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Dear Breakdown in Progress:

The best way to start an engaging conversation with employees is by active listening.

Show genuine concern
Giving someone your undivided attention is the best way to start an engaging conversation. Eye contact, a relaxed yet alert posture and modulating your voice are essential. Keep in mind that your employees want to receive your message and better understand your situation. Showing empathy, however, does not mean forbidding them from having differing points of view. The object is to find mutual ground.

Prompt for clarification
This involves clearing up confusion to foster greater understanding, without passing premature judgment. In other words, don’t use an attempt to clarify things as an excuse to dismiss another person’s viewpoint. Rather than telling them they’re wrong, soften your approach: “I disagree” or “My data says otherwise” are likely to be more well received

Paraphrase and pause
Part of clarifying things is repeating what someone tells you. This gives the listener a chance to correct your understanding and make sure both sides are on the same page. Providing people with a laundry list virtually ensures that key issues and ideas will be lost. Learning to pause and segment your message helps the receiver catch the gist much quicker. Also, take momentary breaks from the back-and-forth so the parties can ponder and posit new possibilities. That turns active listening into “creative listening.”

Sometimes you may not know what the other person is feeling. Rather than guess, you might say something like: “I know you are on board, but it sounds like you may have some frustration with the decision. Would you care to discuss it?”

Strategize and summarize
Strategic listening takes active listening to a next level. The goal is more than awareness and empathy. The purpose of such strategic back-and-forth is synergy, a sharing-listening-sharing loop that generates ideas, insights and imagination. It’s important to stop along the way and review and record agreements, unresolved differences and future steps at problem-solving.

SOURCE: Mark Gorkin, “The Stress Doc,” Washington, November 2008

LEARN MORE: Communication is considered crucial to engaging new employees, as well as explaining bonus and other compensation moves.

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

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Dear Workforce Newsletter

Dear Over Your Head:

Before tackling this assignment, have a serious sit-down with the company head.

Two questions jump out immediately: 1) Why is the head of the company accepting the CEO’s dysfunctional behavior and 2) Why is he not the one leading the counseling session? We can speculate on the motives, and again two stand out: 1) Your top leader is confrontation-averse and 2) He and the CEO are buddies.

Another question comes to mind: What is your relationship with the company head? Do you have enough experience to judge his integrity? This is vital as you must obtain substantive assurance (perhaps in writing) that the company head (or the board of directors) will give you protection from any retaliatory behavior by the CEO. (Is the company head aware of how far this CEO has taken retaliation when feeling threatened?)

The company head and company board must understand that employee discontent with treatment from a specific manager or supervisor is the biggest cause of employees leaving a company. That is, profits probably won’t stay up if morale stays low and people eventually change ships, which is what they will likely do once the economic climate starts to improve.

Finally, I would obtain buy-in from the company head for some executive/communications/diversity coaching for the CEO.

Assuming you get satisfactory assurance (and if you don’t then I would think twice about meeting with the CEO alone; I might opt instead for a three-way meeting with the CEO and the company head) then consider these steps:

Challenge and reassure the CEO. If possible, have the CEO meet in your office. Psychologically this will be self-empowering. Let the CEO know that the head of the company strongly suggested the meeting. Then inform the CEO that you and the company head (there is strength in numbers) value his contributions to the company success (note specific strengths). Also, share that you appreciate how, as a leader, he wants to hold people accountable, and you understand his frustration when people do not meet company performance expectations.

However, you and the company head both are concerned that some of the CEO’s actions are hurting his status as leader and potentially are hurting the overall position of the company.

Be specific. Ask the CEO if he recalls imparting any insulting or racist comments in e-mails? If he denies the deed, if at all possible be prepared to present such e-mails or have some documentation at hand. (I would not bring up your experience with the CEO in this meeting. Don’t give the CEO ammo to question your objectivity.) Let the CEO know he is putting himself and the company in legal jeopardy with such insults and racist comments.

Ask for feedback and have a plan. How does the CEO respond to your constructive confrontation? If he is defensive or in denial, then you have to let him know that you will be reporting this fact back to the company head. If he is open to your comments, solicit his ideas on how he can express his frustrations or concerns with people or business operations in a more constructive and substantive manner. I would also let the CEO know that the company is prepared to provide voluntary executive/communication/diversity coaching (and will make it mandatory) if problems persist.

Follow up on the meeting. I would schedule a three-way meeting with the CEO and company head to make sure everyone is on the same page, after you’ve had a report back with the company head. And then have a follow-up meeting in two to four weeks with you and the CEO to monitor progress.

If you follow these steps, I believe you will demonstrate your professionalism and will determine whether the CEO’s behaviors are amenable to change. And if the CEO resists this intervention, then the ball is in the company head/company board’s court, where it belonged all along.

SOURCE: Mark Gorkin, “The Stress Doc,” Washington, April 29, 2009

 

LEARN MORE: “HR Feedback for Your Boss” contains additional advice.

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

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Dear Workforce Newsletter

We may be in a recession, but this year’s batch of interns at advertising agency Crispin Porter & Bogusky will be getting fatter paychecks.

Not that the agency itself will be funding the pay increases for the 40 young talents who will slog away in its Miami and Boulder, Colorado, offices on accounts such as “Guitar Hero” and Burger King.

Rather, Crispin has launched an eBay auction for their services.

On-again, off-again Twitterer and top Crispin creative executive Alex Bogusky (whose real handle is @bogusky, not to be confused with @bogusbogusky and @bogusalex) announced the auction Tuesday, May 19, via a tweet.

The bidding began at $1 and as of this report had already climbed to $1,225, with eight days and 22 hours remaining. (That’s more than $30 for each intern.)

“The interns only make minimum wage, so we thought this would be a great way to augment that,” Bogusky said in an e-mail. “They’re excited about that.”

The winning bidder will receive a “creative presentation” developed by Crispin’s interns in a three-month period, consisting of strategies, recommended brand positioning and concepts.

What the bidder won’t get is production services or any finished advertising materials. Travel and any other out-of-pocket expenses for the interns aren’t included either.

It seems a bit counterintuitive to farm out your own talent, but Bogusky said he doesn’t really see it that way.

Each year, the interns work for Crispin clients, but a portion of their time is carved out to work on special assignments that are typically pro bono. Now they’ll just work on this instead.

“It would be great if the high bidder is a cause-related thing,” Bogusky said.

Who isn’t welcome?

The likes of Pizza Hut and Philip Morris. The fine print on the online auction page states that Crispin, which works for Domino’s, “reserves the right to decline services in the event of a conflict with any of our existing clients or for any other reason (like if you sell cigarettes) in our sole discretion.”

Filed by Rupal Parekh of Advertising Age, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Health care actuarial firm Milliman reported Monday, May 18, in its annual medical index that health care costs would increase at 7.4 percent in 2009, marking the third straight year of declines in health care inflation.

Good news, right?

Take a closer look: The percentage growth may be the smallest in three years, but the total dollar increase for a family of four—at $1,162—is the largest in that same period, thanks to the cumulative effects of all these annual health care cost increases. Year after year the cost being measured against grows, even if the percentage increases don’t.

Such is the fuzzy nature of health care costs.

In 2006, health care costs grew at 9.6 percent, the highest since Milliman established its index five years ago. But back then it was 9.6 percent of $12,214—the amount in 2005 a family of four spent on medical care. And the increase was $1,168.

Three years later, inflation may be down but the total dollar increase is just about the same: 7.4 percent of $15,609 (the average amount a family of four spent on medical care last year) totals about $16,770—an increase of $1,161.

Health care inflation may be lower by nearly two percentage points in 2009, but the total year-to-year increase is about the same. That means, next year, even if inflation continues to slow, total cost increases could be larger than a few years back when inflation was near double digits.

That’s particularly bad news for employees, as they are shouldering more and more of the cost.

Three years ago, when costs were increasing by 9.6 percent, employers shouldered most of the burden. Costs went up, but they went up less for employees, who saw the amount coming out of their paycheck to pay for health care costs increase 5.4 percent.

Today, the trend has reversed.

According to Milliman’s data, employer costs in 2009 will rise 5.4 percent; employees, meanwhile, will see nearly a 15 percent increase in the amount of money that comes out of their paycheck to pay for health care. Then add another 5.4 percent increase in the amount employees pay out of pocket (and already taxed) for other health care expenses.

Put it this way: A family of four making $50,000 would spend 8 percent or $4,000 of wages to pay for health care premiums alone. Factor in actually seeing doctors, taking medicines and receiving health care, and the costs continue to rise.

The latest data on health care costs is a reminder of how fuzzy math can be. What’s clear is that in a recession—against a backdrop of layoffs and pay cuts—these increases are hurting more than they used to. And the pain may get worse even if the economy gets better.

As Milliman suggested in its report, it is easier to lay someone off or cut their salary than make broad changes to the design of health benefits, which typically occur only once a year. In other words, Milliman’s report says that employers will likely make changes to reduce the cost they are paying for benefits even after the recession subsides.

The great hope in 2009 is health care reform—a sentiment supported nearly unanimously by employers, health care providers, insurance companies and other constituents. The details of reform, however, are as uncertain as the future. Health reform may bring more health care to people, but, as Milliman suggests, it is likely to cost just the same, no matter how one slices it.

—Jeremy Smerd

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An employer does not necessarily violate the Pregnancy Discrimination Act by paying pension benefits calculated using an accrual rule before the law took effect, even if women on maternity leave at the time received less credited service time, the U.S. Supreme Court ruled Monday, May 18.

The ruling in AT&T Corp. v. Noreen Hulteen et al. applies only to women who became pregnant before the Pregnancy Discrimination Act took effect in 1979.

Hulteen and several other AT&T employees each took partially uncredited pregnancy leave before the Pregnancy Discrimination Act became law.

According to the Supreme Court, AT&T replaced its old pension plan with a new one on the day the act took effect, providing the same service for pregnancy as it did for disabilities on a prospective basis, but not providing retroactive adjustments. The group sued, alleging discrimination under Title VII of the Civil Rights Act of 1964.

The 9th U.S Circuit Court of Appeals, sitting en banc, ruled 11-4 in 2007 that the plaintiffs were entitled to regain the lost time retroactively.

The Supreme Court, however, reversed the appeals court in Monday’s 7-2 decision. The majority held that AT&T’s pension payments are in accord with a bona fide seniority system’s terms.

Therefore, the plan is not subject to challenge under Title VII, Associate Justice David Souter wrote for the court majority.

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

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The maximum contributions that can be made to health savings accounts in 2010 will increase, as will the minimum deductible imposed by health insurance plans linked to HSAs and the maximum out-of-pocket expenses that employees can be required to pay, the Internal Revenue Service said last week.

The maximum contribution that can be made to an HSA in 2010 for employees with single coverage will be $3,050, up from $3,000 in 2009. The maximum HSA contribution for those with family coverage will rise to $6,150, up from $5,950.

Additionally, the maximum out-of-pocket expense, including deductibles, that employees can be required to pay next year will rise to $5,950 for single coverage, up from $5,800 this year, and $11,900 for family coverage, up from $11,600.

The minimum deductible of the high-deductible health insurance plan to which HSAs must be linked will increase next year to $1,200 for single coverage and $2,400 for family coverage. The current minimum deductibles are $1,150 for single coverage and $2,300 for family coverage.

The new limits that the IRS announced Thursday, May 14, reflect increases in the cost of living.

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

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Former Pension Benefit Guaranty Corp. director Charles E.F. Millard was subpoenaed to testify Wednesday, May 20, before the Senate Special Committee on Aging, which said it has been investigating the agency’s manager hiring process over the past month.

The move Friday, May 15, follows the release Thursday of a draft report by Rebecca Anne Batts, PBGC inspector general, which alleges Millard made “inappropriate” contacts last year with BlackRock, JPMorgan and Goldman Sachs before they were hired as strategic partners to run a combined $2.5 billion for the PBGC in real estate and private equity.

The contracts of the managers could be canceled if the PBGC’s board agrees that Millard’s contacts with the firms during the procurement process gave them an unfair advantage.

Ashley Glacel, a Senate committee spokeswoman, said that at least one member of the PBGC board—Labor Secretary Hilda Solis, Treasury Secretary Timothy Geithner or Commerce Secretary Gary Locke—has been asked to testify along with Batts.

Glacel said the results of the committee investigation into the PBGC are expected to be released at the May 20 hearing.

The investigation has also been looking into whether the PBGC “will be able to continue fulfilling its mission as we weather the financial crisis,” Glacel said.

The committee’s chairman, Sen. Herb Kohl, D-Wisconsin, was concerned in particular about the PBGC’s ability to continue meeting its financial obligations to plans it takes over because the agency, under Millard’s leadership, shifted to a less conservative investment allocation policy.

Vince Snowbarger, the PBGC’s acting director, said in a statement that no assets have yet to be transferred to BlackRock, JPMorgan and Goldman Sachs.

“We will work with our board to decide whether these contracts should be terminated and whether strategic partnerships fit into the board’s investment approach going forward,” Snowbarger said in the statement.

Also, agency staff would work with the board to implement Batts’ recommendation that future agency directors stay out of the procurement process, Snowbarger said in the statement.

 

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

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Enrollment in health savings accounts linked to high-deductible health insurance plans continues to surge, with 8 million people covered by HSAs as of January 1, a 31 percent increase in the past year, according to an annual census released Wednesday, May 13, by an industry group.

HSA enrollment rose in all markets, according to Washington-based America’s Health Insurance Plans, and posted the greatest percentage increase in the large-employer market.

Employers with at least 51 employees had 3.8 million people enrolled in HSAs as of January 1, a roughly 35 percent increase in the past year.

Enrollment also increased in other markets. In the small-employer market—or businesses with up to 50 employees—HSA enrollment increased to 2.4 million people, up about 34 percent from a year earlier, while enrollment in the individual market climbed to 1.8 million, an increase of about 22 percent.

HSAs, authorized under a 2003 federal law that added a prescription drug benefit to the Medicare program, became available on January 1, 2004, and enrollment has been surging since then.

For example, AHIP surveys found HSA enrollment of 1 million people in March 2005, 3.2 million as of January 2006, 4.5 million as of January 2007 and 6.1 million as of January 2008.

The key factor driving HSA growth is that premiums for high-deductible health insurance plans—to which HSAs must be linked by law—tend to be much lower than more traditional health plans, where enrollee cost-sharing is lower. In 2009, the minimum deductible of an HSA-linked health insurance plan is $1,150 for single coverage and $2,230 for family coverage.

The census is based on 96 insurers and their subsidiaries offering HSA-linked health insurance plans. AHIP said it believes its annual census covers virtually all people enrolled in plans linked to HSAs.

Copies of the 2009 census are available at www.ahipresearch.org.

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

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Members of Congress weighed the implications of the federal government’s regulating the insurance industry during a hearing Wednesday, May 14.

“The events of the last year have demonstrated that insurance is an important part of our financial markets,” said Rep. Paul E. Kanjorski, D-Pennsylvania and chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. “The federal government therefore should have a role in regulating the industry.”

However, just how involved the federal government should be in its oversight was a topic of hot debate among the witness panel members and the subcommittee members in the hearing.

Bob Hunter, director of insurance at the Consumer Federation of America in Washington, suggested that the federal government step in to manage systemic risk, oversee solvency risks and establish a repository of expertise and data analysis.

However, the federal government can’t handle everything, he argued. An optional federal charter would be incapable of handling systemic risk, as carriers can decide who has oversight.

Rather, a combination of state and federal oversight would handle local consumers’ concerns, while addressing overarching industry issues, Hunter said.

“We conclude that the split in regulation that best deals with the pros and cons of each level of government is to have the federal government deal with systemic risk, solvency and international issues but to have the states deal with consumer protection, complaints and market conduct issues,” he said.

Solvency, risk management and policyholder protection—the factors that kept carriers from going the way of the banks during the economic downturn—will have to be at the heart of any new federal role in insurance regulation, according to Patricia L. Guinn, managing director of risk and financial services at Towers Perrin of Stamford, Connecticut.

New regulatory systems will have to preserve the best aspects of the state-based system without being duplicative, she said.

“Regulation at the federal level needs to be carefully structured and designed to supplement and improve the existing regulatory framework, not replace it,” Guinn said. “Reform should recognize that there is a great body of expertise in the state regulatory system that should be retained and leveraged.”

Guinn recommended that solvency and policyholder security be handled on a federal level, but the market-conduct ball could fall into the state regulators’ court, where it is closer to the customer.

No state regulators were present at the hearing, but congressional members disputed their abilities to manage complex matters, such as carriers’ involvement in securities lending and credit default swaps, particularly as American International Group of New York became a massive problem last year that had gone unchecked until the last minute.

Rep. Ed Royce, R-California, co-sponsor of the optional-federal-charter bill, argued that the state regulators waited too long to react when AIG became overleveraged.

“Only when AIG was on the [brink] of collapsing did the New York state commissioner and governor propose to redirect $20 billion from the surplus of the insurers to the holding company. Fortunately, that was aborted, but that’s the scale of oversight that existed,” Royce said.

“It’s the overleveraging on top of all the rest of this—the fact that that couldn’t be caught because of the piecemeal patchwork here,” he said. “I think this would have been caught by a world-class regulator with full access to all the information.”

Filed by Darla Mercado of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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