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

Growing Your Rising Stars

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Your organization may have some rising stars – high achieving employees with the ability to move up in your organization and carry the demands of your organization’s most challenging and promising opportunities. You may love their work, think highly of their potential, but notice a few skills or abilities that need some development before promoting them to the next level. Here are a few ways to grow and engage your rising stars.

Uncover their (and your) objectives.

According to a 2011 study conducted by the Corporate Leadership Council, 1 in 5 emerging leaders believe their personal aspirations are different than the plans of their organizations. Obviously, there’s a strong disconnect between what emerging leaders want from a career and what they think their organization wants from them in the future. Before your organization pours resources and time into the process of developing these employees, be sure that both of your objectives match. Similarly, in order to know how to develop your rising stars, your organization needs to determine its long-term objectives and the talent it will need to achieve those. For example, will your business be expanding? Will its product/service line change? What skills will it need? How will technology affect your workplace? When will leaders retire or move on? Growing your best people often requires good workforce and succession planning.

Place on intense assignments and in challenging roles.

Research shows that intense, challenging, and risky assignments are the best learning experiences for growing leadership capabilities – and more meaningful than traditional job rotation programs. These developmental assignments not only engage the rising star, but also allow your organization to evaluate how well the employee performs on new challenges they have not experienced and where further development is needed. Similarly, rising stars should be placed in challenging roles and positions – perhaps an undeveloped area of the business, a department that is underperforming, or a potential business opportunity that has not yet been ceased. It’s important not to shield rising stars from the realities and stressful situations they will face in future roles. Rather, throw them into the fire, but build in support.

Provide formal training and development opportunities.

While job experiences are one of the best ways to grow rising stars, there’s no replacement for the classroom. Seminars, activities, and instruction are a necessary supplement to leadership development initiatives and frequently are used to grow capabilities in key leadership topics like change management, presentation, communication, influence, and negotiation. Other formal development opportunities such as attendance at conferences, certification programs, advanced degrees, participation on boards, and involvement in professional associations can all be helpful in growing capabilities. Rising stars will need to acquire knowledge not only in their organizations and through experiences, but also externally from facilitators, coaches, and peers.

Engage in regular feedback and dialogue.

A conversation once or twice a year isn’t going to grow your best employees. Development done right requires frequent conversations and dialogue. This dialogue can address how the employee is performing and provide direction, guidance, and coaching on new stretch tasks and development opportunities. It can also help gauge their engagement and satisfaction with the initiative and how they are progressing in their development plan. These conversations often can help avoid derailment – failure or underperformance at the next level – a common problem many leadership development programs experience.

Beyond one-on-one dialogue, 360 feedback is another common leadership development tool that can help your rising star determine how their style and competencies are perceived by others in the workplace such as managers, coworkers, and customers. The results can be used for follow-up coaching and training.

Use your current leaders as resources.

While most development responsibilities fall on HR or line managers, seasoned leaders and top managers can (and should) be actively involved in mentoring and developing rising stars – not just evaluating and selecting who these leaders will be.  Oftentimes, exposure to current leaders and tapping into their perspectives, knowledge, and experiences can be very effective in growing future leaders if they want to be engaged in the developmental process. It can also engage your rising stars, providing them with opportunities to interact and build relationships with your senior staff. Plus, your organization may save on other developmental costs such as use of an external coach or mentor that is not as ‘in tune’ with the workings of your company.

A range of work experiences, developmental activities, dialogue and feedback, and use of current leaders is a simple recipe for growing your rising stars into higher levels of your organization and engaging them.

Additional Resources

The Emerging Leaders Series
Have the emerging leaders within your organization been identified? Do they have the skills and knowledge needed to best represent your organization? This two-part series covers professional etiquette in and out of the workplace, communication skills, and the traits of a strong leader. Participants will learn tools to present themselves more effectively and enhance their contribution to the organization. 

Leadership Development Training
Developing your leaders or managers? Check out the range of courses we offer to help you grow talent of all levels and especially managers and leaders. Click here

Coaching, 360s, & Talent Management
ERC offers several developmental services including employee, manager, and leadership coaching, 360 feedback initiatives, as well as assistance with talent management projects including workforce and succession planning to support your leadership development initiatives. For more information, please contact consulting@yourerc.com.

Three-Quarters of Employers Offer Supervisory/Management Training

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According to the results of the 2011-2012 ERC Policies & Benefits Survey, most employers in Northeast Ohio provide supervisors and managers with training in supervisory and managerial skills. Most commonly, 75% of local employers say that they use employers association supervisory/management development courses to train employees compared to only 32% of employers that use college supervisory development courses.

“The survey’s results suggest that local organizations find value in the supervisory/management training provided by employers associations like ERC. Within the training we provide, participants learn how to apply a variety of managerial and interpersonal skills including dealing with the everyday challenges of being a manager and also receive a variety of resources to support them in their managerial roles,” says Chris Kutsko, Director of Learning and Development at ERC.

She adds, “Many of our clients find tremendous value in the quality, delivery, support, and affordability of our supervisory and managerial training beyond what other providers offer.”

Additional Resources

More information about this survey: click here
Upcoming training and programs on this topic: click here

5 Common Management Challenges

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Communication, management of conflict and performance, and management of potential liabilities are all challenges managers experience. Here are some practical ways to deal with these common management challenges and support and develop your managers.

Communicate.

Managers are frequently not aware of the quality of their communication about expectations, changes, procedures, and other work-related issues, or how their communication or interpersonal style is perceived by their employees. Help managers understand their unique communication and interpersonal style and how to “flex” this style in different situations. Provide managers with communication templates, scripts, tips, or checklists. Engage in role-play or dialogue with the manager to help them practice their skills and identify opportunities for improvement. Additionally, educate managers on common communication breakdowns and how to avoid them and encourage managers to notice signs of communication problems (misunderstandings, consistent performance problems, etc.). When all else fails, provide a personal coach if communication problems persist

Resolve conflict.

Many managers ignore problems and do not address conflicts with their employees or work team directly. Whether these are performance problems, conflicts among team members, issues of trust, or personality clashes, managers are challenged to confront and address problems head-on and as they emerge, diffuse employees’ feelings and emotions about the problem, listen to both parties’ needs and desires, derive win-win solutions that lead to more productive and positive work relations, and prevent conflict in the future by nurturing positive coworker relationships and recognizing potential for conflict or problems early.

Manage performance.

Managers must balance meeting goals, managing workloads, and motivating employees. These issues coupled with the fact that many managers are ill-equipped to provide regular and constructive feedback and may not understand the importance of documenting performance can make managing performance challenging. To support them, build on-going performance feedback into the performance management process to ensure accountability. Create an easy method for managers to document performance like a database, log, or diary. Provide support tools for managers such as rewards, recognition, training, and development to recognize and build performance. Most importantly, train managers in topics such as performance management, coaching, and feedback since many will have had no experience with these.

Handle protected employees.

Most managers are not well-versed in administering ADA, FMLA, and other laws that protect certain groups of employees, but unknowingly find themselves managing an employee that requires an accommodation, leave of absence, or falls into a protected class. These situations need to be handled delicately due to their legal nature, so make managers aware of:

  • Legal basics such as conditions or disabilities that are protected
  • How to determine essential functions and reasonable accommodations
  • Requirements associated with FMLA (eligibility, length of time, etc.)
  • Types of employees that are protected under law (gender, race, national origin, etc.)
  • Hiring and interviewing liabilities (questions to ask/not ask, etc.)

Administer policies fairly and consistently.

One of the most common challenges for managers is treating employees fairly and consistently. A manager may allow policies and rules to be disregarded by some employees and not others – or may disregard employment policies altogether. “Stretching” the rules for some employees can open up a range of potential liabilities and perceptions of bias and favoritism that have negative far-reaching affects in the workplace. Be sure to write clear policies and let managers know when changes have been made. Set clear criteria for making employment decisions, particularly where managers need to distinguish between employees (recognition, reward, development, etc.). Also, clearly differentiate between the policies in which managers have discretion to implement and those in which they do not.

Addressing these management challenges sooner then later can prevent your organization from experiencing many problems and liabilities. It’s never too early to ensure that your supervisors and managers have the skills, tools, and support to do their jobs effectively, so if your supervisor is just starting out, consider developing these important skills as soon as possible.

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 to register or click here to learn how we can bring this training on-site to your organization.

Strategic Legal Update
Stay up to date on all of the most recent law and policy news with our blog

Coaching & Performance Management Services
ERC offers a full range of services to support your organization’s performance management activities. We also offer one-on-one coaching services to help your build and develop your manager’s skills. For more information about these services, please contact consulting@yourerc.com.

4 Ways to Develop and Retain Leaders

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4 Ways to Develop and Retain Leaders

Do you have some people in your organization who you might label as “high potential” or perhaps an “emerging leader”? If so, what are you doing to develop and retain those employees? If the answer is “nothing” or you’re not sure what you can or should do, here are a few ideas to consider.

Assess Your Talent.

So your gut tells you that the new college grad that’s been interning for the last year who just accepted your offer to come on full time could be on the fast track to a very successful career. Before you sign her up for every leadership course in town or name her the successor to your CEO, you may want to consider assessing her leadership skills or at least getting some kind of a baseline in terms of her personality, skills, and abilities that you can compare against some benchmarks to see if your gut matches up with actual data. This can help you help your emerging leader understand what her strengths and weaknesses are, how she “ranks” compared to other leaders in your organization or based on whatever benchmarks you use, and can help set a nice baseline on which you can build an individual development plan to help her move forward on that fast track to success.

Assign a Mentor.

The benefits of mentorship programs are well documented, and the benefits to an individual you have labeled as a high potential leader are equally as, if not more, attractive. It’s not only a great way to enhance the development of an employee and more quickly get him familiar with how the organization works and how to make things happen, it can also be a wonderful retention tool.

Invest in Your Talent.

Just because you put seeds in the ground doesn’t mean your garden will grow. It takes a lot of time, care, and feeding to make sure the roots take hold and the flowers blossom. The same is true for your emerging leaders. Just because you’ve identified them as having a lot of potential for growth doesn’t mean they’re going to get there on their own. It takes an ongoing investment of time, training, and resources to make sure their roots take hold in your organization and their leadership skills blossom in the future.

Let Them Know.

Maybe. Depending on the culture of your organization and the maturity of those you’ve identified as high potentials, you may want to consider letting them know you think they have potential. On one hand it can be a great confidence booster and great way to increase the chances you’ll retain that person. On the other hand, if he or she already possesses a great deal of confidence (and doesn’t hesitate to let everyone else know about it) then you may want to take a different approach.


The bottom line is that when you have identified talent that you believe will help your organization long term, it makes a lot of sense to invest some time and thought into how you can increase the probability that talent develops in a positive way and that person stays with your organization for the long term.

Emerging Leader Training Series

Emerging Leader Training Series

Have the emerging leaders within your organization been identified? Do they have the skills and knowledge needed to best represent your organization? In this 3-part series, participants will learn tools to present themselves more effectively and enhance their contribution to the organization.

Learn More about Emerging Leader Training

Why Y? Working with Gen Y and Surviving

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As generational research steams ahead and more and more gigabytes are collected, we are fast looking for answers to an age-old question.  “Why are these young people so weird?” Wait! Did I say that?  Yes, but just so you know, there are young people among us that have tattoos, pierced lips and tongues that are bright, multi-talented —and they don’t wear button down shirts!

Working productively with the Millennial’s, the Nintendo Generation, the Echo Boomers or whichever label we put on these 12-25 year olds is critically important today, since there are 60 million in the United States that are entering the job market. Let me give those of you that struggle some ideas, three to be exact, to working in harmony with the young men and women with iPods in their ears and cell phones strapped to their back-packs.

Tip Number One.  Keep them engaged and challenged.  This generation has been multi-tasking since they were born; talking on a cell phone while playing Nintendo is common for these bright young people. Their parents have involved them in soccer, gymnastics and playgroups, and by doing so have built a generation that is comfortable doing something different all of the time. Having meaningful work was less important to their Grandparents because they were happy to be working. The expectations of the Gen-Y'ers are much different.  They’ve been busy most of their lives doing many different activities and flourish in that environment. Give them something important to do and get out of the way, they will astound you!

Tip Number Two.  Keep your technology current.  Any investment in your technology is perceived as an investment in them. For the older generation, growing up in the 1950’s and 60’s, the first color television was a big deal. Today the Y Generation sees a better picture on their iPod. They can download a half hour sitcom for a couple of bucks and watch it at their leisure. The Gen-Y’er expectation is clearly, “How can I do my job with the equipment we have here?” Their Baby Boomer manager doesn’t get it.  “Hey, we only had three channels on our television,” is not an acceptable response.

Tip Number Three.  Don’t expect respect simply because you are more senior. Not that these super-high achievers are disrespectful. They are not! Authority just doesn’t intimidate them. That’s a good thing! Some executives over the last 20 years have asked for honest feedback (not that they’ve always done anything with it) from their staff and associates. These young professionals will certainly give us feedback. We need to be careful how we respond to it. A much more open and accepting leadership style is critical. These young people respect success and want to be part of it. They don’t really get excited about more conventional forms of recognition such as preferential parking. What gets them fired up is working on something meaningful and being part of a winning effort.

Things change, and as quickly as we adapt to one, the next is upon us. Each generation has lamented about the next and worried that they won’t be able to take the hand-off.  We are optimists and tend to see the glass half-full. This is generation could be the greatest of all time.

One more thing, just when you get this group figured out, then comes Generation Z!  Egad!

Few Local Employers Have Succession Plans

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Only 15% of Northeast Ohio employers have a formal succession plan in place for supervisors, managers, and professional-level staff, according to the results of the 2011-2012 ERC Policies & Benefits Survey. The survey reports policy, benefit, and practices information from 173 Northeast Ohio employers.

This figure is down from 20% in 2007. The drop may be related to several factors.

“Many employers were likely not focused on strategic workforce planning initiatives such as succession planning during the recession,” says an ERC Survey Manager, “Some were focused on just staying in business and keeping as many people employed as possible.”

Stock market conditions may have indirectly impacted the drop in succession plans as well, they add. “After seeing their retirement savings shrink, many employees decided to postpone retirements and other career movements. The sense of urgency to find replacements for these employees may have dropped, giving employers less reason to put a priority on initiatives like developing successors.”

To access more ERC Surveys, click here.

Additional Resources

ERC can support your succession planning initiative by helping with the design and execution of your plan or simply providing expert guidance and best practices on an as needed basis. Contact ERC at 440/947-1283 or consulting@yourerc.com for more info.

6 New Ways to Contribute to Your Company

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Strategic thinking means focusing on the desired plans and results of your organization and integrating this focus into the overall goals of your job and team. Increasingly, this type of thinking is necessary at all levels of the organization – not just at the top – and can greatly enhance your career. Here are some easy ways that any employee can become more strategic in their role.

1. Gain a broad understanding of your business.

Obtaining a broader understanding of all of the major business areas of your organization and how they operate helps you understand the needs and demands of other departments. There are several ways you can accomplish this. You may seek out opportunities for cross-training, lateral career development, or job rotation; shadow a strategic thinker or seek one out as a mentor or coach; and develop relationships and connections across business units, divisions, and departments. With more knowledge of other departments, you increase your ability to make good decisions, solve problems more effectively, and become a more valued contributor.

2. Recognize the priorities of your business.

Strive to understand the short and long-term strategy of the business as well as its vision for the future. Where is it headed now and in the future? What is it trying to accomplish? What is the big picture? Continue to ask questions about the direction of the organization, even when leaders to not explicitly communicate it. You may consider keeping a list of these priorities handy so that you are constantly reminded of the organization’s objectives.

3. Link your activities and goals to the business objectives.

Your business’s priorities should guide the goals you set and your day-to-day activities and tasks. When creating your own goals (or department’s), choose objectives that align with your organization’s objectives and priorities. This means that they should link to the bigger picture. For example, if your organization is focused on improving revenue or improving efficiency, your goals should line up with this objective. Oftentimes, we may create our own personal and professional goals in a vacuum, not considering the implications or priorities of the business. This hurts the business and ourselves, limiting our strategic potential and derailing us from the organization’s direction.

4. Expose yourself to different business challenges and demands.

Exercise your mind and career. By working on challenging business projects outside of your area of expertise, you become exposed to new problems, people, and experiences – all of which can help deepen your strategic thinking skills. Additionally, find ways to work on cross-functional teams and initiatives that expose you to different perspectives on business problems. Also, it’s important to find ways to reduce tactical components of your job so that you have more time for planning and strategic activities that will enrich your career. Become comfortable with new technology, processes, and efficiencies. Finally, volunteer experience within committees, boards, and leadership roles can all help strengthen your strategic mindset.

5. Focus on strategic tasks.

The main difference between strategic and non-strategic tasks and activities are the reasons for doing the tasks and the outcomes. For example, non-strategic actions are not driven by an identified and measurable business need, while strategic actions are. With strategic tasks, some data, observation, or information suggests a business need to take a certain action. In addition, strategic actions tend to be driven by or result in a measurable business outcome – such as better performance, improved retention, enhanced productivity, and achievement of an organizational objective. Non-strategic tasks do not have as much value to the business and are generally more reactive than proactive. Examples of such tasks are below:

6. Anticipate problems, trends, and needs.

A final tip for enhancing your strategic thinking skills is to improve your anticipation of changes, potential problems, and trends in the market, economy, and the needs of your customers. For example, if you are a manager, you may anticipate changes in staff, workload, and performance requirements. If you are an HR professional, you may anticipate new benefit, compensation, or other rewards trends; the need to hire additional staff or obtain needed skills through training and development initiatives; or plan leadership development initiative to support succession in the organization.

Strategic thinkers are needed at all levels of the organization – not just the top level - including HR, managers, and professionals. By improving your skills you can be more valued and achieve greater accomplishments within your organization.

For help with strategic HR initiatives such as performance management, workforce planning, succession planning, or employee engagement, please contact consulting@yourerc.com.

5 Ways to Know Your Training Dollars Paid Off

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As a business leader, you foot the bill for training, but how do you know you’re getting your money’s worth? You can, and should, rely on your in-house trainers and external suppliers to provide quality, meaningful training. But as the saying goes, you can lead a horse to water…

The good news is…you, as a business leader, are in the ideal position to increase the likelihood that the skills learned in class will transfer to the job. In fact, research suggests 2 of the 3 most important roles related to training are #1 – Manager Before and #3 – Manager After. In other words, what the manager does before and after training contributes most to whether or not the training is ‘transferred’ (a.k.a. applied).

Here are five pretty painless ways to make that happen…

  1. Participate. Ask for an executive overview of the training – for yourself and/or the managers of those being trained. The supplier, for example, would spend 30 minutes or so walking you through the program, including key learning points, models or techniques taught, application exercises used to help participants experience and retain the concepts, etc. You would receive a participant workbook and any job aides or handouts. Ideally, the executive overview precedes the training. This gives you the opportunity to request that certain points be emphasized or aligned with current business priorities. It also positions you to reinforce the new behaviors after the training.  
  2. Model. Select one aspect of the training that resonates with you, apply it to your role, and start practicing it. It could be anything from using the Situation-Behavior-Impact feedback model, to documenting performance expectations for your direct reports, to starting every company-wide meeting by publicly recognizing a handful of employees who have exceeded goals, to authoring a blog to keep employees ‘in the know’.
  3. Reward. Allocate a small sum of money to be used to reinforce the demonstration of behaviors and skills learned in training for 90 days following. Have managers of the participants partner with the facilitators to generate a short list of behaviors/skills to be rewarded. Publicize to participants that managers will be on the lookout to ‘catch’ them doing things ‘right’ and distributing rewards accordingly.
  4. Ask. ‘Walk the floor’, asking employees about the training…what they learned, what was most valuable, what they applied, how it worked, etc. Once employees learn they will be held accountable, they will be more likely to put the training to use.
  5. Connect. Tie the training to related initiatives, facilitating immediate application. For example, train employees on writing and delivering performance reviews just before they are due, train employees on goal setting at the beginning of the year, train employees on communication and team building at the start of a large organization-wide project, etc. Time the training and ‘tee it up’ by communicating why it’s being offered, why it’s important, and what related activity will immediately follow that calls for those skills. Having a senior leader endorse the training at the beginning of class is a great strategy too.

Leaders are like the media…they ‘tell’ us what to pay attention to and talk about. Take advantage of your role; try out these five easy steps. You will be amazed at how much more value you will get out of your training investment. And, who knows, you may even find a new technique that produces returns for you, too!