Employers Continue to Be Challenged with Attracting & Retaining Employees

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According to the results of the 2011 ERC/Smart Business Workplace Practices Survey, hiring and retaining employees is the most prominent challenge faced by Northeast Ohio organizations. 

Results of the survey, conducted by ERC in collaboration with Smart Business Magazine, show a trend regarding the recruitment, hiring, and retention of qualified candidates as the top organizational challenge faced by organizations for nearly a decade.  While the poor economy was cited as a primary challenge for employers the from 2009, hiring and retention has emerged once again as the top challenge for local businesses.

Additionally, the survey results show that organizations are investing more in hiring and retaining talent, as a result of this challenge. Specifically, employers reported spending a higher percentage of their recruiting budget on online advertisements (33.7%) and are increasingly using internet job boards to find candidates (77.8%). Also, more employers are providing financial assistance for training and development (90.7%) than in past years.

In recent years ERC has seen an increase in both the use of our member-based resources and our fee-for-service areas related to hiring and retaining employees.  Despite the economy, employers continue to be focused on retention-boosting programs like training, employee development, and employee engagement initiatives.

To access more information about the ERC/Smart Business Workplace Practices Survey, please click here.

More Employers Invest in Training, Survey Says

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According to the results of the 2011 ERC/Smart Business Workplace Practices Survey, the percentage of organizations providing employees with financial assistance for employees to upgrade their skills increased from 2008. In 2011, 91% of organizations report providing such assistance – the highest it has been since 2007. 2010 showed that the percentage of employers paying for training and development decreased, but now appears to be rising again.

While employers continue to use classroom training, tuition assistance, and other traditional avenues to develop their employees’ skills, they are increasingly leveraging web-based methods and e-learning for training. Specifically, 71% of respondents indicated that they used web-based training for employee development, a significant increase of 39% from 2007 and 43% since 2004.

“This survey shows that a growing number of organizations recognize the value of providing financial assistance for employees to upgrade their skills. Employee training programs are a vital part of developing and retaining top talent at all levels of an organization,” says Kelly Keefe, Vice President, Training, and Consulting & Coaching Services at ERC.

For more information about ERC’s training offerings, please click here. To download the free results of this survey, please click here.

7 Ways to Respond When an Employee Quits

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Employers often must deal with turnover and resignations of their best people. When an employee quits, there are many right and wrong ways to respond. Here are 7 critical questions to ask to guide your responses and actions when an employee says “I quit.”

1. Do you value the employee?

When an employee approaches you about their transition, how you respond to the employee depends on how much you value them. If you value the employee, you have two options: do everything you can to keep them at your organization or accept the resignation and show gratitude for their contributions. The option you choose will likely depend on the reason for the resignation and your relationship with the employee.

As an employer, you have an obligation to help address any issue that is preventing you from retaining a top performer. Sometimes these issues are personal and beyond your ability to impact, but many other times there will be something you can adjust in the workplace. This, however, should ideally be done before the employee approaches you with their resignation, because by that time they have likely already made a firm decision.

If you don’t value the employee, accept the resignation without negative commentary, request it in writing, and quickly coordinate logistics for their transition (final paycheck, etc.). Keep your dialogue with the employee limited, professional, and operational in nature.

2. Do you want their feedback?

While most employers conduct exit interviews or surveys to gather feedback from exiting employees, not all organizations consider whether they actually want the feedback of these employees. In fact, it’s not uncommon for employers to mandate exit interviews. Let’s face it though, not all employees’ opinions should be counted equally, especially if they are poor performers. You could find yourself implementing changes to feedback that are simply unproductive complaints.

Be sure that the employees’ opinions and suggestions are worthwhile before you spend time and resources on gathering their feedback in the first place. Top performers, new-hires, and highly tenured employees are all those whom you will likely want to solicit feedback. Their ideas and opinions are often helpful in making changes to workplace and on-boarding programs.

3. Do you have a replacement?

Do you have a replacement who is currently employed at the organization? An employee can quit, leave, or get “hit by a truck” at any time. Knowing this, good managers always make sure that they have a replacement for themselves and for the members of their team, in the event of an emergency. They ensure that someone is cross-trained in the role and can step to the plate if needed. As employers and managers, you should always be asking yourselves: “What if xxxx leaves?” to better your business and minimize risk. Otherwise, you’ll be scrambling to figure out how to fill your or their shoes, and this lack of planning can potentially disrupt your business.

4. How will you retain their knowledge?

Many employees carry a great deal of knowledge, talent, and expertise that is sometimes difficult to train or hire, especially those with significant tenures or unique skills. Increasingly, organizations are focusing on knowledge-sharing practices to cope with this issue before they encounter significant talent losses. The bad news is that it might be too late to retain the knowledge of your key employee if you haven’t already implemented knowledge-sharing practices. These practices could include succession planning, mentoring, knowledge management systems, and procedural/workflow documents which capture their knowledge before it’s lost.

5. How will you notify others?

A best practice when notifying others about a resignation is to start the communication process intimately, with the employee’s managers/supervisors, then with the employee’s team or department, and finally the entire organization. Alert staff of the transition, the timeline until his/her departure, and plan for replacing the employee.

If you want the employee to leave immediately or don’t trust them to work productively until their last day, it’s best to send an immediate written notification to your employees and not use this tiered communication approach. Keep the communication general and let employees know that their coworker has moved on to other career opportunities.

6. How will you respond in their remaining days?

If the employee is going to continue to work through their last day, your organization will need to decide how to deal with their existing assignments and project load, and transition their customer relationships. You’ll need to determine which projects the employee will finish, and which ones will be directed to other employees or put on hold.

In addition to responding to work issues, you’ll also need to determine how you will respond to the departure. It’s best to remain positive about the employee’s new opportunity and wish them success, even though you may be upset with the decision.  Also, decide if or how your organization will wish the employee good luck in their new endeavors, perhaps through a social gathering. Oftentimes, coworkers appreciate a formal opportunity to “send off” the former employee. This, however, isn’t always appropriate.

7. Do you want to keep the door open for a future relationship?

When an employee leaves, you can choose to close the door on the relationship or maintain it. Increasingly, employers are keeping the door open and maintaining relationships with employees who have left their organizations. Social networking tools, in particular, provide an opportunity for them to do this easily. This helps organizations continue a positive relationship with their previous employees which can benefit their recruitment efforts. For example, previous employees can serve as excellent referral sources, and some employers use their “alumni” as a network to attract applicants. These organizations recognize that former employees will be asked about their past employment, potentially by their job candidates, and their honest responses can help (or hurt) their organization’s hiring efforts and reputation.

Another way that organizations keep the door open is by having re-hire policies, which allow the former employee to be considered for employment opportunities in the future. Oftentimes, the employee may end up being even more valuable once they have developed more industry experience and skills, which can benefit your organization.

Inevitably, a talented employee will choose to leave your organization at one time or another, and how you prepare for this departure ahead of time and respond as an employer and manager can make a difference during their transition. Streamlining your exit strategies, creating a good exit interview, developing standard communication practices, implementing knowledge sharing, preparing possible replacements, and maintaining positive relationships with your “alumni” are all ways that you can effectively respond to unavoidable resignations.

Additional Resources

Supervisory SeriesIn the series, participants will gain an understanding of their role as a supervisor as well as employment law as it relates to common supervisory issues. They will also learn how to apply basic managerial and interpersonal skills including dealing with the everyday challenges of being a supervisor, communicating effectively with others, resolving workplace conflict, managing performance, and coaching.

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Win Trust & Influence: 6 Tips for Improving Employee Relations

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In HR, how you approach everyday employee relations can make a difference in whether or not your employees and managers view you as a trusted advisor. Here are ways that you can improve your relationships with managers and employees at your organization to win their trust, respect, and confidence.

Interact and communicate with employees on a daily basis

Make regular interaction a priority and it will help you do your job better. Walk the plant floor or the office. You’ll get to know employees personally, understand their concerns, and better identify work problems that you can fix. Meet with employees regularly, either one-on-one or in small groups. The best HR professionals have won the respect and trust of their employees by taking an interest in their day-to-day lives and creating an open dialogue.

Maintain their trust and confidentiality

Be a trusted resource that employees can turn to discuss problems, conflicts, or other issues. Handle employees’ concerns with integrity and professionalism. Refrain from discussing confidential issues with other members of your team or outside your department, or gossiping about employee matters. If you gather employees’ feedback on any topic, always protect their confidentiality and anonymity. Don’t try to pinpoint who said what.

Advocate for your employees

Know what drives retention and engagement for your employees. Advocate for and champion programs that enhance employees’ work experience and those that are important to your workforce.  Over time, these improvements will be noticed by your employees and they will value your contributions. We have seen many HR professionals gain the respect of the employees’ and leadership teams by creating great places to work.

Gain the respect of your managers

Develop strong relationships with your supervisors and managers. Learn about them and their departments and ask them how you can be of better assistance to their needs. Understand their demands and make their jobs easier, not harder. Create tools and systems and offer training to help them do their jobs better and more efficiently.  In doing so, you will have more luck collaborating with them to manage employees.

Make an impression from the start

Use on-boarding as a way to build your reputation with employees as a trusted advisor. Build a positive rapport prior to them coming on-board by staying in contact, being responsive and accessible, and providing them with all of the information they need for their first day. In addition to facilitating orientation, describe your role to employees in ways that you want to be perceived. Reach out to new-hires multiple times within the first 6 months to gather feedback, provide support, and solidify a positive relationship.

Be objective and balance interests

Execute and enforce policies and procedures consistently and fairly, with no exceptions. Additionally, balance serving all of your internal customers – leaders, managers, and employees. Learn to look at issues objectively from all sides of your business and balance these three interests. Be collaborative in developing and implementing policies. Don’t develop policies without considering their perspectives. 

 If you want to broaden your influence, achieve better results, and improve relationships with your internal customers, consider using these approaches. We have witnessed many HR professionals win the trust and confidence of their managers and employees by adopting these positive employee relations practices.

20 Tips for Managing Young Employees

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We hire them for their fresh knowledge, strong technical skills, and growth potential, but managing young people effectively requires a different strategy than some of your other employees, given their lack of business and work experience. Here are 20 tips for managing young workers.

   1.  Help them transition from college to work. Transitioning from student to employee can be a time of confusion, anxiety, exploration, and excitement. Recognize that each employee handles this transition differently and requires a different level of support from your organization. Think of ways that you can support your new employee in this time of change, whether that’s help with relocation or financial support for continuing education.

2.    Assign them to the right manager.  A young employee needs the right type of manager – one that enjoys teaching, mentoring, developing, and spending time interacting with their employees, since this is the focus of their interests. They also need a manager who is a strong communicator, isn’t afraid to provide frequent feedback, and values employee ideas and suggestions. Your traditional or untrained managers may not be the right fit for a young employee.

3.    Create a good on-boarding program. While it may be tempting to drop your young employee into an assignment right away with limited training, young employees usually need a more detailed and lengthy on-boarding experience to get started on the right foot. Spend the time up-front to make sure they are well-trained to carry out their job responsibilities, understand the business and its products/services, and are comfortable with your operating procedures.

4.    Fill the experience gap by providing just that: experiences. Job experiences should be many and varied and the employee needs to be involved in actually doing the work. Some managers are resistant to putting a younger employee on a more challenging project because of their lack of experience; however, recognize that the employee will only be as valuable to your organization as you let them be. With the right amount of task structure and supervision, potential risks can be minimized.

5.    Invest in them early. Make sacrifices in productivity early on to develop skill gaps in your young employees. Top organizations invest in young employees early in their career – and oftentimes right from the day one. They assess skill gaps right away, lay out structured development plans, and focus heavily on training and development in their first few years – sometimes even in lieu of a full workload. Once the right foundation has been laid, these organizations find that young workers are better equipped to contribute at a higher level later in their careers.  

6.    Give them attention. Young workers know that they have a lot to learn from others and expect more attention from their boss as a result. They don’t necessarily want autonomy, especially if they aren’t skilled yet at their job tasks. Once they become skilled, autonomy may become more valuable to them. They do expect to be heard and want their employers to listen to and value their input.

7.    Provide constant feedback. An annual performance review is not enough performance feedback for your young employees. They like and will need constant feedback as they navigate their tasks and responsibilities. They will also need affirmation as they progress. Managers should meet with young employees often for these purposes.

8.    Re-think how work is done. Younger employees don’t always approach work and life separately and may see these as blended and integrated. This may result in use of work time for personal affairs and use of personal time for work. As a result, they may be more productive working at home or using a flexible schedule.

9.    Provide variety. Young workers typically have a short attention span. They thrive on variety and change and may be your strongest change-agents.  They are usually most productive when working on short-term projects and quick tasks, or longer projects that are broken down into smaller tasks or phases.

10.  Use them for their strengths. They may not be your most perfect assets from the start. They’ll make mistakes and you’ll see the effects of their inexperience over time, but their energy, fresh knowledge, willingness to learn, growth potential, and creativity are all valuable to your organization and likely reasons for which you hired them. Use them with these strengths in mind, and over time with good direction and development, the rest with usually come.

11.  Offer “intrapraneurship” opportunities. Growing research shows that many young people want to be entrepreneurs. To keep their fresh, new, and great ideas inside your organization, allow or offer “intrapraneurship” opportunities – projects or opportunities that allow them to create or be involved in the creation of a new product, service, or start-up scenarios. Use their entrepreneurial spirit for your benefit.

12.  Be or give them a mentor. An experienced mentor can help young employees learn from experiences that they haven’t had and provide an objective sounding board for career discussions and work problems. They can also suggest or help facilitate developmental activities. A mentor could be another individual in the organization (perhaps a top performer), a leader, or the employee’s supervisor. Typically a mentor is 1-2 levels above the employee.

13.  Show them clear, defined career paths. Young employees are focused on advancement. They want to know their career options and work towards a specific career goal. If your organization doesn’t have clear career paths, discuss alternative career and developmental opportunities in the organization and show examples of how other young people have advanced.

14.  Monitor workload. Young workers don’t know what their limits are yet and are eager to take on new projects and responsibilities. They also don’t feel as safe saying no to additional responsibilities because they lack experience. Similarly, keep in mind that young people are not always skilled at managing their time and prioritizing work.

15.  Emphasize professionalism. Young employees may not be educated on the right ways to conduct themselves in a workplace setting. Expect that they may not know the basics like how to lead a conference call, create a meeting agenda, network, manage a project, general business/email etiquette, or more touchy subjects like handling emotions, hygiene, and dress in the workplace.

16.  Choose and monitor work events carefully especially if there is alcohol involved. After-work outings, happy-hour events, and other social gatherings are a great way to attract and engage young employees, but consider limiting alcohol consumption, choosing locations that minimize risk, setting ground rules, and dealing with inappropriate behavior on-the-spot to avoid liabilities.

17.  Differentiate between friends and coworkers. It’s not that friendships in the workplace are bad (in fact, they can be very positive), but young workers have a tendency to view their coworkers as friends more than other employees. These relationships can get too personal and may be inappropriate (i.e. dating relationships), depending on your policies. Plus, when friends start getting promoted and managing one another, these relationships can pose problems.

18.  Explain key policies. Hone in on certain policies with young people such as dress code, attendance, harassment, substance abuse, and social media/internet usage, and specifically what actions are unacceptable in the workplace and the consequences of those behaviors.  What was acceptable in college isn’t always acceptable in the workplace, and some young employees miss these differences.

19.  Provide benefits education. Young workers usually lack knowledge about their benefits – how health and dental insurance works, how much to contribute to their 401K, if they should use a flexible spending account, what an employee assistance program provides, etc. They may also need some help with financial planning such as paying off student loans, saving for a house, budgeting, to name a few. Spend additional time discussing benefits with your younger employees and provide financial planning resources.

20.  Be an example. Young people will emulate who you are. They will view you as a model for their behavior, copying your actions and words. In their first days and months, they are attuned to the norms of workplace behavior and will take on positive and negative behaviors they observe in their work environment. Recognize their malleable nature and use this time to mold them in positive ways.

Additional Resources

 Training for Your Young Professionals

This can’t-miss, two-part series for your organization’s young professionals, covers communication skills, professional etiquette in and out of the workplace, and the traits of a strong leader.

Mid-Level Manager Training

Employers Develop Younger Workers

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Cleveland– According to the 2011 ERC/NOCHE Intern & Recent Grad Pay Rates & Practices Survey, most Northeast Ohio employers invest resources in training, development, and performance management activities for younger workers, particularly new graduates.

The survey shows that over 70% of employers provide new graduates with an orientation during their first week (72%), conduct performance evaluations (71%), and provide regular feedback and coaching (71%). Additionally, more than half of employers provide formal training (56%) and access to a mentor (52%). Fewer (20%) offer management in training programs for new graduates, however.  All of these developmental activities were more commonly offered by non-manufacturers than manufacturers. Similarly, larger organizations tended to be most likely to provide these, although they were still commonly used by small and mid-sized organizations.

Specific training and development opportunities provided to their new graduates as cited by respondents included: on-the-job training, corporate culture training, product/industry/market training, mentoring, shadowing, and targeted leadership development programs.

The results of the survey show that organizations are making investments in training and development for their younger professionals and emerging leaders. These organizations understand the benefits of on-boarding and developing younger employees early in their careers for their businesses and in developing a pipeline of talent.

View the Intern & Recent Graduate Pay Rates & Practices Survey

This survey reports data from Northeast Ohio employers about their internship and recent graduate employment and pay practices.

View the Results

6 Causes of Employee Problems

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Are employee problems festering at your organization or has a good employee “gone bad”?  Recognizing whether certain controllable factors in the workplace are playing a role is key. Here are six (6) common causes of employee problems and ways you can manage these.

1. Stale job responsibilities

One of the major reasons that employees’ performance suffers is lack of self-motivation, which is usually most influenced by the work they do. An employee may become bored or disinterested in their work, especially if they’ve been doing the same job for awhile. To keep their jobs from becoming stale, consider ways to challenge all of your employees and keep their jobs interesting. Involve them on a new project. Create new goals. Cross-train them on a coworker’s responsibilities or give them a new responsibility. Add a new duty to each employee’s job description each year. Make professional development a requirement so that they keep developing new skills. Let them take initiative and lead a new project. We’re often quick to give these opportunities to managers, but extend the same invitation to your non-management staff.

2. Scarce rewards

Many employees are motivated by rewards, but consider whether the rewards you offer are meaningful enough to motivate high performance. For example, do employees feel that they have a good shot at receiving an incentive? If funds for incentives or pay increases are traditionally low and reserved for a small percentage of employees (and typically at the manager or leadership level), employees may believe that the rewards are not worth the extra effort. Additionally, how long has it been since you advanced an employee? Do employees believe that they have the opportunity to advance and develop in your organization? If your organization doesn’t share how people can advance or provide tangible steps and strategies to help your people advance, and makes advancement decisions in a vacuum without any transparency, you may be creating a host of motivational issues. Plus, scarce rewards can lend themselves to other issues like conflict, lack of teamwork, and unhealthy competition.

3. Inadequate training

Sometimes employees just haven’t had the right training or skills to do their job effectively and this gets overlooked in the hiring process. We may find that they don’t know how to do their job or parts of their job. They may have gaps in experience or knowledge that prevent them from performing well, or they may be scared or ashamed to admit that they need guidance to do certain tasks. Fortunately, this is one of the easiest performance problems to fix, because skills are usually trainable or coachable. Your job is to figure out what those gaps are and find ways to close them by recommending and coordinating training, coaching them through issues, and encouraging and making it safe for employees to ask questions if they don’t understand something. Similarly, employees may be in the wrong job for their skill set and need a better fit. Recognize the unique talents of each employee and put them where they will excel, if possible. As often as we work on employees’ weaknesses, it’s important to notice their strengths and how they can add value to our organizations. When employees are using their best skills and abilities, we encounter far fewer performance problems.

4. Not enough resources

Resources don’t just include supplies, equipment, and technology, but also time, people, and money. Lack of resources and increasing demands over an extended period of time can drain the energy and motivation out of your employees, leading to mistakes, errors, and missed deadlines and opportunities. If you suspect that lack of resources are preventing your employees from being successful, invest time in re-evaluating your (and their) priorities, re-distributing workloads, adding staff, and making efforts to ensure that they have all the right resources and support to do their job efficiently.

5. Personal problems

Many workplaces have the philosophy that employees should leave their personal problems at the door, but we all know that they seep into the workplace and affect performance. Child care issues, marital problems, grief and bereavement, illness or injury, and life changes may unavoidably lead to performance and attendance problems for our employees. Our workplace policies and management styles may not allow employees to take the appropriate time to deal with their issues or provide the support that our employees need. If we give our employees the tools and resources to manage their personal lives more flexibly via generous leave, flexible schedules, employee assistance programs, and supportive management, we generally find that employees can better manage their personal life and work results. You can still expect great results and hold employees accountable for high performance while treating them like the adults they are.

6. Missing the basics

Finally, be sure your organization excels at the basics. When the basics are missing, motivation and performance can really suffer. The basics include making sure that employees are treated respectfully, managed well, appreciated, compensated fairly, and provided with appropriate direction and communication. If any of these are lacking, the workplace culture can become a minefield of negative emotions created by employees who feel that they’ve been treated wrongly and undervalued. This undermines your efforts to create a high performance and productive work environment.

When we start exploring the nature and cause of our problems with employees, we usually find that one of these reasons is contributing to the issues and that there are effective ways to manage and fix them without jumping immediately to termination or disciplinary actions. As employers, we need to recognize how our workplaces contribute to problems with our employees and fix those core issues for the betterment of our organizations.

Additional Resources

Learn more about our Supervisory & Leadership Training programs and courses here.

5 Costly HR Mistakes

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These common HR mistakes have very costly consequences for many businesses. Find out the symptoms of these mistakes and their warning signs and how to avoid them.

1. The one-person HR department.

Symptoms: HR functions are managed by individuals with no HR experience such as an Operations Manager, Office Manager, or a Controller. HR responsibilities are delegated to line managers.

Results: When the HR function is managed by individuals with other responsibilities, or those that haven’t been properly trained in HR, important tasks tend to fall through the cracks – like meeting compliance deadlines and keeping up with changing legal requirements and trends. The basics may be accomplished, but more strategic issues are overlooked.

Solutions: Training anyone involved in an HR function or responsibility on the basics of HR, outsourcing HR projects (i.e. compensation, benefits analysis, performance management process overhaul, training and development), and using experienced consultants to help with strategic issues are ways to support the one-person HR department.

2. Losing control of hiring and recruiting.

Symptoms: Your organization receives an unmanageable number of resumes, has hiring managers that ask their own interview questions or use biases to make selection decisions, is frequently rushed to hire anyone to fill a position – which oftentimes is not the best hire, or lacks a consistent method of selection (different candidates are evaluated on different criteria). Or, your hiring process may be so lengthy and inefficient and require so many individuals’ involvement, that candidates lose interest and patience.

Results: Your organization experiences new-hire turnover, turned down job offers, vacant positions, lost productivity, and low hiring manager and new-hire satisfaction. You may experience difficulty managing applications and resumes and overlook potential top talent. You put your organization at legal risk because selection is not based on objective and consistent criteria. You rush the process and end up with a poor hire which affects your bottom line and that you inevitably terminate.

Solutions: Investing in an applicant tracking system, training hiring managers in the basics of interviewing and selection, and developing standard hiring policies and processes are all ways to make your hiring process more efficient, consistent, and productive. Also, establish reasonable timelines for the hiring process and only include those that need to be involved. Lastly, make sure that you believe the person you are hiring is the best candidate for the job and will be a top performer. Don’t just hire to fill a spot – it is far more costly in the long run.

3. Not reviewing performance.

Symptoms: In light of not providing pay increases the past few years, your organization may have skipped its annual performance review. Or, your performance review process may be lackadaisical – reviews aren’t completed on time and supervisors don’t take them seriously. Your organization may not even have a formal method of reviewing performance.

Results: In turn, either a portion of your workforce or many of your employees don’t receive feedback about their progress, leading to disengagement and less productivity. Documentation about performance is lacking, so when you need to terminate someone, you’re at a loss. Measurement of performance may be questionable, especially if supervisors don’t take the process seriously, and this could affect other programs like variable pay. Employees are dissatisfied with how their performance is measured and consider the tool invalid.

Solutions: Reviewing performance annually (at a minimum) is important. Develop either a standard review form or goal setting process, and consider employees’ feedback in the development of the system for buy-in. Additionally, train your supervisors in performance management (especially conducting a performance review) and hold them accountable for performance management duties in their own reviews. Make the performance management process mandatory, but not cumbersome (i.e. too many reviews to do at once, too lengthy form, etc.).

4. Failing to know your competitors.

Symptoms: Your organization doesn’t invest any time in learning about or benchmarking other organizations’ pay, benefits, or workplace practices. It doesn’t track HR data or metrics. It doesn’t know who its competitors are in terms of talent.

Results: Job candidates turn down offers or provide direct feedback that pay or benefits are below that of other organizations. Voluntary turnover of employees is prevalent in certain pockets of your workforce or throughout the organization. You receive consistent complaints about pay, benefits, and development opportunities.

Solutions: Identify the organizations in which you compete for similar types of talent and define their industry, size, and location. Select a few sources of data that are most relevant to these organizations. Compare your internal data with the information in these sources. Use the data to make adjustments to your pay, benefits, and workplace practices.

5. Not protecting your business.

Symptoms: Your employee handbook hasn’t been updated in a few years. Compliance changes have been neglected, as have risk management and disaster recovery plans. You haven’t created succession, development, and staffing plans to assure that you have the right talent in place to meet short and long term business objectives. You don’t look at demographic trends that will impact your business – like retirements or family needs.

Results: Your organization finds that it can’t make termination or disciplinary decisions without legal risk because it lacks certain policies. You realize that you don’t have the right skills or competencies to meet your organizational objectives. One of your key leaders leaves and you don’t have anyone prepared to fill the missing role. An employee goes out on FMLA and no one has been cross-trained to fill their shoes.

Solutions: Create succession plans for key roles and create plans (with timelines) to develop individuals in your organization to take on these roles, such as leadership development training or preparation. Conduct an annual “skills inventory” each year of your employees and compare the results to your strategic objectives. Do you have the skills you need? For what skills do you need to develop or hire? Do you have back-ups cross-trained? Coordinate training and staffing plans with this inventory. Finally, update your employee handbook at least annually (and always after a change in employment law) and obtain an outsider’s perspective – such as a consultant or legal counsel. These individuals will be able to notice gaps or deficiencies in your policies and make recommendations to protect your business.

Additional Resources

HR Consulting & Project Support
ERC is a leading provider of quality, affordable HR consulting and project support services in Ohio. Our HR consulting services provide the crucial strategic and technical expertise needed to support your HR goals and workplace initiatives. Contact consulting@yourerc.com for more information.

Compensation & Benefits Surveys
ERC publishes many compensation and benefits surveys to help Northeast Ohio employers benchmark their pay and benefits practices.Our ERC Salary Survey, Wage Survey, and Executive Compensation Survey provide local pay information for over 300 positions.

Elements of an Incentive Program

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Looking for a way to motivate or incentivize employees to meet a goal or objective? Whether it’s sales, productivity, service, quality, teamwork, or just a change in behavior, incentive programs can be an effective tool to meet your organization’s needs and objectives. Here are the most important elements of an incentive program.

 

Clarify the objective of the incentive program.

What is the purpose of providing the incentive? Will it be designed to improve the productivity of your production staff, increase sales, improve customer service, and enhance management? Usually, the objective of an incentive plan is tied to meeting some organizational or departmental goal or objective or motivating/changing a specific behavior. This may be general or specific to a certain work group or department.

Define the incentive.

Define the type of incentive you will provide and make sure that it aligns with the objective. Individual incentives should be tied to individual goals and performance, team incentives should be tied to team goals and performance, and so on. Also, will it be offered in addition to a salary increase or instead of one, and will it be considered part of the total compensation package? Below are three (3) types of incentives to consider.


Type of Incentive

Description

Individual incentives

  • Tied to the achievement of individual and/or organizational goals
  • Typically only distributed to specific individuals
  • Differentiates top, average, and bottom performers

Gain-sharing

  • Tied to the margin of profit or savings attained through a group or team’s performance
  • Typically only distributed to certain groups or teams
  • Rewards and encourages teamwork

Profit-sharing

  • Tied to the margin of profit attained by entire organization
  • Typically distributed to all employees or certain executives/managers
  • Provides employees with “line of sight” – how their contributions impact the organization’s success

 

Create a measure for the incentive.

Having a clear objective will make measurement easy. Measurement could be as simple as determining whether the goal was achieved or not achieved. You may also weight what percent of an objective was met (i.e. 75% of goal achieved or 110% of goal achieved). One key question your organization will need to consider is if you will payout for not reaching goals completely or if you will payout extra for exceeding goals.

Determine who is eligible to receive the incentive.

If the objective of the incentive plan is specific to a certain work group or department, eligibility should be constrained to only employees in those areas. If the objective is general, eligibility may be widespread, applicable to nearly all of the workforce. We find that incentive plans typically follow one of these two tracks.

Establish the size of the incentive.

This is, first and foremost, dependent on what your organization can afford to pay – which may vary from year to year and depend on cash flow, revenue, and profitability. The size of the reward may be a fixed dollar amount or a percentage of salary. On average, we find that variable pay costs account for 3% of revenue (variable compensation divided by total revenue) – compared to compensation costs which typically account for 25% of revenue. Below are average target percentages, maximum threshold percentages, and percentages of total cash pay that incentive/bonus pay represents.


Type of Employee

Average Target %

Max. Threshold %

% of Total Cash Pay

Production, Maintenance, Service

4.4%

6.6%

4.1%

Clerical, Technical

4.0%

7.7%

4.3%

Supervisory, Managerial, Professional

8.1%

12.1%

6.6%

Source: 2011 ERC Pay Adjustment & Incentive Practices Survey

Identify the form of payment.

Some incentive/bonus payments are paid out in lump sums annually, while others may be distributed across paychecks throughout the year. Annually is by far the most common frequency of payout, but quarterly is a close second. Monthly and semi-annual payments are extremely rare.

Incentive programs can be effective in promoting the behavior and results we want in our organizations, but in order to do that, they need to constructed effectively. This starts with clearly identifying the objective of the program and then aligning all of its pieces and parts (type, work groups eligible, size, form of payment, etc.) with that purpose.

Additional Resources

Pay Adjustment & Incentive Practices
Benchmark your organization’s pay adjustment and incentive plan practices with our ERC Wage & Salary Adjustment Survey. For more information about this survey (including pricing information), please click here.

Consulting & Project Support
For assistance in developing incentive/variable pay plans and compensation systems or benchmarking compensation practices, please contact consulting@yourerc.com.

HR Guide to Summer in the Workplace

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It’s that time of year again. Memorial Day signals the return of warm weather, summer activities, and plenty of HR and workplace issues from enforcing dress code and attendance policies to planning a company outing or event. This is your guide to managing summer in the workplace.

Spell out specifics in your dress code policy.

Dress code tends to become more open to interpretation during the summer (sleeveless tops, open-toed shoes, flip flops, capris, skirts, etc.), so be sure to specify exactly what you mean by “business casual” attire instead of leaving it to the employee’s discretion.  Spell out acceptable and unacceptable types of clothing and shoes (and examples), colors and styles (depending on your industry or type of organization), and specific days or situations that require different attire (such as formal or casual) that the usual. Also, be sure that you apply the dress code policy uniformly and consistently.

Provide flexible scheduling.

Now is an ideal time to remind employees of your attendance policy as issues of consistently coming into work early or late or “calling off” tend to become more of a problem during the summer months. Another way to address this issue is by introducing flexible scheduling options to allow employees to better self-manage their work/life throughout the summer. In the summer, employees are typically faced with greater work/life constraints such as more activities, family obligations, and children home from school. Seasonal perks like flex-time, shorter hours on Fridays, compressed work weeks, and revised work schedules are all offered by some employers during the summer to help employees achieve better balance.

Hire an intern or new graduate.

Another useful way organizations provide relief to their employees during the summer months is by hiring an intern or new graduate. Interns offer a variety of workforce support and assistance with special projects at an affordable cost. They also bring fresh ideas and perspectives, technical knowledge, and a desire to learn. New graduates offer similar capabilities. If you’re not sure where to start in terms of hiring and compensating an intern or new graduate, check out our Intern & Recent Grad Pay Rates & Practices Survey for detailed information about recruiting, hiring, training, engaging, and paying interns and new graduates.

Offer time off from work.

Time off is a common request during the summer with three major holidays (Memorial Day, 4th of July, and Labor Day). Be sure to communicate the paid time off your organization intends to provide for these holidays. Consult our Holiday Practices and Paid Holiday Survey for information about which paid holidays employers plan to offer this year.
Additionally, scheduling and coordinating summer vacations requires an efficient and fair process to ensure that employees are able to take time off when desired, but also that the business is able to meet its demands. Here are some common ways organizations effectively coordinate vacations and paid time off:

  • Use a vacation planner or vacation planning system.
  • Create a method for employees to request or “bid” on preferred dates of vacation – such as a vacation request form. Build in supervisory approval.
  • Require employees to schedule time off in advance, but be reasonable about how far in advance they need to schedule.
  • Have employees coordinate vacation time with their coworkers and/or self-manage vacation time.  This helps ensure that “back-ups” exist.
  • Develop policies that specify what criteria will be used to approve vacations (first come, first served, seniority, rotation, etc.).
  • Specify the limits of taking vacation (i.e. people with the same skill set can’t be out at the same time, maximum number of days, etc.).
  • Monitor and take into account other leaves (FMLA, maternity/paternity, sick, disability, etc.).
  • Remind employees that the business’ needs need to come first when scheduling vacations. As an employer, you do have the right to require an employee to postpone a vacation or require advanced notice. If you do promise vacation, however, you may be legally bound to it, according to Ohio law.

Start (or re-energize) your wellness program.

There’s no better time to start or re-energize a wellness program than at the beginning of summer. Summer is an ideal time for employees to get into shape and improve their well-being and the workplace can help them do that. Employees also tend to be more interested in wellness at this time of the year given the nice weather, outdoor activities, and greater availability of fresh and healthy foods. This can boost participation rates which help you keep your workforce healthier and manage the sting of rising health insurance costs. Here are some ideas for your summer wellness program:

  • Introduce a walking program
  • Hold company-wide wellness/fitness competitions, challenges, or team-building functions
  • Coordinate informal pick-up sports at lunch-time or after work
  • Provide fresh fruit and vegetables
  • Hold seminars on nutrition-related topics
  • Encourage employees to go outside during their lunch break, or even hold meetings outside

Plan a company outing or event.

The summer is a great time to plan a company outing or event and many businesses take advantage of the nice weather to spend time informally socializing with their employees.  Outings and events are great opportunities to get to know your staff, show appreciation, and do some team-building. Here are some tips for planning a summer event, provided by ERC’s own event experts:

  • Form a committee. Don’t plan your event alone. Get other employees involved in planning the outing and event and delegate responsibilities.
  • Define the event or outing’s purpose. Is the outing intended to be a social or networking event? Or is it an event that celebrates or recognizes something?
  • Determine the location. Outdoor locations are ideal for summer events, but make sure that the venue fits your audience and the type of event you are creating. A formal event will need a formal setting.
  • Set a date. Identify a couple potential dates and confirm the availability of the location as well as those that need to attend the event. Provide confirmations.
  • Create an agenda or timeline for the event. Lay out the entire event in terms of breaks, activities, meals, etc. and the times that they should take place. Assign roles to people on your committee and have them “own” certain tasks.
  • Communicate details. Be sure that your guests have all the information they need about the event or outing (i.e. location, directions, timing, attire, meals provided, response directions, and contact information).
  • Select food and activities. Make sure these are relevant to the type of event and the people attending, and also consider any dietary restrictions ahead of time. For example, if children will be attending the event, activities and food selections should be fitting.
  • Test-drive the event. Test equipment, walk through the venue, and get familiar with the things you’ll need during the outing. Pretend like you’re the guest.
  • Make it unique. Traditions are great, but try to build an element of surprise into your outing or event to make each year exciting. This could be a new location or venue, different entertainment, or a new giveaway.

Continue to train and guide performance.

Engagement can often become stale in the summer months. That’s why performance management, training, and development should not wane during the summer months. It’s important to keep investing in these practices so employees stay engaged and productive. For example, the summer signals mid-year, which is an ideal time for employees to meet with supervisors to discuss their performance and progress towards goals and objectives set at the beginning of the year. This discussion can help refocus employees on their goals, help establish new projects and objectives, and identify what additional support is needed. Additionally, while many employers refrain from scheduling training during the summer due to vacations, this actually can be an ideal time for training and development – especially if business is slower than normal during this season. 

Have a contingency plan for severe weather.

More severe weather is being predicted for this summer. Be sure that your organization has contingency and disaster recovery plans in place to deal with unexpected power outages, damages, and other issues that severe weather (such as thunderstorms, tornados, flooding, etc.) could cause for your business and its employees.

Prepare for budgeting. 

The summer passes quickly and budgeting will be just around the corner. With most employers planning to provide salary increases this year, it may be worthwhile for your organization to benchmark your employees’ compensation so that you are prepared to make good decisions about market adjustments and compensation increases when budgeting time approaches. Keep a compensation project on your agenda this summer and use our recently published 2011 compensation surveys as resources. Similar to compensation, use the slower summer months to catch up on major HR projects that have been on your to-do list.

The key to managing summer in the workplace is to acknowledge employees’ work/life needs, balance work with fun, and continue to engage.

Additional Resources

Supervisory Series
In the series, participants will gain an understanding of their role as a supervisor as well as employment law as it relates to common supervisory issues. They will also learn how to apply basic managerial and interpersonal skills including dealing with the everyday challenges of being a supervisor, communicating effectively with others, resolving workplace conflict, managing performance, and coaching. Click here

Emerging Leaders
This two-part series covers professional etiquette in and out of the workplace, communication skills, and the traits of a strong leader. It is an ideal course for younger professionals, such as new graduates. Participants will learn tools to present themselves more effectively and enhance their contribution to the organization. Click here.

Compensation Surveys
Get a jump-start on budgeting this summer by benchmarking compensation with our Salary Surveys which provide pay information on nearly 300 jobs that are relevant to all organizations and industries. Click here