Author: Site Staff

The U.S. Supreme Court ruled Monday, June 11, that corporate pension plan sponsors are free to terminate their plans even if the union representing a company’s workers offers to merge the company’s plans with the union’s multiemployer plans.

At issue in the case, Beck v. PACE International Union, was PACE’s 2001 offer to merge 17 of the pension plans of Crown Paper Co. and its parent, Crown Vantage Inc.—which were liquidating assets in Chapter 11 bankruptcy proceedings at the time—with the union’s Taft-Hartley PACE Industrial Union Management Pension Fund. Crown’s board rejected the union’s offer, opting instead to purchase an $84 million annuity that would result in the company getting a $5 million surplus after satisfying its obligations to plan participants and beneficiaries.

The bankruptcy court sided with the union, arguing that Crown had a fiduciary duty under ERISA to consider PACE’s merger offer. In a 2005 decision, the U.S. Court of Appeals in San Francisco also backed the union. But in its decision today, the high court held that Crown’s decision to terminate its plans did not breach its ERISA fiduciary duties.

“Merger is not a permissible form of plan termination under ERISA,” the high court said in a decision written by Justice Antonin Scalia.

Filed by Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

One day after the Senate halted debate on a comprehensive immigration reform bill, President Bush’s two leading surrogates for the measure—Secretary of Commerce Carlos Gutierrez and Secretary of Homeland Security Michael Chertoff—expressed optimism that it would be revived and approved.

At a Friday, June 8, media briefing at the Commerce Department, Chertoff also addressed concerns that the human resources community has outlined about the employment verification provisions of the bill. He said the legislation would improve current law by giving his department access to Social Security databases.

The bill failed to garner enough votes June 7 to end Senate debate. For now, Senate Majority Leader Harry Reid has pulled the measure off of the Senate calendar, but he has not killed the bill.

In its current form, it is drawing opposition from a group of HR organizations, led by the Society for Human Resource Management and the HR Policy Association, that says the government’s trial electronic verification system, known as Basic Pilot, is flawed.

“Reliance on the current Basic Pilot—as mandated in the Senate immigration bill—is destined to fail and will not be support by employers,” the HR Initiative for a Legal Workforce wrote in a June 4 letter to senators.

U.S. employers within 18 months of congressional approval of immigration reform. That requirement is part of the Senate bill. Such improvements would cost hundreds of millions of dollars.

Another major criticism of Basic Pilot is that it cannot detect identity fraud. In December, U.S. officials raided six Swift & Co. meat processing plants, arresting more than 1,200 employees on charges of illegal immigration.

Swift uses Basic Pilot but that did not prevent the company from employing ineligible workers who stole legitimate American identities. Swift says the raid cost it $30 million.

Chertoff said the Senate bill gives his agency the ability to fight the kind of identity fraud that roiled Swift. Specifically, it allows DHS to access Social Security databases to determine whether the same number is being used by multiple workers.

“We [would] have the ability to take the next step, which is to be able to verify that the identity is real,” Chertoff said. “That’s an example of the kind of tool we can’t currently use by law, and we to change it. That’s part of this bill.”

He also asserted that Basic Pilot has the wherewithal to handle all U.S. employers.

“It can be ramped up because it’s underutilized,” he said.

But the HR organization is advocating that employers not be limited to Basic Pilot for verification. One option is for companies to use an overhauled Basic Pilot that operates from cleaned-up government databases.

The other choice would be an alternative electronic system based on advanced technology, additional background checks and the voluntary use of biometric information stored with government-certified vendors.

Chertoff and Gutierrez stressed that the Senate bill represents a substantial advance in verification policy because it limits the number of identification documents that can be used and mandates the development of tamper-proof Social Security cards.

Both stressed that reforming immigration policy is urgent.

“You always [have to] ask yourself, what’s the alternative?” Chertoff said. “The alternative is going to highly inconsistent local and state laws that will attempt to address this problem because we have not addressed it nationally.”

But resistance in Congress is high. Conservative Republicans have decried provisions of the Senate bill that offer a path to legalization—albeit it one laden with fines and other requirements—and members of both parties have criticized guest worker and family reunification aspects.

“The amnesty bill’s defeat is a victory for American workers, legal immigrants and the rule of law,” Rep. Lamar Smith, R-Texas and the highest ranking Republican on the House Judiciary Committee, said in a statement. “The American people want secure borders, not amnesty.”

Gutierrez countered that the bill does not endorse amnesty.

“This is not an unconditional pardon,” he said. “This is a very hard-earned path.”

Reid and other Democrats claimed that Republican senators were trying to choke the Senate bill to death with amendments over the course of that chamber’s two-week debate.

In a statement June 8, Reid said that he would bring the bill back to the Senate floor “as soon as enough Republicans are ready to join us in moving forward on a bill to fix our broken immigration system.”

Gutierrez and Chertoff are in the midst of a fierce lobbying campaign to bring more senators on board and to reach out to business, church and Hispanic groups to build momentum.

“The president is 100 percent behind this,” Gutierrez said. “We have bipartisan support and we are as encouraged as ever. We are going full speed ahead to try to get the bill back on the floor.”

He argued that the bill is vital for national security and economic security.

“We cannot grow the economy without immigrants,” Gutierrez said, citing employment demands in many sectors coupled with a declining U.S. population. “It is a demographic reality; it is a mathematical reality.”

Chertoff said the political reality on Capitol Hill is that the Senate is close to approving an immigration bill.

“If it takes a couple more days, so be it,” he said. “As time has passed, there’s a greater receptivity to it. This is crunch time in the debate.”

—Mark Schoeff Jr.

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Dear Results-Oriented:



Creating a new unit specifically for competency development suggests the scope or impact of this unit applies to most, if not all, of the positions in the company and involves the development of both hiring and training systems that focus on the job’s key accountabilities. For that reason, I’ll argue the primary mandate is to articulate and otherwise ensure a solid foundation is defined for each job–that is, to identify the key accountabilities in the job and the related competencies required to deliver on those key accountabilities. Once that is accomplished, this unit should put in place hiring and training systems to deliver the most important competencies in the job, and to manage the development of competencies across the organization.

Developing competencies within the organization can occur in two ways: 1) hiring the needed competencies or 2) training for the needed competencies. Both are methods that result in more of a given competency. Neither of these tasks needs to be owned by the competency-development unit. Rather, they should be owned by the individual business units or departments.

By some standards, building a competency development unit might be considered a huge undertaking requiring a large budget. But best-practice methodologies and technology make revealing key accountabilities in a job, and identifying the required competencies, much simpler and less expensive than ever before. These advancements also are empowering department managers to drive this process and use the results effectively, eliminating the need for this new unit to perform all of the required tasks. If the new unit wants to hit a grand slam in short order, it must consider how to balance high production levels, high-quality results with total stakeholder acceptance—none of which can happen without involving stakeholders.

A high level of production suggests competency development for every position occurs not in years, but in one to two months, regardless of how many positions need to be profiled and studied. It also suggests putting more effort into selecting off-the-shelf training modules. The level of quality suggests the end results of each job study must be valid and reliable, and that training and development programs must be focused on development of the right competencies for each employee. That requires the ability to quickly compare the talents required in the job with the talent of the person in the job. You will also want a solution that managers and employees will accept and embrace. The best measure of stakeholder acceptance is when managers demand more of it. That only happens when they feel the program delivers results as defined by them, isn’t expensive, and is easy to understand and use without an interpreter.

To summarize, the primary mandate of your competency development unit is to:

1. Create and communicate to stakeholders a solid strategy for developing and documenting the key accountabilities of each job, including measures of success.

2. Empower managers and high-performing incumbents to identify the key accountabilities. Use the key accountabilities as the reference point for stakeholders to identify the most important competencies required in the job (online job profiling tools allow stakeholders to identify the key competencies in a manner of minutes).

3. Implement job-talent assessment tools that identify gaps in competencies.

4. Implement work processes that assess applicants early in the hiring process to reveal “best fit” candidates quickly and to expedite the recruitment of high potential candidates.

5. For the most popular competencies—those found across jobs throughout the organization such as a set of management or leadership competencies—develop internally delivered training programs (purchase off-the-shelf programs where possible) or contract with training/consulting firms to deliver the program on a regular basis at your locations.

6. For unique or not-so-popular competencies, provide guidance to department managers on the most cost-effective training and development alternatives. Many times, competency development requires nothing more than correctly identifying the competency, correctly assessing the level of the competency within the organization, and providing some basic strategies for developing skills in the competency.

For a list of competencies used to identify job requirements and talent, go to http://www.nielsongroup.com/articles/list_of_competencies.pdf. For an article on how to develop key accountabilities in the job, go to http://www.nielsongroup.com/articles/laying_the_foundation.pdf.

SOURCE: Carl Nielson, principal, the Nielson Group, Dallas, June 26, 2006.

LEARN MORE: Please read about 31 core competencies that most employers seek.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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Dear Workforce Newsletter

Even if comprehensive immigration reform survives in the Senate—an outcome that was significantly set back on Thursday, June 7—the employment verification dimension of the bill is deeply flawed, according to human resource advocates who were making their case on the other side of Capitol Hill.

The fate of the bill in the Senate is now uncertain after a vote to end debate on the legislation failed 50-45 on Thursday night. Efforts earlier in the day to invoke what is called cloture also failed. If cloture is achieved, which requires 60 votes, then the Senate would move on to a final vote on the legislation.

The chamber had been debating comprehensive immigration reform for the past two weeks of the legislative calendar and had voted on more than 40 amendments to the controversial measure.

Senate Majority Leader Harry Reid, D-Nevada, took the bill off the Senate calendar, but he indicated that it is not dead.

“I have every desire to complete this legislation,” Reid said on the Senate floor after the vote. “We all have to work—the president included—to figure out a way to get this bill passed.”

Senate Minority Leader Mitch McConnell, R-Kentucky, was not throwing in the towel.

“I think we are within a few days of getting to the end of what many would applaud as an important bipartisan accomplishment of this Congress,” he said in a floor speech.

McConnell asserted that more Republicans would agree to vote on final immigration legislation after they had a chance to offer more amendments. On the final cloture vote, 38 Republicans and 11 Democrats voted to continue debate, while 37 Democrats and seven Republicans voted to move to final passage.

Earlier in the day, Reid and other Democrats blamed Republicans for trying to kill the bill by choking it to death with amendments. Reid challenged President Bush to get more Republicans behind the bill, which was put together in large part by the White House.

“This year’s bill is not a Democratic bill,” Reid said during media availability in his Capitol Hill office. “This is the president’s bill. We are helping him. He can’t help himself. It can’t pass unless we get significant Republican support.”

But even if it does pass the Senate, the HR community says the employment verification aspects of the bill would cause serious problems in the workplace.

The Senate bill would require all employers to sign up for an electronic employment verification system known as Basic Pilot, which is now being used voluntarily by 16,000 companies.

Under the Web-based system, an applicant’s documents are checked against Social Security and Department of Homeland Security databases. If the Senate bill becomes law, employers would be required to verify all new hires within 18 months after enactment of the immigration bill and all employees within three years.

At a June 7 hearing of the House Ways & Means Subcommittee on Social Security, HR advocates testified that the Basic Pilot system, which has a nonconfirmation rate of 8 percent, is inadequate in its current form to handle all 7 million U.S. employers.

With an estimated 50 million people changing jobs each year, the Basic Pilot system could produce nonconfirmations for upwards of 4 million. Some of the rejections, however, would be for people who are not eligible for U.S. jobs.

“If they don’t do this in a thoughtful way, it will create gridlock in the employment process in this country,” Sue Meisinger, president and CEO of the Society for Human Resource Management, said in an interview during a break in the hearing.

Her organization is leading the HR Initiative for a Legal Workforce, which criticizes Basic Pilot for being unable to detect identity fraud. The group is calling for the government to clean up its databases before mandating that all employers use the system.

In addition, the initiative is proposing employers be given a separate option to sign up for “a secure electronic employment verification system that would verify identity through the use of state-of-the-art technology, additional background checks and the voluntary use of biometric enrollment conducted  by government-certified private vendors,” according to a June 4 letter to senators.

At the House hearing, members of both parties expressed misgivings about the ability of the government to upgrade Basic Pilot to accommodate all U.S. employers. A Social Security official at the hearing estimated that the cost could be about $370 million annually for management and compliance work.

“We think that’s doable with the appropriate funding at the beginning of each year,” said Frederick Streckewald, an assistant deputy commissioner of the Social Security Administration.

Several members of the subcommittee were nonplussed.

“The word fiasco comes to my mind,” said Rep. Paul Ryan, R-Wisconsin.

Rep. Kevin Brady, R-Texas, said, “It’s like standing an elephant on a toothpick.”

Meisinger stressed that a verification system must work efficiently and effectively because one is certain to be part of any final immigration legislation.

“Verification is the linchpin of really, truly reforming the immigration system,” she testified. “This is a debate about workplace management that impacts all employers and employees, not just those who are foreign-born. We cannot have HR—and we should not have HR—be America’s surrogate border control agents.”

Even if the Senate passes a bill soon, the process has a long way to go, as House leaders have not yet formulated their own legislation.

The HR community will make its case at each step along the way. “We’ll work even harder in the House … and when they go to conference to get the issues addressed,” Meisinger said.

—Mark Schoeff Jr.

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Socially responsible funds are offered in 19 percent of defined-contribution plans, according to a survey conducted by Mercer Investment Consulting for the Social Investment Forum. In addition, 41 percent of defined-contribution plan sponsors without socially responsible investing (SRI) options expect to offer them within three years.

Dave Stangis, director of corporate responsibility at Intel Corp., who participated in a recent teleconference on the survey, said Intel has offered two SRI funds in its 401(k) plan since 2000, a Calvert Social Equity and Calvert fixed-income fund. The two funds have $2 million and $6 million, respectively, of the plan’s $3.7 billion in assets. Stangis said Intel evaluates the SRI funds the same way it evaluates its other 68 investment options, including factors such as low cost and performance.

Craig Metrick, a consultant with Mercer Investment Consulting U.S., said a substantial amount of evidence from legal experts and regulators indicates that SRI funds are not in conflict with any fiduciary duty if put through the same due diligence as other funds.

Of 129 plan officials who responded to the survey, 50 percent were with publicly traded corporations; 23 percent, privately held companies; 7 percent, government; 10 percent, health care organizations; and 10 percent, other types of organizations, according to the report based on the survey.

Filed by Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Two of the so-called Big Three job boards have announced major shifts in their corporate leadership.

Monster Worldwide CFO Lanny Baker is leaving the firm and will be replaced by Timothy Yates, according to a release issued Wednesday, June 6. Yates will oversee Monster’s accounting, tax, treasury, business development and investor relations operations. Baker is departing to pursue other career opportunities, a spokesman said.

Yahoo HotJobs is bidding farewell to general manager Dan Finnigan, it was announced Tuesday, June 5. Jeff Kinder will take his place as GM. Kinder will be based in the Sunnyvale, California, headquarters and takes over June 18, according to a company spokeswoman. He will report to Hilary Schneider, executive vice president for Yahoo’s local markets and commerce and publisher network divisions.

Finnigan is leaving HotJobs to pursue other interests, the spokeswoman noted.

Yates’ appointment isn’t the only C-suite news at Monster. The company has announced a major restructuring plan designed to simplify operations.

“This new operating structure will further realign the company and enable Monster to realize the growth opportunities before us,” said Sal Iannuzzi, chairman, CEO and president of Monster Worldwide. “We believe it will facilitate quality customer service while providing our associates with an environment that will encourage and foster success.”

A Monster spokesman declined to comment on whether the business play was initiated to make the company more appealing to potential suitors. Rumors have been rampant in recent weeks that a sale is imminent, with Google named among the potential buyers.

“We don’t comment on speculation,” the spokesman said.

The realignment consolidates key functions to bolster Monster’s ability to implement projects on a global platform. These areas include sales, technology, finance and human resources as well as product, marketing and customer services.

“The era of Sal Iannuzzi has begun,” the Monster spokesman said.

Some of the changes are:

• A new position has been created for Steve Pogorzelski, formerly group president, international. Pogorzelski is now executive vice president of global sales and customer development. He will oversee enterprise, field, telesales and e-business channels on a global basis.

• Brad Baker, former president of product, technology and service, is being appointed executive vice president of product, marketing and customer service. He will be responsible for product development and customer services as well as for overseeing the company’s marketing resources internationally.

• Darko Dejanovic, who recently joined the company as senior vice president, will be assuming Baker’s technology-related responsibilities. He was appointed executive vice president and global chief information officer.

Monster also has announced that Doug Klinger, president of Careers North America, will leave the company to pursue other opportunities. Monster will pay a combined $3 million in severance for the departures of Baker and Klinger.

—Gina Ruiz

Employers and HR consultants for years have pondered ways to retain aging workers as the retirement wave nears. But as companies start to tackle the issue, many are realizing that the solution is not just about coming up with new ways of working; it’s about creating a culture where employees close to retirement age feel comfortable discussing their plans with their managers.

By the time companies initiate conversations with older workers about what they can do to get those employees to stay, it’s often too late, said Bruce Monte, director of retirement plans at PepsiCo, during a presentation at the WorldatWork Total Rewards Conference this month in Orlando, Florida.

These employees already have a date in mind and have discussed their plans with friends and family, he said.

“We realized the need to establish a dialogue about retirement with these employees,” Monte said. “It’s not something people need to feel closeted about.”

To address the issue, PepsiCo recently conducted interviews with a dozen top corporate executives to see what their retirement plans were and what would keep them at the company. The company is based in Purchase, New York, and has more than 150,000 employees worldwide.

A number of the executives revealed they were burned out and wanted time to rejuvenate, but could work longer, said Samira Kaderali, a senior consultant at Towers Perrin who made the presentation with Monte and helped analyze results of the interviews.

PepsiCo is talking to a select number of executives who are approaching retirement about how the company could keep them on longer. For example, one company executive will be working part time for a few months and a few executives have been invited to participate in a global sustainability task force, Monte said.

While PepsiCo’s pilot program is in its early stages, the company believes there is potential for having such discussions on a more formal basis with select executives approaching retirement, Monte said.

And employees value the frank discussions, according to Bruce Barge, principal in human resource management at New York-based Buck Consultants.

During a separate WorldatWork presentation, Barge cited a recent study conducted by the Tennessee Valley Authority in which workers were asked about their retirement plans.

“They got a tremendous amount of data and employees really liked the fact that they were being asked,” he said.

It would behoove companies to be proactive in this area because once employees start planning and talking about retirement, it might be harder to get them back, says William Love, a financial advisor with the Marshall Financial Group, a Doylestown, Pennsylvania-based registered investment advisor.

Love, whose clients include top executives planning to retire, says that often they are burned out, and by the time he talks to them they are focused on their retirement accounts. They just want to know what “number they need to hit so that they can retire,” Love says.

“By the time I see them, they are set on that number,” he says. “It would be good if companies could get ahead of that.”

—Jessica Marquez

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Several large coalitions of special interest organizations and businesses have formed in recent months to promote universal coverage and other major changes to the U.S. health care system.

The latest group jumped into the fray on Tuesday, June 5, with a much more modest goal—persuading Congress to pass legislation that would facilitate the use of information technology in health care.

The initiative—called Health IT Now!—consists of 22 members, including Verizon, the International Brotherhood of Electrical Workers and a variety of health care organizations.

Led by the National Association of Manufacturers, it is calling for federal legislation that would establish standards for interoperability, provide government grants to help doctors and hospitals adopt health information technology, encourage patients to use electronic health records, and set up a federal-state process to address privacy and security.

Privacy concerns have sunk legislation in the past. In November 2005, the Senate passed a $652 million health IT bill by unanimous consent. The House passed its own version in 2006, but the two measures were never reconciled because of disagreements about privacy regulations.

Shortly after the June 5 Capitol Hill press conference, Sen. Edward Kennedy, D-Massachusetts and chairman of the Senate Health Education Labor and Pensions Committee, announced he and a bipartisan group of senators would soon introduce a bill that would help health providers overcome financial and technical barriers to implementing health information technology.

One of the obstacles in the current session of Congress is that the Democratic majority has approved so-called pay-as-you-go rules for legislation. Any spending on health IT would have to be offset by cuts in the federal budget or by tax increases.

But former Sen. John Breaux, D-Louisiana and co-chair of the coalition, urged his former Capitol Hill colleagues to take action.

“Congress is going to have to find the money to provide the grants to get this started,” he said at the press conference. “The privacy issues can and will be solved.”

Proponents assert that deploying advanced technology to handle medical records and other administrative tasks would reduce health care costs, improve quality and ultimately save lives.

“This is an area where there should be no disagreement,” Breaux said. “It should be a win-win for everybody. It doesn’t have to be part of a bigger [health care] package.”

Verizon’s enthusiasm for the idea centers on its need to finance health care for 238,000 employees and about 200,000 retirees and their dependents. The company provides coverage for about 900,000 people total at an annual cost of $3.5 billion.

The company wants to lower its costs and improve health care for its employees, according to Peter Davidson, Verizon’s senior vice president for federal government relations.

“We think health IT is the best way to do that,” he says. “It’s like a low-hanging fruit.”

The company’s leadership on the issue was spurred by chairman and CEO Ivan Seidenberg, who served on a national commission a couple years ago that issued recommendations on health technology interoperability.

“Consumers should be driving the health care business, much as they [do] the cellular industry,” says Andy Mekelburg, Verizon’s vice president of federal government relations.

Before it puts them in a position to change the health care industry, people would first notice increased health technology in the waiting room. Instead of filling out forms about their medical history, their background would be stored electronically and be accessible to nurses and doctors.

But the impact could be more powerful.

At the press conference, Jennifer Queen related the story of her daughter, Courtney, a 10-year-old suffering from DiGeorge syndrome, which undermines several of her body’s systems. She has been hospitalized 24 times and has undergone 400 medical procedures. During one episode, doctors were delayed for hours as the hospital compiled mounds of health records and transported them in a wheelchair to the floor where Courtney was being treated.

“From a parent’s perspective, that can be extremely frustrating” and terrifying, Jennifer Queen said.

Although the latest medical technology is available in the intensive care unit when Courtney Queen is treated, that’s not the scene elsewhere in the health industry, asserts John Engler, NAM president.

“In the physician’s office, we’re stuck on paper,” he said. “Reams and reams and reams of paper—17th century technology.”

Engler also argues that improving health IT can address broader health care questions by providing a tool for rigorously assessing chronic care and disease management.

For now, Verizon is circumspect in the wider health care dialogue. It has not yet signed up with any coalitions that are advocating universal care. But, according to Mekelburg, it is talking with the group Better Health Care Together, which is led by Wal-Mart and the Service Employees International Union.

“No one’s come up with the right answers yet,” he says. “We don’t want solutions to increase [health care] costs. Solutions have to decrease the costs.”

—Mark Schoeff Jr.

 

The recent lawsuit filed against General Electric may indicate that the company’s long-renowned ranking system isn’t quite as transparent as it seems.

The suit, which is seeking class-action status, was filed May 31 in U.S. District Court in Connecticut by Lorene Schaefer, general counsel for GE’s transportation division. It alleges that GE discriminates against women systematically.

According to the complaint, Schaefer relocated with her family to Erie, Pennsylvania, from Atlanta to accept the position after being promised that she would be promoted to the company’s senior executive band from the executive band.

The complaint notes that her two predecessors, both men, had been promoted to that rank either before or at the time of taking the general counsel position.

Five months after taking the position, however, Schaefer’s boss, Charlene Begley, CEO of GE Rail, left and was replaced by John Dineen, who created “an old boys network” at the company, consistently excluding Schaefer and three other female executives from meetings, Schaefer says.

Schaefer’s performance ranking dropped from being among the top 20 percent to being among the middle 70 percent, she says, but “in mid-2006, Dineen told her that if her performance continued to be strong, he would support her for promotion,” according to the complaint.

But in April, Greg Caputo, the HR manager for GE’s transportation division, informed Schaefer that she was going to be demoted because she was “not big enough” for her position and that Dineen wanted “a big-time GC,” or general counsel, according to the complaint.

Schaefer is seeking $500 million in damages for a class of 1,500 executive band female employees and attorneys.

Whether GE discriminated against Schaefer because of her gender, the fact that she was surprised by her demotion indicates a problem with GE’s performance appraisal process, observers say.

GE has long touted its performance appraisal program. In an unrelated interview with Workforce Management on May 29, two days before the suit was filed, Bill Conaty, senior vice president of human resources at GE, described why differentiation is important, saying: “It isn’t about putting a stamp on someone’s forehead or anything. It’s about constant communications and appraisal systems that have candor and honesty.”

But the fact that Schaefer was surprised to learn of her demotion is a sign that perhaps GE needs to make sure all managers are being candid about their staff’s performance, says Jan Rose, a principal at Capital H Group.

“If an employee is surprised about what they hear about their performance, then something is wrong with the performance appraisal process,” Rose says. “If it hasn’t already, GE may want to do an audit of its system to make sure it’s generating the results that it should.”

But GE maintains that “every decision regarding Ms. Schaefer was made on the merits.”

“We strongly deny the allegations made by Ms. Schaefer,” spokeswoman Archana Handa says. “We will defend against the claims in court.”

If the job requirements had changed under Dineen, it should have been communicated to Schaefer before the demotion, says Roz Courtney, managing director of Roslyn Courtney Consulting, a Scarsdale, New York-based consultant.

The lawsuit indicates how increasingly difficult it is getting for employers to manage employees’ expectations because job definitions change rapidly, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School.

“It’s difficult to talk to employees about expectations because that requires employers to know what they are going to need a few years down the road, and most companies don’t know that,” he says. “You can’t promise employees anything today.”

—Jessica Marquez

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Regulations proposed Thursday, May 31, by the Internal Revenue Service would allow employers that contribute to employees’ health savings accounts to accelerate contributions for employees whose medical care expenses are greater than what the employer has so far contributed to the HSA during the year.

Such an acceleration would enhance the appeal of HSAs by reducing employees’ concerns that their accounts could be exhausted if they incur big medical bills early in the year before employers make all of their contributions.

The proposed rule would apply to HSAs that are not part of Section 125 programs, in which employees make pretax contributions to their accounts. Benefit experts say such an acceleration of employer contributions to HSAs that are part of Section 125 programs already is permitted.

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Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.