriers to control costs because they have limited the amount of profitability they can make.”  

This is one of the core elements of the ACA. The percentage of profits are limited to 15 to 20 percent, depending on which marketplace they are in.

“We counted on the carriers before to help us on Disease Management, and to help us in promoting wellness programs and to really work with us and the employers to try to control costs,” says Klonk. “Since that incentive with community rating is very challenging, and with the maximization on their profitability, it’s another area that I see diminishing for the carriers.”

However, Klonk says that financially, the carriers are doing fairly well right now.

“You’ve got the reinsurance fees subsidizing the exchange numbers, and with grandmothering in the small market space, as well as community rating, the carriers are able to pad their numbers a bit.  Although their profits have increased recently, I think they are going to get squeezed here as we go forward. You will see more costs being pushed to the carriers from the insurer fees through ACA, and it is going to challenge them a little bit.”

Klonk believes that many of them, conceptually, will change the way they do business years past to where they go forward and their focus isn’t on managing costs as much or managing the risk as much, but simply processing claims and being networks and claims processors, and technology platforms going forward.

“I can see some of that changing as the incentives in ACA go away from really managing risk and managing cost,” says Klonk.

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The 5 Most Common FLSA Exemptions

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The 5 Most Common FLSA Exemptions

The most common FLSA exemptions are white collar exemptions. They can be broken down into five main categories, including:

  1. Executive
  2. Administrative
  3. Professional
  4. Outside sales
  5. Computer

In order for an exemption to apply, an employee’s specific job duties and salary must meet all of the requirements of the Department of Labor’s regulations.

Here is how the FLSA defines exemptions for these various duties.

1. Executive

An employee is exempt from the FLSA as an executive if they regularly perform all of the following:

  1. The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
  2. The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  3. The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  4. The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

2. Administrative

This exemption is for employees whose main duties involve the support of the business, such as human resource staff, public relations, payroll and accounting. Generally, administrative employees do not directly produce what the company sells; however, they are at a much higher level than those employees performing clerical work.

The FLSA defines exempt administrative duties as follows:

  1. The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
  2. The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  3. The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

3. Professional

Exempt professional employees include lawyers, physicians, teachers, architects, registered nurses, and other employees who perform work that requires advanced education or training. These typically are intellectual jobs, require specialized education and involve the use of discretion and judgment. 

This exemption also includes creative professionals such as writers, journalists, actors and musicians. In general, such jobs require imagination and some unique combination to the employer. 

  1. The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
  2. The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  3. The advanced knowledge must be in a field of science or learning; and
  4. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

4. Outside Sales

To qualify for the outside sales employee exemption, all of the following tests must be met:

  1. The employee's primary duty is to make sales or the employee's primary duty is to obtain orders or contracts for services or contracts for the use of facilities for which clients or customers pay
  1. The employee must be customarily and regularly engaged away from the employers place or places of business.

The salary requirements of the regulation do not apply to the outside sales exemption. An employee who does not satisfy the requirements of the outside sales exemption may still qualify as an exempt employee under one of the other exemptions allow

5. Computer

A computer professional can be paid on a salaried or hourly basis, but must receive compensation equal to or greater than:

  • $455 per week if paid on a salary basis (annual salary of $23,660); or,
  • $27.63 per hour, if paid for each hour worked.

Job titles do not determine the exemption status. In order for this exemption to apply, an employee’s specific job duties and compensation must meet all the requirements of the FLSAs regulations. However, the computer exemption does state that an employee must be employed as a:

  • Computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field; and,
  • The employee’s primary duty must consist of:
    1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
    2. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
    3. The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
    4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

If you have any additional questions regarding common FLSA exemptions, and are an ERC Member, contact our HR Help Desk or visit the U.S. Department of Labor (DOL) FLSA page at http://www.dol.gov/whd/flsa/.

By providing you with information that may be contained in this article, the Employers Resource Council (ERC) is not providing a qualified legal opinion concerning any particular human resource issue. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application. We also recommend that you consult your legal counsel regarding workplace matters when and if appropriate.

HR, compliance, termination, or compensation questions?

ERC has a team of HR Help Desk Advisors to provide timely and trusted answers.

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Wellness Programs: Where We've Been and Where We are Heading

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Wellness Programs: Where We've Been and Where We are Heading

Over the past several years having some form of wellness program for your employees has gone from a cutting edge forward thinking trend, to a mainstream part of many employer’s benefit plans. While the catalysts for this immense growth in the wellness movement are varied depending on the stakeholders involved, most of the changes in strategy, whether being implemented by healthcare providers, the health insurance industry, or even the federal government, are focused on preventative healthcare.

What follows is a brief overview of where wellness programs stand today as well as what these quickly evolving programs and laws could mean for employers and employees alike in the near future.
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How to Determine if a Job is Exempt or Non-Exempt

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exemptvsnonexemptemployees

The terms non-exempt and exempt can cause a lot of confusion for workers and employers. Exemption status determines if you receive overtime pay for working more than 40 hours in a work week. The exemptions are governed by the Fair Labors Standard Act (FLSA).

Non-exempt 

Non-exempt employees must be paid at least the minimum wage and overtime pay for any work performed over 40 hours worked in a week. This time must be paid at a rate of time and one half of their regular pay rate for each hour of overtime.

Exempt

Exempt employees are not granted the same protection under the FLSA, therefore they are paid the same dollar amount regardless of the number of hours worked in a week. Exemptions from the overtime requirements of the FLSA are just that—exceptions to the rule. They are very narrowly construed, and as the employer, you will always bear the burden of proving that you have correctly classified an employee as exempt. When in doubt on the classification of a job, it is best to make them non-exempt.

For most professions, an individual is an exempt employee if he or she meets all of the following three tests: 

  1. Is paid at least $23,000 per year ($455 per week)
  2. Is paid on a salary basis
  3. Performs exempt job duties

But how do you know if the individual performs exempt duties?  As a general rule, exempt employees tend to perform relatively high-level duties with respect to the company’s overall operations.

The most common FLSA exemptions are white collar exemptions and are broken down into five main categories, including: 

  1. Executive
  2. Administrative
  3. Professional
  4. Outside sales
  5. Computer

Other issues

There are also some other concerns to consider when determining non-exempt and exempt status.

  • Time off. Although there are exceptions, it’s usually illegal to give non-exempt employees time off instead of paying them overtime.
  • Child labor. Federal and state laws include special requirements to protect workers under the age of 18. These laws can affect the type of work, wages, and hours that an employee can complete.
  • Breaks. Employers need to make sure they follow federal and state law requirements regarding breaks, including meal breaks, for their employees.

If you have any additional questions regarding non-exempt and exempt employees, and are an ERC Member, contact our HR Help Desk or visit the U.S. Department of Labor (DOL) FLSA page at http://www.dol.gov/whd/flsa/.

By providing you with information that may be contained in this article, the Employers Resource Council (ERC) is not providing a qualified legal opinion concerning any particular human resource issue. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.  We also recommend that you consult your legal counsel regarding workplace matters when and if appropriate.

HR, compliance, termination, or compensation questions?

ERC has a team of HR Help Desk Advisors to provide timely and trusted answers.

Contact the Help Desk

Yelling at Co-Workers and Employees: Is It Ok?

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employee conduct in the workplace Yelling at Co-Workers and Employees: Is It Ok?

Yelling; it’s a part of human communication. Sometimes it’s good and sometimes not. People yell for many different reasons. Maybe it’s to assert themselves over others, or to make their presence known. Maybe they want to incite confrontation or satisfy an ego.

However, what if this is a common practice at your workplace? With any organization, employees at all levels of the business are expected to treat each other with respect. The success of your business heavily depends on co-operation and teamwork among all employees. It’s all about workplace civility.
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