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Report Highlights Continued Decline in Defined Benefit Plans

Only 49 percent of 200 of the largest U.S. companies had ongoing defined benefit plans in 2009, down from 61 percent in 2006, according to Mercer’s Retirement, Risk and Finance Perspective.


Released Feb. 10, trends also show an increase in defined benefit plan curtailments among companies.


Some 11 percent had plans frozen to all employees as of 2009, up from 5 percent in 2006; 11 percent also had plans frozen to new employees, up from 7 percent; and 3 percent had plans frozen to some employees, down from 4 percent.


An increasing share of the companies, 26 percent, offered no defined benefit plan as of 2009, up from 23 percent in 2006.


Freezing a “plan does little to mitigate the underlying [pension funding] volatility,” Steve Alpert, principal and senior consulting actuary, and David Weissner, partner and senior consulting actuary, wrote in the perspective report. The attitude that “ ‘everyone else is doing it, so it must be a good idea’ has permeated boardroom thinking, replacing many facts with impressions.”


Plan executives “are starting to realize that it’s not the plan design that drives [pension plan funding] volatility, but the deliberate risk-seeking behavior that results in mismatching of assets to liabilities,” they wrote.


“By implementing thoughtful risk reduction strategies with immediate changes in investments, or through a dynamic derisking strategy, pension plan sponsors may be able to reduce cost volatility with less drastic changes in plan design.”


Among other data, the perspective report said in 401(k) plans, participants on average have been contributing less during the recession.


The average contribution rate as a percentage of pay was 6.8 percent as of March 31, a nearly steady fall each quarter since Dec. 31, 2007, when the rate was 7.46 percent.  


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


 


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Workplace Guidance Remains Elusive After Facebook Posting Case Is Settled

Employees may be rejoicing, but some legal experts are disappointed that the National Labor Relations Board reached a settlement on Feb. 7 with a company that fired an employee for bad mouthing her boss on Facebook, dashing hopes for a legal precedent to guide employers’ social media policies.


Dawnmarie Souza, an emergency medical technician with ambulance service company American Medical Response of Connecticut, was fired in 2009 after criticizing her supervisor on Facebook. Her case was scheduled to be heard before a federal labor board judge in Hartford, Connecticut, on Feb. 8.


“I had hoped we would get an administrative law judge’s decision on this issue,” said James Hays, an employment lawyer who is a partner in the law firm Sheppard Mullin Richter & Hampton in New York.


In the settlement, American Medical Response agreed to “revise its overly broad rules” to ensure that employees’ rights to discuss working conditions are protected, according to an NLRB written statement. Souza was fired for violating a policy that prohibits employees from depicting the company “in any way” on social media sites on which they post a picture of themselves—a policy that the board asserted was too broad. Additional details of the settlement are confidential.


“Did her comments meet the criteria for protected concerted activities or did it amount to water cooler talk? We don’t know,” Hays said. “The company made modifications to its policies, but what are they and what in the policy was problematic to the board? Unless they issue a copy of their revised employee handbook and someone gets a copy of the old one and does a comparison, we’ll never know.”


This was the first NLRB complaint involving an employee terminated for comments made on a social media site.


The settlement means that employers are still without a legal precedent to guide their decisions when it comes to employee speech on social media sites such as Facebook, LinkedIn and Twitter, but Hays said it won’t be long before another case emerges.


“We’ll have to wait for the next case where it goes a bit farther in the legal process,” he said. “I wouldn’t advise any client to say, ‘Well, that case got settled so we don’t have to look at this for a while.’ It’s just a matter of time before the next one comes along.”


The NLRB is an independent federal agency whose mandate is to uphold the National Labor Relations Act of 1935, which gives workers the right to form unions and protects their right to discuss working conditions, regardless of whether they are in a union. The NLRB complaint alleged that Souza, who was a union worker, was illegally denied her request for union representation in the matter.


Lewis Maltby, president of the National Workrights Institute in Princeton, New Jersey, an offshoot of an American Civil Liberties Union workers rights task force, sees the settlement as a win for unionized workers but says it probably doesn’t mean much for nonunion employees, who are typically employed “at will,” meaning an employer does not need to show good cause for firing an employee.


“In reality, it means that people belonging to a union can complain about their boss on a social network site, but it doesn’t do much for the 90 percent of workers who don’t belong to a union,” he says. “If you’re fired because of your race you know that you should go to the EEOC [Equal Employment Opportunity Commission] for help, but most nonunion workers have probably never heard of the NLRB.”  


Rita Pyrillis is Workforce Management’s senior writer. To comment, e-mail editors@workforce.com.


 

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Employees Rely More on Employer, Health Plan Information

Employees are turning more to their employers and health plans for medical and health-related information, according to a nationwide survey that the National Business Group on Health released Feb. 1.


Employees also say they are somewhat familiar with “comparative effectiveness research,” the science that compares the clinical effectiveness of various health care interventions to determine which course of treatment works the best.


Employers are looking for ways to incorporate comparative effectiveness research into their health benefit design to ensure that employees are receiving safe, appropriate and cost-effective care, said Helen Darling, president of the Washington-based NBGH.


Funding for comparative effectiveness research also is included in the Patient Protection and Affordable Care Act.


The NBGH survey found that 75 percent of employees used their employer as a resource for medical and health information in 2010, a significant increase from 54 percent in 2007, the last time this survey was conducted. In addition, 69 percent of respondents rated their employers as completely, very, or moderately trustworthy sources of such health information.


Darling said part of the reason that employees are relying more on employers to provide such information is the fact that “employers are gateways of information … they are the conduits.” In addition, as employees are paying a greater portion of their health care costs, they increasingly are seeking such information, she said.


“This is a combination of newly empowered consumers” and “more transparency and more information” being made publicly available, resulting in a “more informed and skeptical public,” Darling said.


The NBGH survey also found increased use of health plan resources for health and medical information, with 76 percent of employees relying on that source in 2010, up from 67 percent in 2007.


Growing numbers of workers also turned to health-oriented websites, the survey found, while fewer workers sought information from doctors’ offices, published articles, prescription drug package inserts and, pharmacies, and  as well as medical school, hospital and governmental websites.


Employees also are becoming more inquisitive, either looking up information about their symptoms prior to seeing their doctors (85 percent) or bringing a list of questions (71 percent) or an advocate (52 percent) with them to office visits, according to the survey.
The survey included responses of 1,538 employees ages 22 to 69 who were working for an organization with at least 2,000 employees. It was conducted Oct. 4-15, 2010, by Washington-based market research firm Mathew Greenwald & Associates Inc.  


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


 


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As We Transition to Internal Coaching, What Obstacles Should We Expect?

Dear Out to Nurture:

It sounds like you are embarking on a pretty comprehensive talent management program. You haven’t given much detail on how you will design the process, but there are some common patterns and pitfalls with any design.

Be aware that a program with this wide a reach requires a lot of work if you wish to produce something meaningful and keep it up-to-date. A good program should be multifaceted and detailed.

The best “career-pathing” tools help an employee understand:

1. What jobs are logical next steps?
2. The skills and competencies needed for those jobs.
3. How the employee measures up to each of them.
4. What he/she can do to build any skills/competencies they are missing (and in particular whether there are jobs, projects or teams that can serve as skill-building stepping stones)

Often, HR professionals who are trying to build these programs underdeliver in one or more of these four areas. It’s important to ensure that your plan addresses all of these areas, because if it lacks substance, it will not be useful.

The most common mistake I see is in not paying enough attention to item No. 4. Many organizations merely provide employees with a list of books, training classes or websites as growth tools. The better way is to build a system that helps people find “on the job” roles and projects to round out their skills.

Employers also have difficulty designing item No. 3. Their programs do not offer employees any way to frankly and accurately assess their own skills. Employees have a pretty good idea of their capabilities in their current role, but many struggle to vet their skills for roles they have not held. You can avoid this problem by ensuring your employees connect with your company’s HR professionals who can help them informally evaluate their skills or have access to skill assessment tools they can administer themselves.

As I mentioned above, if a system is not robust, then it isn’t valuable to the workforce and therefore isn’t used. To ensure that your program is meaningful for your population, it might make sense to involve a group of employees—either in design or for feedback—before you go live. This can help you tailor aspects of the plan to ensure that it meets user needs.

Another area that causes problems with programs of this type is oversight. In other words: Who is responsible for seeing that employees improve—and how will effectiveness of the program be measured?

It’s no surprise that the programs that require managers to take an active part in shepherding their employees’ careers are more successful. Some companies ensure manager commitment by evaluating managers on how many of their direct reports have development plans in place, have been promoted or have moved into a role that will improve their skill set.

Likewise, organizations that measure things like the increase in the number of internal promotions or turnover of employees being actively developed, compared with the general employee population, tend to correctly focus on impact rather than activity.

Finally, ask yourself how long this will take. Building a program with the specificity and breadth you mention can take three months to a year depending on the complexity of your design. Employee learning and growth on the other hand is constant and ongoing. Remember, growth paths for employees will mirror your company strategy. As the business needs change, so must your career path tools.

While employee development programs take time and attention if they are done right, the payoff far outweighs the work.

SOURCE: Ellen Raim, vice president of human resources, Cascade Microtech, Beaverton, Oregon

LEARN MORE: Please read an outline of eight steps to use in the coaching process.

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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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Appeals Court Judges Plan Quick Review of Reform Law Decision

Federal judges in the 4th U.S. Circuit Court of Appeals have agreed to expedite their review of a decision from a district judge in Richmond, Virginia, that struck down the individual insurance mandate in the Patient Protection and Affordable Care Act as unconstitutional.


The decision means the Virginia federal appeals court will render a quick decision as the case winds its way toward what will be its likely final destination: the U.S. Supreme Court. The request for expedited review was filed jointly by the Department of Health and Human Services and Virginia Attorney General Kenneth Cuccinelli II. The case is scheduled to be heard by May.


“Major decisions are already being made and money is already being spent to comply with a law that may not be around two years from now,” Cuccinelli said in a news release. He said he had not yet decided whether to seek permission to bring the case directly to the Supreme Court without an appeal.


An appeal is also pending in the 6th U.S. Circuit Court of Appeals regarding the decision of a federal district judge in Detroit that the law is constitutional. Numerous friend-of-the-court briefs have been filed in that case since the appeal was lodged last week, but a briefing schedule has not yet been set.  


Filed by Joe Carlson of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Fewer Company Executives Say Workers Taking Own Financial Reins

Thirty-eight percent of human resources executives surveyed in late 2010 by Aon Hewitt “are confident that workers are taking accountability for their financial future,” down from 43 percent a year earlier, according to an Aon Hewitt news release issued Jan. 26.


Only 30 percent of the executives “are confident employees are sufficiently prepared for retirement, showing no improvement” between 2009 and 2010, the release said.


The latest survey, covering 210 midsize to large companies, was conducted in November 2010. The results were compared to a similar survey conducted in November and December 2009 that was published in early 2010.


Because companies are worried about employees saving for retirement, they are making additional plan design changes to increase participant savings rates and “promote responsible investing,” according to the release.


One change is increased automatic enrollment. Last year, 57 percent of defined contribution plans offered automatic enrollment compared with 24 percent in 2006, the release said. Among companies that do not offer automatic enrollment, 36 percent said they are likely to add the feature this year, the release said.


“Automatic contribution escalation is now offered by 47 percent of plans, up from 17 percent, and automatic rebalancing is offered by 49 percent of plans, up from 27 percent in 2006,” the release said. “More than a quarter of employers—26 percent—are likely to add automatic escalation in 2011, and a third are considering adding automatic rebalancing.”


The Aon Hewitt survey also found that once participants enroll in a 401(k) plan, “their investing habits are often suboptimal,” the release said. “Many employees are not investing in a diversified portfolio, are taking inappropriate risk and very few rebalance their portfolio regularly, if at all.”


The annual survey, which has been conducted since 2005, includes Aon Hewitt clients as well as other companies, MacKenzie Lucas, an Aon Hewitt spokeswoman, said in an e-mailed response to questions.


The survey of companies with a combined 6.2 million employees includes responses from firms with defined contribution, defined benefit and retiree medical plans, she said. Ninety-four percent of the companies in the survey have a defined contribution plan, she added.  


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


 


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Auditors Probe U.S. Role in GM Funding of Delphi Pension Plan

Federal auditors said they are looking at whether the Obama administration pressured General Motors Co. to provide additional funding for Delphi Corp.’s pension plan for hourly workers.


The audit focuses on GM’s decision after its 2009 bankruptcy to add to Pension Benefit Guaranty Corp. benefits for Delphi hourly workers without doing the same for salaried retirees.


Neil Barofsky, the special inspector general overseeing the $700 billion federal bailout of financial institutions and the auto sector, reported the audit on Jan. 26 in his quarterly report to Congress.


A number of congressmen led by Rep. Christopher Lee, R-N.Y., have questioned whether political considerations played a role in GM’s decision on behalf of hourly retirees.


Barofsky, a former federal prosecutor who also is conducting an investigation of possible illegal conduct by GM and Chrysler Group in their dealer reductions, didn’t say when his audits would be completed.


In June 2009, Lee and more than 20 other lawmakers wrote to Treasury secretary Timothy Geithner to complain that 15,000 salaried Delphi retirees may have their pensions cut by as much as 70 percent.


“It is fundamentally unfair that two groups of retirees from the same company, who worked side-by-side for so many years and who are faced with the same unfortunate situation, are being treated so differently by the federal government,” the letter said.  


Filed by Neil Roland of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Managers List Their Most Embarrassing Moments at Work

Falling asleep while interviewing a job seeker and sending an offer letter to the wrong candidate are among managers’ most embarrassing moments at work, according to a survey by OfficeTeam, a division of Robert Half International Inc.


The survey included more than 1,300 senior managers at companies with 20 or more employees in the United States and Canada.


“Nearly everyone has had an embarrassing situation at work,” said Robert Hosking, executive director at OfficeTeam. “Although these moments can be awkward, it’s best not to dwell on them, or you risk drawing more negative attention on yourself.”


Other embarrassing moments listed include answering the phone using the wrong company name, falling off the stage while speaking during a business event, getting locked in the office and inadvertently sending the boss a personal voice mail from a spouse.


Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Dear Workforce How Do We Determine Our Staff Level?

Dear Numbers Game:
The essential question you have to answer is this: How many people are needed to get the job done efficiently and effectively? To determine the optimal ratio, you need to consider a number of items.
Gain insight on workflow. By mapping out the workflow in operations, leaders can compare it to the workflow being considered in the support function. Themes and trends will emerge that parallel work in operations with corresponding support work in administration, safety and wellness, among other areas.
Determine core competencies. Once the workflow is understood, then the specific competencies for support can be analyzed in relationship to tasks in operations. Traditionally, this phase would include detailing a job description, but much more is involved. A job description provides only a starting point. Along with competencies, you need to identify a strategy for bringing them to life, including the role of supervision and training.
Survey your operations staff. Ask questions of your current operations and support staff. As an expanding company, you already have teams to assist in problem solving. Engage them and give them a sense of involvement, buy-in and ownership.
Internal and external benchmarking. What is your company’s experience with similar operations or competitors in the industry? You can learn critical lessons by understanding what works and what doesn’t. Sometimes, it is simply a matter of uncovering more stones to get to the real answer.
Conduct a “what if?” analysis. This allows leaders to test-drive various scenarios without actually deploying resources. This helps you determine a staffing ratio that makes sense.
Engage mission, vision, values and culture. Examine the mission, vision, values and culture. If your staffing ratios line up with critical organizational needs elements, then success is likely. If not, don’t be surprised if it fails.
Analyze and compare ratios. Based on the data generated above, determine which ratio makes the most sense. For example: by plotting the total number of operations’ employees with total hours worked vs. projected support staff and hours worked, the ratio will come into sharper focus. This does not need to be complicated: You could use a basic spreadsheet to test various assumptions.
SOURCE: Dana E. Jarvis, adjunct professor of leadership and management, Duquesne University, Pittsburgh
LEARN MORE: Please review a series of tools, including worksheets, for workforce planning.
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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 How Could Our Not-for-Profit Accurately Predict Future Skills Needs?

Dear Peering Into the Future:

I applaud your inquiry. Rarely do human resources professionals take time to understand the importance of recruiting future skills. For a not-for-profit in the recreational field, there are three main categories of skills you will want your people to have as you move into the future: people skills, technology skills and developmental skills.

Because you will probably continue to rely on sponsorship, you will want your development people to have excellent powers of persuasion. This skill will also be helpful in recruiting new members as well as new employees. Hint: Have your internal and your external marketing people work together so that your employer brand and your organizational brand are aligned. (Sometimes not-for-profits forget this important step.)

Also in the area of people skills: You will need good leaders as well as good followers. As you grow, you will need people who are good at working in teams to accomplish projects. When you are ready to expand to a second club, you will need people who are good at establishing systems and procedures in new environments. You can recruit for these particular skills by using behavioral interviewing.

Second, as we all know, technology is becoming more and more important in recreation and fitness. You will want to hire some people who are familiar with the “latest and greatest” in gaming and simulations. Today, it’s the PlayStation, Wii and the Xbox. Who knows what tomorrow’s technology will bring? Hire people who pride themselves in staying on the leading edge. They will probably be members of the millennial generation—sometimes called Generation Y.

To repair these systems and your increasingly sophisticated machines in the club, you will also need people who are good (and fast) technicians. Machine downtime discourages people from visiting your club, so you will want to have any broken machines up and running as soon as possible. Be sure to include a practical test in your pre-employment candidate assessment. (One of the worst hires I ever made was when I believed a young woman whose résumé said that she was able to program in HTML; I didn’t find out until after I hired her that she thought being able to use Dreamweaver was the same as being able to program from scratch.)

Finally, you will want to hire people who have the ability to develop and grow, so that they may grow with your organization. Many of the jobs that will exist in 10 years do not exist now. Hire people who are adaptable and who not only can learn new things, but also enjoy learning them as well. And although in your area of recreation you will hire many young people, do not dismiss your candidates from other generations. What is most important is that the candidates want to keep developing themselves.

SOURCE: Joyce Gioia, strategic business futurist, The Herman Group, Austin, Texas

LEARN MORE: Targeted conversations with executives are a hallmark of workforce planning.

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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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