Paid Time Off – Back to Basics

In a 2017 small business survey conducted by Justworks and Squarefoot, it was reported that less than half (44%) of employees felt that unlimited Paid Time Off (PTO) is important. Only about 28% work at organizations that offer unlimited PTO. This week in Astronology® we discuss the basics of PTO.

In general, PTO is identified as vacation, sick leave, and / or personal days; in other words, allotted paid time away from work. While in some cases employers designate a specific amount of days / hours for each reason for being away from work, this article will focus on policies that allow employees to earn a bank of paid time off, and then use the time as they see fit.

The majority of organizations provide employees with paid time away from work, even though it’s not legally required (with the exception of sick leave in certain states and major cities). Paid time off is considered an excellent recruitment tool. As explained by Chron.com, “…many job postings state that the company has a ‘generous vacation policy’ or ‘generous time-off policy’ to increase the company’s appeal to qualified applicants.” This is understandable as there has been an increased focus on work-life balance by the incoming generation of workers.

Two popular forms of awarding PTO are banked and accrued. Banked time is typically awarded at the beginning of the calendar or fiscal year. Accrued time is gained through a designated rate per days (and / or years) worked by the employee. Adds Chron.com’s small business website, “if an employee takes time off before accruing the hours, the time is unpaid. An employer may decide to cut employee compensation costs by reducing the number of PTO hours an employee can accrue.”

Some advantages to having a PTO policy include the following:

• Managers are no longer put in the position of policing and reporting employees’ use of benefits.
• Unscheduled absences are more controlled.
• Employees have more flexibility of use (they can use the time to take care of a sick child, or go on a restorative beach day, for example).

Some disadvantages include the following:

• In cases where paid time off is banked, an employee could save his / her PTO, and leave an organization with a balance of banked time for which the organization would then have to pay the employee.
• Sometimes employees view PTO only as vacation time and will attend work while sick.

Humana, a medical insurance company, gives some suggestions regarding specific elements to consider when building a PTO policy:

• Who is eligible for PTO? (Full-Time, Part-Time, Interns, All?)
• How much PTO will be offered?
• How does PTO time accumulate? (What is the rate? Will it be banked?)
• How can PTO time be taken? (Hour increments? Full days?)
• Can unused time carry over from year to year? If so, how much?
• Can an employee opt to cash out his / her unused days?

The Humana website also suggests that “many employees don’t take vacation because they simply feel they have too much work to do. Creating a culture that prioritizes work-life balance must start from the top.” To avoid some of the disadvantages listed earlier, employers can begin to emphasize the need for proper work-life balance and encourage proper use of the organization’s PTO policy.

Does your organization have a robust PTO policy? Are you considering adjusting the policy to appeal talent in the coming years? Feel free to share your thoughts in the comment section below!

Effectively Using Employees’ Opinions to Shape HR Strategy

Without a prompt and visible response, even the best designed employee opinion survey or exit interview process will fall prey to employee cynicism. If employees feel that management is ignoring their feedback, an effort to involve their opinions will likely cause a drop in morale.

Utilizing employee opinion and exit interview data well is a challenge. In this Astronology®, we share methods for strategic analysis that can help you turn your opinion-based data into concrete strategic objectives.

STRATEGIC OBJECTIVES IN HR
Strategic objectives in human resources are set to reinforce employee efforts and behaviors in support of an organization’s critical success factors – factors that will determine the future success or failure of an organization.

Many successful human resource functions have taken a page from the book of Drs. Kaplan and Norton and adapted the Balanced Scorecard approach to their strategies. In terms of HR, this approach involves viewing the organization through five strategic lenses:

• Learning and growth
• Customer
• Financial
• Quality
• Human Resources

This approach involves developing metrics (criteria for measurement), collecting data, and analyzing it as it relates to each of these perspectives.

In the quest to link the needs of the organization and the needs of its employees, conflicts often arise. Whether they arise from miscommunication, lack of acceptance, or a discord between organizational and employee values, HR is at a disadvantage when it does not strive to understand these conflicts and their foundations.

DATA ANALYSIS
Two powerful tools for collecting the data needed for this effort are employee opinion surveys and exit interviews.

Successful strategic planning in human resources begins with linking the information from opinion surveys and exit interviews. Trend analysis will become easier with time, but using both sources in tandem will reveal a clearer picture of working conditions. The following questions may be of use in this analysis:

• What do both sources identify as common sources of dissatisfaction?
• What do both sources identify as common motivators?
• What perceptions of the organization and its leadership are common?
• Are particular supervisors singled out as strong or weak leaders?
• How is human resources perceived in both sources?
• What are employee perceptions regarding the organization’s mission, vision, values, and objectives in both sources?

SWOT ANALYSIS
Once these sources of data are analyzed, it is the responsibility of human resources to conduct an internal analysis of its programs as they relate to communicating and reinforcing the strategic values of the organization. To this end, SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is an excellent strategic tool.

SWOT Analysis is a flexible line of questioning that can be used for organizational, individual, or competitive ends. In this context, the data analysis described above will be further organized:

• What are the current strengths of the organization?
• What are the obvious weaknesses to be modified?
• What opportunities exist to modify systems and / or programs that will better reinforce those employee activities and behaviors needed by the organization?
• What threats could interfere with successful implementation of necessary changes?

HR has an obligation to provide the organization’s leadership with insights regarding employee perceptions, as well as with concrete recommendations for reinforcing what is working and what needs to be changed. Employee opinion survey and exit analysis data are prime sources of information in this endeavor, but their collection could result in a backlash if results are not both shared and acted upon. After analysis is complete, share some version of the results with your employees, and tell them what will be done about the problems they have identified.

For instance, if an employee opinion survey communicates a lack of understanding about the organization’s mission, vision, values, and objectives, a training program could be instituted to address the problem. As this information can be distributed via e-mail, a technically savvy organization can raise employee awareness with no greater cost than a few hours of writing time.

Effective use of employee opinion and exit interview data provides the backing and justification the organization’s senior leadership team needs to support HR’s recommendations. Linking this supportive data to concrete proposals and programs that demonstrate ROI, return on investment, is key. The lack of response to employee concerns raised in the collected data can lead to increased turnover, inability to recruit effectively, and, potentially, lower productivity and efficiency due to lower morale.

The Onboarding & Retention Relationship

         O.C. Tanner reports that 69% of employees are more likely to stay with their places of employment for at least three years after a great onboarding experience. Back in 2009, an Aberdeen Group survey reported that 86% of senior executives and HR professionals believe that a new hire’s decision to stay with an organization long-term is made within the first six months of employment. Is the process of onboarding really that critical to retention?

         Research suggests that perhaps the first 90 days of employment are more critical than we think in terms of retention. The Wynhurst Group found that 22% of employee turnover happens in the first 45 days of employment. BambooHR found that one-third of 1,000 individuals surveyed quit a job within six months of hire. A study from Kronos Incorporated earlier this year also indicates that many feel the onboarding process can affect employee retention, as it should include more than orientation paperwork. Also of note is that

• 60% of survey respondents felt the main purpose of onboarding is to integrate employees into the organization’s culture.
• 36% blame insufficient technology for their inability to automate and better organize onboarding programs…resulting in the inability to properly train managers in proper onboarding techniques.

        Sharlyn Lauby, the HR Bartender & president of ITM Group, Inc. explains, “We all know turnover is expensive, both in terms of direct costs and intellectual capital. Organizations can increase retention by focusing on those activities that get employees engaged from the start. One way to do that is by taking care of administrative paperwork before day one so employees can focus on their role and other things that matter to them most. Onboarding processes set new hires up for success by building positive work relationships, making good on promises made during interviews, and providing a career roadmap.”

        What should an organization consider when creating an onboarding program geared to retain an employee? In an article on the Society for Human Resource Management (SHRM) site, Roy Maurer quoted Amber Hyatt from SilkRoad, suggesting these reflective, brainstorming questions:

• When will onboarding start?
• How long will it last?
• What impression do you want new employees to walk away with at the end of the first day?
• What do new employees need to know about the culture and work environment?
• What role will HR play in the onboarding process? What about direct managers? Co-workers?
• What kind of goals do you want to set for new employees?
• How will you gather feedback on the program and measure its success?

          Another aspect to consider is technology. Although nothing will replace one-on-one conversation and experience within an organization’s culture, some organizations have taken the step to use technology to make the onboarding experience more robust:

• Ashoka: the non-profit organization has an onboarding management system that allows new staff to complete tasks and set their own goals. It is said to empower new hires to “own their development.”
• ADP: the software developers at ADP have software that give text and video introductions to new hires before they even enter the workplace.
• Yoi: the onboarding platform Yoi is based on the concept of “experiential learning.” Through a range of assignments and assessments, managers are able to customize the onboarding experience for all new employees.

         Have you given thought to updating the onboarding process at your organization? What are some changes you are considering? Will you be adding some technological upgrades? Share your thoughts in the comment section below!

Good Office Politics in 2018

In a recent national survey conducted by Bridge by Instructure Inc., 53% of employees believe that “engaging in workplace politics was a moderately important factor in being promoted.” Naturally, we all want to succeed. We expect that success is achieved based on our undeniable hard work and skill. The above quote, however, raises a concern over the role office politics may play in advancement.

A mindtools.com article equated “good” office politics to networking and / or stakeholder management. “Office politics often have a negative connotation because of the negative influential behaviors associated with a person trying [to] achieve goals of getting to the top. There’s a thin line between persuasion and manipulation, and the negative connotation exists because of the few bad eggs that use unethical tactics in their pursuits,” explains E.M. Raws in a Chron online article. If all office politics isn’t bad, what exactly is “good” office politics? How do you conduct positive office politics?

Kathleen Kelley Reardon, in a Harvard Business Review article, explains that the degree to which an employee may have to engage in office politics largely depends upon the work environment. She lists four levels of politics in organizations:

• Minimally political organizations: in this environment, expectations for leadership, management, and promotions are made clear. Camaraderie exists, and although rules occasionally are bent and favors are granted, they are not done underhandedly.
• Moderately political organizations: in this environment, rules are widely understood and formally sanctioned. Political behavior could be denied since it is exists in a low current state.
• Highly political organizations: in this environment, who you know is more important than what you know. Rules are invoked when convenient to those in power. In-groups and out-groups are clearly identified.
• Pathologically political organizations: in this dangerous environment nearly every goal is achieved by going around people or formal procedures. Distrust permeates everything.

Reardon encourages identifying the type of political arena you work in and if you are a good match currently. If not, she notes “…it never hurts to learn about politics and to stretch your style to accommodate a variety of levels.” How so? She lists the following tips:

• Read about workplace politics and observe those who are skilled
• Try tweaking how and when you say things
• Consider to whom you’re giving power and alter that if it’s getting you nowhere
• Break out of dysfunctional patterns
• Be less predictable

In addition, Monster.com shares some positive strategies to use in environments with higher levels of work politics:

• Be alert
• Ask respected higher-ups for counsel periodically
• Perform deliberate acts of kindness
• Do visible important tasks

How do you feel about workplace politics? Do you work at an organization that displays high levels of politics? How do you handle that environment successfully? Feel free to share your thoughts in our comments section below.

Pay Equity in the Workplace: Do Gender Based Disparities Still Exist?

The American Association of University Women released its Fall 2017 Gender Pay Gap report/guide with statistics regarding the pay disparity between women and men. In this issue of Astronology®, we look into how broad these pay disparities truly are and how this situation impacts Human Resources.

According to the American Association of University Women (AAUW), women earned 80% of what men earned. The smallest pay gap was found in New York, where women earned 89% of what men earned. California came in second at close to 88%, with Florida third at 87%. The largest pay gaps were Utah and Louisiana at 70%. Some writers highlight that the AAUW’s findings do not take into account personal choices with respect to careers. These choices or factors include college major, occupation, industry, hours worked, workplace flexibility, and experiences.

Yet in AAUW’s recent research findings, unexplained pay gaps still exist even when men and women have the same level of education. For instance, women with a Bachelor’s degree make 74% of what their male counterparts with the same education earn. Women with a high school graduation level education made 78% of what their male counterparts earned.

In regards to industry, there is research that notes a few fields were women make more than their male counterparts. These fields tend to be historically male-dominated fields such as riggers, small engine mechanics, and non-oil & no-gas drillers. For many industries, however, a gender pay gap exists, with male counterparts making more. In some cases, the gaps are closer than others. These findings, plus additional research & speculation, lead many to believe that personal choices can’t fully account for the gender pay gap. Adding to the importance of the discussion, a Pew Research Center report finds that 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family.

What can HR departments do to prevent gender-based pay disparity? Keeping accurate records is an important step. The AAUW urges employers to “conduct salary audits to proactively monitor and address gender-based pay differences.” Astron Solutions offers an array of packages to support organizations in the quest for fair and equitable compensation programs. We encourage you to learn more about how we can be your trusted partner in this critical and sensitive matter! If you do not use an outside consultant, however, closely watching your organization’s internal salary increases, salaries for new hires, and salary changes associated with promotions is critical in eliminating gender-based pay gaps in your organization. An ounce of prevention today is worth a pound of cure tomorrow.

Unpaid Internships: The Return

2014 saw an explosion in lawsuits surrounding the proper identification and payment of interns. In January 2014, Elite Model Management settled with former unpaid interns. Months later in October, NBC Universal closed a $6.4 million settlement with its unpaid interns. Then in November, Condé Nast settled with its former unpaid interns for $5.8 million. This lawsuit also resulted in Condé Nast terminating its unpaid internship program.

For some time, it was anticipated that the existence of unpaid internships would decline. Most of the lawsuits mentioned here revealed each employer’s inability to meet the U.S. Department of Labor’s (DOL) six factor test for unpaid internships.

On January 8, 2018, however, the DOL announced adjustments, thereby updating the guidelines for “The Test for Unpaid Interns and Students.” The updated fact sheet explains that “Courts have used the ‘primary beneficiary test’ to determine whether an intern or student is, in fact an employee under the FLSA (Fair Labor Standards Act). In short, this test allows courts to examine the ‘economic reality’ of the intern-employer relationship to determine which party is the ‘primary beneficiary’ of the relationship.” A concern for many courts with the original test was determining whether “the employer doesn’t gain an immediate advantage from the intern’s activities.”

What are the new seven factors for determining a lawful unpaid internship? Do these adjustments make it easier for organizations to provide meaningful unpaid internships?

The Seven New Factors

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4.  The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

With the inclusion of the possible academic credit / formal education tie in, the new test is more flexible than the previous one. Determination on whether an employee should be paid is now based on an overall view of the circumstances. This makes it possible for organizations to meet the standard. It is still suggested, however, that employers ensure the intent and design of their internship programs are primarily beneficial to the interns.

Reactions, of course, vary. For example, Eric Glatt was a plaintiff from a lawsuit involving his unpaid internship with Fox Searchlight. In a comment to Bloomberg Business online, Glatt mentioned that “I don’t like the legal implications of this new test…but the practical implications may make the kinds of internships I did [entry-level jobs disguised as educational opportunities] go away.” Some labor advocates worry that these new guidelines may permit an organization to justify any program as benefitting an intern. On the other hand, due to the wave of lawsuits in previous years the on-going trend has been for employers to be safe and pay minimum wage. We look forward to seeing how organizations and future interns utilize these new adjustments.

What about your organization? Have you hosted an unpaid internship program? Have such programs been discontinued in recent years? Share your thoughts in our comments section below!

Meeting the Demand for Talent in 2018

In 2016, “failure to attract and retain top talent” was the number one issue in the Conference Board’s 2016 survey of global CEOs. A recent McKinsey Global Institute Study suggests “that employers in Europe and North America will require 16 million to 18 million more college-educated workers in 2020 than are going to be available.” This means the hunt for acquiring and retaining talent will be heightened as time goes by.

In particular, the ever-growing technology industry has large demands for talent. A Gartner report entitled “Service Providers are Waging War against U.S. Talent Shortage with Unconventional Methods” says to expect 1.4 million computer specialist job openings by 2020. Projections show universities won’t produce enough graduates to fill 30% of these jobs. How can we meet the needs for talent in 2018 and beyond?

A Manufacturing Business Technology online article points to four economic trends that may impact this talent issue:

1. Global Growth – indication of steady growth.
2. Softening Dollar – U.S. exports are increasing as U.S. products become cheaper to foreign nations.
3. Increase in U.S. Spending – increase in spending and inventories after two years of flat sales.
4. Political Realities Settling – as we move into a new year and go into a second term with the current Presidency, the expected tax overhaul should fuel hiring in the near future.

With these factors stoking the war for talent, what are some proactive choices Human Resource departments can make or consider when attempting to attract and keep critical employees? Recruiting trends indicate that due to advancements in Virtual Private Network technology, or VPN, remote workforces are growing. This approach appeals to a workforce that values flexible work. Perhaps investigating how your organization can feature some form of flexible work scheduling could be helpful in retaining talent. In addition, gamification technology could be used not only to engage current employees, but also to screen candidates for openings. Investing in such technology will appeal to the tech-savvy generations in the workforce.

Investing in on-the job training programs also can be helpful. As Mike Starich explains in a manufacturing Business Technology online article,

During the Great Recession, companies had to dramatically cut training costs — if no one is hiring, there is no need for training. Today, the pressure to hire is on and companies that are proactive on improving their approach to hiring and training will be ahead of the market. Embrace on-the-job training and develop internal training and certification programs to build your pool of skilled talent. Typically, Hiring Managers are more open-minded on job descriptions than HR and TA [Talent Acquisition] presume because they know that they can train people with right basic profiles and positive attitudes.

An ADP-powered blog supports this thought by pointing out that the lack of advancement opportunities is the second most popular reason why employees leave an organization. To combat this, offering learning management systems, training opportunities, and / or certification programs can give employees avenues to learn more and further develop without leaving their current employers.

What tools does your organization use to attract talent? Has your organization made adjustments to HR programs in order to more successfully attract and retain talent? We encourage you to share your thoughts in the comment section below!

Translating Military Experience into Civilian Organizational Needs: A How-To (Guest Article)

Contributed by: Rich Virgilio

Congratulations, HR Professional! You made it into 2018 and now you get to take on the challenge of achieving the goals your executive leadership set forth in the strategic plan for the year. Most of the goals are straightforward, but a new wrinkle has appeared. Your organization’s execs have made it a specific goal to bring in more talented, former military people as a way to add another dimension of experience that can be shared among the workforce. This is intended to improve teamwork, generate some fresh views on finding solutions to problems, and increase productivity by promoting a “selfless service” culture found in the uniformed services.

Certainly, your recruiting has always included sourcing from the veterans’ community, but expressly targeting military experience is a step beyond, and certainly challenging. You find yourself asking, “How do I know that the skills I need specifically fit what a veteran has to offer?” Maybe you feel hamstrung since you don’t have first-hand military experience, or that you’re unfamiliar with what the military actually does behind those walls and gates, or that certain knowledge that there’s a whole lot more that goes into daily operations besides “killing people and breaking things (as some wags occasionally express it).” Certainly your organization doesn’t do those things!

Well, OK, as a methodology, let’s think generically about what the services have to do to function as the organizations that they are. Yes, they are huge, but they are made up of many, many smaller and subordinate units. Subordination implies a degree of both responsibility (to a next higher supervisor, let us say) and specialized function (which is a necessary portion of a bigger one). Organizational relationships and communications exist in your organization as well as in these units where they wear uniforms.

Are you following my line of thinking so far? See how we’re getting away from thinking that being in the military is isolated from the skills your organization’s needs?

“But we need people who can sell, and military people don’t sell anything.”

So as a start and as an illustration of this approach, let’s break this idea of selling into the component parts of the selling process. Fundamentally, selling is recognizing a prospect’s shortfall that can be fulfilled by a product or service offered by the seller. The skill is in characterizing the shortfall, communicating the identified need to the prospect, communicating the beneficial characteristics of the product or service, and then obtaining a commitment to utilize the offering. Here’s the piece that’s missing from most people’s understanding of the military: it’s not static. Things change. Old ways of doing things, or applying old solutions, don’t improve matters. Corporals bring up new ideas to sergeants, lieutenants present new options to captains, commanders present new tactics to admirals. All of these communications are sales. Yes, sales. So your position description or requisition doesn’t just say “Sales experience a plus;” it says “Sales or military decision briefing experience a plus.”

Or, you need an operations manager at one of your warehouses. Instead of “Warehouse operations experience desired,” you open up the aperture a bit and add “military supply and logistics fulfillment experience a plus,” because you know that somehow those soldiers overseas need to get food at their deployed site and they aren’t going to shop at the local grocery –somebody is in charge of moving that food from warehouses stateside, across interstate highways, across oceans, across local roads, and into the hands of cooks. If someone has successfully done that for a couple of years, they could surely manage your warehouse. But making that connection requires both you and the candidate to be speaking the same language, otherwise you won’t realize that although one is talking blintzes and the other crêpes, you’re both talking pancakes.

An out-of-the-box (somewhat) suggestion for you to consider. This takes some time, but if your organization is serious about taking some proactive steps to increase your veteran “inventory,” the investment in effort and time could pay off. Don’t take it all on yourself! Communication is a two-way street, so think about reaching out to someone in the candidate pool whose résumé has at least a hint of what you’re looking for. Phrase it as a “request for more information.” Maybe like this: “Dear John, your résumé has some characteristics of what we’re looking for in our new widget production manager, but I need some better description in civilian terms of your experience at the Navy’s Widget Command so we can better understand if you’re a close enough fit to see if we should further invest time together.” Let the candidate take on the responsibility of presenting himself in your language. He will have been forewarned by his career change advisors to do it, and will do his best to better break out of any military-ese still remaining. And that will benefit you.

Give yourself a chance to effect this wrinkle in your recruiting. It’s not hard, but does take some focus and a bit of adjustment. And it’s a good way to assure yourself you haven’t missed some great talent because you weren’t thinking about how to connect with the veterans who are out there looking for you.

Rich Virgilio is a retired HR Professional and an occasional contributor to Astronology®. He currently resides just outside San Antonio, Texas.

Low Cost Techniques for Employees Recognition

Everyone wants to be recognized for their hard work. Many believe that recognition gives employees incentive to stay loyal to their organizations, and promotes the employees’ continued hard work. Despite this common thought, however, a 2016 Gallup report highlighted that in the United States, only “one in three workers strongly agree that they received recognition or praise for doing good work in the past seven days.” In this issue of Astronology®, we explore low-cost ways of engaging and rewarding employees with the goal of demonstrating that their dedication & hard work are appreciated.

Two Ways to Communicate Recognition
Informal recognition can be of a spontaneous nature, such as noticing a desired behavior and commending the employee for it. Sending a positive e-mail when tasks are taken care of well beyond expectations is another example of spontaneous recognition.

Another type of employee recognition is formal recognition. Formal recognition is helpful for those managers and supervisors who experience difficulty in making employee recognition a priority. It’s easy to get caught up with day to day activities, and before you know it, a whole year can go by without formal acknowledgement of employee appreciation. Setting aside a certain month out of the year to celebrate employees or instituting an employee of the month program are examples of formal employee recognition programs that do not involve major time commitments. An additional tool you most likely already have available to help in this regard is an efficient performance management system. Such a system can keep track of employee progress & goals, and aid in rewarding employees when it is appropriate.

Low Cost Ways of Saying Thanks!
Keeping in mind your own organization’s culture, perhaps some of the following suggestions could be a start in incorporating regular employee recognition:

• Provide a “Behind the Scenes” award for actions not normally highlighted 
• Give an “Above and Beyond the Call of Duty” (or ABCD) Award for employees who convey this attitude
• Create a “Kudos” column in the department newsletter 
• Hold a department break in the employee’s honor. Don’t forget to include light snacks! 
• Keep a supply of appropriately clever “thank you” notes for immediate rewards
• Award tickets to a sports game 
• Share gift certificates / cards, such as
• To a popular store or restaurant in the area 
• American Express, Visa, and MasterCard gift cards that allow the employee to choose where to spend the allotted amount given 
• Movie theater gift cards
• I-tunes gift cards for those iPod or iPad users 
• Distribute unique coupons to demonstrate thanks, such as a 
• Longer Lunch Coupon
• Shorter Work Day Coupon
• Work from Home Day Coupon
• Swap a Task for a Day Coupon

The point of employee recognition is to make the employee feel valued by the organization where he / she spends most of the day’s waking hours! When employers take time to acknowledge their employees’ hard work and attentiveness, they give employees esteem motivation to continue their good work. Consider employee recognition as part of creating a cohesive, happy organization. Such an organization will have greater success in achieving its objectives. No matter your organization’s budget or culture, spend some time giving employee recognition to those who deserve it.

The Challenge of Misclassification in the Gig Economy

According to a 2016 Pew Research survey, some 24% of American adults have used some sort of digital commerce platform to earn money. This approach to earning a living is considered part of the gig employment phenomenon. In a 2016 study conducted by Harvard’s Lawrence Katz and Princeton’s Alan Krueger, 16% of American workers work for a temporary help agency, contract as independent contractors, or hold an on-call position. Current trends anticipate the gig economy to comprise more of the workforce in the future. In this issue of Astronology®, we look into the recent trend of gig employment and a critical challenge surrounding it.

In 2015, the Economic Policy Institute (EPI) reported that workers misclassified as independent contractors had grown considerably. Also stated in the report was that “New ‘sharing economy’ [also known as gig economy] businesses create cause for concern about misclassification because it is unclear how ‘autonomous’ these workers really are.” The report further expresses, “Employers who misclassify avoid paying payroll taxes and workers’ compensation insurance, are not responsible for providing health insurance, and are able to bypass requirements of the Fair Labor Standards Act, as well as the 1986 Immigration Reform and Control Act.”

A direct result of this misclassification is gig workers being forced to pay the full ACA tax or purchase their own health insurance. However, these costs may not be within their gig incomes. These conditions have given rise to lawsuits alongside the rise of gig-like jobs. For instance, Lyft recently settled a $27 million class-action lawsuit brought by drivers seeking to be classified as employees. Currently, Uber is in court for a similar class-action lawsuit. In light of this, the next question to consider is if labor laws will ever catch up to the rise of the gig industry.

Some employers have lobbied state legislatures to assist in legal coverage. In response, 28 states have legalized ride-hailing services, such as Uber and Lyft, labeling their workers as independent contractors. In Arizona, all workers using online labor platforms for work are considered independent contractors. This means that, while workers will find it hard to file successful claims for state-run benefit programs, gig workers still retain the right to sue over benefits and protections owed to employees under federal law. In New York and Washington, portable benefits, an encompassing benefit program designed for independent workers, are being considered.

As the workforce continues to change and more independent workers comprise our labor force, it will be important to see how legislatures continue to react. Do you work for an organization that supports or has some form of independent workers? How large a part of your organization are gig workers? How does your organization support gig workers? Please share your thoughts in our comments section below!

Freelance isn't Free Act

New York City Mayor Bill De Blasio signed the Freelance Isn’t Free Act (FIFA) back in November 2016. The law goes into effect May 15th, 2017. With an estimated four million freelancers in the New York City Metro area, the new law looks to rectify the payment challenges freelancers sometimes encounter. For instance, in 2014, the Freelancers Union discovered that 50% of reported freelancers had trouble collecting payments owed for their work. 81% of these freelancers experienced being paid late for their services, and 34% were not paid at all for some projects. Perhaps your organization currently employs freelance workers for various functions. If so, organizations that hire freelancers from the New York area, as well as organizations that function in the New York area, should take special note of this new law.

Temporary workers, contract workers, independent contractors, and freelance workers all fall into the growing category considered the “gig economy.” FIFA is considered one of the first attempts to deal with this segment of work, employment that covered just 10% of early 2005’s workforce. Ten years later, in late 2015, the gig economy encompassed 16% of the workforce. It is anticipated that this field will continue to grow and have a significant impact on employment in the coming years. To protect these freelance workers, FIFA creates a formal means for enforcement of freelancers’ labor rights. Highlighted features of the non-retroactive law include the following:

• A contract must be written if a business hires a freelancer for $800 or more worth of labor over a period of 120 days. The contract must include:
• The name and address of both parties
• Itemized list of all services provided with the value of each service
• Freelancer’s rate and method of compensation
• Specific date when the freelancer must be paid
• An understanding that the freelancer must be paid no later than 30 days from the completion of the work if no date is provided on the contract

• The hiring party is prohibited from “threatening, intimidating, disciplining, harassing, denying a work opportunity to, or discriminating against a freelance worker, or taking any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelancer worker from, exercising or attempting to exercise any right guaranteed under the new law, or from obtaining future work opportunity because the freelance worker has done so.”

• If a freelancer succeeds in court with a claim, it is possible for the freelancer to recover
• Contracted value of the services,
• Double damages,
• Reasonable Attorney’s fees and costs,
• Injunctive relief,
• Statutory damages, and
• Other “such remedies as may be appropriate.”

• The city can take additional civil action against a hiring party that demonstrates “a pattern or practice of violations of the new law and seek up to $25,000 in civil penalties.”

An Entrepreneur online article written by Carol Roth suggests that organizations review current contracts and practices with respect to hiring independent contractors / freelancers, and to consult a lawyer with any concerns. The New York City Office of Labor Standards website also should be referenced for more details on FIFA and sample contracts for both freelancer workers & hiring organizations. Roth also noted that even if FIFA currently does not cover your organization, pay close attention that local, state, and / or federal definitions, such as in the Fair Labor Standards Act, do not define a hire you consider to be a freelance worker as an employee.

What has your organization done to prepare for the newly enacted Freelance Isn’t Free Act? If you’re not in the New York City area, what actions might you take in advance of potential future state or local legislation? We’d love to hear your thoughts in our comments section below!

Forgoing Annual Performance Reviews: What Are the Alternatives?

A 2014 survey report from the Society for Human Resource Management (SHRM) finds that 70% of organizations use annual performance reviews and 16% use semi-annual performance reviews. However, only 32% of surveyed organizations believe that managers are able differentiate between poor, average, and strong performers. Such stats can help us understand why there are mixed feelings when the topic of performance reviews is mentioned. In this Astronology®, we discuss the current trend of replacing or enhancing the annual performance review with regular communication.

Why are performance reviews conducted? Performance assessment became popular in part due to labor union contracts requiring annual reviews to grant merit raises. Over the years, performance reviews became the go-to method to help organizations formally set goals for their employees, make employees feel valued, and keep employees focused on the organizations’ visions. Performance reviews also served as a critical source document – proof of legitimate grounds for terminating an employee.

Times have changed, however. Depending on the nature of the work and organizational culture, performance reviews can be viewed as time consuming and / or too complicated to properly conduct. As a result, confidence can wane on whether the assessment not only is accurate…but also if the feedback and goals are worthy of consideration.

In some cases, the nature of work can change so frequently that a yearly assessment may not be sufficient to engage employees. In response, The GAP INC conducts regular coaching sessions between employees and management, replacing the need for yearly feedback. Rob Ollander-Krane, the Director of Talent and Performance at GAP INC, explains in a Forbes online article that “We call it GPS. If a GPS waited until you got to the destination to tell you that you took the wrong turn, you would never get where you wanted to go. This is how individuals benefit from regular feedback; there is an alignment and re-calculation that helps them get to their goal. From a company perspective, there are parts of our company that are doing well and some less so. I am more of the mindset that we should use performance management to help individuals achieve their goals.”

Another company that uses continuous communication in performance assessment is General Electric Co. (GE). Last year, GE introduced a phone app called “PD@GE” that employees use to assess both employees and managers, replacing the once-a- year performance assessment conversation with rolling feedback. The new system is being tested on the company’s 185,000 white-collar employees. This frequent communication method also allows for immediate adjustment if a goal or method to complete a task is working – or not – for an employee.

Back in 2012, Adobe made waves by revealing it was replacing the annual performance assessment with a program called “Check-In.” Donna Morris, in a 2014 Business Insider interview, explains “The check-in is far more informal. While the check-in process is regular and on-going, it starts at the beginning of the year, since it’s tied to people having yearly expectations.” After that initial meeting, an employee has established the year’s expectations. With regular on-going feedback, employees can perform better with the understanding of where they stand. Adobe boasts that within the first year of using the “Check-In” approach to performance, they saved 80,000 manager hours (equivalent to 40 full-time employees).

Astron National Director Jennifer Loftus notes that she regularly encounters the “should I eliminate performance reviews in my organization?” question when meeting with HR professionals across the country. “That question doesn’t necessarily have an easy answer,” explains Loftus. “The most effective advice I can provide is this: if your organization’s culture is supportive of honest, open, and regular weekly communication between managers and employees, then eliminating annual performance appraisals might be the right move. If, however, this switch will lead to even less communication between employees and managers, stay where you are. Strong communication systems are essential to making a performance review-free environment successful.”

While it looks appealing to completely scrap your performance assessment method, it’s important to think of how such changes could affect your organization. In some cases, perhaps adopting a hybrid method of constant communication included with an annual overview maybe more suitable. We here at Astronology® would love to hear your insights on the trend of changing annual performance reviews. Feel free to share in our comments section below!

Requiring Noncompetes:Are You Overdoing It?

By guest author: pmphrblog for Portnoy, Messinger, Pearl & Associates, Inc. Tri-State area human resources and labor relations consulting firm.

Does your business require all new hires to sign a noncompete agreement? Are those agreements enforceable? The practice of requiring all employees -- including low-level staff -- to sign noncompetes has come under fire recently, with federal and state both targeting the issue.

The New York Attorney General’s office recently settled cases it had brought against Law 360, a legal news service, and the sandwich chain Jimmy John’s. Both Law 360 and Jimmy John’s Sandwiches have had a practice of requiring low-level employees to sign noncompetes. At Law 360, these employees included journalists fresh out of college; at Jimmy Johns they included sandwich makers. The Attorney General has stated, “Unless an individual has highly unique skills or access to trade secrets, non-compete clauses have no place in a worker’s employment contract.”

Furthermore, in May the White House issued a report on the use of noncompetes. The report asserts that noncompetes can depress wages and reduce workers’ mobility. The report also notes that employees are often asked to sign a noncompete only after they have already accepted the job and declined other offers, at which point they have little leverage. Further, the report expressed concern over the increasing number of lawsuits brought by employers to enforce noncompetes in recent years.

Notwithstanding these concerns, there are circumstances where noncompetes are indeed necessary for protecting an employer’s proprietary assets. In New York and many other states, noncompetes are enforceable, if reasonable in time and geographic scope, where necessary to prevent disclosure of trade secrets or confidential customer information, or where the employee’s services are deemed special or unique.

Accordingly, when considering requiring an employee to sign a noncompete, employers should ask themselves: If this employee were to leave and joins a competitor, in what ways might our business be harmed? Are we concerned she would use our proprietary information for the benefit of the competitor? Or is our primary concern that she might take our clients with her, or recruit our other employees to join her? Or is it simply that we don’t want to lose her as an employee, period?

If the employee will have no real access to trade secrets, business strategies, plans, or similar proprietary information, then there is probably no need for a noncompete. If the main concern is that he/she will poach clients or other employees, this can be addressed more efficiently with a nonsolicitation agreement. If the employer is simply using noncompetes as a retention device---i.e., trying to discourage employees from leaving by limiting their ability to find new jobs---it would be well-advised to consider other, more effective methods of employee retention.

There is no doubt that noncompetes have a place in the business world. But they should be used thoughtfully, and when actually needed. Requiring everyone from the CEO to the mail room clerk to sign a noncompete is neither necessary nor a good business practice. For guidance on the use of noncompetes, please contract an HR professional at Portnoy, Messinger & Pearl.

This article is intended for general information only and should not be construed as legal advice.

For more information on labor relations please visit us at: 
http://www.pmphr.com/ or email: info@pmpHR.com.

About Portnoy, Messinger, Pearl and Associates:
Portnoy, Messinger, Pearl and Associates, Inc. (PMP), the oldest labor relations consulting firm representing management on Long Island, was founded in 1964 by former union organizer and worker’s rights advocate, Murray W. Portnoy. Initially, Murray offered human resource consulting and union contract negotiating services to a handful of clients. Today PMP has a full staff of experienced and talented human resources and labor relations consultants, labor and employment attorneys, and administrative personnel. Murray Portnoy’s values and vision remain at the core of PMP’s mission and principles.