Don’t Let Economic Stress Become an Employment Lawsuit

Don’t Let Economic Stress Become an Employment Lawsuit

None of us can be certain of what to expect in these turbulent economic times but we can be certain most of us will see increased workplace challenges. HR professionals and the labor law community are being advised to anticipate significant increases in work related complaints and lawsuits as the fallout from the current economic downturn continues.

In this volatile business climate employees are anxious to alleviate their economic and emotional pain and an employer may become the focus of employee frustration and anger. The result may be a financially and emotionally draining lawsuit at a time when every business resource is already stretched too thin. The U.S. Equal Employment Opportunity Commission (EEOC) reported 2007 as having the highest volume of incoming private sector discrimination charge filings since 2002 and the largest annual increase since the early 1990’s. We can only imagine what the final tally for 2008 and beyond will be given the rapid deterioration in overall economic conditions. Employers who believe this won’t happen to them can be seriously wrong; former employees who find their unemployment benefits ending, savings gone and no other job prospects in sight have significant motivation to look for a lawsuit.

Lawsuits can run the gamut from age discrimination to harassment. In a volatile economic climate employers must be extra vigilant to ensure legally compliant employment practices are in place and enforced. Managers and supervisors must be educated on legal employment practices and held accountable for maintaining sound HR practices.

Workforce reductions are a particularly difficult issue and employers often make serious legal mistakes which leave them vulnerable to wrongful termination suits. Some simple advance planning and careful management of the termination process can make all the difference in terms of legal liability.

If a workforce reduction becomes necessary the following steps are critically important:

1. Determine the criteria to be used to establish who will be laid off and be certain it is consistently applied. Carefully evaluate whether your criteria have a disparate impact on protected categories before you implement your plan. If there is any question call on a professional to do an objective evaluation.
2. If you are basing reductions on merit be certain your selection process can withstand scrutiny. Nothing spells lawsuit faster than laying off someone for poor performance when their performance reviews have been positive. This is also not a time to try to rewrite history so be sure if you have a performance appraisal process in place it gives an accurate picture of an employee’s performance.
3. Document the workforce reduction process and educate your managers on the process and their responsibilities.
4. Be honest with employees during the process and avoid making promises or sugar coating the truth.
5. Always treat laid off employees with dignity.
6. If at all possible have more than one person present during the termination and document it.

Maintaining solid HR practices during difficult economic times is the key to preventing difficult and costly legal challenges.

How to Judge Applicants

"The trouble with doing something right the first time is that nobody appreciates how difficult it was"
Walt West

Most employers are still using the interview as their primary screening device. While the interview is an important aspect of the process, it is very
subjective. Studies show that using an interview alone gives you only a 14% chance of the employee being successful.

By doing background checks and checking references this percentage increases to 26%, or about 1 out of 4 people you hire will ultimately be successful in the position.

What Works?
It is important to look at the steps leading to a hiring decision and to limit personal biases as much as possible.

Today, employers have proven scientific ways to make the hiring decision a less emotional one. For instance, many people have told me they can know in 30 seconds if a person is right to hire. Unless you are a psychic, this is a very unproductive and
dangerous way to make hiring decisions. Decisions based primarily on personal biases upon first impression typically backfire.

The more scientific the screening process, the better opportunity you have of hiring the best person for the right position in your company.

What works is extensive recruiting and testing. Broader recruitment increases the talent pool. Let's look at what integrated processes can do to increase employee success and lower turnover. Turnover in a company is extremely expensive and disruptive to production.

Self Screening Devices
A supplemental questionnaire to your normal application that asks pertinent questions specifically related to the skills, knowledge abilities and duties
for this specific position is important.

Candidates often determine that they do not have the appropriate skills or would not like the specific duties that are critical to the position.

Personality Characteristics
Measuring personality characteristics needed for the position improve the hiring process success rate to 38%.

Abilities
When applicants are assessed for abilities as well as personality, employers found they hired the right people approximately 54% percent of the time.

Interests
Using more sophisticated assessments that measure the interests of the candidate compared to the position raises the bar to 66%.


Job Match
The most impressive assessments to date are integrated assessments that measure a combination of factors, as well as introduce the component of "job match."

This cutting-edge technology combined with empirical data evaluate "The Total Person" in a way that measures how candidates match the exemplary employees in the position.

These assessments have increased an employer's ability to identify potentially excellent employees better than 75% of the time; a far cry from the rate of 14% rate using interviews only.

The Payoff
Doing it right really pays off! Take the time and make the small upfront investment to learn about the position being filled, what type of behavior it requires and what type of person best fits the job. The rewards are great; your business is more successful since your company is only as good as your employees.

I try to do the right thing at the right time. They may just be little things, but usually they make the difference between winning
and losing.”
Kareem Abdul-Jabbar , LA Lakers

Interviews: Rambling Candidates Can Be Risky

Strong interviewing skills enable hiring managers to avoid crossing the "too much information" (TMI) line and to rein an interview back in when a job candidate oversteps that boundary.

Interviewers who are not skilled in the process sometimes ask questions or make comments that are inappropriate or irrelevant. They intentionally or unintentionally broach certain topics that are off-limits during an interview, including marital status, personal companionship practices, the Candidate's medical history, and religious affiliations, and they sometimes use that information when making hiring decisions.

Similarly, some interviewers are not adept at reining in an interview when an Candidate goes off on a tangent or reveals personal information. That's a problem, because interviewees who cross the TMI line reveal information that employers could--purposely or inadvertently--factor in when making an employment decision.

If the information relates to the candidate's ethnic background or religious affiliation, for example, that could lead to a claim of discrimination under Title VII of the Civil Rights Act.

In addition, allowing an interviewee to ramble about irrelevant information, provide details about his or her personal life, or complain about a previous job, takes away from the purpose of the interview---to determine whether the candidate is the best match for the job.

Skilled interviewers are able to focus on the requirements of a particular job and how closely a candidate matches those requirements, she says.

Many employees with interviewing responsibilities need more training. Training should cover the topics that can--and can't--be addressed during the interview process, as well as effective interviewing techniques.

To minimize your risk:

Know what the job entails. Before starting an interview, interviewers need to understand the requirements of the particular job and what skills and competencies the successful candidate should have.

Prepare interview questions. This helps ensure consistency with all Candidate interviews and keep focus on getting the information you need to make a good assessment of the Candidate.

Rein in the interview when necessary. Interviewees who are nervous or who don't have a good response to a question may ramble, she says. "The onus is on the interviewer to rein it in and help the candidate get back on track." That often can be accomplished by rephrasing a question, and not allowing the Candidate to evade the question. The goal of an interview is to get the best essence of someone you can, relative to what you're interviewing them for.

Making objective personnel decisions. If an interviewee reveals personal information, the interviewer must not let his or her own biases factor into the employment decision, she says. "Bias has to be kept out of the decision-making process. It's hard. It's natural for all of us to interject our bias."

HAVING A WORKPLACE POLICY MAY NOT BE ENOUGH-TRAINING AND ENFORCEMENT ARE CRITICAL

Cell phones are a valuable tool in conducting business and more employees are using them to perform their jobs. Cell phones can positively support productivity by connecting employees to the office and to clients. On the down side, cell phones bring up a number of issues involving safety, security, and privacy. And, as the whole world now knows, inappropriate use of cell phones can create liability issues for employers. If an employee has a moving vehicle accident and hurts someone while making a work-related or non-work-related cell phone call, the employer as well as the employee may be found liable.

The accident that occurred with the Metrolink is an unfortunate and real example of what can happen when policies may not be clearly understood or followed. The Metrolink train accident that occurred on September 12, 2008 in Los Angeles was the worst train accident in the United States in several years. Twenty-five commuters were killed and several others were injured. The most recent report by federal investigators with the National Transportation Safety Board stated that the conductor was “texting” just seconds before the accident occurred.

On July 1, 2008, California instituted cell phone regulations that required a driver to use a hands-free device while talking on their cell phone while driving. Reviewing the Cell Phone law that went into effect on July 1, 2008, the term “hands free” may not be clearly explained or defined. According to the Department of Motor Vehicles, the “hands free” law does not specifically prohibit drivers 18 and older to text message while driving, but an officer can pull a driver over and issue a citation, if, in the officer’s opinion, the driver is distracted and not operating the vehicle safely. The DMV also states in their Wireless Telephone Laws FAQs that “sending text messages while driving is unsafe at any speed and is strongly discouraged”. So California has gone further to clarify cell phone use and “texting” while driving. It will be unlawful beginning January 1, 2009.

This is probably a good time to revisit your Cell Phone policy. If you do not have a Cell Phone policy it may be time to consider creating a policy. As you review or create a policy consider other issues of concern when drafting a workplace policy. Employers must understand that it is not enough to create and publish a policy. An employer must ensure a company policy is clear, explicit and understandable by all levels of the organization. It is also worthwhile to note that an effective workplace policy includes appropriate dissemination, training, follow-up and enforcement of the policy. Establishing and following through with this process can help ensure that employees understand the policy and their responsibility with regard to the policy and it can possibly help reduce the employer’s liability if an issue should come up.

As a Human Resources professional and or employer you must understand and interpret legal requirements for your employees. It may mean you work with legal counsel to clarify and interpret as clearly as possible the requirements of a law. For example, using the cell policy that is currently in effect, what does “hands free” legally mean? Should it include the Department of Motor Vehicles recommendation that sending and receiving texts messages is not safe and should be discouraged? As stated in a previous paragraph, the new law, effective January 1, 2009, takes the July 1, 2008 law one step further. It specifically prohibits “writing, sending, or reading text-based communication – including text messaging, instant messaging, and e-mail – on a wireless device or cell phone while driving”.

You have established a clear and concise policy; the next step in the process is to communicate the policy so employees understand the policy. Step 1 is to provide the policy electronically or in hard copy form and require the employee to sign a Confirmation of Receipt of the Policy. Communicating the policy may also include reasons or rationale for the policy. Providing reasons may actually help the employee understand the policy more clearly. Step 2 requires you, the employer to provide training about the policy. This includes explaining the policy to the employee and providing the employee the opportunity to ask questions about the policy so he/she understands the policy more clearly and therefore understands his/her responsibility for the policy. For instance, using the new “texting” policy as an example, the employer can emphasize how the new “texting” policy focuses on employee and company safety. The final step in the process is to monitor the policy’s effectiveness. Verify the policy is uniformly applied throughout the company and all employees, supervisors and managers are following the policy. If and when you find that employee, supervisors or managers are not complying with the policy you have an obligation to address the non-compliance. It might include additional training or clarification or some level of disciplinary action.

Remember the new “texting” law goes into effect on January 1, 2009 and now is the time to updae an existing policy or create a new cell phone policy.

Caution: Do Not Let Economic Stress Lead to Careless HR Practices

Several months ago I wrote about the stresses employees may face during an economic downturn. Little did we know then just how much more dire the economic news would become. During these bumpy economic times employees and managers may be faced with complex HR challenges that require careful management to ensure best HR practices are maintained.

Layoffs
An economic downturn may mean layoffs but employers can minimize their risk of wrongful termination claims with good HR practices. The first line of defense occurs when the employment relationship is established. Ideally all new business should have employees sign an agreement that protects the at-will employment status. If layoffs are on the horizon it is time to standardize termination procedures and train supervisors on protecting the at-will relationship. Supervisors must also be clear on the importance of consistency when layoffs occur. Companies should have objective, nondiscriminatory criteria when selecting employees for layoffs. If the layoff involves a worker with an actual or perceived disability employers should seek the advice of an experienced HR professional or legal counsel. The same advice applies if an employee has recently returned from a legally protected leave or if the employee has made harassment claims or reported safety violations.

Proper handling of the layoff process is the best possible way to avoid messy and costly discrimination and wrongful termination suits. It is very important to give an employee accurate information about why you are terminating their employment. Do not tell an employee you are laying them off for economic reasons if the termination is due to performance issues.

Wage & Hour Compliance
A Stanford Law Review article by John Donohue and Peter Siegelman (The Changing Nature of Employment Discrimination Litigation, 43 Stan. Law. Rev. 983 (1991)) has interesting information with regard to the relationship between the economy and employment litigation. Recessionary economies mean increased employment suits and damage awards also increase.
To avoid wage and hour compliance complaints you must carefully track hourly employee's time and accurately track and pay overtime wages. It is also important to enforce meal and rest break requirements. Be certain exempt employees are properly classified as misclassification is one of the most significant areas of employment litigation.

Workplace Violence
Times of economic stress may lead to an increased incidence of workplace violence. Employees may be coping with financial stresses at home and more demands at work as businesses seek to maintain productivity with a reduced workforce. A proactive approach can reduce your risk of workplace violence which can take both a financial and human toll.

Employers need a zero-tolerance policy that addresses violent acts and intimidation in the workplace. The policy should be communicated to all employees and must include reporting procedures as well as disciplinary action up to an including termination as a remedy.

Risk Management
Be particularly aware of risk management practices during an economic downturn. Stressed and overworked employees are less likely to carefully follow safety protocols which can lead to an increase in workplace injuries. Another serious concern is the potential increase in workers compensation claims as employees facing potential layoffs seek to replace their income. An economic downturn is also not the time to reduce safety training and equipment as a cost cutting measure because the long term consequences can be even more expensive.

Serious economic times call for sound HR polices and practices. A commitment to maintaining good HR fundamentals even when the economy is unsteady can help protect your assets and the human capital you rely on to keep your business on track.

Performance Management: Moving Beyond the Annual Review

Performance management is a hot topic these days, and along with change management, you'll find the business section of the bookstore overflowing with titles on the topic. But for most managers and business owners, performance management is what you think about with a sense of guilt, feeling that you should be doing written performance reviews on your people, but not knowing how to find the time.

To really manage the performance of your employees, though, there are a few basic things you can do to ensure your employees are giving, and gaining, the most possible in their positions. Yes, as an HR Director, I of course recommend written reviews, but if you can do these simple steps, you will be managing performance, and contributing to the success of your organization.

True performance management starts in the hiring process. Often in the rush to fill a position, we overlook such basic things as whether the person will be able to be successful in the position. This goes beyond asking a candidate to describe their relevant work experience. You want to use the experience of the interview to tell you as much as possible about the potential employee. Are they very nervous? Plenty of people get nervous in job interviews, but if you're hiring for a sales person or front-line client contact, you are probably looking for someone who appears confident in any business situation and can be a strong representative of your company. Don't ignore the signs in the interview process. Just as you wouldn't hire an excessively nervous person for a hard-driving sales position, pay attention to what the candidate tells you about themselves. If they describe themselves as non-confrontational and gentle, you probably don't want to hire that person to do your collections. It sounds obvious, but many managers pick up on positive traits in a candidate, and ignore the rest of the story, at their peril.

Another simple action that managers can do to manage performance is pay attention to where your employees are making mistakes. Do you have someone who sits at your desk and nods when getting instructions, but then goes off and does things their own way, unsuccessfully? Do you have an employee who, when confronted with a mistake, claims never to have been trained on it? In the first case, you can help your employee by ensuring that they are taking notes, or by training them verbally while they physically go through the procedure. Those are two different ways of communicating information and accommodating different learning styles. For the defensive employee complaining they've never been trained, consider following up training with emails or written procedures to reinforce the learning. The bottom line with this action is that as a manager, you can choose to treat mistakes as annoyances or as coaching opportunities, and managers that choose the latter are truly managing performance.

A third guideline for managers is to be more direct than you think you need to be. It's amazing to me, even though I'm guilty of it as well, how often we assume that we're on the same page as people we're working with. We assume that they know what our goals are, and the end result we're looking for. What I've found, though, is that employees can deliver the best results when they understand the most about the problem and the desired resolution. So rather than being vague with your deliverables, be specific, be clear, and be thorough. Sometimes spelling it out on the front end can save clean-up and repairs on the back end.

Managers are responsible for making sure that resources are utilized for maximum effectiveness with minimum effort, meaning that you are being as efficient as possible. This means that managing performance throughout the entire employment cycle, and not just at annual intervals, is essential in successfully doing a Manager's job.

CEO Roundtables

I have had the privilege and honor to be the Program Administrator for the CEO Roundtable program since its inception in mid-2005. Over the years I have seen it grow from a concept in a conference room to a regional program serving over 40 local CEO with 4 active tables. I am impressed by the world-class caliber of the local CEOs, the businesses they have built, and their personal agendas. These are the most talented individuals in our community sharing best practices and developing professional relationships that make our business community more competitive. The CEOs are energized by different perspectives leading to fresh approaches to complex challenges. At times it's an amazing process to be a part of.

A prospect member CEO asked me why Your People Professionals (YPP) built the CEO Roundtable program and I must admit I stuttered a little answering the question. The program is modeled after the one in Milwaukee where it is run by the Chamber of Commerce. I had belonged to the program in Milwaukee for several years as a member CEO before moving to the Central Coast. I had friends within that program that assisted us in building the local program by sharing exactly how the program worked. The Milwaukee program has been around since the 1950's and the roster of member CEOs reads like a Who's Who of the Region. For an organization like a Chamber it is easy to understand why they would start and run a CEO Roundtable. It helps promote and advance the business community and this is core to their non-profit mission. YPP on the other hand is a private for-profit company that provides Human Resource Services to other businesses. They saw a requirement to help their client's CEOs develop professionally and they saw peer groups as a key element to their executive development strategy. So they decided to take on the role of the community HR Executive and find a way to bring this resource to the community. Their vision was, and is, that a stronger business community would be better for their business.

There was plenty of discussion in the early days about keeping the program within YPP and making it a profit center. There are plenty of examples in the market place where private businesses have monetized programs like this. Examples abound in the market with national programs like Vistage and many other consulting groups that use this concept to create billable hours. However, the goal and intent was to serve and improve the business community, not to create a revenue stream. As the concept developed it became apparent that in order to grow to the community level that the program would have to be community based. To serve the YPP clients it had to involve business leaders beyond the client list of any one company. This strategic decision to partner with others allowed the program to build relationships with Softec, the Economic Vitality Corporation, and the Santa Maria Chamber of Commerce. These non-profit partners allowed the program to connect to the regional business community. YPP partnered with BLHK, which is now known as Caliber Accounting Group and Longcrier & Associates. This partnership provided us with additional networking reach and many other resources.

To understand what a CEO Roundtable is and how it serves it members you first have to understand the world of a CEO. CEOs are unlike any other person in an organization because they have to provide leadership on the tough decisions that cross multiple specialties. CEOs do not have the luxury of taking one perspective to a problem because they have to bring together the diverse specialties and get everyone headed in the same direction. All CEOs were at one time in sales, finance, operations, IT, accounting, administration, human resources, manufacturing, or some other department. However, as CEOs, they have to balance all these areas and they have to reasonably come to a position that everyone can support. It's a tough job when you consider some of the natural conflicts in every business. CEOs must be fair and consider all perspectives and then lead people through the decision and implementation.

Business leaders need to continue to develop as professionals and for CEOs this is a tough challenge. While far from a complete solution the CEO Roundtables give them a unique peer environment that allows them to challenge themselves. The program gives them opinions from respected peers that do not report to them. The honest and sometime brutal opinions can be absolute eye openers on decisions that are critical to their business. While not every meeting is a home run I have witnessed many exchanges that I know later helped shape the CEOs decision and it helped improve the business. There is just something magical about a room full of highly talented natural leaders that just makes taking a problem apart seem simple. CEOs share how they have addressed specific areas, what has worked, and more importantly what has failed. The level of honestly is, at times, amazing.

In a recent meeting the discussion was on data security and as everyone knows there is no perfect solution to security. The tighter you make the security the more problems you create for operations and the higher your costs. It was fun to watch a room full CEOs tear this problem down and look at the pieces. It will take time before the meeting has any impact but you could tell by the conversation that people in the room were being exposed to solutions and perspectives they had not thought of themselves. Will something change, will one of the businesses get better? Who knows but what is clear is that CEOs absorbed one more aspect of the business puzzle.

The other thing that this program has done is it has created relationships between these highly talented people. As we all know it not what you know but who you know. I have seen some major issues tackled with relationships built in the program. While the details are private I have seen major improvements in costs, operations, new business, technology, and negotiations. I have seen members transition from one phase of their life to another with support from their roundtable.

The program has not been without its challenges. The biggest problem has been finding openings in the tables for all the CEOs that want to be involved. We have 4 active tables and for the first 3 years the vast majority of support came from YPP but with just a few actual clients being served by the program there have been growth limits on the program. This month we put in place, with the full approval and support of the members, a small administrative fee to allow the program to grow. With this we transferred the program to Softec, one of our non-profit sponsors. This provides a program oversight by a highly respected independent Board and paves the way for other companies to step up as program sponsors.

The program is healthy and ready to grow!

If you are interested in getting involved contact Bob Dumouchel bob@smsrd.com