Do your employees know where they stand?

Sure... right? We do our annual reviews. We sit down with our employees and we say, "good job with this or that" or "we'd like to see some improvment on your TPS reports". Of course our employees know where they stand.

Ok, and if I were to ask you, say, "what percentage of your employees is uncertain about their job security?" or perhaps something a little more specific like, "what percentage of your employees thought they were on the right track for a promotion right up until they didn't get one?" and "how did not getting that promotion affect their performance?", "did they start looking for another job?", "do they think you care?". You might say something like, "I'm not sure. But, more importantly, I'm not sure it matters"... and I'd believe you. And you'd have to also give me that your employees don't know where they stand; that you don't know where your employees stand; that maybe you don't know where you stand.

It starts to look somewhat amazing that the company functions. Of course, if you were to ask around, folks would say, "ahh, but we are such a dysfunctional, uncooperative, catty, bunch." He knows it, she knows it, I know it and you know it.

If you're a mamanager, start scheduling some time, right now, for each memeber of you team to come in and talk to you about "things". Maybe type up and distribute a little survey and put a box outside your door or cube or tent. Make it a "check yes or no" survey and pass it out. Get some feedback. Ask your team if they want to do a little survey too. Ask HR if you can do a big survey. Ask HR to ask if you can do a really really big survey. Ask some questions.

+25% of Employers Think Employees Fake Illness to Explain an Absence

More Than A Quarter of Employers Think More Employees are Calling in Sick with Fake Excuses Due to Stress Tied to the Recession, Finds CareerBuilder’s Annual Survey

Chicago - While the cold and flu season serves as a primary culprit in workplace absences, the economy may be a factor as well this year. CareerBuilder’s annual survey on absenteeism shows nearly one-third (32 percent) of workers have played hooky from the office this year, calling in sick when they were well at least once. Twenty-eight percent of employers think more employees are absent with fake excuses due to increased stress and burnout caused by the recession. The nationwide survey included more than 4,700 workers and 3,100 employers.

While the majority of employers said they typically don’t question the reason for an absence, 29 percent reported they have checked up on an employee who called in sick and 15 percent said they have fired a worker for missing work without a legitimate excuse. Of the 29 percent of employers who checked up on an employee, 70 percent said they required the employee to show them a doctor’s note. Fifty-two percent called the employee at home, 18 percent had another worker call the employee and 17 percent drove by the employee’s house or apartment.

"Longer hours and heavier workloads are common in the current economic climate and employers are becoming more flexible with their time off policies," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Sixty-three percent of companies we surveyed said they let their team members use sick days for mental health days. If you need time to recharge, your best bet is to be honest with your manager."

More than one-in-ten workers (12 percent) who played hooky admitted to calling in sick because of something work-related, such as to miss a meeting, give themselves some more time to work on a project or avoid the wrath of a boss, colleague or client. Others missed work because they needed to go to a doctor’s appointment (31 percent), needed to relax (28 percent), catch up on sleep (16 percent), run personal errands (13 percent), catch up on housework (10 percent) or spend time with family and friends (10 percent). An additional 32 percent just didn’t feel like going to work that day

When asked to share the most unusual excuses employees gave for missing work, employers offered the following real-life examples:

• I got sunburned at a nude beach and can’t wear clothes.

• I woke up in Canada.

• I got caught selling an alligator.

• My buddies locked me in the trunk of an abandoned car after a weekend of drinking.

• My mom said I was not allowed to go to work today.

• A bee flew in my mouth.

• I’m just not into it today.

• I accidentally hit a nun with my motorcycle.

• A random person threw poison ivy in my face and now I have a rash.

• I’m convinced my spouse is having an affair and I’m staying home to catch them.

• I was injured chasing a seagull.

• I have a headache from eating hot peppers.

Amazing.

Here is the link to the original release. Thank you CareerBuilder for always amusing us!

ePraise

I just heard about a silly new form of "around the office praise". It's called ePraise. ePraise is a kind of eCard that is designed for the sole purpose of praising the performance of a coworker. For those of you who don't know, an eCard is just like a real card except that it is sent to your e-mail box instead of your real mail box...

Anyway, ePraise is a free service from Baudville.com and, while it's silly, I think it has it's place.

These ePraise cards don't take themselves seriously, so hopefully the sender doesn't either. Rather, it seems to me that the ePraise serves as a kind of lighthearted supplement to broader "around the office recognition" programs or initiatives that hopefully all companies attempt to implement (even if only in a limited way).

They're good because they show that someone has taken a moment to personalize and send them. They show that someone recognizes the work someone else has done and they're kind of funny so they lighten the mood.

Lots of ePraise for Baudville.com

Steps to a Great Incentive Plan

July Benefits Installment by Jim Moniz

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A performance based incentive plan is one element of compensation that most companies recognize as vital to the remuneration mix, but developing such an effective program requires some thought and effort.

To get things moving, you first have to define the specific goals of an incentive plan – are you seeking increased sales, improved customer retention, certain margins? Before you put a rewards strategy in place understand what you’re trying to achieve.

Once key result areas have been determined, identify which employees are best positioned to make these results happen; not every employee will be able to fulfill these initiatives.

Next comes quantifying the value created if incentive objectives are met – in other words, what will be the financial result for shareholders? This process typically requires construction of a model that projects base, target and superior result thresholds.

Once the economic value has been determined, you have to figure out the amount you will share with those employees who helped create the upswing.

First determine an acceptable “target” pay-for-performance return and then earmark an achievable “superior” return. Once those two measures are identified you can better establish an incentive goal.

The next step is to determine a standard that defines the potential value in current terms. The potential reward, then, might be stated as a percentage of contributors’ current salary – of course, the big question is the percentage amount. Incentive plan targets that combine the short and long term will likely be in the 60% to 80% of salary range for top managers and between 40% and 80% for second tier managers.

Establishing tiers comes next. After all, not everyone had an equal part in creating increased value. A business needs to define tier levels and assign participating employees – by establishing different tiers you can assign greater potential value to those who will have the greatest impact.

Weighting – or determining how much of a reward should be assigned to the achievement of various categories of expectations – is the sidekick to the tier concept. Weighting should be based on how much of an employee’s role impacted categories.

Determining allocation is the next step. You need to decide when awards will be paid out…at the end of the quarter, end of year and/or sometime down the longer road. Typically, a percentage of total incentives are paid annually and a percentage rewarded in the future.

The final step deals with the long-term portion of the incentive plan. This could take any number of forms. For instance, it could be held in a pool; credited with interest or investment earnings; or treated as a stock or phantom stock incentive.

With this type of incentive program in place, shareholders know the precise value accrued before managers earn incentives; they know the percentage of future growth shared with the management team; and they also know managers will be rewarded for achieving specific and measurable results.

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About our Benefits Installment Author:

James E. (Jim) Moniz, CEO of Northeast VisionLink, a Massachusetts firm that specializes in structuring executive compensation. James E. Moniz is a national speaker on the topic of wealth management and on executive compensation.

Performance, Compensation and the Recession

June Benefits Installment by Jim Moniz

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One of the key characteristics of companies that move ahead while others are falling behind is the ability to turn obstacles into opportunities.

High performance organizations that advance, even in the wake of a recession, have the foresight and courage to make seemingly counter-intuitive decisions during difficult economic cycles. Companies that adopt this strategic approach can discover opportunities during times when competitors are in defensive mode.

For example, during recessionary periods, high performance companies recognize and take advantage of the following:

• Weaker competition will fade away, creating opportunities to acquire higher market share
  
• Top talent becomes more available in the marketplace and typically at more affordable salaries
  
• Capital expenditures can be re-focused in anticipation of recovery
  
• Acquisitions prospects become more accessible
  
• A challenging economy often forces a company to look closely at it’s compensation structure and subsequently revamp it, positioning the organization more positively not only during the recessionary period but also following it
  

Savvy companies recognize that in both good times and bad times, the ultimate key to success is their talent pool. Likewise, they are also well aware that it is precisely at the trough of a recession that the labor pool will be at its deepest and wage pressures at their lightest.

Regardless of the economic climate, the highest performance organizations look to hire those they believe will commit to the company’s vision and strategy – in other words they want top talent with an ownership, not an entitlement mentality.

So, what type of compensation package does top talent respond to?

The most talented individuals want to participate in an opportunity that rewards them for their performance – they want to clearly see a relationship between how they perform and how they are compensated.

Top-tier employees also recognize and respect the balance that inherently exists between guaranteed and incentive compensation and long-term versus short-term pay. They understand the economic outcomes the company needs to achieve for sustainability and growth and furthermore they are aware that current economic conditions will impact the shape and form compensation will take now…a shape and form that may shift when times are better.

While top talent may be willing to take a little less in their paychecks when jobs are scarce, in general terms a compensation structure that will attract high echelon workers will address the primary needs of sustainable cash flow; security; and wealth accumulation.

Understanding these elements, a company must formulate a compensation philosophy that not only addresses current economic cycles, but takes the longer range into consideration. The compensation philosophy of a high performance company typically includes market salaries; upsides/bonuses for exceeding annual expectations; long-term wealth accumulation opportunities; a flexible benefit structure that bends and shifts to both strong and weaker economic years.

Compensation philosophies of this ilk can absorb adjustments as the company faces various challenges, recessionary or otherwise. For example, when business is on an upward trend, salaries are at or are even slightly above market; short-term incentives are equal to percent of salary; and long-term awards are based on market guidelines. Conversely, when business is trending down, salaries are at or slightly below market; short-term incentives are minimal; and long-term awards are higher than market levels.

Businesses that adopt these compensation philosophies have the capability of interjecting practical solutions when the economic flow is downward.

For example, during recessionary periods, a company with a thoughtful compensation philosophy may offer “sabbatical” leaves to certain employees instead of a cut and dried layoff. Such a leave will reduce or suspend salary, but keep employees eligible for long-term benefits and wealth building programs.

Tiered pay cuts, as opposed to the feared “reduction in force” are another approach to cutting costs, while retaining key employees during challenging economic times. Top quality team players will recognize these adjustments in salaries as a necessary means to maintain jobs.

And during poorer performance cycles, a company might eliminate bonuses or raises, instead granting additional stock options.

Ultimately, companies, regardless of the shape of the economy, must have exceptional people on staff – employees who are aware that shifting financial circumstances may redefine their compensation and short term rewards, but who have the desire to maintain their focus within the organization knowing that the pendulum will eventually swing back toward better times.

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About our Benefits Installment Author:

James E. (Jim) Moniz, CEO of Northeast VisionLink, a Massachusetts firm that specializes in structuring executive compensation. James E. Moniz is a national speaker on the topic of wealth management and on executive compensation.

Executive Compensation as a Strategic Tool

As part of our series of articles by exceptional HR professionals, today we present article by a new guest author, Jim Moniz.

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With the year 2008 gone and its legacy of a weakened economy and even the most understated financial pundits already designating 2009 as volatile, many companies are reevaluating their business plans and shifting into survival mode. While attracting, retaining and motivating key employees are vital to the success of any business, the current economic environment may be the ideal time to re-think executive compensation measures.

The days of the “holiday bonus” may soon be by gone as companies – both private and public – progressively recognize there are other, more creative vehicles that can serve as incentive for retention. For instance, that annual check bestowed during the office holiday party is a short-lived and anticipated incentive and once received, what’s to stop employees from moving on to newer landscapes? This yearly “reward” come the end of December or the fiscal year is often looked upon as part and parcel of salary, essentially diminishing the true definition of performance incentive – and while the intention may be good, this type of across the board reward mechanism can alienate certain employees whose performance is consistently outstanding.

By creating a business environment that fosters achievement and implements long-term incentive programs, the loss of vital employees whose skill and knowledge are fundamental to the overall success of a company may be avoided.

For example, deferral plans are fast becoming a popular executive benefit, since they allow for pre-tax contributions that mirror 401(k) contributions lost under limitation rules. A deferral plan is the bonus that keeps on giving year-round as it allows employees to reduce their current income tax liability and watch their funds grow tax-deferred. In addition, the employer can make matching contributions to cover those contributions not allowed under a 401(k) plan, making the deferral plan a genuine incentive for longevity within a company.

Phantom stock is another incentive that can be tied exclusively to performance. Simply put, phantom stock is a promise to pay a bonus in the form of the equivalent of either the value of company shares or the increase in that value over a period of time. The most essential element of this incentive approach is its long-term understanding. Also, phantom stock plans are not tax-qualified, and as such not subject to the same tax rules as 401(k) plans. A company can promise a new and valuable executive this durable bonus every three or five years or over a longer period of time, making it attractive to remain for an extended run.

Another form of executive bonus is the performance unit – an offer to pay an executive a sum of cash at the end of a long-term performance period. The amount of a performance unit is based on attainment of certain pre-established financial objectives of the company. Some may define this brand of incentive as the ultimate performance carrot, as it consistently encourages an executive employee to tie his or her individual success into that of the company.

Company stock options are another form of incentive compensation appealing to many executive level employees. The amount of equity can be tied to the number of years in service, translating into potentially high returns for employee longevity.

It must be said that there are occasions when a well-timed “spontaneous” reward can be worth its proverbial weight in gold. A check for a modest amount in the aftermath of a key company success can go a long way toward providing management team members with a sense of company loyalty.

Finally, don’t discount other, more imaginative approaches to executive compensation. Options that should be considered are life insurance programs, health-club memberships, tuition reimbursement, flexible hours, and the leeway to work from a home office on occasion.

Ultimately, incentives should be connected to a company’s broad mission and scope of values. Companies must create an environment that fosters success and incentives should be tied to that success. Failure to keep an eye on that goal may result in lack of motivation for certain key employees, whose performance or lack of performance can make or break a business.

An effectively designed executive compensation program impacts the overall success of a company. A well integrated compensation arrangement can assist in promoting the core values of a company and help it along the path to continued success.

About our Guest Author:

James E. (Jim) Moniz, CEO of Northeast VisionLink, a Massachusetts firm that specializes in structuring executive compensation. James E. Moniz is a national speaker on the topic of wealth management and on executive compensation.

New Tricks

It's a cooling economy... sort of. It would be a stretch (though it's made everyday) to claim economic hardship across every industry. With these “troubled times” comes a series of booms and busts.

HR Vendors are booming. Why?

Employees are expensive (everybody knows that). But it is estimated that a new hire can cost around $5,000 in time and money spent. That's quite a bit of money and a lot of companies have decided that, given the way things look (with the fed estimating a stabilization of the markets sometime in the middle of 2009) they no longer want to throw that kind of cash around on straight gambles.

So, the old selection methods learn new tricks. Metrics and quantifiable analysis made possible by on-line reference checking systems (external 360's and the like) shave the “time spent” column down a hair while revamped internal performance assessments, employee and organizational engagement / climate assessments help manage, benchmark and improve existing “human capital investments”.

Firms are starting to see these methods not as new-fangled “techie” approaches, but as smart, cost conscious and effective reinvestments in their capital assets. The picture doesn't even have to look that sterile. When employers are viewed as caring about their employees, they are viewed as caring about their business just like when they take time to wash the windows and cut the grass, do the books, and send out their PR announcements.

How does your company reduce turnover, improve employee engagement, streamline performance reviews, etc.? To put it another way, what are your “new tricks”?