Author: Site Staff

Posted on

Dear Workforce How Do We Decide Whether to Outsource Payroll or Bring It In-House

Dear Overwhelmed:

Payroll is one of the most complex processes found in the financial operations of companies these days. Not only do payroll administrators need to keep track of federal income tax and benefits regulations, they also must be aware of state wage and hour regulations in every state in which you operate. Most small to midsize firms find it much more economical to outsource this complicated and demanding function. It is only when you reach 1,000 or more employees that you find companies being able to afford the expense associated with maintaining payroll in-house. Even then, these firms usually have access to a variety of outside services that support their legal and regulatory needs related to payroll. If your company is growing rapidly, you may want to study this possibility further. Here are some of the relevant factors to consider in any analysis:

  • How quickly is your company growing? Are you looking to make a significant number of acquisitions or expand internationally over the next several years?

  • How complex are your payroll needs? Look at things like how many hourly employees you have, the different work/shift schedules, and which types of deduction codes and earnings types your company uses. Another indicator of complexity would be a lot of different bonus or other cash compensation programs.

  • How many distinct payrolls does your company run each month? How many physical checks or deposit stubs do you generate each month?

  • Are state regulations (in the 39 states) complex and demanding? Illinois, New York and California have some of the most complicated wage and hour regulations on the planet.

  • Do you have access to payroll expertise (including outside expert resources) to assist with preparing a formal cost/benefit/return on investment analysis?

  • What is the level of IT support at your company? Is your IT department capable of managing another system?

  • Do senior executives understand the complexity, and are they willing to support the conversion with needed resources?

These are some of the more critical questions you will need to consider in the decision to source payroll or bring it in-house. If your company decides to move to another vendor rather than insource, here are some of the significant considerations:

  • Is the vendor financially stable? How long has it been in business? What is its track record in meeting commitments? Check references in detail.

  • How strong are the vendor’s project management capabilities? Does the firm have expertise in all aspects of project management, including project planning, tracking, control, and management?

  • What capacity does the vendor have for bringing your company on board with them? Will you have a dedicated service team?

  • Does the vendor operate nationally? With 39 states, you might as well not even consider firms that have not had experience in all 50 states.

  • Does the vendor serve similarly sized organizations that are growing rapidly? Does it serve organizations that operate internationally (presuming this is a factor)?

  • Does the vendor have experience with companies in your industry? If so, quantify that experience?

  • Can you trust the confidentiality of the vendor? Does the vendor also serve your competitors?

  • Finally, can the vendor manage the variety of your company’s payrolls?

Many of these questions will form the basis for a formal request for proposal that you will send to a select list of vendors. Using these lists as a starting point, you also may want to check with your business colleagues/professional associations to find people who have gone through this type of change and are willing to share their experiences. This type of change should not be done in a “quick and dirty” manner. Invest the time and resources into making the right decision for your organization.

SOURCE: Bob Fulton, the Pathfinder’s Group Inc., Naperville, Illinois, September 7, 2007.

LEARN MORE: Please read how companies large and small have begun to contract our more HR administrative tasks.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce What Are the Steps to Grooming Successful Mentors

Dear Teaching the Teachers:

First off, I’d like to acknowledge that managers need to play a role in driving employee engagement and performance. I would not recommend that you replace manager-employee coaching or try to make up for bad managers with a mentoring program.

Clarify your objectives. An effective mentoring program supplements coaching from managers, and it should be positioned as a way to make the business, not just individual employees, more successful. From there you can add a more specific goal, such as helping new employees get up to speed quickly.

Define your mentor selection criteria. Mentors need to be more than willing. They need to have a coaching attitude and ability. Describe these characteristics in writing—and other traits, such as particular business knowledge or specific skills.

Equip your mentors. Provide tools and training to help mentors fulfill their role. This process goes beyond basic coaching skills to include an emphasis on:

  • Individualized partnerships. “Do unto others as you would have others do unto you” may serve people well most of the time, but it can actually get in the way of successful mentoring. Effective mentors understand their individual mentees’ needs and work with everyone differently. What works great for one person can derail another.

  • Career coaching. Although employees may look to their mentors for career “navigation” advice, our research indicates that few are clear on what’s important to them. Mentors need to help people get behind the core values that create job satisfaction for them. What do they like to do and why? What would enrich their work each day? Only then can mentors help employees create a plan for professional development, career progression or job enrichment.

Reinforce mentoring. To reap the benefits that mentors provide, you need to make mentoring a way of life. Senior leaders must be role models and discuss with employees the impact that mentoring has on business and personal success.

Leaders experience success as mentors through practice. The more they mentor, the more successful their mentoring becomes. A virtuous cycle will then take hold: They believe in mentoring, they’ve seen how it works, and they’re motivated to build their own competence.

And don’t forget to build in accountability, metrics and recognition systems. Without these, mentoring can fall by the wayside as a “nice to do that we don’t have time to do,” instead of remaining a core strategy for building an engaged workforce and thriving business.

SOURCE: Cathy Earley, BlessingWhite, San Francisco, November 27, 2007.

LEARN MORE: Please read Mentoring Matters to learn how and why corporations are ramping up efforts to pair seasoned managers with promising talent.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce How Do We Capitalize–and Recognize–Intellectual Capital

Dear Discouraged:

You clearly have a few issues to consider here that revolve around recognizing the individual’s problem-solving skills and willingness to contribute his expertise.

The first step is getting the right stakeholders together to discuss the issue. This group should involve some key business leaders or managers, as well as a human resources partner. Use this situation to review your organization’s overall ability to manage and effectively share employees’ knowledge and expertise. Doing so positions the conversation in a positive light and avoids pointing fingers at managers who fail to recognize an individual’s contributions.

Positioning the conversation in this light is positive versus pointing out the failure of some mangers and leaders to recognize an individual’s valued contributions.

Questions to address to develop a solution

  1. Does the organization currently have formal or informally designated subject matter experts (SMEs) whom people rely on as “go to” players for deep technical expertise?

  2. If there is no formal program or designation of SMEs, consider this: Is your organization at risk in terms of highly qualified experts leaving the business, taking with them valued knowledge that is difficult to replace?

  3. Which types of technical knowledge and expertise are most highly valued? Who has this knowledge and how often does the organization rely on it?

  4. Is it imperative that you designate SMEs/technical experts in key areas, functions and levels across the business?

  5. Does your employee competency model reference deep technical expertise—and willingness to share it—as a valued behavior? If not, can this be added so that contributions are recognized in the performance management process, for example?

  6. How do you foster improved collaboration and knowledge sharing through recognition?

  7. What are the required leadership behaviors to support a collaborative environment and recognize effort and valuable contributions?

Finally, it should be stated that recognition for individuals who play the technical-expert role (as described in the question) doesn’t necessarily saddle your organization with financial or other costs. Simple recognition tools (such as designating the individual as an SME, inviting him/her to coach others, or inviting the employee to present their ideas or solution to company leadership) go a long way to ensuring the person doesn’t walk to a competitor—and take expertise your organization relies on to make important decisions.

SOURCE: Garrett Sheridan, managing partner, Axiom Consulting Partners, Chicago, June 18, 2008.

LEARN MORE: Please read about strategies on formalizing approaches to cross-training for key employees.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce How Do I Become an Influential Leader

Dear Confounded:

Your first step should be to demonstrate that there is a quality problem. Gather your data, do your analysis and prepare a report on the scope of the problem. The report might include items such as: frequency of errors, the impact on delivery/completion, the costs to identify and correct the errors, and any post-product/sales-support costs that result directly from the lack of quality.

(Caution: These are examples; you would be wise to come up with metrics more meaningful for your product. Keep in mind that cost is always a good one to include.)

It is not enough just to identify a problem. You’ll gain a lot more traction in your organization if you prepare a plan of action to address the problem, with some metrics showing reductions in costs and/or time spent fixing bugs, among other things.

SOURCE: Carl Norcross holds a master’s degree in human resources and has more than 20 years’ experience leading HR departments. He has worked for several midsize and Fortune 500 firms, including GRID Systems, Colorado Memory Systems and Nortel Networks.

LEARN MORE: Companies across all sectors are wrestling with the issue of manager training.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce How Does 1,000-Hour Rule Apply to Non-Retirement Benefits?

Dear Bedeviled:

The best-known 1,000-hour rule is contained in Part 2 of Title 1 of the Employee Retirement Income and Security Act of 1974 (ERISA) and generally only applies to employee pension benefit plans. It’s also mentioned in the Internal Revenue Code (IRC) Sections 410(a) and 411(a) regarding participation and vesting in retirement plans.

The concept of 1,000 hours has received attention lately in the Section 403(b) universal availability requirement in the finalpe 403(b) regulations. Under that requirement, employees who are not expected to work at least 20 hours per week need not be offered the opportunity to make salary deferrals.

However, the IRS added that once such an employee works at least 1,000 hours in a year, he or she must become a participant in the following year. As pointed out in the preambles to both the proposed and final regulations, the exclusion for employees who are “expected to work (fewer) than 20 hours” is available only for non-ERISA 403(b) plans.

Although the 1,000-hour rule is best known in retirement circles, it also has some applicability with group welfare plans—generally only with respect to nondiscrimination testing.

Unfortunately, it is not applied on a consistent basis and does not apply to all benefits.

For example, in determining eligibility for nondiscrimination purposes under a dependent-care assistance program under IRC Section 129, employees with less than one year of service (defined with reference to the 1,000-hour requirement of IRC Section 410(a) can be excluded.

Additionally, for similar purposes, under group-term life insurance plans (IRC Section 79) and self-insured group health plans (IRC Section 105(h), employees with less than three years of service can be excluded. The regulations under IRC Section 105(h) state that although other methods can be used to measure service, the 1,000-hour requirement in IRC Section 410(a) would be reasonable.

It is interesting to note that both group-term life insurance plans and self-insured group health plans are permitted to exclude part-time and seasonal employees. IRC Section 105(h) defines a part-time employee as someone whose customary employment is less than 25 hours a week.

As a result, the 1,000-hour rule for such plans may not be an absolute figure. However, any exclusion for “part-time” employees is not an acceptable exclusion for retirement plans.

Group health plans that are insured are generally not subject to nondiscrimination rules, with regard to service requirements, under ERISA or the IRC unless offered through a cafeteria plan.

Other types of benefit programs, such as education assistance programs and adoption expense programs, are also subject to nondiscrimination rules, but those rules are not as well developed as are those for the benefit plans mentioned above.

SOURCE: John Kent Graham, regional director of compliance, Sibson Consulting, New York, February 24, 2009

LEARN MORE: The U.S. Department of Labor provides an FAQ on ERISA that aims to help employees understand the law.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce How Could We Ensure Employee Evaluations That Avoid Subjective Measurement?

Dear Fair-Minded:

Ensuring your evaluations are fair and objective requires a little planning.

Fully understand and communicate expectations

Many supervisors don’t effectively communicate performance expectations to their employees. Misunderstandings about expectations result in diminished focus on the important aspects of the job, lower productivity and quality, and perceived (and real) unfairness in performance evaluations.

A job description that lists specific activities to be performed, the measurements to be reported, the time allocated for each task—and the required results—helps eliminate many potential misunderstandings. By making result expectations clear to your employees in advance, the evaluation process becomes fair and balanced.

Focus on data

If you’ve developed a good job description, you’ve already outlined the measurable outcomes you expect. Next, you need to consistently measure and record these outcomes. One of the simplest ways is by keeping a performance “plus and minus” log on each employee. Simple forms are available from numerous sources, or you can create your own.

Have your supervisors carve out 10 minutes a day to record the performance results of their employees that either exceed or fall below expectations. (Since it’s unlikely that every member of your team will do something noteworthy each day, 10 minutes should be more than enough time.)

At the end of the appraisal period, it is very easy to roll up your notes and complete the appraisal form. Keeping detailed, regular notes on performance helps supervisors objectively rate performance and provides employees with better, more credible input.

Involve the employee

Asking the employee to be involved in measurement and record keeping of their results will further improve the perceived fairness of those results. Give your employee a plus-and-minus log and ask the individual to note significant accomplishments, misses or extra value added.

Periodically meet with employees to go over the log together, and use the employee’s log as one of the inputs for the annual performance appraisal.

Telling your people clearly what you expect and measuring and providing specific comments on performance results help supervisors offer evaluations that are objective. Employees will be more appreciative of the performance evaluation they receive.

SOURCE: Richard D. Galbreath, Performance Growth Partners Inc., Bloomington, Illinois

LEARN MORE: Please read “Six Steps to Successful Performance Appraisals” for additional advice.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce What Are Some Techniques to Hire People Whose Personal Values Best Fit Our Company

Dear Fixated:

 

You are correct: The cultural fit between employee and the organization is an extremely important consideration. We have all had a job for which we had the skills and experience but were just not a “good fit.” Such situations often result in poor employee performance and/or turnover, both of which are costly for the employer.

During a down economy, employees who are a poor fit are way less likely to jump ship–and while this may reduce turnover, it also may perpetuate lower performance that eventually shows up in the bottom line.

So what steps can you take to ensure you hire employees whose values and interests jibe with the company? First of all, it is critical for your company to clearly understand its own culture. This requires a bit of soul searching.

This effort can be complex if yours is a larger company with many divisions and geographic locations. Each group within the organization may take on its own unique culture. In your search for a cultural identity, look at the enduring and stable things that the company values as a whole—and identify meaningful differences in these values across various branches or divisions.

Organizational culture has been studied by many different groups and has been defined in many different ways. Industrial psychologists have conducted decades of research aimed at defining organizational culture, the result being a set of relatively stable “work values” that define the aspects of work that are meaningful to an organization, based on the values of the individuals who constitute it.

Some of the most useful work has been performed by Jennifer Chatman, whose Organizational Culture Profile (OCP) identifies the following major dimensions:

• Innovation

• Stability

• Orientation toward people (fair and supportive)

• Orientation toward outcomes (results-oriented, achievement-oriented)

• Easygoing vs. aggressive

• Attention to detail

• Team orientation

The OCP uses these dimensions to measure fit via the following process:

First of all, a baseline for the organization’s culture is established. This is done by having members of the organization make ratings based on their opinions regarding which of the above dimensions they feel are most and least characteristic of the organization. These ratings are then aggregated to provide a profile that defines the organization’s culture in terms of these dimensions.

Second, an individual’s “personal value profile” is created. This process involves having individuals rank their own personal values (using the dimensions listed above) in terms of their most and least preferred work environment.

Finally, the individual’s ranking of the above work values is compared with the aggregate values profile created by the organization to summarize its culture. This comparison process yields detailed information about the overlap between the values of an organization (or one of its many groups) and those of an individual. These outcomes provide a data-based estimate of the fit between an individual and the group or organization.

As you can imagine, this information can be very useful for helping organizations make all kinds of important decisions. Perhaps the most important is within the hiring process. The work values that underlie cultural fit are relatively stable and enduring within individuals, so hiring people and trying to change their values does not often prove to be an easy task.

There are a number of different “fit” inventories available from pre-employment assessment companies, and it makes sense to look into these. When doing so, make sure to ask for the technical documentation that will demonstrate the measure has been created and evaluated using the proper scientific techniques.

SOURCE: Charles A. Handler, Rocket-Hire, New Orleans, August 13, 2009

LEARN MORE: Post-hire introductory periods provide a way to ensure people’s behaviors, attitudes and attributes actually dovetail with those of a company.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce How Do We Rein In a Touchy-Feely Employee?

Dear Trapped:

Communication and awareness of organizational policy are keys to successfully dealing with this and similar situations.

First some background: The idea of personal boundaries in the workplace is not new. Look at traditional office space here in the United States. Traditionally, the higher you go on the corporate ladder, the more personal space you are given. That corner office is desirable to employees in large part because of the privacy it offers. Culture also plays a part in a person’s comfort level regarding personal space, both in one’s personal life and in the workplace. People intuitively know that the level of trust and intimacy in a relationship dictates how much physical space should be maintained among colleagues, friends and family. Finally, studies have revealed that women tend to need less personal space than men do, and some women touch a colleague in order to make a closer connection with the person to whom they are talking. The touching is not necessarily a sign of physical attraction. However, it is always improper to touch someone if it makes him or her feel uncomfortable.

There are several steps that should be taken with the employee in question. The situation needs to be dealt with without regard to the employee’s job performance or seniority. In policy matters, all employees need to be treated equally and consistently. The employee’s professional abilities or executive standing do not make inappropriate actions any more palatable.

The following actions have proved successful in these situations:

• Train employees to understand and respect the clues given to them by co-workers. For example, have you ever watched two people talking and noticed Person A constantly taking one step closer while Person B keeps taking one step backward? Body-language clues can be addressed during employee training sessions.

• Communicate to employees that getting too close for another person’s comfort is easy to do, and can happen before they realize it. Associates, supervisors and customers may take close talking and innocent touching as a threat to their emotional or physical well-being. Also communicate that if it’s not corrected, this behavior can cost employees their jobs. Finally, employees must understand that such behavior with customers can also affect the company’s business relationships.

• Communicate and train your employees on the firm’s generally accepted behavior, and include those behaviors in your employee handbook. Such policies should, however, recognize that everyone expresses themselves differently, and we should not confuse differences with bad behavior.

• Encourage your employees to ask colleagues and supervisors to speak up if certain actions offend them.

In summary, communication and awareness are keys to resolving this situation in a manner that keeps all employees focused and working effectively together.

SOURCE: Rania V. Sedhom, principal, Buck Consultants, New York, October 30, 2009

LEARN MORE: Employee misconduct needn’t be a problem. Learn what should be tolerated and how to handle behaviors that can spell legal trouble.

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Dear Workforce We Use the SMART Format For Setting Goals. Which Appraisal System Best Suits Us?

Dear Smarter:

The first step in your appraisal system should be to establish goals, and to make them “SMART.” The acronym stands for goals that are specific, measurable, attainable, relevant and time-bound.

In construction, the organizational structure is typically based upon projects. Therefore, a company’s performance management system usually follows the project framework. Because each project has its own goals—including revenue, budget and timelines—you will likely want to develop goals on a project-by-project basis. It is the job of management to align the overall project goals, the manager goals and the individual goals to bring the project home on time and on budget.

Your company should make the overall project-based goals clearly visible to the members of each project team. Within the project, individuals should then be assigned specific responsibility to do their part to achieve the overall project goals.

Writing SMART goals

One special consideration in a project-based business is that the timing of performance feedback and goal setting typically follows the timeline of the projects. And because a project may wrap up at any time during the year, when people are reassigned from one project to the next, they usually must also update their goals.

Specific goals:

• Are concise.

• State a clearly observable result.

• Identify a specific reference point from which to track progress.

Measurable goals:

• Quantify the expected result (includes number, percentage and frequency).

• Describe the criteria by which the result will be evaluated.

Attainable goals are:

• Challenging, but within reach of the person doing the work.

• Have a realistic time frame.

• Do not present unrealistic barriers to achievement.

Relevant goals are:

• Aligned across the company from individual goals through higher goals and strategies.

• Integrate the company’s values into the objectives.

Time-bound goals:

• Identify the expected deadline for completion.

• Identify the frequency or duration of the project.

SOURCE: Patsy Svare, managing director, Chatfield Group, Glenview, Illinois

LEARN MORE: It can be helpful to remember the role that job analysis can play in defining roles and responsibilities.

Workforce Management Online, March 2011 — Register Now!

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.

Ask a Question

Dear Workforce Newsletter
Posted on

Poor Economy Has Little Effect on Disability, Workers’ Comp Benefits Programs

Employers appear to have been spared the ill effects of a weakened economy on their disability and workers’ compensation benefits programs, a new survey has found.

A survey of as many as 13,000 employers by the Integrated Benefits Institute revealed “no dramatic changes” in the incidence of short- and long-term disability claims from 2008 to 2010. Though median costs associated with disability and workers’ compensation claims rose slightly, the median duration of a disability or workers’ compensation claim has remained largely flat since the beginning of the recession three years ago.

Researchers for the San Francisco-based IBI said the survey’s results, released this week, undermined what previously would have been considered reasonable assumptions of the recession’s effects on employers’ claims experience.

“We might expect that tough economic times would lead to falling claims rates as employees seek to maintain jobs,” researchers wrote in their report. “At the same time, we could envision that in a downsized workforce, employees experience more physical and mental job pressures leading to serious health conditions and worse claims experience.”

Short-term disability claims increased 12 percent between 2008 and 2009, but receded in 2010, yielding an overall rise of just 6 percent during the three-year period. Changes to the median duration of those claims were even more modest, increasing 2 percent per closed claim between 2008 and 2010. Claim costs also increased, but by just 7 percent during the three years.

IBI researchers said more dramatic shifts might have been prevented by higher average wages among claimants (due in part to layoffs), changes in plans designed to attract and retain key employees or an altered mix of medical conditions.

Long-term disability claims remained relatively flat, increasing less than 2 percent from 2008 to 2010, however the median cost of closed claims rose by 26 percent while median open-claim costs jumped up 29 percent in the same three-year period.

New and closed workers’ compensation claims also fell from 2008 to 2010, which researchers said could indicate fewer workers willing to claim benefits, or that “employees remain in the workers’ compensation system longer during difficult economic times.”

However, that has not translated into more lost work time, the survey found. The median number of days lost per workers’ compensation claim remained flat, at 33, in all three years the companies were surveyed.

The cost of medical payments from those claims rose 17 percent, while indemnity payments rose 10 percent.

In their summary of the results, researchers cautioned that employers could see significant increases in incidence, duration and costs associated with workers’ compensation and disability claims if they discontinue health care coverage after the implementation of the health care reform laws.

Those programs, they said, provide valuable assistance in managing workforce health, and that costs associated with disability and workers’ compensation claims must be viewed in tandem with those tied to health care coverage.

“Those that continue to view medical costs in a separate and distinct program silo do so at their peril,” researchers said.  

Filed by Matt Dunning of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.