Month: November 2014

Performance Appraisal Mistakes

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The 7 Most Common Performance Appraisal Mistakes

Performance Appraisal MistakesFor many companies, the end of the year brings holiday hours, a break room full of treats, and the dreaded annual performance review period. Employees are generally anxious to hear whether their performance has earned them a raise (and maybe a bonus) while bosses usually dread the paperwork and awkward conversations that come with appraising employee performance.

Even though performance appraisals are an important part of effectively managing a team and keeping everyone on track toward departmental and company goals, many managers make mistakes when conducting reviews. The issues stem from a number of causes: An inexperienced or unconfident leader who is hesitant to provide constructive criticism, managers who are too far removed from their staff to have any real insight, or a lack of clarity on the evaluating criteria are just a few of the issues that make many performance appraisals either pointless or frustrating.

Because of these issues, many managers make these same mistakes over and over again, making review time a time of anxiety and fear, not reflection, planning — and yes, celebration — as it should be. Not only that, poorly conducted performance evaluations could lead to disputes and even legal problems down the road, especially if an employee is terminated.

Mistake #1: Evaluating Intent, Not Results

When an employee’s performance isn’t up to par, it’s easy to assume that he or she didn’t care or didn’t really try. Unless you have concrete proof that someone had malicious intent though (such as a salesperson regularly spending the afternoon at the salon or movie theater instead of calling on clients), attacking someone’s motivation or intentions is bound to backfire. Even if you honestly believe that someone could be a top performer if he or she simply tried harder, that’s irrelevant.

Focus on the performance itself, and engage the employee in a conversation to determine why the results were poor. It might have nothing to do with intent, but rather outside factors that were out of the employee’s control. By focusing on identifying solutions, the employee feels supported, not attacked, and is more likely to improve performance going forward.

Mistake #2: Doing All the Talking

As a manager, it’s your job to provide feedback to during performance appraisals. However, if the meeting just consists of you sharing a litany of criticisms and complaints, your employee isn’t going to leave feeling very motivated to do better. No one wants to feel as if they are being talked at, so turn employee appraisals into conversations.

While you should certainly share your assessments, ask your employee for feedback as well. Set goals together, discuss your employee’s role within the team, and ideas for the future. Having a conversation takes some of the anxiety out of the review for both sides, and makes it a more productive meeting.

Performance AppraisalsMistake #3: Not Identifying Specific Behaviors

If people don’t know exactly what they are doing wrong, how can they fix it? Telling someone that they aren’t a team player, or that their attitude could use some work, isn’t very constructive because it doesn’t explain exactly what constitutes those behaviors.

Telling your employee that their inability to meet deadlines or unwillingness to fill in for a sick coworker impacts the whole team, is more constructive feedback, and tells the employee exactly what they should or should not do going forward.

Mistake #4: Relying on Your Own Perceptions

While you might be the supervisor, are you the only person who works with an employee? Getting feedback from other employees, clients, even the employee him or herself will provide a better view of their performance.

Otherwise, you may not realize that your employee is polite to you but rude to others, or was actually the mastermind behind a brilliant marketing slogan and deserves recognition.

Mistake #5: Inadequate Documentation

In many cases, performance reviews play a role in employment decisions. If someone is fired or denied a promotion due to a performance review, without proper documentation the company could face significant legal consequences.

Documentation doesn’t only provide protection against disputes, it also helps gauge an employee’s progress toward goals and improvement (or decline) over time. Ideally, you should follow a consistent format and use a defined checklist or questionnaire for every employee to ensure fairness and accuracy across the board.

Mistake #6: Relying on Recent Events

Although best practice recommends holding performance reviews more often, most companies evaluate employees once per year. As a manager, are you able to remember everything that has occurred in the previous 12 months for all of your employees? Probably not. If you only rely on the most recent few weeks or months of performance, though, you could miss some important details that might play a role in compensation or promotion.

Again, asking others for feedback, and documenting performance throughout the year, prevents the “recency” effect and ensures that your employee gets a thorough and complete evaluation.

Mistake #7: Not Giving Positive Feedback

Some managers see performance reviews as an opportunity to express grievances and criticisms freely. However, effective reviews also include some praise. Everyone likes compliments, and wants to know what they do well, so even if the news isn’t all good, look for at least a few positive factors you can praise. It will help keep your employee happy and engaged.

Performance appraisals may be time consuming, and even tedious in some cases, but they are an important part of managing a team. Avoid these mistakes, and your reviews will be well received and keep you out of trouble down the road.

Employee Handbook Trends

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5 Employee Handbook Trends for the New Year

Employee HandbookAs 2014 winds down, it’s time to start thinking about updating your employee handbook for next year. Employee handbooks are not meant to be static documents. Changes in your company structure, the laws governing employment (both on federal and state levels), and growing trends in the workplace all contribute to the need for your employee handbook or policy manual to be a living document that’s updated on a regular basis.

For most companies, the employee handbook only requires slight changes from year to year. However, there are a few major trends taking hold, and as you look at what needs to be updated for 2015, keep these points in mind.

You Need a Social Media Policy

One of the biggest trends across all industries is the need for a comprehensive social media policy. Not only should such a policy govern the use of social media during working hours and/or on company devices, it should also outline acceptable use. The National Labor Relations Board has issued strict guidance for employers regarding social media policies, given that overly restrictive policies can be construed as a violation of freedom of speech, so evaluate your policy in terms of the law, and make any necessary adjustments.

If you do not yet have a social media policy already in place, it’s important to develop one, and include it in the employee handbook.

Outline BYOD Policies

Bring your own device, or BYOD, is one of the fastest growing trends in business today, with more than three quarters of all companies allowing employees to use their own mobile devices for work purposes. While BYOD undoubtedly helps improve productivity and employee satisfaction, it also creates potential security issues, which should be addressed by a comprehensive policy outlined in the employee handbook.

Employees do not always take the same precautions with their personal devices as they do with company-issued phones, computers, and tablets; for example, few people actually properly lock and secure their devices when not in use. Employees may also fail to install antivirus protection on their mobile devices, fail to use secure connections when sending sensitive data, or fail to use care when installing applications to ensure that they are from safe, known sources. For this reason, if your company is a BYOD environment, it’s important to have a clear and comprehensive policy that governs which devices may be used, security rules, and acceptable use. This policy must be included in the employee handbook, and updated as needed.

Address Workplace Bullying and Violence

In the wake of several high profile cases of workplace violence, companies can no longer afford to ignore the potential for such episodes. While statistically speaking, the likelihood of a deadly incident is slim, HR still needs to implement training, policies, and procedures for identifying and containing potentially violent employees.

Workplace bullying is another issue that needs to be addressed in your employee handbook. Given that nearly 96 percent of workers have experienced workplace bullying in some form, as either a victim or a witness, your staff needs to be educated on what constitutes workplace bullying, how to address the issue, procedures for mitigating bullying, and the consequences for violating company policy related to treatment of co-workers. If your handbook does not cover bullying and violence, it needs to be updated.

In fact, some states, including California, have enacted anti-workplace bullying laws that require additional training for managers and employees; be sure that your employee handbook reflects the most up-to-date regulations.

Changing the Employee HandbookUse Your Handbook as a Recruiting Tool

How does your employee handbook read? Is it an endless list of rules and regulations, or page after page of “policy speak” that few people even read, never mind completely understand? Or does it accurately reflect your corporate culture, showing employees and prospective employees what it’s really like to work at your company? There’s a growing trend toward making the employee handbook more of a recruitment tool and “company story,” and less of a didactic, legalistic document.

For example, personal finance website Motley Fool has created an interactive employee handbook that includes video as well as text to give employees, and prospective employees, a glimpse at the company culture. Have you thought about what your employee handbook says about your company? It might be time to revise it, and have it more accurately reflect who you are and what you stand for.

Take It Online

Printed employee handbooks appear to be going the way of the dinosaur. Many companies, cognizant of the costs of printing such huge documents every year, are taking their handbooks online instead. An electronic document, stored on the company intranet or dedicated site, is easier to update regularly, can be accessed on demand, and saves valuable resources. In addition, online handbooks allow for easier training and record keeping; employees can conduct required training as they review the handbook, and digitally acknowledge that they have completed the requirements.

Employee handbooks are an important part of managing policies, procedures, and setting expectations for performance and behavior. Make sure that yours isn’t out-of-date or incomplete, and make the necessary changes to stay in step with current trends.

Flexible Spending Accounts

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Flexible Spending Accounts: New Rules Mean New Choices

Flexible Spending AccountsThere are fewer than 60 days left in 2014. Do you know where your flexible spending account is?

If you don’t, you should.

Medical flexible spending accounts, also known as FSAs, allow employees to put up to $2,500 per year into a dedicated account to cover certain out-of-pocket medical expenses. Because the money comes out of the paycheck before taxes, these accounts can save employees some money on their tax bills while also providing a cushion to cover unanticipated medical expenses.

However, the passage of the Affordable Care Act resulted in some important changes to FSAs, and if your employees aren’t aware of them, they could be in for some unpleasant surprises.

Use It Or Lose It? Not Necessarily

Prior to 2014, most FSA plans were a use it or lose it proposition: If you didn’t spend all of the money you put into the account by the end of the plan year (usually December 31) it was gone forever. Some plans did offer a grace period of up to 90 days, but for most people, maximizing an FSA meant scrambling to spend everything in the account by the end of the year.

Under the new rules, plans have the option of either offering a grace period until March 15, or allowing employees to roll over up to $500 until the next year. However, federal guidelines prohibit plans from offering both options and they do not require plans to offer either option. In fact, only about half of all employers plan to allow the rollovers this year. In either case, now is the time to let employees know what their options are.

How Can FSA Funds Be Spent?

Another major change to FSA plans this year are the restrictions on how the money can be spent. In the past, the list of eligible expenses was broad, and covered everything from over-the-counter medications to alternative care, such as chiropractic and acupuncture.

Some of those items are still eligible for payments, but the restrictions have become tighter. In order to qualify for payment via an FSA, a doctor must prescribe an over-the-counter medication. For example, if your doctor recommends that you take acetaminophen for pain, or use an over-the-counter yeast infection treatment, he or she will need to write a prescription that you can submit along with your receipt in order to be reimbursed from your FSA.

This new rule applies to any over-the-counter treatment that is considered a medicine or drug; it does not, however, apply to purchases of medical devices like crutches, blood pressure monitors, breast pumps, heating pads, or diabetes meters. Diabetics can also still purchase insulin using FSA funds, even if they do not have a prescription.

The restrictions on over-the-counter medications are the only major change to what can be purchased with FSA funds this year. The money can still be used to cover co-payments and deductibles for office visits and prescriptions, in addition to vision and dental care. You still cannot use your FSA money for cosmetic treatments like tooth whitening, but it can pay for an extra cleaning or a stylish new pair of specs.

FSA Rules in 2015Planning for 2015

One of the most common complaints about FSAs has always been that it’s difficult to predict your annual medical expenses, and therefore calculate how much money to put away. Many people either lose hundreds of dollars at the end of the year, or go on an unnecessary spending spree.

On the other hand, some people who relied on FSA funds to cover significant expenses, such as orthodontia, have been stymied by the account limits established in 2013. Prior to 2013, employees could contribute up to $5,000 (depending on their plan) to their account. In 2015, the contribution limit will rise slightly to $2,550, as 2014 marked the first year in which a new policy tied the cap to the consumer price index.

According to the methodology set forth by the Affordable Care Act, the annual FSA account limit will be set in accordance to the CPI at the close of the 12-month period ending on August 31.  The ACA calls for the annual indexed amount to be rounded down to the nearest $50, so when the CPI on August 31, 2013 was $2,542, the annual cap for 2014 was set at $2,500. However, the indexed amount on August 31, 201 was $2,583, so by rounding down to the nearest $50, the 2015 cap will be $2,550. Keep in mind, as well, that the cap is not per household or per tax return, but per employee, so technically a husband and wife could put away $5,100 in 2015.

However, determining how much of that amount you actually put away depends on your own needs and spending patterns. When determining your 2015 contributions, analyze how much of your 2014 contributions you actually spent. If you have too much money, or are able to roll over hundreds of dollars, you might consider contributing less this year.

In any case, if you have an FSA, take some time to figure out your options before the year ends. While you may not lose money as you did last year, or have to buy loads of bandages and cough drops to use up your money, you still need to maximize your investment.

Why You Shouldn’t Ban Social Media in the Workplace

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Why Banning Social Media at Work Is Bad for Business

Social Media in the WorkplaceIt’s a debate that’s raging in offices across the country: Should employees be allowed to use social media at work?

Those who think that sites like Facebook and Twitter have no business in the workplace point to declines in productivity as their privacy concerns. Employees should be focusing on their work, they say, not checking out their friends’ status updates and vacation pictures. Some proponents of the social media ban point to security risks as well: Given the number of viruses hiding behind seemingly innocuous apps on social media, the best way to prevent a major security breach is to block the sites altogether.

However, most experts conclude that most of the reasons for social media bans do not hold up, and that banning or blocking social media access in the workplace is actually counterproductive to fostering an environment of happy, engaged employees. Not only does telling employees that they cannot use social media at work create resentment, it also triggers a number of other issues.

1. Productivity Doesn’t Improve — And May Even Decline

Have you ever sat at your desk for eight or more hours and stayed completely focused on your tasks without any other distractions? Most likely, you haven’t — and it’s unreasonable to expect that employees will either. Most humans work best in short spurts, punctuated by short breaks that allow them to rest, recharge, and refocus. In the past, these breaks may have taken place in the break room where co-workers chatted while grabbing a cup of coffee or a snack. These days, people take a break by scrolling through their newsfeeds. When you take away the option to check in on social media throughout the day, you won’t improve productivity, because employees will find other ways to take breaks.

If productivity is an issue, it’s most likely not because of social media, but instead a morale or training issue. Avoid the knee-jerk response of banning social media and get to the real root of the problem instead.

2. Morale Will Nosedive

Banning social media sends the message to your employees that you do not trust them. Instead of treating them like adults who understand their responsibilities, restricting social media sends the message that you cannot rely on them to manage their own time effectively, and you need to limit distractions for them. When workers don’t feel trusted and respected by their employers, morale declines — and when morale declines, so does productivity.

If the issue isn’t so much the time that employees spend on social media, but what they are saying, a comprehensive social media policy should clear up any misunderstandings. There is nothing wrong with establishing acceptable use guidelines for social media to protect your company’s brand, as long as they do not infringe upon employee rights to free speech. Setting the ground rules and the expectations up front helps establish trust, and shows employees that you respect and value them.

3. You’ll Have Difficulty Attracting Young, Talented Employees

Younger workers — the Millennial generation — are accustomed to sharing their every thought and activity online, and seeing the same from their friends. Few will willingly go to work for a company that they see as archaic or restrictive in their social media policies. For companies that want to attract talented individuals, a social media ban could prove to be a hiring obstacle.

Employee Use of Social Media4. Employees Will Find a Way Around It

While you may opt to block access to Facebook on the corporate network, remember that most employees will have their own mobile devices with them at work — meaning that there’s a good chance that they will access social media anyway at some point during the day. Even if they don’t have a mobile device, there’s a good chance they will find a way through the firewall to access it anyway, so a ban is usually ineffective.

5. Exceptions to the Rule

While social media bans are not advisable for most business, there are some exceptions. Most Wall Street investment banks, for example, are bound by regulations that require them to store any business communication for at least three years — and this includes anything sent via Facebook and Twitter or comments made on sites like YouTube. Given the sheer volume of communication flowing in and out of these banks each day, maintaining records of social media conversations simply isn’t practical.

Still, even in those tightly controlled environments, employees use their own mobile devices to access social media. And a report by Gartner notes that fewer than 30 percent of companies are actually blocking access these days, down from more than half just two years ago. Even the most conservative and controlled organizations are starting to realize that bans do not work, and that the benefits of allowing employees to use their favorite sites at work far outweigh any drawbacks.

Social media is a fact of life these days, and smart employers are finding ways to allow employees access to their favorite sites while also protect productivity, security, and their brand. Before you enact an all-out ban, work with your employees to develop a policy that everyone can live with.


Making Smart Decisions During the Open Enrollment Period

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How HR Can Help Employees Make Smart Decisions During the Open Enrollment Period

Open EnrollmentFor most employees using their employer’s benefits plans, fall marks the beginning of the open enrollment period, during which they can make changes to their health insurance coverage and other benefits. However, according to research from Aflac, about 90 percent of all employees do not carefully review their options and make changes, and most people spend less than 15 minutes making their selections and filling out the paperwork. In fact, about a quarter of all employees spend less than five minutes considering their health coverage options.

With the advent of the Affordable Care Act, though, employees may want to rethink that strategy. Changes to how health insurance is sold, policy coverages, and rules regarding flexible accounts have most likely significantly changed the available options, and if an employee does not make the right selections now, he or she could wind up paying a lot more for their health insurance in 2015.

So what can HR do? Communication is important during open enrollment, and HR can help people make the right choices with a comprehensive communication and action plan.

Communication Priority 1: Explain the Exchanges

In the past, most employees relied upon their employers to do the health insurance shopping for them, and chose their plan from a pre-determined array of options offered by a single carrier. However, the new health insurance exchanges provide more options, and some employees may find that they will pay less for their coverage by purchasing insurance on the exchange. In fact, studies show that many employers are not shopping for employee coverage at all, and are instead providing subsidies for employees to shop for their own coverage on the exchanges.

In either case, employees should be prompted to spend some time exploring their options and weighing the costs and benefits of multiple plans. It’s important to note that employees who are eligible for employer-sponsored health insurance who opt for the public exchange instead will not be eligible for any government subsidies, but if the overall premium cost is equal to or less than the premium for the employer-sponsored coverage, that may not be a factor.

Premiums Aren't EverythingCommunication Priority 2: Premiums Aren’t Everything

Many employees, especially those who are younger or who earn lower wages, look at their monthly premium first and choose the least expensive option without carefully considering what each policy covers. For a relatively healthy individual who needs basic primary care, a lower priced, higher deductible plan may work. For someone with chronic conditions or a family, though, a plan with a slightly higher monthly cost may prove to be a better value, if it provides better coverage. Benefits administrators need to communicate the value of each plan option and specific coverages to help guide employees to the best choice.

Communication Priority 3: Flexible Spending Accounts

One of the provisions of the Affordable Care Act was a major change to Flexible Spending Accounts (FSA). Under the new rules, individuals can only defer up to $2,500 a year into a FSA, which must then be used to cover qualified health care expenses. Employees need to understand that such accounts are “use it or lose it” propositions — money left over at the end of the year does not roll over or get refunded — and that only certain expenses are covered.

For example, over the counter medications no longer qualify for reimbursement unless they are prescribed by a doctor. Benefits administrators should be prepared to help employees identify the potential out of pocket medical expenses they will incur throughout the year, and determine how much (if any) cash should go into an FSA.

Communication Priority 4: Compare Family Coverage Options

If your employees are covering family members — including their spouse — on their plans, encourage them to compare their options. In some cases, transferring the children to a spouse’s policy or purchasing coverage on the exchange may be more affordable than covering the whole gang under your employer’s policy. That’s because some employers will only subsidize the employee’s coverage, or perhaps the employee and the children.

Some companies have even started adding surcharges onto premiums when an employee adds his or her spouse, and the spouse qualifies for coverage from his or her own employer. Help employees compare all of the options to determine which offers the best coverage at the best price, and communicate all surcharges and other fees that can raise the rates.

Communication Priority 5: Explain Health Incentives

Under the ACA, employers can charge more for health insurance for those employees who smoke or do not meet designated health standards. However, employees who agree to enroll in wellness or smoking cessation programs, and meet certain benchmarks can qualify for discounts and lower premiums. It’s up to the benefits team to communicate these policies to employees and help them enroll in the appropriate programs to ensure that they not only save money, but get healthy at the same time.

As a benefits administrator, it’s your job to ensure that all employees have the same access to benefits and get the coverage that they need. As we head into the open enrollment period, be prepared to communicate these important points to avoid last minute changes and unhappy employees.