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!

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.

To Ask or Not to Ask: The Salary History Question in Today’s Hiring Process

With increasing interest in the issue of gender-based pay gaps, legislation continues to make small movements to meet the challenge of eliminating pay inequity. One such movement has been recent legislation in a number of jurisdictions that bans asking job applicants / new hires about their salary histories. In this issue of Astronology®, we explore this new trend and what it means for employers.

It is heavily thought that asking an applicant his / her salary history continues the spiral of the gender-based pay gap and pay discrimination. For starters, if you begin your career with low pay at an early job, that pay rate could naturally affect the salary earned at the next job if hiring managers base their salary offers off your previous salary. In addition, historically, women tend to be offered lower salaries than men, even if the women negotiate with their employers.

This past summer, Massachusetts unanimously became the first state to enact a law that bans employers from requiring job candidates to reveal salary information, information that would be considered the basis for future pay. The law becomes effective on July 1, 2018. Jim Rooney, President and Chief Executive of the Boston Chamber of Commerce, mentions that the law does allow for candidates to be asked about salary expectations, thus providing hiring managers with an opening point for negotiations.

Another jurisdiction following Massachusetts’ lead is New York City. On April 5th, the New York City Council approved a similar law that prohibits employers from inquiring about, relying on, and verifying a job applicant’s salary history. According to a SHRM newsletter article, the new law, to be effective in six months’ time, will not apply to:

•  New York City employers acting pursuant to any federal, state or local law authorizing the disclosure or verification of salary history or requiring knowledge of salary history for employment purposes.
•  Current employees applying for an internal promotion or transfer.
• Public employee positions for which salary, benefits or other compensation are determined pursuant to procedures established in collective bargaining.

A Business Insider online article mentions that this new law amends the New York City Human Rights Law. This means that there will be two ways in which individuals can bring action against employers who violate the rule. After filing a complaint, if the City or court rules in favor of the plaintiff, damages could be awarded to the plaintiff. In addition, the City could choose to issue civil penalties to the employer. These penalties and fines can reach up to $250,000. The article also notes that since New York City houses not only national but also international organizations, there is speculation that this law could have a far reaching impact on many well beyond the five boroughs.

While we expect other cities and states to adopt similar laws, there also are cases where similar legislation is being disputed. Recently, the Chamber of Commerce for Greater Philadelphia filed a federal lawsuit to block the City’s signed wage equity law, a month before its May 23rd effective date. The lawsuit hinges on the argument that the law violates businesses’ freedom of speech and that the new law won’t do much to close gender pay gap issues. The lawsuit also suggests that the new law would deprive employers of information they could use to make effective decisions in the hiring process. We will have to keep a close watch on what happens in the “city of brotherly love” to see how this impending lawsuit affects other cities and states considering their own salary question ban laws. In the meantime, what can you do?

Organizations not subject to such a law can prepare now. Besides keeping a close eye on jurisdictions that have already passed such a law, pay attention to organizational reaction and changes that employers make in response. Proactively, review your organization’s job application to see if such a question is listed. Consider other options to the question that are in compliance with legal trends. Organizations also should consider training HR staff, line managers, and anyone involved in the hiring process on how to handle interviews after the implementation of new laws.

An additional step proactive employers should take is to ensure that their base pay compensation systems are market sensitive, up to date, and free from discrimination. As National Director Jennifer Loftus explains, “organizations should focus new hire salary offers on the value of the position, not the person’s last salary. While of course there will be natural variations in salary due to years of experience, education, or other factors deemed acceptable under the Equal Pay Act, using the job as the basis for salaries addresses the gender-based pay gap in an equitable fashion.”

Linking Gainshare Plans to Strategic Performance Assessment

Strategically aligned performance assessment processes have given attention to increased creativity in reward programs. A suggested rewards program can include gainsharing. While gainsharing has existed for many years, most equate it with profit sharing or a way to legitimize previously scheduled bonus payments. In this two-part Astronology®, we will discuss how to increase organizational success by combining gainsharing and the “Balanced Scorecard” strategic performance method.

Curiously, with combining the use of a simplified two-page performance assessment outline, focusing primarily on "Balanced Scorecard" strategic objectives and each employee's contribution to the organization through his / her essential functions, a strategic performance assessment plan can be created to give an organization enhanced success. How so? If designed properly, gainsharing can focus on the behaviors of individual employees and employee teams, resulting in a more motivated, successful organizational culture.

The U.S. Office of Personnel Management (OPM) website describes gainsharing as: “a reward program that allows employees to share in an award based upon productivity gains or savings in excess of a predetermined baseline of performance. If an organization's goals include improving productivity, reducing waste, reducing costs, and/or creating a savings in production costs, a gainsharing program focuses employees on those goals.”

Organizations should keep in mind when considering any form of gainsharing that

1. An organization cannot expect its employees to continuously improve organization performance when:

• Their jobs limit their latitude & ability to change work processes, and
• When they are given little information about the business and / or management systems' focus on control.

2. Gainsharing’s primary goal is to support a philosophy of participative management. When commitment to change is lacking, the involvement process will be ineffective. Gainsharing then will fall short of expectations.

There are six basic components of and processes to build a successful gainshare program.

1. Define the group to be included. Many organizations attempt to make these programs all-inclusive. However, one must address the "line of sight" issue. All-inclusive programs sometimes lose their effectiveness since employees may not understand how they personally impact results.
2. Define the formula for measuring success and funding the share. According to the OPM website, “a gainsharing program is self-funding. Therefore, it requires reliable financial measures to calculate the ‘gains’ (i.e., profits or savings) that the organization and employees will share.” This is where the strategic balanced scorecard comes into play. Most organizations focus only on the financial aspects of the scorecard. While this financial emphasis ensures the funds for rewards will be available, this approach jeopardizes the other scorecard components. On the other hand, having four or five objectives can complicate the formula to the point that all are confused and have little trust in the outcomes.
3. Set the baselines and targets. The baseline for measurement should focus on historic information from the past fiscal year or quarter. Three levels of targets work best for all types of reward and recognition programs: threshold, target, and optimum. However, most gainshare programs focus on one specific level at which the actual share begins.
4. Determine the share between the organization and the employee. While organization culture often defines this, the most common ratio is 25% to employees and 75% to the organization. Some organizations first determine what percentage they want to reserve as retained earnings and then calculate the share. This ensures the ability to invest in future organizational improvements and, in public companies, to provide for stockholder equity.
5. Determine payout frequency. Many manufacturing organizations focus on an annual gainshare payout. There is an increasing trend towards quarterly shares to quickly reinforce the behaviors exhibited by employees. However, there may be financial reporting barriers that prevent this from happening. Those on a quarterly program commit to a payout within thirty days of the end of the quarter.
6. Develop the method to distribute shares to employees. Many advocate an equal share to all involved so as to reinforce the team aspect of the program. Some creative methods include distributing equal shares based on the total hours actually worked during the measurement period. Another determines the share based on the pay grade in which the job is classified. Care must be taken when distributing funds to non-exempt employees. Overtime payment is required on gainshare distributions.

Naturally, the next questions are “what are some critical tips in developing a strategically aligned gainshare program?” and “are there any negative impacts to using such a program?” In our next Astronology® article we will discuss these topics in more depth.

Concerns Surrounding Non-Profit Executive Compensation

Executive compensation is a natural concern of many in the non-profit sector. A 2011 report from the Chronicle of Philanthropy highlighted that the median pay of executives in 132 surveyed charities and foundations increased 3.8% over the prior year. Three years later, Charity Navigator reported that the typical charity CEO’s compensation had increased just 2.6% over the prior year. The Charity Navigator report surmises that raises have been modest since the recession. However, the report also acknowledges that despite this overall trend, there are some non-profit leaders that earn “excessive” wages of more than $1 million. Factors involved in increasing executive pay levels include the following:

• Greater competition among non-profits to attract top talent.
• Difficultly in retaining staff, and a lack of internal candidates for some critical positions. 
• Nonprofits’ desires to lure corporate executives, as the finances of non-profits have become subject to greater government scrutiny.

In addition to higher pay, some non-profits compensate for the lack of stock options and other corporate extras in the sector by allowing flexible work time. Others even pay bonuses, once rare at non-profits.

In recent years, the Internal Revenue Service has begun examining executive compensation at non-profits with an eye toward uncovering potential abuse.

Understanding the need to recruit and retain quality staff has added to the concern over how to structure compensation policies & programs to be fair and competitive, without crossing the fiscally abusive line. Incentive plans and other innovative compensation & human resources practices are becoming critical elements in the organizational strategy of many non-profit organizations.

A previous Astronology® highlighted details to consider when developing a compensation plan for non-profit executives:

1. Rationale for developing plans

Surveyed non-profits indicated multiple reasons for creating new programs. More than half of the participants indicated their program objectives included the following:

• improve morale and/or employee relations;
• improve employee retention;
• link pay to performance / improve employee performance; and
• become more competitive in total compensation (i.e., cash compensation, recognition, and benefits).

2. Types of plans and performance measures

The most popular types of cash compensation and recognition programs implemented by the participants were bonuses, incentives, and non-cash recognition programs.

Productivity, financial, and quality measures were the performance criteria most often used as the basis for the respondents’ compensation awards under a variety of programs.

3. Budget and award amounts

The average variable compensation award payouts typically ranged from 20% - 30% of salary. In some organizations, the targeted payouts ranged from 10% - 20% of the salary range midpoint.

Interestingly, in Astron’s confidential database of non-profit organizations, target incentives levels are as follows:

• Staff / Non-Management: 5% - 10%
• Supervisory Staff: 5% - 15%
• Middle Management: 10% - 20%
• Senior Management: 15% - 30%
• Executive Management: 20% - 40%
• CEO: 30% - 50%

Beyond these details, following are guidelines to consider when implementing a new compensation plan:

1. Nonprofit organizations should first conduct an assessment to determine the appropriateness of innovative compensation to their cultures and organizations. This assessment should focus on the following:

• the objectives to be achieved through implementing an innovative compensation program,
• what motivates staff,
• the opinions and views of members, constituents, & volunteer leaders, and
• the financial resources available.

2. Any innovative compensation program should be viewed as part of a total approach to compensation and carefully integrated into the design of that program. A market analysis of current compensation levels related to the jobs in the organization should be conducted in the early stages of or prior to developing a program.

3. The innovative compensation program, especially management incentive programs that provide significant opportunities for financial rewards, should be clearly tied to performance. The program should demonstrate the achievement of overall organization objectives in finance, program, development, client service, membership, public affairs, government relations, community relations, and any other areas deemed important to the organization.

4. Organizations should consider pilot testing innovative compensation programs on a selected group of staff before introducing the programs to all staff. More than one innovative compensation program should be considered, especially in larger organizations. Many non-profit organizations have implemented at least two types of programs.

5. Innovative compensation programs should be well communicated to staff and used as a vehicle to announce the success of employees, teams, and the organization.

Is non-profit executive pay a concern for your organization? Is there some form of transparency in place to alleviate those concerns? Are you considering changing or have you recently changed your compensation plan? Please share your thoughts with Astronology®. We may feature your response in a future article!

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.