Category: HR Administration

Posted on

What does floating holiday mean? Guide + Template

Summary

  • A floating holiday is a paid day off that an employee can use at their discretion to substitute for a public holiday.

  • Employers have no legal obligation to offer floating holidays but do so to increase retention and make their benefits packages more attractive.

  • Carryover and encashment rules are usually up to employer discretion unless there’s state-based legislation that dictates how they should do so.

Aside from paid time off, some companies offer floating holidays to make their benefits package more competitive and appealing. But what is a floating holiday exactly, and how does it work?

A floating holiday is a paid day off from work that an employee can use at their discretion, typically serving as a substitute for a public holiday. There’s no set date to take one; hence these holidays “float.” Click the link below to see what a basic floating holiday policy looks like:

Floating Holiday Policy Template

Like paid time off, floating holidays are not legally mandated by law, so it’s up to the employers whether to offer them or not. And if they do, they also decide how to implement them unless state-based legislation tells them otherwise.

According to statistics, 48% of companies offer floating holidays, allowing employees to observe a holiday on any day of their choosing.

Floating Holiday vs. PTO

A common question regarding floating holidays is how they differ from paid time off. The main difference lies in how they are given to employees. 

Floating holidays are typically awarded at the beginning of each calendar year or as soon as an employee joins a company. In contrast, PTO is usually accrued over a period of time. Furthermore, some paid time-off credits are carried over the next calendar year and encashed once an employee resigns. Floating holidays, on the other hand, are typically not rolled over the next year and are not paid out upon termination.

Floating holidays also take the place of public holidays, unlike traditional PTO. So, for example, a single floating holiday credit representing Easter could be used on a random day in February – this would mean, however, that the employee would then need to work on Easter. PTO, on the other hand, can be taken whenever without replacing a holiday. 

When are floating holidays used?

Floating holidays are typically provided to offer more flexibility. Therefore, they are usually taken whenever an employee wants. They can be used to observe a religious or cultural holiday that’s not typically part of regular federal holidays, celebrate a birthday or special occasion, or take a break or recharge. 

Can floating holidays be used for federal holidays? It depends. If your business also goes on break during regular federal holidays and you pay time off for your employees, there’s no need for your employees to take a floating holiday. 

If you’re open during holidays like Thanksgiving or Christmas, employees who choose to work on those days can take a floating holiday another time. Remember that not all employees observe these holidays and may opt to work and take time off on a date that’s more relevant to them instead. For instance, a Muslim employee may opt to work on Christmas and take a floating holiday to observe Eid Al-Fitr. 

Webinar: How to Drive Engagement for Hourly Employees

Setting parameters for floating holidays

The key to implementing a floating holiday policy is to set clear parameters. Here are vital parts it should include.

Eligibility

Will it apply to all employees, or will there be exemptions like contractual or part-time workers? Typically, floating holidays are given to all employees to help improve retention. 

Hiring date is also another thing to consider. It’s common for companies to offer two floating holidays at the beginning of the year. For instance, new hires joining from January to June can receive both days. However, employees hired in the middle of the year can be entitled to only one floating holiday for the remainder of the year. 

Number of days

How many floating holidays are you going to offer? It’s typical for most companies to give two floating holidays a year, but it’s vital to consider the nature of your business to come to an ideal number. 

Approval process

Define how employees should file for floating holidays. Include how many days in advance they must give notice and what system to use to log their request. Having these details specified allows employees enough room to plan. 

Carryover and encashment rules

Indicate what will happen to unused floating holidays. For example, can they be carried over the next calendar year? In case of resignation or termination, will unused floating holidays be encashed?

Whatever you decide, make sure that it’s clearly discussed in the policy. Unused floating holidays are typically not carried over to the next calendar year nor paid out upon employee resignation. However, in California, floating holidays are somewhat treated as paid vacation leaves. This means employers should encash unused floating holidays upon termination and allow unused leave credits to roll over the next year. 

Blackout dates

Blackout dates refer to periods or dates when employees are discouraged from taking time off or floating holidays due to high demand or extra busy operations. Again, make sure that it’s clearly stated in your policy if this is something you implement. 

Benefits of floating holiday

Employers are not mandated to offer floating holidays, but there are advantages to doing so. Here are some of the top reasons why companies choose to include them in their benefits package:

A way to give importance to diversity and inclusion

Giving floating holidays is a way to promote diversity and inclusion in the workplace. It helps to recognize that employees have different cultural and religious backgrounds and that you allow them to freely practice their beliefs.

Survey shows that employees who feel included are three times more likely to feel excited and committed to their organizations. Furthermore, a company’s inclusiveness is a primary factor that different respondents look at when considering career decisions or moves.  

Flexibility

Floating holidays offer flexibility to employees by allowing them more control over how and when they would like to spend a holiday. Aside from religious and cultural holidays, employees can use this to spend time on a hobby, attend to other important things, or have a restful day at home.

Less admin burden in managing holidays

If inclusion is a priority for you, that doesn’t mean you must create an exhaustive list of holidays to account for all religions and cultures in your workforce. Instead, you can choose a few major federal holidays to include in your paid holidays policy and supplement these with additional floating holidays, which employees can use as they see fit. Aside from giving your employees flexibility, you also free up your HR team from the burden of maintaining and updating that list.  

A more competitive benefits package 

To retain and attract top talent, you must have a competitive benefits package. Floating holidays help do that.

The US is one of the more advanced economies, but 1 in 4 US workers have no paid vacation benefits. Furthermore, there’s no law mandating organizations to provide PTO. Having a PTO policy gives you a more competitive edge, but offering floating holidays can improve your chances of employee retention. 

Best practices for implementing floating holidays

Floating holidays are only effective when implemented correctly. Here are some best practices you can apply to get the most results from this policy.

Be clear with your policy

We can’t stress this enough. You need to eliminate any inch of ambiguity so that your employees will be encouraged to use their floating holidays. Since floating holidays do not roll over into the following year, any unused hours will go to waste – make sure your employees understand this with constant reminders. In addition, make sure that the policy is readily available to your team. It’s best to use an employee self-service platform to make this policy accessible to your staff at all times. 

Use a PTO tracking app

The best way to stay on top of PTO and floating holidays is to use a comprehensive leave management system featuring mobile PTO tracking. 

PTO tracking software is vital for efficiently managing leave requests and approvals. It ensures managers don’t miss requests or accidentally schedule staff who are on leave. 

But it shouldn’t just be helpful for managers. PTO tracking apps should be user-friendly for frontline staff; otherwise, introducing one will create even more confusion. Make sure basic tasks like viewing leave balances and floating holiday credits, submitting PTO requests, and seeing time off on schedules is as straightforward as possible for your staff. 

Encourage employees to use their floating holidays

This actually extends to all leave types. Statistics show that of US workers who have paid time off, only 54% of Americans say that they use it for vacation or holiday. 

The only way that you’ll see floating holidays positively impact your culture is if they are used by staff. It all boils down to communication and culture. Sometimes, employees need a little nudge or reminder that it’s okay to take a break and go on holiday.

Use labor forecasting to identify necessary blackout dates

The appeal of floating holidays is that employees can take them whenever they want. But blackout dates take a little bit of that away. The key is identifying only necessary dates when employees are discouraged from utilizing their floating holiday. 

Accurate labor forecasting looks at seasonal trends, historical sales data, booked appointments, foot traffic, weather, and other relevant information that can affect demand during any shift. Labor forecasting software shows you which days and shifts you can expect to be the busiest. Based on this, you can make calculated staffing level projections and narrow down the periods that need to be blacked out for leaves and holidays.

Webinar: How to Forecast Your Schedule Based on Demand

Stay compliant

While floating holidays are not legally mandatory, consider state-based legislation. As discussed, California looks at floating holidays like vacation days. Therefore, employees are required to encash remaining credits upon termination. Be careful of these specific rules to avoid violations and penalties.

It can be challenging to stay on top of compliance and how labor rules come into play with your benefits and policies unless you have a robust compliance engine within your HCM platform.

A good compliance feature automates labor compliance in every stage of workforce management—from onboarding, scheduling, administering benefits such as floating holidays, calculating payroll, and offboarding.

Floating Holiday Policy Template

If you want to get started on drafting a floating holiday policy for your company, here is a standard template to get you started: 

All (type/s of employees) are entitled to two floating holidays per year aside from (Company Name)’s regular paid holidays and time off. These two floating holidays can be used for any reason the employee deems necessary. It may be used for reasons such as birthdays, religious holidays, cultural festivities, or state and federal holidays during which [Company] remains open. 

Employees must submit a request at least five (number) days before they intend to use their floating holiday. It must be logged through the leave management system and approved by the manager. 

Meanwhile, floating holidays may not be used during blackout periods of (date range) due to high demand and seasonal events. 

Floating holidays are given at the beginning of the calendar year. Employees hired during the first half of the year will be entitled to two floating holidays. Meanwhile, employees hired in the middle of the year will receive one floating holiday. Floating holidays cannot be carried over to the next calendar year and will not be compensated upon termination.

Perks like floating holidays are just one of the many facets of managing a workforce. Make sure to implement them well with a robust system like Workforce.com. 

Aside from demand-based scheduling, labor forecasting, and time tracking, Workforce.com has an extensive leave management system that automatically tracks PTO and holidays while keeping you compliant with local labor laws in your state. 

See Workforce.com in action. Book a call with us today.

Posted on

PTO vs Vacation Time: Best choice for your company (2023)

Summary

  • Under a PTO policy, all leave time is lumped together into a paid time off bank. Vacation, on the other hand, is simply a specific type of leave categorized under a traditional leave policy. 

  • The pros of a PTO policy include fewer administration/accruals to manage, more flexibility for employees, and a more transparent relationship between employers and employees.

  • The cons of a PTO policy are that it may turn out to be more expensive, employees may work when they’re sick, and they may take a fewer number of actual days off.

  • While no perfect policy exists, creating the best one for you means you’ll have to evaluate state laws, consider your work environment (remote or on-site), and assess your software solutions.

Do you need to know why your employees are taking time off, or are you fine with them having autonomy over it?

Evaluating which leave policy suits your business requires careful consideration. Scheduling managers need to weigh the pros and cons of each type of leave policy, consider the nature of the business, take employee preferences into account, and pay attention to current trends. Only then can they make a decision on a leave policy that boosts employee productivity and optimizes payroll costs.

PTO vs. vacation time: What’s the difference?

PTO is standardized leave that covers all types of paid time off (sick leave, personal time, etc.) with no labels. Vacation time is leave specifically for vacation purposes. So, vacation is a type of PTO, but PTO may not necessarily be for a vacation.

Employers can find ways to retain employees by offering more flexibility around their leave. With PTO, employees don’t need to explain how they’re using their time off. Along with vacation days, employers may decide to offer other types of leave, which means employees have to take different types of leave for certain purposes, which can be restrictive.

The trend is definitely moving toward PTO banks. 63% of employees said they’d turn down a job offer if it didn’t include PTO. So it’s clear that a majority of employees would rather work for a company where they’re free to take personal days without having to state the reason why. Pandemic stress resulting in job reshuffling has only served to further highlight the importance of effective company policies for paid time off, as the workforce is prioritizing mental health now more than ever.

Kerry Wekelo, managing director of HR at Actualize Consulting in Reston, Virginia, switched to the banked PTO policy. She says, “We made the switch because our people were not using their sick time and were complaining about not having enough time off. So we combined to a total of four weeks’ paid time off versus two weeks’ vacation and two weeks’ sick time. Our people love this, and, even as we hire new recruits, they rave about starting at a firm with four weeks’ vacation.”

The pros and cons of a PTO policy

HR managers must consider the pros and cons of a paid time off policy to determine whether or not their business should offer one. Each type of policy involves costs and benefits to the business and its employees, and a thorough analysis can be insightful in determining which one is right for your company. Here are some pros and cons of a PTO policy:

Pros:

  • Less administration required/accruals to manage: Under the traditional leave policy, the employer needs to manage different types of leave, which involves administration costs. Under the PTO policy, none of this admin is required since all of the leave is lumped together. A PTO policy is easier to manage.
  • Offers more flexibility to employees: Employees can use PTO however they want, without explaining how they’re using it. More flexibility could keep employees engaged, and also reduce unscheduled absences. 54 percent of employers that implemented a combined PTO program said unscheduled absences dropped by up to 10 percent when they started the new policy.
  • Creates a more transparent relationship between employers and employees: Employees need not lie about being sick under the PTO policy since they can just state they need time off. Under traditional leave policies, employees may feel forced to use their sick days, so they might lie.

Cons:

  • It may turn out to be more expensive when the employee leaves: A company may have to pay more if the employee leaves, depending on state laws. This is because they may have to pay out all accrued paid time off if the state law mandates it, but under the traditional paid leave policy, they may not have to pay out sick leave to an outgoing employee.
  • Employees may show up to work while they’re sick: Since there’s no distinction made between the two types of leave, employees may show up to work when they’re sick in order to earn more PTO. This can infect other employees, which can ruin the overall productivity of the company.
  • Employees might get fewer days off: Depending on the accrual rate for PTO at your company, new employees may accumulate PTO more slowly than longer-term employees. Research also suggests that employers who adopt PTO may give employees fewer overall days than they had previously. According to SHRM, employers with PTO policies give employees an average of only 18 days, which is fewer than the number of days employees get under a traditional leave policy.

How to create a leave policy that works for you

If you pick the right leave policy, your employees will be happy and productive, and your company will optimize its resources. That’s why, for creating an effective leave policy, you need to take the following steps:

  • Review your state mandates regarding unused time off: Most states don’t require you to pay an employee for unused sick time when they leave the company, unlike PTO policies where payment is required for all time accrued. So, if your state requires you to pay unused PTO, a PTO policy may be more expensive. Review this, and evaluate if bearing the costs of a PTO policy is worthwhile for your business.
  • Consider whether you’re a remote company or an on-site company: A PTO policy is better suited to remote companies where employers cannot scrutinize the reasons behind every leave an employee takes. It’s impossible to know if someone is actually sick in a remotely distributed company, so there’s no point in having separate sick leave. Therefore, choose the leave policy depending on the type of company you are.
  • Evaluate your resources to see if you can administer your leave policy: Under the traditional leave policy, your company will have to maintain two accounting systems — one for sick leave and one for vacation time. Choose the traditional policy if you can make the time to administer the policy, and choose the PTO policy if you want lower administration costs and more efficiency. A good PTO policy should prioritize employee self-service, meaning it should be accessible via mobile app and should sync fluidly with your scheduling and time tracking systems. Requesting, viewing, and approving PTO should be seamless, quick, and integrated with your workforce management.
  • Ensure your policy covers the basics: Make sure you cover some basics in whichever leave policy you choose such as how an employee can request time off or how far in advance employees must request vacation time or planned PTO. Also, consider whether or not employees can carry over their PTO hours at the end of the year. Think about whether you’re going to send home employees who are sick under the PTO policy. Decide how much time off can be taken at one time and how the time off accrues. Finally, choose whether or not employees can carry over unused PTO at the end of the year.

Unlimited PTO: A possible solution

Another option is to switch to an ‘unlimited PTO’ policy. The unlimited PTO plan gives employees the freedom to take off as much time as they need, as long as it’s approved by their managers. But critics say that with unlimited PTO, employees actually take less time off since they rely on company culture to determine the right amount of time to take away. So clearly, there’s no one-size-fits-all leave policy, and you must decide the best policy based on your unique situation.

Making leave management easy

No matter the type of leave policy you choose, it needs to be easy to utilize. Luckily, recording things like PTO, vacation, and sick time on schedules and timesheets, is becoming easier thanks to recent advances in workforce management. Learn more about it by contacting us today – we’ll help make leave management a breeze for you and your staff.

Posted on

Should your business offer a paid time off policy?

Summary

  • There is no federal law mandating PTO in the US

  • Utilizing a PTO bank reduces deception, builds trust, and lowers absenteeism. – More 

  • PTO comes with some difficulties, such as determining accrual rates and navigating conflicts around the holidays. – More

With the lowest number of mandated paid leave days, the United States is often referred to as the “no vacation nation.” 

However, for American workers, paid time off, including personal time and vacation days, is crucial for maintaining a healthy work-life balance and job satisfaction. In fact, a recent survey found that 62% of workers consider paid time off (PTO) to be “extremely important.”  

This raises an important question for businesses – should you offer a paid time off policy even though it’s not required by federal law? 

As labor market expectations are shifting when it comes to paid time off, this might be a great time to consider revisiting your company policy to include offering your employees a number of days of PTO. There are currently nearly double the amount of job openings than there are job seekers, making it a job seekers market. People are looking for more out of their jobs, particularly younger job seekers like Gen Z, who prioritize things like flexibility and work-life balance. Offering a competitive paid time off package is a great way to do this and, as a result, attract top talent.

Here are a few things for company owners and human resources professionals to consider before making the decision. 

The basics of paid time off 

Paid time off covers a number of situations, such as:

  • Vacation leave 
  • Personal days
  • Sick leave  or medical leave (for physical and mental health)
  • Public holidays
  • Bereavement leave
  • Parental leave
  • Maternity leave
  • Jury duty

There is no federal law saying employees can have paid time off from work. In the words of the Department of Labor, “These benefits are matters of agreement between an employer and an employee (or the employee’s representative).” 

However, the United States is now the only advanced economy not to mandate paid leave. And as workers return to a labor market shaken up by the pandemic, this discrepancy is becoming more of an issue. As pro-PTO advocates are fond of pointing out, “even the ancient Egyptians had paid sick days.”

PTO and the law

Despite the United States lagging behind compared to other countries when it comes to nationally mandated PTO, 14 states, plus Washington, D.C., have passed their own laws related to paid time off for illness. State laws can also dictate how PTO is accrued. For example, in Connecticut, the first state to impose PTO laws in 2011, companies with more than 50 employees must offer one hour of sick leave for every 40 hours worked, up to a maximum of 40 hours per year. This, however, is only applicable to employees in 69 job classifications. You can see an up-to-date overview of which laws apply in which states here.

Federal law does allow employees to take up to 12 weeks of unpaid and job-protected leave every year under the Family and Medical Leave Act (FMLA). This time off can be taken for “certain family and medical reasons,” such as caring for a family member or a loved one or for medical leave. 

PTO banks 

An increasingly popular way of implementing paid time off is via a PTO bank. With a PTO bank, employees have a number of hours or days that they can use whenever they need to for any purpose. As the number of years of service an employee has given to a company increases, so will the time off in the bank – in 2021, that was 10 to 14 PTO days after one year.

The benefits of implementing a paid time off policy

Setting up a PTO bank has obvious appeal to employees, but it can benefit employers, too.

Saves managers’ time: As long as time is booked in advance (with the exception of sick days, where advance notice may not be possible), there is no need for the employee to explain why they are taking time off and, therefore, no need for managers to spend time deciding if requests are justified. This becomes even easier when PTO-tracking software is used. 

Builds trust: Managers don’t need to know if someone is taking a day off for a hospital appointment or just to catch a new movie on opening day. You’re treating employees like responsible adults, not schoolchildren who need to justify themselves.

Reduces unauthorized absences and lateness: Having a PTO plan means employees can plan ahead for everything from vacations to appointments without losing out, so work and life aren’t in conflict with one another.

Reduces deception: Ninety-six percent of U.S. workers have lied to get out of work. While it’s impossible to completely eliminate this kind of time theft, with PTO, employees don’t need to spin a story to take time off. They just use their time.

The difficulties of paid time off

As with any change to workplace culture, implementing PTO is not without its difficulties.

Earning more PTO is hard: There is a generational gap regarding employment tenure that can impact a worker’s ability to expand their PTO allowance. For people over 55, the average time spent at a job is almost 10 years, while for 25- to 34-year-olds, it is now just 2.8 years. This places a soft ceiling on how much PTO new employees can enjoy, which can lead to difficulties in recruiting staff and resentment, and decreased motivation for newer employees. Some companies now offer 15 days of PTO as a lump sum as soon as employees start to level this playing field.

Unused vacation and time off: In the U.S., employees are bad at using their allotted benefits – they often don’t use their time off and then experience burnout and are aggrieved if they can’t roll over those days and hours to the next year. Sixty-two percent of U.S. workers admitted to working while sick, and 92% said that they do so “because they can’t afford to take a sick day.” To combat this, educate staff that PTO policies are there to be used, and encourage your employees to use their sick days, vacation time, and other days off as needed.

Time off requests need fair treatment: Not everyone will be able to take their desired days off – there’s often a rush to take time off at the end of the year, for example, and some people will have to miss out to keep the company running. To prevent this, set up your company calendar so that PTO accrual expires in the spring rather than on New Year’s Eve.

Unlimited PTO isn’t a magic bullet: The idea of unlimited PTO is becoming increasingly popular among job seekers. The concept may seem appealing to employees, but it has its drawbacks. Most workers with unlimited PTO policies don’t take advantage of their unlimited time off and take fewer days than they would have with a set number of vacation days, and miss out on payments they would have received for unused PTO at year-end as a result.

A paid time off policy isn’t essential for your business – but it could be soon

The idea of a traditional eight-hour workday at a job you work for decades, with two weeks of vacation and national holidays every year, lingers in the popular imagination but doesn’t reflect the reality for millions of U.S. workers in 2023. Employees are more alert than ever to the benefits they want, and, for many, that is paid time off in their benefits package. 

With no legal requirement to do so, it’s understandable that not every business will want – or be able – to implement a paid time off policy right now. But between legislation and staff expectations, it may not be optional for much longer. 

Whether you think the time is right to introduce PTO to your company or prefer to adopt a wait-and-see approach, Workforce.com’s time and attendance software is already set up to help you manage time off requests effortlessly. 

Posted on

What is skills management? Maximizing productivity and engagement

Summary:

  • Skills management is the administrative practice of assessing and recording employee competency in skills associated with their job roles.

  • Actively assessing, recording, and tracking skills competency not only assists HR functions like hiring and succession planning, but it also helps operations teams boost productivity and engagement. 

  • Use skills management software to easily assess and record employee skill levels across your workforce.

Are you making the most of the skillsets present in your workforce?

While you may be tempted to say yes, most would actually answer no. In fact, research shows that only 14% of business executives strongly believe that their organization is using their workforce’s skills and capabilities to their fullest potential.

Proper skills management is an underutilized strategy these days, especially within hourly businesses. But figuring it out could lead to higher productivity and better employee engagement in the long run.

 

What is skills management?

Skills management is the process of assessing employee job competencies and mapping them to your organization’s labor needs. Think of it like taking inventory of your resources; only this time, you’re dealing with talents, certifications, and skill levels.

Cataloging employee skills helps you identify skill gaps present in your organization. More importantly, it gives you the data you need to bridge these gaps, be it through upskilling, reskilling, or hiring new talent.

Webinar: How to Track Skills Development

 

 

Why should you adopt skills management?

Spoiler alert: it’s not a matter of whether you should or not. Successful organizations know that they actually need skills management. Here’s why:

Improve employee productivity

Skills management has long-term benefits, but it’s also a quick and relatively easy way to make an immediate impact on productivity. A good skills management strategy will give you insight into how to utilize employee skills on the front line better. This could take the form of scheduling staff with better customer service skills during busier shifts or pairing more qualified staff with new hires for difficult projects.

Keep up with emerging technologies and trends

Skills management allows you to project the trajectory of certain job roles. What will they look like down the line? Will they evolve and require new skills? Will they become obsolete?

Research shows that 59% of hiring managers expect that AI and other forms of workplace automation will cause a significant shift in the kinds of skills employees need to have. Actively tracking essential skills helps your decision-making regarding future talent needs.

Impactful succession planning

If a core team member becomes unavailable due to resignation or an extended leave of absence, can someone fill the gap?

Skills management provides insights for succession planning and ensures that your team and operations aren’t crippled when a good manager or senior staff member suddenly leaves or becomes unavailable.

Succession planning is the strategic transfer of knowledge to future-proof your workforce. Skills management gives you the data you need to execute this strategy. For example, you might use skill competency scores to determine whether any of your staff are suited for a management position. If so, great. If not, you can come up with a professional development plan to flesh out important skills needed for the role, or you can simply hire outside talent.

Make better hiring decisions

Skills management also provides direction for your talent acquisition. Roles evolve, technologies emerge, and workflows change. Skills management data can help HR navigate these shifts and equip them with the data they need to address talent gaps properly.

For instance, some organizations focus more on identifying skills needed for vacant positions rather than looking for candidates with matching job titles. This is called the skill-based approach and can be done either externally or internally.

Looking at your catalog of employee skills can inform these hiring decisions, whether internal or external, and put your organization in a better position to hire with confidence.

Improve employee retention

Along with burnout, wage issues, and a poor physical work environment, limited opportunities for career advancement also lead to high levels of employee churn.

74% of employees say that training and development are important to an organization’s strategy, but only 34% are happy with the organization’s investment in their skills and performance.

Webinar: How to Stop Employee Turnover

Employees find value in skills and development training, and even more so with opportunities that allow them to grow. You may have some training programs, but if they don’t meet staff aspirations, they won’t help retention. When you prioritize skills management, you’ll identify training opportunities that your workforce will find beneficial and worthwhile. It will allow you to curate learning and development opportunities that actually resonate with employees.

 

How to build a skills matrix

A skills matrix is the backbone of a skills management strategy. It is a tool to record, identify, and analyze the skills across an organization. Think of it as a grading system that allows you to see the skills present in your workforce, how they are being utilized, and if additional training or people are needed.

Here are the steps on how you can build an effective skills matrix:

Define the skills important to your workforce

This may seem straightforward, but it can be easily overlooked. These can be hard skills like coding language proficiency, or they can be soft skills like problem-solving, teamwork, and effective communication.

Break down these skills by team/job role

Doing this helps you make sense of what you should evaluate each of your employees on. For instance, keeping a record of a chef’s cash register competency probably does not make sense. Pick and choose what skills you will be evaluating employees on based on what skills are relevant to their role.

Evaluate each employee according to skill

Create a ranking system for each skill and grade your employees according to it. Self-evaluation, peer feedback, and performance reviews are useful ways to inform how you grade these competencies.

  • Employee self-evaluation – Ask employees to rate themselves according to their skills and competencies. While this may not paint the whole picture, this can give you a gauge of how employees perceive their capabilities.
  • Peer feedback – Feedback from co-workers is also a valuable indicator to gauge the skills of your workforce. This is first-hand information from people they work with and may provide you with more information on how they fare on a granular level.
  • Regular performance reviews – This insight comes from your managers based on their observations from daily operations and coaching sessions. This offers another perspective that can help validate what you have gotten from employees and their workmates.

Map out skill competencies to identify gaps

Once you have all the necessary information on staff skills, you can start mapping them out. You can do it manually on a spreadsheet or use a skills management system.

This skills matrix will give you a clear visualization of where your employees meet skill requirements and where they fall short.

While doing this manually is fairly straightforward for smaller businesses, large organizations may want to look for skills management software to streamline this process. This kind of software can also link directly with your scheduling system, meaning you can easily fill shifts according to skill and qualification requirements.

 

Best practices for skills management

Skills management can be daunting, especially with so many factors influencing your business goals and customer demands. To make the most of your workforce’s skill set, here are some best practices:

Make skills management an ongoing process

Skills management should be a continuous process, building upon previous iterations over and over until staff fulfill their potential.

If you have a skills management platform, it’s easy to check your team’s competencies anytime. Doing this allows you to address skill gaps and performance issues quickly. You can optimize schedules, revise training plans, assess the impact of emerging tech on certain roles, and set more timely check-ins with your employees.

Skills management should be closely tied to training and development

Skills management points your training and development efforts in the right direction. With a wealth of recorded skill competencies and needs at your disposal, you can easily devise training programs that have higher chances of producing results. Whether it’s upskilling, learning a new technology, or reskilling, you’d know the best type of training for your team at a particular time.

Use a skills management platform

It just makes things easier. Tracking and mapping skills to improve productivity is challenging, especially for bigger organizations. Having software do it for you eliminates the complexity of tracking your employees’ skill levels, increasing productivity, identifying gaps, and analyzing staff development. In addition, it interconnects your skills management with other important HR and ops functions, like performance, scheduling, attendance, and more.

Account for hard and soft skills

Technical skills are vital, but conceptual skills are equally important in a team. As you map your workforce’s skills, it’s best to consider both.

Hard skills refer to the technical competencies an individual needs to have to do job-specific tasks. Again, these skills can be learned with training and work experience.

On the other hand, soft skills are not job-specific competencies that typically include personal traits or characteristics. Communication skills, people or relational capabilities, and leadership traits all fall under soft skills. They are more challenging to measure than technical skills, but they indicate whether an employee can work with a team or thrive in an organization.

Take a look at the nature of a role to understand what soft skills are needed for it. For instance, client-facing functions should be for people with strong communication and people skills. Meanwhile, a head chef should have strong leadership capabilities to ensure that all kitchen stations are running smoothly.

Utilize a skills management platform

Developing both hard and soft skills is vital in today’s workforce. But, more than getting the job done, doing so helps with engagement and sets the tone for how well your team can work together.

Managing skills is one of the many moving parts of successful workforce management. To tie everything together, you need a system like Workforce.com.

Workforce.com’s skills management feature records, identifies, and analyzes skills across your organization. You can then optimize your schedules based on skills matrix data to ensure that best-fit staff are scheduled for the right shifts.

Book a call today to learn more about Workforce.com’s skills management platform and how it integrates with other WFM areas, such as employee scheduling, labor forecasting, and time and attendance.

Posted on

What is a performance management system? A detailed guide

Summary

  • A performance management system (PMS) is a combination of tools and processes that companies use to measure and monitor each employee’s performance. 

  • A PMS lets you schedule reviews, set expectations and goals with employees, monitor their performance in a collaborative way, and recognize good performance. 

  • A PMS is beneficial to your company and your employees because it centralizes the performance review process, helps you address training needs, and promotes self-motivation.

A performance management system (PMS) is a combination of tools and processes that companies use to measure and monitor how each employee contributes to the success of the company. 

A strong PMS enables you to easily work together with managers and employees to achieve goals and recognize good performance. Implementing a PMS helps guarantee that everyone across the organization is aligned on and contributing to overall business objectives.

Benefits of a performance management system

A PMS is beneficial to your company and employees because it centralizes performance management, helps you address training needs better, and promotes self-motivation.

Centralizes performance reviews

The PMS acts as the single source of truth for measuring and reviewing staff performance. Everyone from HR directors down to frontline workers can use the same system to submit feedback, schedule reviews, and set development goals. 

With a centralized performance management system, there’s full transparency. It creates an environment where everyone knows what’s expected of them and what they need to improve upon. Without one, it is easy for an organization to lose sight of how individual performances impact one another across teams and departments. It also limits the degree to which management can audit the history and development of an employee’s performance. 

Allows you to better address training needs

A PMS also gives you more accurate insight into the training needs of your employees, so you know what areas they can be upskilled in, what new abilities they need to develop, and how they can otherwise boost their performance. 

Information like skill reviews, feedback, and performance metrics gets logged into the PMS. HR and managers can then use the PMS to identify gaps in knowledge and skills for each employee and recommend certain training or courses to individual workers rather than a blanket suggestion for everyone.  

Helps promote a culture of self-sufficient employees 

With the help of a PMS, HR can work with managers to set expectations for their employees and delegate important tasks based on skill sets. This way, employees understand what is expected from them and work self-sufficiently. 

With a PMS, all employee skill sets, goals, and objectives are in a central spot — either in a tool, database, or spreadsheet. With this information, managers can empower employees by delegating important tasks they know they can handle, recognizing positive behaviors that they want to reinforce, and building a culture of transparency and trust. 

A culture of self-motivated employees can also mitigate the need for tattleware so that HR and managers don’t have to micromanage their employees. 

What to look for in a performance management system

A performance management system lets you work with managers to schedule reviews, set expectations and goals with employees, monitor their performance in a collaborative way, and recognize good performance. 

Performance review features

Perhaps the most critical function of a performance management system is its ability to schedule performance reviews. These reviews may occur as often or as little as you like. Some organizations may only conduct formal reviews on an annual basis, while others may schedule routine, informal reviews every week. Some may even schedule impromptu reviews as needed, based on attendance, scheduling, or teamwork issues. 

No matter the method, the physical process of scheduling reviews is the foundation upon which a performance management system is built. A solid performance management platform should feature a calender, notifications, and a streamlined process to set up reviews. 

Goal-setting or planning features

Goals are essential to help employees understand what is expected of them and how they can perform to meet company objectives. A performance management system should help you facilitate goal setting and planning so there is a clear roadmap to meeting goals that you, managers, and other employees can use and reference. 

HR and managers should have the ability to input OKRs, KPIs, action steps, and more into the PMS system. These are the foundational components of each employee’s goals and the benchmark for measuring their performance.  

The process of goal setting and planning should also be collaborative. Involve employees in their own goal-setting and planning so that they are more likely to buy into their goals and achieve them. 

Monitoring features

Use your PMS to monitor performance so you can help managers remove roadblocks for employees and motivate them. A PMS should let you see what all employees’ strengths and weaknesses are. Based on this information, you can work with managers to help employees improve on certain aspects of the job, like attendance — or skills, like customer service or communication. 

Look for the capability to input important talent metrics into your PMS so you and the managers can monitor them, compare them to previous performance inputs, and help employees understand what they can improve upon. Track talent metrics like attendance, retention, engagement, and quota attainment. 

Recognition features

Prioritizing recognition can go a long way toward increasing engagement. In fact, employees who receive adequate recognition are four times more likely to be engaged than employees who don’t. 

And remember: engaged employees are more productive and profitable to your company as a whole.

Your PMS should help you identify top performers and people who have picked up extra work and properly recognize them. Look for employees who have the fewest absences, complete all their tasks regularly, and have good customer feedback. All of this information should be in your PMS so you and your managers can easily recognize high-performing staff members. 

3 best practices for a performance management system

With a PMS in place, you want to encourage managers to act on the insights they receive, use it to provide ongoing feedback, and leverage it for succession planning. 

1. Encourage managers to act on the insights from your performance management system

Insights mean nothing if managers don’t use them to communicate regularly with employees about how to improve their performance. In fact, 55% of workers said that standard annual reviews do nothing to improve their performance. Instead, they need more specific insight into their performance on an ongoing basis. 

Set up regular recurring meetings between employees and their direct manager to discuss their performance, career plans, and growth based on data from the PMS. A good cadence for performance reviews is bi-weekly or once per month so that employees are always in the know about what they should improve on and what they are doing well. 

2. Use your performance management system to provide ongoing 360-degree feedback 

Feedback helps employees understand what they’re doing well and what they could improve on. Not only that, but employees whose managers offer them daily feedback are three times more likely to be engaged with the company they work for than those who receive feedback only once per year or less. 

To incite ongoing feedback, employees should be able to get feedback from managers, peers, and customers so they know how they’re performing. Collect feedback from comment cards, peer reviews, and manager one-on-ones. Then log all feedback for each employee into the PMS so everything lives in one place. 

Managers can look at the PMS to identify patterns in feedback — either to recognize the employee or to make a plan for improvement. 

3. Use your performance management system for succession planning

Succession planning can help you avoid any gaps in positions when an employee leaves or retires. This can make it less stressful or urgent when someone leaves because you already know which employee will fill the position from within and have a plan in place. 

Use an organizational chart to document promotions, positions that employees have an interest in, employee skill sets, and more. Identify current employees who would be good candidates for positions that are opening up in the future. Keep track of positions that are likely to open up for which you don’t have an employee to fill the role. 

By inputting all your succession information into a PMS, you have a better idea of when you need to start hiring externally. You’ll also be able to see which of your current employees need to be trained on certain skills in order to prepare them for their career growth.

Implement the right performance management system

Decide how you want to set up your PMS based on what works for your budget, the data you need to collect, and what tools or processes you’re already using. 

The right performance management system should make life easier, not harder. It should be unintrusive, fitting seamlessly into employee workflows, and it should add value to your organization in the long run. 

Oftentimes, you’ll find performance management platforms falling short in one, or even both, of these requirements. This is a pitfall that major white-collar agencies can tolerate, but for the majority of businesses out there with hardworking, hourly staff, choosing the wrong kind of performance management can be costly. 

Find out how to properly navigate employee performance by checking out our platform – we promise it’s worth your time. 

Posted on

11 HR policies every company should have

Summary

  • HR policies can cover a range of topics, from recruitment and conditions of employment to disciplinary action.

  • Any HR policy should explain its overall purpose, how it ties in with the company’s values, instructions on how to follow it, and procedures for reviewing it. 

  • There are 11 important HR policies you should consider for your company. 

Imagine you run a human resources department at a tiny startup. The company doesn’t have any human resources policies because leadership can handle every employee matter on a case-by-case basis. 

But as the business grows, this approach becomes untenable. Teams are using different processes and job boards for hiring, and employees have quit because they don’t know how to resolve conflicts with colleagues. 

Don’t let your work environment get to this point. Set up HR policies that help keep your organization running smoothly. 

There are workplace policies for just about every HR matter — like hiring new employees, complying with local and federal laws, and addressing employee conduct issues. In this post, we’ll guide you through 11 essential HR policies that every workplace should have and what the policies should include. 

Key elements of any HR policy

Some of the key elements to include in your HR policies are:

  • The overall purpose of introducing the policy
  • How the policy ties in with the company’s values and mission
  • Instructions on how to follow the policy and who is responsible for doing so
  • Procedures for regularly reviewing the policy 

All HR policies are part of your company-wide human resource strategy and should be readily available to all employees through a handbook or document library. 

And now, let’s get into the top HR policies you should consider implementing for the good of your organization:

1. Recruitment policy

A recruitment policy outlines the procedures for attracting, screening, and selecting job applicants. It ensures that the hiring process is fair, consistent, and based on merit and without discriminating based on race, gender, age, religion, or other protected characteristics. 

Your recruitment policy should also contain new hire documentation, such as new position requisition forms and information on the onboarding process. 

A well-crafted recruitment policy streamlines and standardizes the hiring and onboarding processes, so they’re fair and manageable.  

2. At-will employment policy

An at-will employment policy allows employers to terminate an employee’s contract at any time for any reason except for reasons prohibited by law. This type of employment is common in the United States. 

  • An explanation of the nature of at-will employment 
  • The job duties and responsibilities
  • Compensation, benefits, and working conditions information
  • An acknowledgment that the employee has read and understands the policy

At-will employment policies must be clearly stated in the employee handbook and understood by all employees to avoid any misunderstandings or legal disputes.

3. Employment classification policy

There are various forms of employment classification — from full-time and part-time to exempt and non-exempt workers. An employment classification policy helps employers determine which category their workforce falls under. It is also known as the FLSA policy since it follows the Fair Labor Standards Act guidelines.

In your employment classification policy, indicate the different types of employees your company has and define the criteria for each type. Most policies will explain the difference between full-time, part-time, and temporary statuses, as well as exempt versus non-exempt employment.

This policy is critical for avoiding worker misclassification — hiring individuals as contractors when they’re doing the work of full-time employees — and costly legal disputes. It also helps protect employees by clarifying their wage statuses and if they should work overtime.

4. Compensation policy

A compensation policy outlines all employee benefits and payroll procedures, including: 

  • Payment frequency
  • Payment method (e.g., direct deposit or bank transfer)
  • Eligibility criteria for benefits, reimbursements, and overtime pay 
  • Guidelines on how employees can earn bonuses, promotions, and other incentives to promote career growth 

With a transparent compensation policy, organizations can build a culture of trust. 

5. Time and attendance policy

Employee absenteeism and tardiness can impact performance and productivity, so companies need to have measures in place to tackle them. An attendance policy can help by clarifying:

  • How many hours employees must work on a daily basis
  • How employees should handle scheduled and unscheduled absences and tardiness
  • If employees need to record working hours (and if so, instructions on how to do so) 

This policy is especially important when attendance write-ups lead to termination. You need to have clear rules about attendance expectations and consequences. More importantly, you should regularly schedule and document all performance reviews so to justify any dismissals. 

READ – The Practical Guide to Time and Attendance Management

6. Time-off request policy

Your time-off request policy (or leave policy) outlines the procedures for managing leave requests. It simplifies the process for your HR team and also takes your team’s personal needs into account. 

Your time-off request policy should include: 

  • How much time off employees receive and the different types of leave available (e.g., sick leave, family leave, and paid time off)
  • How an employee can request a leave of absence
  • How far in advance requests need to be made
  • How often employees can request time off and if there are any time-off blackout periods (e.g., over certain holidays)

Your policy should also take employment laws and acts, such as the Family and Medical Leave Act (FMLA), into account. The FMLA states that some employees can be eligible to take unpaid and job-protected leave for “specified family and medical reasons.” They can do this “with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.” 

7. Break policy

Your company’s break policy should communicate how many breaks employees can take in a day — including lunch breaks and short rests — and the length of the breaks. This policy helps to promote employee wellbeing while also reducing time theft. 

While federal law does not require employers to offer breaks, the U.S. Department of Labor states that companies that do offer short breaks of 5 to 20 minutes must pay workers for this time. States can also create their own lunch and rest break laws or default to the federal policy. 

For example, according to New York State law, the amount of time employees get for a break depends on how long their shifts are. Employees who work six-plus hours, for example, get 30 minutes. If a shift starts between 1 pm and 6 am, the break is 45 minutes. 

8. Remote work policy

Develop specific policies that cover your company’s procedures surrounding hybrid and remote work arrangements. Your policy should include:

  • Eligibility criteria: Who is eligible for remote work
  • Work hours and schedule: Work hours and expectations for work schedules
  • Communication: Guidelines for communication tools, availability, and response times for remote workers
  • Cybersecurity: Guidelines for accessing secure networks, using company devices, and protecting data
  • Performance evaluation: Processes for evaluating remote worker performance
  • Expenses and reimbursement: Guidelines about which expenses related to remote work are reimbursed by the company, such as internet and equipment costs
  • Termination of remote work: Circumstances under which remote work may be terminated

With a flexible remote work policy, HR leaders today can promote employee engagement and retention. 

9. Anti-harassment and non-discrimination policy

Provide a safe and non-stressful working environment for your employees by creating an anti-harassment and non-discrimination policy. It shows employees that your company values diversity and is committed to preventing discrimination or harassment. 

There are a number of employment laws and acts that protect employees against harassment and discrimination. Laws like these need to be integrated into your company’s policies along with your own stances and procedures:

By setting clear expectations for behavior and the consequences for violating the policy, companies can foster a respectful workplace culture and reduce the risk of legal issues. 

10. Health and safety policy

A health and safety policy outlines your organization’s commitment to protecting the health and safety of its employees, customers, and visitors, and it should include:

  • The roles and responsibilities of employees, supervisors, and management in maintaining a safe work environment
  • Procedures for identifying and controlling workplace hazards
  • Protocols for reporting accidents, injuries, and near misses
  • Procedures for investigating and resolving health and safety issues
  • The organization’s plan for complying with applicable health and safety laws and regulations, such as the Occupational Safety and Health Act of 1970, which lead to the formation of the  Occupational Safety and Health Administration (OSHA)

Check to see which health and safety laws are applicable to your industry. 

11. Disciplinary action policy

A disciplinary action policy outlines the consequences of employee misconduct or rule violations. The specific course of action taken may depend on the severity and nature of the infraction. It will include:

  • The different forms of discipline and the steps in which they will be taken. For example, they could start with a verbal warning and end with termination. 
  • The infractions that might not follow the same order mentioned above. If your company has a zero-tolerance policy on sexual harassment or workplace violence, you must state that this will lead to immediate termination.
  • Outline how an employee can appeal a decision. 
  • Legal protection for your company. You need to include the conditions that show when you have a right to terminate employees at will.  

Your disciplinary action policy is crucial for maintaining a productive and respectful work environment.

Create and enforce HR policies with Workforce.com

Workforce.com is an all-in-one solution for HR policy creation and compliance. It allows you to schedule shifts according to employee certifications, file incident reports, build attendance rules, and stay compliant with wage and hour laws. 

Learn more about how Workforce.com can help increase employee engagement, reduce turnover, and prevent absenteeism in your hourly workforce by contacting us today. 

Posted on

Termination Letter to Employee [Template + Example]

Summary

  • An employee termination letter is an official document given to employees to notify them that they are being let go. It should include the reason for termination, effective date, and next steps.

  • Employee termination letters should include the reason for termination, effective date, and next steps. They should be concise, factual, and carefully written.

  • While a termination letter is vital to the offboarding process, sometimes it is simply not enough. Most times it is essential to sit down with an employee face-to-face. 

An employee termination letter is vital to letting people go regardless of the reason. It is a written form of documentation that officially declares the termination of employment.

To check out some examples and templates, click here.

While termination letters may sound straightforward, there’s actually a lot that goes into them – and for good reason. Getting them wrong can lead to all kinds of issues for your organization down the road. So, let’s take a look at some ways to get termination letters right. 

Why are termination letters important?

Short answer: to avoid legal trouble.  

A termination letter should stand in court if ever the need arises. It’s crucial to make it airtight and leave no room for doubt and misinterpretation. If an employee feels they have been unfairly terminated, the letter may be used to point out discrepancies or unfair employment practices. 

Aside from legal issues, termination letters also play a role in ending things amicably with your employees. While it should sound direct and objective, a properly curated termination letter should provide every vital detail relating to the termination, such as the reason for termination, when it takes effect, and final compensation.

What an employee termination letter should include

While terminating an employee is never a pleasant experience, you can soften the blow by doing it properly – writing a sound termination letter is a critical part of this. Here are some things that every termination letter should include:

Basic details

First, a letter should include the who, what, and when. It must clearly state that it’s for ending employment, who it is for, and when it will take effect. It also should include contact information in case the employee needs more information or has questions. 

Reason for termination

The reason for termination is at the heart of this document, and the letter should be able to clearly state why an employee is being let go. Typically, termination is warranted due to the following reasons:

  • Downsizing or laying off – One of the top reasons for letting employees go is downsizing. If you’re writing a termination letter for this reason, you must explain the need to downsize and why their position is affected. 
  • For cause – In some cases, employees are let go due to cause, such as violating company policies, unsatisfactory performance, misconduct, stealing or damaging company property, chronic tardiness, absenteeism, and falsifying company records. Letting go of staff for cause tends to be more complicated because, without documented proof and HR references, an employer’s cause can be called into question. It helps to consult with your legal team to ensure that you’re adhering to all relevant company policies and labor laws.
  • Termination of contract – This reason is typical for freelance workers and happens when a project ends or if there’s no need for the services anymore.

Best practices for writing a termination letter 

While undoubtedly difficult for both the employee and employer, following proper termination protocol can really minimize the burden and stress felt by both parties. Here are some tips for doing just that:

Include all the necessary information

As mentioned, a termination letter is formal documentation that, if need be, should stand in court. It has to be direct and very specific. A suitable termination letter answers the following questions:

  1. When will the employment officially end?
  2. Why is the employee being let go? 
  3. When can they expect their final paycheck, and how much will it be?
  4. What will happen to their employee benefits?
  5. On their end, what are the next steps they need to take (e.g., returning company property)
  6. Who can they contact should they have follow-up questions?

While a termination letter should be concise, don’t hesitate to include as much relevant information as possible. This is especially important if an employee is being terminated for cause. Include information such as policies violated, a timeline of events, performance reviews, and investigation results.

For instance, if an employee is being let go for time and attendance issues, provide a record of their absenteeism or tardiness using data from a workforce management and/or HR system. 

Webinar: How to Reduce Absenteeism

Use the right tone

A termination letter is a formal document, so it needs to sound professional and direct. While the goal is to end the employment amicably, the termination letter is not the place to be sarcastic, candid, or drop jokes. Instead, state the necessary information and make sure that everything is clear.

Consult your legal team

Consulting with your legal department helps termination letters be more airtight and solid. While termination letters are all routine, there’s always that risk of overlooking minute but vital details. So get legal advice and take time and go over your company’s termination policy, making sure the letter aligns with it. 

In some cases, legal advice can also help you determine if termination is really the right thing to do. For instance, you’re terminating an employee for absenteeism. Is termination the right step at this time? Did the employee receive warnings before termination? Again, your legal team can help spot these potential issues before you even send that letter and risk legal repercussions later.   

Pair it with a meeting

Before you serve the termination notice, it’s best to speak with your employees. While termination always comes with a shock, having a face-to-face meeting about it helps soften the blow. 

A conversation adds face-to-face honesty and human respect to the termination process – elements not found in a black-and-white letter. No one wants to open their email and see that they’ve been let go and their employee access revoked. It’s an unfortunate situation, but having some warning can help employees manage better.

Termination letter due to cause – Template

Download template here

(Date)

Subject line: Notice of termination

Dear (employee name), 

This letter is to inform you that your employment as (name of position) at (company name) is officially terminated effective (date of termination). 

You have been terminated due to the following reasons:

(A detailed list or explanation of why you are terminating the employee. Include timelines, incident reports, investigation details, a list of policies violated, and other relevant information.)

Please surrender the following by (date):

(a list of company property endorsed to the employee)

Access to (platforms and tools) will also be revoked by (date and time). 

Please expect to receive your last pay by (date). Your final paycheck will include (salary, leave encashment, or other benefits). A detailed computation breakdown will also be provided.

In addition, keep in mind that you have signed (agreements or policies such as confidentiality agreements, NDAs, and non-compete documents). Attached are copies of said documents for your reference. 

If you have any questions, you may contact (name of company representative) at (contact details). 

Regards, 

(Name), (Position)

(Company name)

Termination letter due to cause – Example

Download template here

Date: February 27, 2023

Subject line: Notice of termination

Dear Michael Smith, 

This letter is to inform you that your employment as Sales Associate at Retail Company will be officially terminated effective February 28, 2023. 

You have been terminated due to excessive tardiness. According to company policy, an employee should not exceed 7 days of coming late to work in a month. Employees are considered late when they arrive 16 minutes past their scheduled start time. The first offense will result in a verbal warning. The second offense will result in a written warning. The third offense will result in a 14-day suspension without pay. The fourth and final offense will result in termination. 

Based on your recent timesheet records, you have been late for 11 days in February. 

Prior to this incident, the following sanctions were also administered due to your tardiness:

    • December 29, 2022 – You were given a verbal warning for your excessive tardiness and for being late for 8 days in December. We scheduled a check-in after two weeks to see if your attendance improved.
    • January 12, 2023 – You were given a written warning and were asked to explain why you’re always coming in late, and you attributed it to heavy morning traffic. To help with your predicament, your supervisor scheduled you for afternoon shifts for the next two weeks. 
    • January 26, 2023 – Because your attendance didn’t improve and you were late for 10 days in January, you were served a suspension period of 14 days without pay. This also served as your last warning. 
    • February 24, 2023 – Upon checking your timesheet records, you have been late for 11 days in February. 

After deliberating with the management team, we deem that termination is the best course of action. Evidently, the lates were excessive and had been going on for consecutive months, despite scheduling adjustments. 

Please surrender your company ID, store key, and company-issued uniform by February 28, 2023. Also, your access to the company time and attendance platform will be revoked on the same date. 

In addition, please keep in mind that you have signed a confidentiality agreement with us. Please see attached document for your reference. 

If you have any questions, you may contact Shelly Harper at shellyharper@retailcompany.com. 

Regards, 

Jack Foster

Head of Human Resources, Retail Company

Termination letter due to layoffs – Template

Download template here

(Date)

Subject line: Company layoff

Dear (employee name),

We regret to inform you that (name of company) needs to let some of its employees go due to (reason for laying off). Unfortunately, your role is affected, and we would need to end your employment effective on (date). 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by (date), and you shall receive your last paycheck by (date). 

We also request you return the following company-issued items on or before (date):

(list of company property endorsed to the employee)

Please be informed that your access to (company tools and platforms) will be revoked by (date). 

We appreciate the time you have worked with us and wish you all the best in the future. 

For any questions, please don’t hesitate to contact (name of company representative) at (contact details). 

Sincerely,

(Name)

(Position), (Company name)

Termination letter due to layoffs – Example

Download template here

March 16, 2023

Subject line: Company layoff

Dear Stephen Simmons,

We regret to inform you that IT Company needs to let some of its employees go due to financial difficulties. Unfortunately, your role as IT Specialist is affected, and we would need to end your employment effective on March 24, 2023. 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by March 22, 2023, and you shall receive your last paycheck by March 24, 2023. 

We also request you return your work laptop and company ID on or before March 24, 2023. In addition, access to your company email, IT database and tools, and workforce management system will also be revoked by March 24, 2023. 

Your medical and other benefits will remain effective until March 31, 2023. 

We thank you for the time you have worked with us, and we wish you all the best in the future. 

For any questions, please don’t hesitate to contact Heather Watson at heather@ITcompany.com. 

Sincerely,

Chris Mitchell

Head of Human Resources, IT Company

Termination letter ending contract – Template

(Date)

Subject line: End of contract

Dear (name), 

Please be informed that we no longer require your services by (date). 

We thank you for providing us with excellent (type of service), but due to (reasons), we had to end our contract. 

Please submit all pending deliverables by (date). We will settle all outstanding bills by (date), so please send all invoices by (date). 

In addition, please be advised that you will lose access to (company-owned platforms and tools) by (date).

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to (name) at (contact information) if you have any questions. 

Sincerely, 

(Name)

(Position), (Company Name) 

Termination letter ending contract – Example

March 16, 2023

Subject line: End of contract

Dear Judith McCain, 

Please be informed that Advertising Company no longer requires your services by March 24, 2023. 

We thank you for providing us with excellent copywriting and content services. Unfortunately, however, the project has ended, and we also need to end your contract. 

Please submit all pending deliverables by March 21, 2023. On our end, we will settle all outstanding bills by the same date. Therefore, please send all invoices by March 22, 2023, so we can pay you promptly. 

In addition, please be advised that you will lose access to our content management system, project board, and internal messaging tool by March 24, 2023.

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to me if you have any questions. 

Sincerely, 

Faye Smith

Creative Director, Advertising Company

Posted on

Is your employee attendance policy and procedure fit for purpose?

Summary:

  • Lateness and absenteeism are early warning signs of a deteriorating attendance policy. — More

  • No-call, no-shows are becoming increasingly prevalent. Every organization needs a clear-cut procedure to mitigate the repercussions of them. — More

  • Automating the way you collect attendance data helps solidify your attendance policy. — More

Dealing with employee attendance can be tricky. You need your team to respect your company’s start time and adhere to predefined work hours. And you need to implement corrective action in the case of tardiness and no-shows. Any disciplinary action needs to be taken at the time and level that best suits your work environment and culture. 

Employee absenteeism and tardiness are bad news for any business and can reduce overall productivity and work quality. 

This is where having a comprehensive employee attendance policy is essential. It informs your employees of what is expected from them, and it helps your human resources team adhere to predefined discipline processes. 

The rise of remote and hybrid work due to the COVID-19 pandemic has made it even more complex to define and monitor work schedules. Businesses that already have company attendance policies will likely need to revise them to take these changes into consideration.     

Lateness is your early warning system

A one-off instance of lateness may be understandable, but if it becomes a recurring problem, it can be an early warning of potentially serious issues with a worker, team, or department.

Tardiness is the most common time and attendance issue facing businesses. Studies have shown that, on average, a quarter of US employees report being late for work at least once a month. Younger employees are more likely to struggle with punctuality — 38% of those aged 34 or younger are late once a month or more. On the other hand, only 14% of workers aged 44 or older turn up late to work at least once a month. Almost half of US employers — 43% — fire employees for lateness each year.

The key is not to focus on individual instances of lateness but instead identify problematic patterns and prevent them from becoming systemic. For example, there may be a specific employee who is persistently late. You may notice a particular department or location with repeated poor timekeeping. Using time and attendance software makes these patterns easy to spot and gives you data-backed insight into the problem.

Your employee time and attendance policy and procedures should insist that employees who are running late inform their manager within a clear time frame. Your policy should also clarify what frequency of lateness will incur penalties and what the disciplinary response will be. Given that lateness is so endemic, some companies build some leeway into their tardiness policy, allowing a 10-minute grace period before an employee is officially marked as late.

As long as managerial leniency doesn’t undermine your attendance policy, there are benefits to reaching out to persistently late employees to see if the company can help resolve the issues causing their problems. Implementing flexible work, such as shift swaps, can help with employee retention and reduce lateness.

 

Webinar: How to Drive Engagement

 

Absences require a nuanced approach

The cost of staff absence is much more visible than the cost of lateness. In January 2022 alone, 7.8 million US workers were absent from work due to health-related issues, such as injury, illness, or medical appointments. This is significantly higher than the 3.7 million workers who took sick leave a year earlier.   

At a strategic level, dealing with individual absences requires a nuanced approach. While granular attendance data is great for identifying problems, it should always be backed up with direct staff communication.

The latest US government statistics on employee absence show that the average absence rate nationwide was 3.2%. Excessive absenteeism above the national average suggests a problem with company culture. Either employees are unhappy in their work, or they are getting too comfortable with exploiting ineffective managerial attendance policies. 

The more detailed your data, the more precisely you’ll be able to identify the problem areas. If your company’s absence rate is noticeably lower than the average, say around 1.5%, that may not be cause for celebration. People will get sick, and the hidden risk of low absence rates suggests these sick people feel unable or afraid to request excused absences for sick days and are bringing their illness to work.

Know your absence rate

If you’re not using time and attendance software to keep track of your absence rate, it can easily be worked out by dividing the number of days or hours lost to absence by the number that should have been attended, then multiplying the result by 100. 

For example, an employee who is expected to complete 260 workdays per year but is absent for five of those days would have an absence rate of 1.9%. The same formula applies to individual workers, departments, or the whole business. You can now compare your absence rate to the national average to see how your business is faring.

Absence rates should always be considered in the context of absence frequency. For example, one worker may be off for 10 consecutive days. Another worker may call in sick on 10 Fridays during the year. Both would have the same absence rate, but the frequencies tell different stories — the first worker may have been seriously ill, while the second likes to have a long weekend. Your procedure should empower managers to take that into account when deciding what action to take.

That’s why it’s important to clarify which types of leave and absence you consider legitimate in your employee attendance policy. The policy should also specifically state how much warning employees are expected to give if they can’t come to work. For example, they should get in touch before 9:30 a.m. or at least an hour before they’re meant to clock in. You may require a doctor’s note after a certain amount of sick days, or you may have a different policy for emergencies or jury duty, for example. 

Of course, the day-to-day implementation of your absence policy will always be down to the manager’s discretion, but setting clear guidelines will prevent confusion on both sides. You will also need to familiarize yourself with and adhere to local, state, and federal laws, such as the Family and Medical Leave Act (FMLA). This allows eligible employees to take unpaid and job-protected leave for certain medical situations. 

“No call, no shows” are the worst-case scenarios

A “no call, no show,” also known as an unexcused absence or unscheduled absence, is when an employee simply doesn’t turn up for their scheduled shift and gives their manager no warning. These are the most serious of all attendance infractions. The lack of notice exacerbates all the costs and inconveniences of a normal absence, which means it needs to be treated especially carefully and thoroughly.

In an economy struggling to deal with phenomena such as the Great Resignation and quiet quitting, maintaining regular attendance is more crucial than ever. There are 10.3 million job openings in the US right now, with hospitality and other shift-based roles especially affected. 

Team members with low employee morale have never been more empowered to simply walk away — sometimes without even going through a formal resignation procedure.

If an employee fails to show up for work on consecutive days with no contact, that is considered job abandonment and is widely seen as reason enough to fire them. Be sure to make it clear in your policy exactly how many days absent will count as abandonment. Three is generally considered standard, but check state case law for any local precedents that have been set.

Therefore, your employee attendance policy needs to be explicit about repercussions for a no-call, no-show absence. Some companies make it cause for immediate termination. Others use progressive, points-based discipline measures that usually go from a verbal warning to a written warning and eventual termination. Be careful assuming the worst, however. For a first-time offense, communicate with the employee. It may just be a hangover, or it could be an issue with a family member. Be firm, but check the facts before dropping the hammer.

Employee attendance policies and procedures protect your business

Once you have closed the gaps in your employee attendance policies and procedures, apply them consistently. Penalizing workers for lateness while always letting a manager leave early sets a bad precedent that can backfire. The more airtight your policies and procedures and the more accurate your attendance data, the less risk of legal exposure for your business.

Having an explicit procedure to follow is particularly important when job terminations are involved, as this is an area where unfair dismissal suits can become public and messy. For example, in 2020, there was a high-profile case of a Boeing employee who was given a “last chance agreement” following repeated attendance infractions. The employee then took time off and didn’t return to work afterward. He was fired, but he sued, saying he had been fired for taking the leave, not his attendance record.

Evidence of repeated clear infractions of an established policy, backed up by incontrovertible evidence of repeated lateness or non-attendance, was what convinced the 3rd Circuit Court to dismiss the case against Boeing—and the same combination of policy, procedure, and data is your best defense against this kind of suit as well.

Collecting good attendance data helps keep your policy airtight

Workforce.com can not only gather that attendance data automatically, but it can also alert managers to staff that repeatedly fail to show up on time. This automation gives managers actionable data they can use to stay ahead of frontline issues. 

Webinar: How to Reduce Absenteeism

If you are ready to see what Workforce.com can do to help your time and attendance policy, book a call with us today or try the platform for free. 

Posted on

Clawback provisions: A safety net against employee fraud losses

Close up painting of a dog's claw

Summary

  • Clawback provisions are usually included as clauses in employee contracts and are used to recoup funds and incentive-based benefits in predetermined situations. 

  • Clawback clauses can be used in various situations and across different industries, from clawing back bonuses unrightfully awarded to company executives to funds given on unprofitable home loans.

  • Setting up a clawback policy for your company ensures that, should you ever need to recoup funds from your employees, the procedures to do so are in place and transparent.

Imagine you’re a restaurant owner with a team of people you pay by the hour. You find out that one or more of your employees have been falsifying their time cards and that you have lost a significant amount of money to time theft.

Or maybe you run a retail store and offer your sales team a commission over and above their monthly salary. You then find out that one of your employees has been over-reporting on their performance and has received bonuses that they weren’t rightfully entitled to. 

In either of these situations, you could be legally entitled to a refund of the money you’ve spent through clawback provisions. 

Clawback provisions are clauses that are sometimes found in employment contracts that allow a business to reclaim money that has already been paid out to the employees in the case of misconduct, unethical behavior, or poor performance. 

Clawback provisions can be used in a number of scenarios to help employers recoup losses — from senior executives breaching contracts to government contractors delivering substandard work. As an employer, setting up a clawback policy will standardize the process while ensuring that you stay compliant with local, state, or federal law. 

Situations in which clawback provisions can apply  

From high-level executive compensation to clawback policies used in retail stores, there are a number of different situations where companies may utilize such clauses. 

  • Time theft — when employees who are paid by the hour falsify the number of hours they have worked. This also includes buddy punching, where colleagues clock in on each other’s behalf. 
  • False performance report — some employees receive commissions and bonuses based on performance. Clawbacks can be used if it transpires that an employee has over-reported their performance to receive these benefits. 
  • Government contracts — in situations where contractors do not carry out the work as outlined in their contracts or if the work isn’t done to a specified quality. The funds received for this contract can be clawed back.  
  • Executive compensation — used when company executives breach a contractual agreement. One such agreement could be that they are not allowed to work for a competitor until a certain period of time elapses. 
  • Life insurance — insurance companies can claw back any payments the customer has received if they cancel their policy.  
  • Pensions — if there is any evidence of fraud or misuse of information by the pensioner, companies can claw back amounts given for pensions. 
  • Mortgage lending — banks and mortgage companies can recoup money given out for home loans if they turn out to be unprofitable. 
  • Medicaid reimbursement — if a Medicaid recipient dies, states grant Medicaid offices the possibility to recoup money paid toward healthcare. For example, if the Medicaid office has preemptively spent funds on nursing home costs, and this is no longer needed since the patient has passed away. 

Setting up a clawback policy

Setting up a clawback provisions policy and writing it into employee contracts usually falls to a company’s HR team. There are seven steps to keep in mind when introducing clawback clauses into your organization’s policies.

  1. Identify the types of funds or compensation that are applicable to your company’s clawback clause. Will your clauses cover things like bonuses, stock options, carried interest, and overtime?
  2. What penalties will you add on over and above the reinstatement of funds? This includes further fees and/or disciplinary action.
  3. To which employees does your policy apply? It might not be relevant for employees who do not receive incentive-based compensation. You may also decide that such measures are only applicable to senior executives.
  4. In what situations will you utilize a clawback? What are the events that will trigger it? These could be based on things like underperformance, overreporting, time theft, or even through actions that could have reputational and financial consequences on the company. 
  5. What is the period of time in which a clawback is applicable? What is the cut-off point from when a bonus is received that allows a company to claw it back?
  6. Who is in charge of enforcing, and what type of discretion do they have? If executives are subject to clawbacks, you will need to go as high up as your board of directors.
  7. What are the laws or regulations in your state that regulate clawback provisions? You need to ensure that your policy does not contradict any applicable laws. 

How federal law regulates clawback provisions

Over the past couple of decades, situations have arisen that led to clawbacks forming parts of federal statutes. 

The Sarbanes-Oxley Act of 2002 (a.k.a. SOX Act of 2002) was passed as a result of a number of scandals involving the misuse of funds in some high-profile public companies such as Enron and Worldcom. The US congress passed the law, which created stronger guidelines for the recordkeeping and reporting of accounting information. It allowed for clawbacks of bonuses and incentive-based compensation from executive officers in the case of abuse. 

The Emergency Economic Stabilization Act of 2008 (EESA) was passed in response to the financial crisis of that same year that came about primarily from the prevalence of subprime mortgages. The EESA allows for clawbacks in cases where there is inaccurate financial reporting and also requires more accountability amongst executives. 

The Securities and Exchange Commission (SEC) rule in 2015, associated with the Dodd-Frank Act of 2010, allows for clawbacks of funds paid to executives in the case of an accounting restatement.

Airtight time and attendance can reduce clawbacks four hourly businesses

Clawback provisions are a great way to ensure that your company is protected from misconduct and abuse. However, it is never ideal to be in a situation where clawbacks are necessary in the first place. Luckily, there are several things hourly businesses can do to prevent time theft and avoid clawbacks. 

An automated time and attendance solution makes it much more difficult for employees to carry out time theft. Paper timesheets are easily manipulated, and legacy time clocks allow for excuses surrounding lost or misplaced time cards. A cloud-based time-keeping solution like Workforce.com records employee hours in real-time, calculating pay instantly and compiling digital timesheets on a daily basis. You can then edit and export these timesheets directly to your payroll system come pay run.

Unlike outdated time clock hardware, Workforce.com lets employees clock-in via mobile device or tablet. All time punches are geo-located, meaning you’ll instantly know if an employee clocks-in early or late while not on-site. Managers can set up geofences as well to ensure staff can only clock in once they arrive at work. 

Alongside accurate data, you’ll need to create an extensive time and attendance policy. You should consider local, state, and federal time-theft regulations and build your policy from there. It should include information about clocking-in and clocking-out procedures, break time, and the use of phones and social media while on the job. You must communicate your policy well to your employees and ensure they take it on board. 

Finally, your policy must outline any disciplinary actions that will be taken in the case that it is broken. These preventative measures can start with a verbal warning and escalate higher if needed. This way, you can avoid having to claw back funds you’ve given to your employees unless absolutely necessary. 

Interested in perfecting your time and attendance management with mobile time clocks and digital timesheets? Contact us today to learn more.

Posted on

PBJ Reports: What you need to know

Nurse looking at a pb&j sandwich on her screen

Summary

  • The CMS requires long-term care facilities to submit quarterly Payroll-Based Journal Reports detailing direct care labor hours and payroll information.

  • PBJ reports include information such as work hours, work dates, job titles, and more.

  • PBJ information can be compiled and submitted to the CMS manually, or, time and attendance software can automatically build PBJ reports for you.

Nearly everybody loves PB&J sandwiches, save for people with severe peanut allergies of course. These deliciously gooey creations are packed with not only taste but nostalgia for the blissful freedom of childhood.

But I am not here to sing praises to the whimsical marriage of peanut and fruit. No, instead a more important topic must be discussed concerning an extremely close relative to the PB&J sandwich: the infamous PBJ Report.

 

What is a PBJ Report?

Payroll-Based Journal (PBJ) Reports are not scrumptious lunchtime meals, unfortunately. They are quarterly reports from long-term care facilities to the Centers for Medicare and Medicaid Services (CMS) detailing direct care payroll and staffing data.

This reporting began in 2010 with Section 6106 of the Affordable Care Act. In 2018, the CMS introduced the PBJ system to facilitate the process of collecting and gaining insight into direct care staffing.

Payroll-Based Journal Reports typically include the following information:

  • Employee ID
  • Labor classification/job title
  • Job title code
  • Pay type code (exempt, non-exempt, contract staff)
  • Hire date (optional)
  • Termination date (optional)
  • Work days and dates
  • Hours worked per day
  • Job/labor descriptions
  • Census data (optional)

Review the CMS’ PBJ Policy Manual for more details.

 

Why are PBJ Reports Necessary?

The broader answer to this question is that they help the CMS monitor staffing level issues within the long-term care industry. They also help increase the amount of freely accessible data available to the public for analysis. Lack of adequate staff in healthcare can have serious repercussions, and it is more commonplace than one would think with labor shortages persisting across the country.

More specifically, Payroll-Based Journal Reporting is necessary for nursing homes to maintain their Five-Star Quality Rating on the CMS’ nursing home compare website. A good rating is crucial for attracting patients and gaining referrals – something that can’t happen if a facility reports a lack of staff, or worse still, reports inaccurate staff hours.

The impact of accurate PBJ reporting cannot be overstated. In 2018, the CMS handed out 1,400 one-star reviews to nursing homes across the country for being insufficiently staffed. This came on the back of new regulation from the CMS stating that all long-term care facilities reporting four days or longer in a quarter with zero registered nurse hours on their PBJ report would receive a one-star rating. The previous cut-off was seven days.

Non-compliant PBJ reports may happen for a variety of reasons. For one, they could be due to healthcare facilities simply being understaffed. They could also occur due to manual calculation errors. Regardless, it’s essential that facilities figure out a streamlined way to record and report direct care worker hours accurately and honestly.

 

PBJ Submission

There are two methods for submitting a PBJ report to the CMS.

The first way is to manually enter all information into the CMS’ system via their website. This data would include info about employees, their hours paid to work, dates worked, and census information (optional).

Alternatively, you can skip all the manual work by using an automated time and attendance system for nursing homes or payroll system to create a report which you can then upload to the CMS website in XML file format. Seeing as the CMS’ reporting requirements are quite strict, you’ll need to ensure your report includes all the necessary data and is properly formatted according to CMS guidelines.

Registering to submit PBJ data requires several steps:

Review the CMS’ PBJ FAQ document for more information.

 

PBJ Report Deadlines

Below you can find the quarterly deadlines for PBJ submission to the CMS:

FISCAL QUARTER REPORTING PERIOD DUE DATE

1

 October 1 – December 31 February 14
2 January 1 – March 31 May 15
3 April 1 – June 30 August 14
4 July 1 – September 30 November 14

 

Automate PBJ Reporting to the CMS

Creating and submitting PBJ reports does not need to be difficult or time-consuming. With the right systems in place, maintaining staff records and generating reports is actually quite simple. What’s difficult is finding and retaining the staff you need to maintain a five-star rating.

Webinar: How to Retain Hourly Employees

With Workforce.com, long-term care facilities can automate PBJ reporting to the CMS, freeing up hours of admin time to work on more pressing issues like employee turnover and short-staffing. The cloud-based timekeeping system maintains employee info like job codes, titles, and pay rates, while recording hours worked, breaks, and pay on a daily basis. And with a click of a button, you can create an accurate PBJ report and export it as an XML file.

For more information on PBJ Reporting visit the CMS website or review their PBJ policy manual. If you want to learn more about how to automate PBJ reports, contact us today, or, visit our long-term care page to find out how to comply with the CMS’ five-star quality rating system.