An Important Enrollment

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By Pat Perry

Next week, the Ohio Bureau of Workers’ Compensation is providing a one month open enrollment for employers relative to selecting a Managed Care Organization (MCO). MCOs are a key player for many organizations in keeping their workers’ comp costs in control through proactive case management and a solid transitional work program. Employers pleased with their MCO do not need to take any action. Employers seeking a new MCO can do so at no cost and it only takes about 5 minutes.

There is plenty of information about MCOs at the Bureau’s web site and more data about Ohio MCOs will become abundant starting next week. If you do not know your company’s MCO, you can simply click here to find the MCO assigned to your organization.

Over the next several weeks, ERC will be providing information about the MCO selection process and other critical data to provide organizations facts upon which to make an informed decision. As this open enrollment only occurs every two years, this decision is extremely important.

Since the MCO Open Enrollment period starts April 30 and ends May 25, we will continue to provide you with information throughout to assist you in your choice of a MCO.

14 Tips to Drive Revenue in HR

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14 Tips to Drive Revenue in HR

HR may not always be able to directly contribute to the bottom line, but there are a number of impactful ways that it can help drive revenue. Here is a list of 14 things your HR department can do to drive revenue at your organization.

  1. Win over talent from your competitors. Win over the best talent with better compensation, benefits, opportunities, and a more attractive workplace.
  2. Retain your top producers. Figure out what will make top performers stay and create a strategy to keep them at your organization.
  3. Pay for performance. Create an incentive program directly tied to profitability. Whether that's a bonus program or profit sharing program, it should produce performance gains.
  4. Be selective. Be choosy with your benefits offerings. Select benefits that matter most to your top talent. You may administer 20 different benefits when just 5 are used and valued.
  5. Incorporate drivers of revenue into performance management. Understand the drivers of revenue in your organization and make sure those are measured in the performance evaluation process.
  6. Train smarter. Conduct a training needs assessment to prioritize and identify critical training needs across the organization. Use high quality training methods that lead to behavior change.
  7. Track ROI. Link wellness to health insurance usage; training to performance improvement; engagement to profitability gains. Showing ROI helps build a business case for HR and reinforces its value.
  8. Improve medical and leave management. Administering employee leave more efficiently and choosing an effective Managed Care Organization (MCO) are ways that you can help employees get back to work in less time and reduce the drain of medical leave and workers compensation costs.
  9. Measure what matters. Measure HR cost factors (i.e. compensation cost, benefits cost) and revenue per employee. Know what your top HR costs are and how those compare to other organizations.
  10. Implement time-saving systems. Digitize HR data and record retention. Make it easy for employees and managers to access and use the information you collect so that they can focus on producing results.
  11. Identify obstacles to revenue generation. Lead performance improvement efforts, suggestion and feedback programs, and other means to help identify opportunities to increase revenue.
  12. Plan your workforce. Understand your organization's areas of growth and ensure that you are stacking those areas with top talent. Workplace planning prioritizes hiring needs.
  13. Reduce legal fees. By choosing inexpensive legal resources and assistance, obtaining legal knowledge, and keeping your organization compliant, you can significantly reduce legal fees.
  14. Save on staffing. Hiring is arguably one of your most expensive HR areas. Reduce your cost per hire by taking advantage of staffing service discounts and using creative, inexpensive sourcing methods.

HR departments that drive revenue and results in their organizations take advantage of opportunities to save their organizations money wherever possible, identify opportunities to build up their top revenue producers, and simply manage HR smarter and more efficiently.

HR Project Support: Job Descriptions and Onsite HR Audit

The Best Solution to Managing Salary Costs

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Like most employers, you’ve probably been faced with the challenge of how to manage rising salary increase budgets, reward high performers, and sustain your organization’s financial health by meeting and exceeding margins achieved in past years. How do you manage these critically important yet competing demands? The best solution is to develop a variable pay program.

Variable pay: A solution to base pay management

Variable pay is one of the best solutions to confronting the problem of base salary increases. It is much less expensive to manage than annual base pay merit increases, doesn’t compound salaries over time, and can deliver meaningful rewards and additional compensation to employees without long-term hits to your margins.

Generally, it takes approximately $5 of variable pay to deliver the same financial effect of a one dollar salary increase. Additionally, base compensation costs account for about 20-25% of your revenue, whereas variable pay costs account for about 3-4% of your revenue (on average). As a result, variable pay can be a huge savings for any employer.

Executing variable pay: Paying for performance

Fundamental to variable pay is the issue of pay for performance. Variable pay requires differentiating pay by some factor, usually individual and/or company performance.

This means differentiating pay by performance and allocating all (or most) of your organization’s pay rewards to your highest performers and reducing rewards for your average or bottom performers. It also means that additional pay is entirely dependent on how your organization performs, which can ensure that your organization’s financials remain healthy and that financial performance targets are met year over year.

The trouble with pay for performance is in the execution. For it to work, you need a culture that rewards high performance; standard performance management systems which give employees the insights, tools, support, and clarity they need to reach their goals and managers the tools to evaluate and objectively compare performance; as well as meaningful payouts.

Here are proven best-practices for executing variable pay when it comes to managing these issues related to culture, performance, and payouts:

Culture

  • Types of variable pay offered match the culture. For example, strong emphasis on teamwork = team-oriented variable pay.
  • Leaders support a performance-oriented workplace and encourage rewarding “A-players.”
  • Tenure, attendance, and other non-performance related factors are not considered when making decisions about pay, rewards, or promotions.
  • Pay for performance is widespread. Everyone has the opportunity to earn more pay based on their performance – not just execs, managers, and sales staff.

Performance management

  • Goals are clear and achievable. Employees understand how to accomplish their targets.
  • A manageable number of targets are given – ideally 1 to 3 important goals.
  • Accurate measures of performance are intact and not subject to extraneous factors.
  • Performance is regularly tracked, monitored, and well-documented.
  • Performance is well-managed. Employees are coaching, re-directed, and assisted in reaching targets.

Payout

  • Payouts are substantial enough to be perceived as beneficial, motivating rewards.
  • Differentiation of pay and/or rewards is enough to be meaningful for high performers. Strive for 2 times the average payout to reward your highest performers.
  • Tiers for payouts are set to reward employees for meeting minimum goals as well as stretch goals.
  • Minimum and maximum thresholds for targets and payouts are provided.

Variable pay programs are promising and highly effective. If your organization is challenged in sustaining its annual merit increase program and controlling base pay costs, variable pay can be an advantageous solution. Just keep these best practices in mind before designing a variable pay program to ensure that the program is successful and delivers results.

Additional Resources

Performance Management Services ERC can support performance management initiatives through performance management system development, performance review form development, competency development, consulting on performance management issues, performance management/goal-setting training for employees and supervisors, and more. 

3 Reasons You Need to be on LinkedIn

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We've all been there. You're at a meeting or a networking event and you meet another professional. Within the next couple days you search for that person through Google or directly through LinkedIn to learn more about them and possibly even connect. And odds are if you don't do that, the other person does.

Social networks have become engrained in the fabric of contemporary networking, and LinkedIn is the network of choice for the business crowd. Having a LinkedIn profile is a necessity for every working professional. Here's why:

1. Control of Your "Personal Brand"

Businesspeople are expected to be on LinkedIn, and a lack of a profile can be an indication of an out-of-date or inaccessible professional. Your profile acts an extension of your business card, showcasing who you are, where you work and what your expertise is.

Quick tip: Don't use Facebook for business networking.*
*unless you feel 100% comfortable with your peers seeing that picture of you from the Bahamas two years ago

Here are three things you can do right away to make sure you're controlling your personal brand on LinkedIn:

  • Get a profile - This is a no-brainer. If you're not on LinkedIn, plan to set up a profile. LinkedIn offers several great tutorials on how to do this.
  • The basics - If you do nothing else, add your contact information and your current employer. This will drastically increase the ability for other people to find you on LinkedIn.
  • Keep adding - Once you've completed the basics:
    • add former employers (to connect with past colleagues)
    • add education (to connect with former classmates)
    • add a summary of your job and expertise (so people can learn more about you).

2. Organize Relationships

Increasing the size of your professional network, whether offline or online, should be an important component of any business professional's career. Having an extensive network comes in handy not only in career transition and advancement, but can be a great resource for sharing ideas and seeking support for issues related to your specific job function.

  • Staying in touch - Remember that person you met at the networking event mentioned above? Build that relationship by connecting with them on LinkedIn.
  • Staying current - LinkedIn provides you with constant updates about people you're connected to, including job transitions, promotions, shared content and more.
  • Staying in the loop - LinkedIn makes it incredibly easy to pose questions to your network and receive nearly instant feedback, making it a powerful tool for getting answers to your job-specific questions.

3. Finding Information & Answers

While LinkedIn is primarily a networking tool, it's become a great research tool for crowdsourcing ideas and information among similar groups of people. Here's how:

  • Your own audience - LinkedIn gives you the ability to ask your own audience a question and receive answers quickly, either through your status message or through a group discussion board.
  • The power of the Group - If you're not using Groups in LinkedIn, you're missing out on an opportunity to listen in on many of the discussions that your peers are having right now. Join a group or two to start, and simply read some of the discussion topics. You're bound to gain something insightful within the first week.

How to Prevent a Retaliation Claim

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Over the past several years, charges of retaliation filed with the Equal Employment Opportunity Commission (EEOC) have significantly increased, making retaliation a major legal risk that employers face. Here are several ways that employers can prevent retaliation.

Know what employment actions are considered "adverse."

An employee can sue for retaliation if they suffer a tangible, adverse employment action - such as loss of income or employment as a result of engaging in a protected activity. They must prove that there is a connection between their protected activity and the employment action they received. Examples of adverse employment actions could be a demotion, termination, or pay cut. A negative performance review may or may not be considered adverse depending on the circumstances.

Be aware that perception is reality when it comes to retaliation.

You may not intend to hurt an employee, but an action can still be perceived as retaliatory if an employee sees it as such. For example, reassigning or transferring an employee to another location, shift, or role or even separating employees from one another can be perceived as an adverse action if the action results in an outcome that is less desirable to the employee.

Address complaints promptly and respectfully.

Take complaints seriously and treat them with respect and care - they are indicators of dissatisfaction and usually precursors to a lawsuit. Start by establishing a policy against retaliation which communicates that your organization does not tolerate retaliation and explains the steps employees should take if they have complaints. Research complaints thoroughly and document the actions you take to address them.

Make and maintain a list of protections.

Create and maintain a list of all protections under law and distribute it to decision-makers, including supervisors and managers. These protections should include employees requesting FMLA, reasonable accommodations, and those employees in protected classes (race, national origin, religion, etc.). Make sure that decision-makers are aware of the types of activities which are protected under law.

Time your decisions accordingly.

Timing is one of the most important pieces of evidence that usually supports a retaliation claim. The longer the timeframe between the protected activity and adverse employment action, the more often courts have dismissed such claims. Refrain from taking adverse employment actions close to a complaint or protected activity.

Channel major employment decisions through HR.

Require a trained HR professional to be involved in any employment decisions, particularly those that negatively affect an employee. Conduct a thorough HR review before proceeding with a disciplinary action (i.e. warning, suspension, termination, etc.) for any employee who engages in a protected action and make sure that you have plenty of documentation to back up your decision.

Train and educate supervisors.

Supervisors can be major culprits of retaliatory decisions and it's important to make sure they are not making any decisions that could be unlawful. While they may feel so inclined to "get back" at an employee, the risks of doing so often far outweigh any benefit. Share specific examples of retaliation by supervisors, common scenarios, and procedures they must follow to avoid retaliation.

On a final note, when it comes to preventing retaliation in the workplace, it's best to consult case law, your attorney, and the EEOC's website for more guidance on the subject.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. 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.

Additional Resources

Supervisor & Manager Training: Employment Law

In this series, supervisors and managers learn about potential legal issues such as workplace discrimination and harassment, managing employee leaves of absence, and employee performance issues. Supervisory Series is offered in AM or PM sessions.

Bandwidth Battles: Streaming Content Takes a Hit

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As the mid-afternoon lull sets in, you decide to check in with a few folks. When you poke your head in and say hello, you get no response. With their headphones in and Pandora buried beneath a cascade of windows on their desktop, you can see that this employee is clearly focused on the task at hand. You move on to the next cube over- headphones again. Oh well, you can stop by again tomorrow, besides there’s a new Pandora station you’ve been meaning to try.

But what if Pandora wasn’t an option anymore? What about YouTube, ESPN.com, or any other site containing streaming audio or video? Employees all across the country are finding out as more and more employers are unable to keep up these bandwidth hogs.

CNN cited Proctor & Gamble as yet another prominent example of an organization forced to make the decision to block certain sites with streaming content. For P&G employees, Pandora and Netflix are now a thing of the past, but interestingly, both YouTube and Facebook remain accessible.

Their decision to block some but not all streaming content sites reflects yet another challenge that organizations are facing related to streaming content. Even as they ban some sites, organizations must balance their need to preserve network bandwidth, while still retaining access to sites that employees utilize for job related activities, such as marketing or professional networking.

So where does your workplace fall on this continuum from total restriction to total access of streaming content? Has the ongoing struggle for sufficient bandwidth forced your organization to block streaming content? Is bandwidth capacity the issue or is the ban more closely related to questions about employee productivity or other factors?

For more news like this, sign up to receive our weekly newsletters here.

Most Companies Can Benefit From a Plan Audit

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401(k), 403(b), pension plans and health insurance plans are wonderful perks to offer employees. But, many companies don’t understand the compliance required by the Department of Labor (DOL) and the Internal Revenue Service (IRS) that goes along with offering these benefits to employees.  The DOL and IRS have various filing and audit requirements that are applicable to these types of plans. Understanding what they need is imperative in making sure the plans maintain their tax-exempt status. 

When is a benefit plan audit required?

As a general rule – most benefit plans are required to file a Form 5500 (Annual Return/Report of Employee Benefit Plan) on a yearly basis. The amount of information included on the Form 5500 will vary depending on the type of plan in place.  If a plan has over a certain number of employees, they may need to have an annual audit of their plan performed, as well.

What actually triggers the plan audit requirement is the number of eligible employees a company has. Generally, when a company has more than 100 eli­gible employees, an annual audit is re­quired. However, you can’t just count all the people participating in the plan to determine whether or not you need the audit; you need to take into consideration eligible employees, as well. Eli­gible employees are those currently par­ticipating plus those who elected not to participate in the plan.

Companies with less than 100 eligible employees only need to file the Form 5500 as a small plan; they do not need an audit. But, companies with more than 100 eligible employees have to file the tax return along with the annual audited financial statements.  There are also certain exceptions for some types of plans with less than 100 eligible employees, stating that a Form 5500 is not required to be filed at all.

The due date of the filings for both the Form 5500 and audited financial statements relates to the due date of the Form 5500. For a calendar year-end plan, the Form 5500 should be filed by July 31, 2012. They also have the option to file for an extension, which gives them until October 15, 2012. Typically, April or May is when companies start to get questionnaires and draft Form 5500s from their third party administrators. This is a good time to address the audit requirement question.

The DOL imposes strict financial penalties when the Form 5500 either isn’t filed at all or is filed im­properly. These penalties are assessed per day and can be as high as $50,000 per report, per year for a deficient filing.

 

If an annual audit is required, what’s next?

The next step would be to find a firm to perform the audit work. Many com­panies look at the firm that does their annual accounting and tax work to see if they perform employee benefit plan audits, as well. Some accounting firms have separate employee benefit plan audit departments with dedicated staff; others do not. Once you find a firm to handle the audit, ask questions: How many other plans does the firm handle? Does it handle all types of benefit plans?

There are three types of benefit plans:

  1. Defined contribution plans – one example of which is a 401(k).
  2. Defined benefit plan, where the participants don’t contribute, but the company does — the most common ex­ample of which is a pension plan.
  3. Health and welfare plans – that offer health insurance and disability-type insurance to employees.

Firms that specialize in employee benefit plan audits have dedicated staff that work on the audits and go through specialized training, and have a streamlined audit process. Companies will also want to find out if the accounting firm is a member of the American Institute of Certified Public Ac­countants Employee Benefit Plan Audit Quality Center. They should also ask what the audit process is going to entail. How much as­sistance is going to be required on the company’s part? They should know go­ing forward how much time their em­ployees would spend assisting the firm with getting the audit completed.

Who will be involved on the company side?

Human resources and/or the accounting department will work closely with the au­ditors because they handle payroll and ben­efits and have all the documentation for what people choose to contribute, along with per­sonnel records and payroll information. Those people are the ones who will put the most effort into getting the documen­tation ready for the auditors.

How long does the audit process take?

It depends on how quickly the auditors can get the information. Typically, the actual fieldwork, where the firm is on-site reviewing original documents, takes anywhere from a day to a week, depend­ing on the size of the benefit plan. Many times the auditors will leave, but have items they want to follow up on. The whole process – from fieldwork to issuing the financial statements to getting the open items cleared – is usually a four- to six-week process.

The Form 5500 and annual audit process can be confusing for those that are new to the process or for those that don’t fully understand all of the compliance requirements that go along with operating the plans.  It really makes sense to talk to a specialist to make sure all of the plans are filing the appropriate documentation on a yearly basis.

Source: Gisondo, D. (2012). Skoda Minotti

Exclusive! ERC member companies can receive their 2011 Benefit Plan Audit at no cost and Lock in their 2010 Rate for the Next Five Years. Click for more details on Benefit Plan Audits, or contact Dani Gisondo at 440/449-6800.

ERC Partners with Turning Technologies

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ERC has partnered with Turning Technologies (www.turningtechnologies.com), based in Youngstown with a national presence, to offer its members discounted pricing on purchases and rentals of their interactive response sytems. ERC members will receive 15% off purchases and $100 of rentals.

Turning Technologies provides response systems to organizations to create engaging, interactive environments that support learning initiatives. Response systems allow speakers to ask questions during presentations with polling software and receive instant participant feedback with handheld response devices.

This is an exciting product that we’re able to offer our members at a significant discount. Whether you’re in an office or industrial environment, the ability to gather data instantly strengthens any meeting or event.
Pat Perry, President of ERC

Click for more information on Turning Technologies.

7 Lessons on Managing Open Workplaces

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Recently, there has been considerable research and debate on whether open work environments improve or impede employees’ performance and productivity.

On one hand, open work environments naturally encourage collaboration, teamwork, socializing, and innovation. They allow employees to move around, create discussion, and collaborate spontaneously. They lead to more informal mentoring, problem solving, rapid information sharing, and easier communication between peers, and can even decrease misconduct.

On the other hand, most organizations that move to an open work environment face challenging management issues. Open work environments can lack private or quiet space for concentration, contain loud noise levels, lead to frequent interruptions, and decrease productivity or performance for some employees.

It’s clear that in practice open work environments can enhance a workplace and improve collaboration, but also pose issues that need to be managed. Here are some important lessons other companies and research tell us about how to effectively manage the open office work environment.

The open office is not for everyone...or every business.

There are employees whose job function, nature of work, and personality benefit from private individual space. For example, mathematical and computer science jobs tend to require long periods of heavy concentration; introverts tend to be more creative and productive in private spaces; and younger employees tend to like open workspaces more than older employees. Don't assume that open spaces work for everyone's job or situation. Consider your generational make-up, types of jobs, and business climate before making the move.

Setting creative rules can help eliminate common problems.

Gather employees together to set basic informal rules and "cube etiquette." This helps alleviate common issues of disrespect and frustration with coworkers in open office settings. These rules could address how to creatively deal with issues such as interruptions, hygiene, noise, and personal business. Have employees participate in creating a respectful work environment. Don’t set the rules for them.

Organizations need to train on soft-skills.

Open work environments prompt frequent interpersonal interactions which naturally lead to more frustration and conflict. Your organization needs to be prepared to train employees and managers on the skills they need to make the environment work. Continuously training employees on soft skills such as respect in the workplace, communication, collaboration, and conflict management is imperative to keeping these interactions positive and constructive.

Listen and keep an open dialogue.

Research shows that employees generally won't come forward with complaints about their work environment or address them directly with their coworkers. Keep an open dialogue with employees – especially during the months of the transition – on what’s working and not working. It shows that you care about their response to the change.

Balance individual and group needs - be flexible.

Effective open work environments seem to provide enough accessible individual (hoteling or individual spaces) and cafe-like or conference room spaces - balancing the needs of private individual work time and space for collaboration, meetings, and open communication. They also give employees the freedom to work how and where they want and still allow employees the ability to individualize their space.

Natural separation and groupings should be utilized.

Put "like-groups" together within a larger space. Employees who use the phone frequently could be grouped in a space, while employees who don't could be grouped in a different space. Another best practice is to place employees in the same department and/or highly interdependent departments within the same work area.

Small details need to support productivity.

Light, color, amount of space, and placement of chairs or desks may seem like unimportant details, but they can make a big difference in comfort and productivity. Light levels can cause headaches or lack of focus; color can energize (or de-energize) your staff; if employees don't have sufficient space to work, they can be uncomfortable. All these things affect output and need to be managed.

Break down impediments to productivity and performance.

If you find that employees aren't getting much done, having to work at home to finish projects, that their performance is suffering, that their best ideas are coming from outside of the workplace, or that there are frequent conflicts between coworkers, your open work environment may be creating problems. Enabling performance and creating an environment where work can get done productively should be your number one goal.

Pilot a layout to test an open work environment.

Try an open layout with one department or a particular location before rolling it out to your entire organization. Observe how employees react to the new work environment.

Open work environments can be highly beneficial to an increasingly team-oriented workforce, but they need to be managed in ways that make employees feel comfortable and productive in their spaces, limit negative effects on performance, and support a respectful and collaborative work atmosphere.   

Additional Resources

Soft-Skills Training for Employees & Managers
ERC offers numerous soft-skills training for both employees and managers on a broad range of topics including communication, conflict resolution, generational differences, team-building, respect in the workplace, internal customer service, dealing with difficult people, and more. All of our courses can be customized to meet your organization’s needs. For more information, please contact ckutsko@yourerc.com

Office Products & Services ERC’s network of Preferred Partners provides discounts on a range of products and services to help your organization enhance its workplace experience for employees from technology solutions to food and catering services to office supplies.