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December 7, 1999July 10, 2018

How to Have Y2K Compliant Communication

With the potential for a wide range of problems at the turn of the century, including the very hyped computer disruptions, there is also the potential for some companies to either distinguish or embarrass themselves.

In their efforts to minimize technological and operational trauma, those in charge often ignore communications planning. Ultimately it will be people, not technology, that react to what may occur. The turn of this century can be an opportunity to form lasting impressions regardless of glitches or glory.

Executive Communications Group, of Englewood, New Jersey, offers the following ideas to consider:

Identify your main audience groups—If your company has any connection to the public at large, you should have a bank of statements prepared that will put people at ease. Consider the communication needs of your employees. If things get ugly, you should be prepared to rally the troops and lead them into battle. If everything goes according to plan, how will you thank them for a job well done? Is your management ready with proper words of appreciation?

Also consider your external stakeholders, including clients or customers, board members, and shareholders. The long-term financial impact of miscommunication with these critical groups could far exceed any court settlement.

Perception vs. reality—Although you may know ‘everything’s fine,’ don’t assume your audience believes it. Make extra efforts to analyze what people will be feeling, as well as thinking. If you don’t acknowledge and address their emotional state before, during and after the big day, don’t be surprised if your future efforts to connect with them fail.

Be prepared for success—If your systems are rock solid, how will you leverage this success without appearing haughty and self-serving … especially when your competition is faltering? This requires a high level of finesse but can ultimately position you above the rest.

Rehearse different scenarios—this should include first identifying who will say what to whom and for what purpose. Then get the crisis team together to practice reactions to these scenarios. This way, when the pressure’s on, they will be able to deliver the message with clarity and credibility.

Plan for two main outcomes—Problems (severe or mild) and no problems. If there are none, seize the opportunity and use this success to your advantage.

SOURCE: Executive Communications Group, Englewood, NJ.

December 6, 1999September 8, 2022

How to Retain Employees

Retaining employees should be a prime concern of any organization because it has a major impact on the bottom line. Recruiting, training, compensating and motivating new employees is expensive. Losing employees usually means losing customers, business and credibility as an employer. A solid track record of low turnover shows the world that your company’s morale is good.

As someone who has started up and expanded a variety of organizations, from retail to high technology, I’ve found that six tactics can increase retention:

Offer competitive compensation.

1. Culture fit.
  I send potential employees through a battery of interviews, ask hard questions and do everything I can to make sure they’re a solid fit.

1. Manage by walking around.
  Get to know each of your direct reports. Talk to them about their family, their hobbies and their work. And encourage them to do the same thing with their reports. Good managers relish the attention and additional input. It makes their job easier.

1. Solicit input.
  It doesn’t matter how you do it—weekly “all hands” meetings, suggestion box, e-mail forum, open-door policy, whatever. Just make sure everyone knows you’re sincere and that you welcome their input.

1. Establish advisory groups that represent all operating divisions.
  Hold monthly meetings, and rotate group members every six months. Set the agenda in advance, and have the meetings in the late afternoon … but on company time. Serve pizza, burgers, etc. and get everyone involved. Urge everyone to participate, but don’t force them. I’ve found that the vast majority can’t wait to have their turn in a group.

Revamp reviews.
Because many people hate reviews, my approach is to find out if individuals are contributing the way THEY want to contribute. I ask them how their job is, and how their department, division or company is doing. We also cover their accomplishments and career path. When we conclude the session, both of us leave the table more informed and confident regarding the future.

December 6, 1999July 10, 2018

Taxes and Employee Education

Issue: One of your employees wants to pursue an MBA in marketing under your company’s educational expense reimbursement plan. He is not currently employed in your company’s marketing department, but he would like to be one day and he believes that this education could help him achieve that transfer. Can he be fully or partially reimbursed for all of his educational expenses on a tax-free basis?

Answer: Yes, if the overall skills the employee will learn from the MBA program will enable him to better perform his current job. Educational expense reimbursement plans enable an employer to fully or partially reimburse employees on a tax-free basis for job-related education or training expenses. Those expenses include but are not limited to tuition, fees, books, supplies and equipment. Educational assistance does not include the cost of meals, lodging or transportation incurred by an employee in the course of obtaining such instruction.

Accountable plan requirements.
Reimbursements must be made under an accountable plan in order to be excluded from wages for employment tax purposes. Under an accountable plan:

The reimbursed education expenses must be job related;

The employee must adequately account to you for the expenses; and

Any excess reimbursement or allowance must be returned to you within a reasonable time.

As a caution, remember that a reimbursement, or any portion of a reimbursement, that does not meet all three of the accountable plan requirements stipulated above may not be excluded from an employees’ income.

Job-related requirements.
IRS regulations provide tests to determine whether educational assistance is job-related. To be job-related, the education courses must:

maintain or improve skills required by the employer; or

be needed to meet express requirements of an employer or of a law or regulation to retain the employee’s salary, status or employment.

Educational assistance does not qualify as job-related if the courses:

are needed to meet the minimum requirements of a job;

will lead to qualifying the employee for a new trade or business; or

are to fulfill general aspirations for personal reasons of the employee.

Any courses that the employer determines to be nontaxable need not be reported on the employee’s Form W-2.

Cite: Internal Revenue Code Sec 132.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health-care and small-business professionals. CCH offers human resource management, payroll, employment, benefits, and worker-safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

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.

December 3, 1999July 10, 2018

Is HR Contract Work in Your Future

Businesses today are rapidly moving away from staffing their human resource departments solely with permanent employees in favor of hiring temporary employees to fill openings at all levels.

The result: Dramatic growth in the number of opportunities available to HR professionals who want the flexibility, advancement and variety available from a career as a contract employee. But how do you know if contract or temp work is for you?

HR encompasses so many different functional areas—such as recruitment, compensation and benefits, employee relations, training, administration and organizational development—that there is no one specific skill set required to guarantee success.

What is necessary to be a successful contractor is flexibility, not to mention a high tolerance for change. Contract employees often engage and disengage from companies quickly. They’re brought in and are expected to be productive quickly and adapt to their environment, which requires a high level of self-confidence and resiliency. Other skills that are valuable include strong analytical and assessment abilities and above-average written and oral communications skills.

SOURCE: Romac Human Resources, A business of Romac International, Inc., Tampa, Florida, October 5, 1999.

December 3, 1999July 10, 2018

Does the FLSA Apply to Work Performed Overseas

Issue: You work for a U.S. multinational employer, with business operations in Puerto Rico, Guam, Germany and Hong Kong. Several staff members will be traveling to these locations to assist with the company-wide implementation of a new computer system. Included among the group are several non-exempt employees who will be providing administrative support for the project. While on assignment, will the non-exempt employees be eligible to receive overtime pay under the Fair Labor Standards Act (FLSA) if their work hours exceed 40 per week?

Answer: The answer to this question is generally dependent on two factors: (1) the country assignment and (2) the timing of the assignment within the workweek.

Country of assignment.
The FLSA states that the minimum wage, overtime, record-keeping and child-labor provisions do not apply to employees whose services during the workweek are performed in a workplace within a foreign country. Also, these provisions do not apply to territories under U.S. jurisdiction, unless they are one of the following:

A State of the United States

The District of Columbia

Puerto Rico

The Virgin Islands

Outer Continental Shelf Lands

American Samoa

Guam

Wake Island

Eniwetok Atoll

Kwajalein Atoll

Johnston Island.

Therefore, hours that the nonexempt employees spend working in Puerto Rico and Guam would still be considered compensable hours under the Act for purposes of determining overtime pay eligibility. However, hours worked where the entire workweek is spent working in Germany or Hong Kong would not be compensable under the FLSA.

Timing of assignment.
What if the employees spend part of the workweek working in the United States and the other part working in Germany or Hong Kong?

According to a wage/hour opinion letter, when part of the work performed for an employer in any workweek is covered work performed within any state (including the areas mentioned above), a nonexempt employee is entitled to FLSA benefits for the entire workweek. In this situation, nonexempt employees working part of the workweek in the United States and the other part of the workweek in Germany or Hong Kong would be eligible for overtime pay under the FLSA if hours exceed 40 for that particular week.

Caution—examine local law.
In addition to determining the applicability of the FLSA to areas outside the United States, the employer should also examine local laws that may apply to work performed within the foreign host country.

Cite: Fair Labor Standards Act, Section 13(f), as amended by the Overseas Labor Standards Amendments of 1957 and W & H Opinion Letter No. 1563 (WH-510), June 29, 1981.

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.

December 2, 1999July 10, 2018

Make Sure Year-End Bonuses Don’t Haunt Your Workers’ Comp Liability

Christmas bonus, holiday bonus, year-end bonus—what’s the difference? It could make a difference in the calculation of workers’ compensation benefits. You can take steps, however, to ensure that it’s not a gift that keeps on giving more than you intended.

Issue: Your company distributes a bonus to employees at the end of the year in consideration for service during the previous year. Does it matter whether the bonus is a “Christmas bonus,” “holiday bonus,” or “year-end bonus”? What are the consequences to your company in regard to workers’ compensation benefits?

Answer: If the bonus is based on an injured worker’s tenure at the company throughout the previous year, the bonus may be prorated over the entire year, not just the quarter in which it was paid, for purposes of calculating the injured worker’s average weekly wage.

Yearly bonus or holiday bonus?
An employee injured at work received workers’ compensation benefits of $451 per week based on an average weekly wage that included a $1600 bonus paid at the end of the year. Less than a year after the payments began, the employer sought a recalculation of benefits, contending that the yearly bonus should have been allocated over the entire year, not just in the quarter in which it was paid. The employee appealed, arguing that the payment was a Christmas bonus that should have been credited to the fourth quarter of the year.

The court concluded that the bonus, which was based on the employee’s tenure at the company for one year, should have been prorated as wages over the entire year based on the time in which it was earned. The employer was allowed to recoup $4,678 as overpayment, a difference of more than $50 per week in benefits.

What you should do.
If your year-end bonus is based on employment throughout the prior year, make that clear to employees. You may be able to prorate the bonus over the entire year for the purpose of calculating workers’ compensation benefits.

Cite: Kiebler v. Workers’ Compensation Appeal Board (Specialty Tire of America), Commonwealth Court of Pennsylvania, No. 2113 C.D. 1998, June 16, 1999.

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.

December 1, 1999July 10, 2018

Web Sites Related to Training for Expatriates

Consult the following Web sites for more information about training for expatriates.

AcrossFrontiers International
www.acrossfrontiers.com
Its interactive, multimedia computer-based training (CBT) covers an array of countries and topics.

Craighead Global Knowledge
www.craighead.com
Offers an array of online offerings for business travelers and expatriates, including developing online policies and procedures, country information and cross-cultural distance learning.

Kroll Associates
www.krollassociates.com
Its Travel Watch service details crime and problems in over 250 cities and 100 countries.

Pinkerton
www.pinkertons.com
Provides global intelligence services that track crime and incidents worldwide.

Workforce, December 1999, Vol. 78, No. 12, p. 108.

December 1, 1999July 10, 2018

How to Protect Knowledge From Walking out the Door

You know George. He’s the guy everyone calls when they have a problem. George has worked for his current employer—an oil company—for nearly 30 years and there’s very little he hasn’t faced when it comes to getting oil out of the ground. Rumor has it he can solve a problem, any problem in 15 minutes or less, and he doesn’t have to be onsite to do it.

The good news is you have a tremendous knowledge asset in George. The bad news is he’s opted for early retirement. And when George leaves, so does his knowledge.

So why haven’t you done anything to protect yourself from knowledge walking out the door? Things move too quickly to afford you the weeks, months, maybe even years it would take to rebuild lost knowledge. Time lost trying to replace key knowledge—and more importantly, losses resulting from not having the knowledge there when you need it—can cost a fortune, if not cripple your company entirely.

The good news is there’s been some real progress in the area of tacit knowledge transfer. It’s not only possible to transfer what George knows to other people who need it. It’s possible to accomplish it in a short period of time, it doesn t require a huge investment in technology, and it doesn’t have to cost you an arm and a leg.

The key is not to try to build an elaborate expert system that you teach to think and solve problems like George. Instead, you want to focus on only those key processes, actions and behaviors that illustrate how George does what it does (in this example, George solves well problems). You want to capture the steps of the process—how, what, when and where he does what he does—and deliver this information back in the form of solutions, chunks, or knowledge nuggets that are immediately actionable.

People don’t have to leave for you to lose knowledge.
As if it weren’t enough that we have to worry about knowledge walking out the door, now we also have to worry about losing it inside the organization. It appears that experts don’t have to leave in order for a company to lose their expertise. Sometimes taking another job inside the company can have the same affect.

When people change jobs, the rest of us tend to associate them with the new role and assume that they only know things related to this one job. It’s as though we forget about all the other experience they bring to the table.

I remember sitting in a meeting one day when someone said, “If we only we could find someone with international payroll experience.” One of the guys on the team came unglued. Prior to his current assignment with the U.S. payroll team, he had spent several years implementing international payrolls. He’d been with the company for many years and had worked with several of the people in the room in previous engagements. He was incensed that no one remembered his international experience or even bothered to ask if anyone had the requisite skills.

One of the smartest things you can do to ensure you know who knows what is to implement a yellow pages type of “find the expert” directory. This is generally a low-cost investment in technology, people and time, but one that can offer a dramatic return on investment. The key in making these programs work rests in the quality of the information provided. It should not include basic bio or résumé-type mentions as much as it should include knowledge and expertise applied. It should be a sort of “who’s worked where doing what with what and with whom.”

Find the Georges in your organization.
In order to identify the people in your organization whose brain houses key knowledge, you should start with your business strategies, objectives and core competencies. What is it that you absolutely must do in order to be successful? In the case of George s company, one of the key competencies is resolving well problems quickly and efficiently. Every minute a well’s not pumping, the company is losing money.

Try this simple exercise. Think about people in your organization who, like George, have key knowledge in their heads. You’ll want to focus on knowledge and abilities that aren’t easily available anywhere else or easily replaceable, should the expert decide to retire, pursue other employment or God forbid, get hit by a bus. Take a minute and think about the key knowledge in your organization. It might be:

Knowledge about and/or a relationship with a particular customer

Knowledge about a key operational process

Knowledge about a key technology or system

Knowledge of a geography or country and its business customs

Knowledge about how to pick the right person for the right job or how to put together a winning team

Knowledge about the internal infrastructure—the tools, the culture, “how to get things done around here.”

Remember: Not everyone in your organization is a George or has the potential to be a George. You don’t need to capture and classify everything that everybody knows—even if it were actually possible. You have to learn to recognize which knowledge is most important to the success of your organization, who has it, and who would benefit from it most.

Think of five people who have key knowledge in your organization, and how their knowledge is used. Now imagine what it would be like if these five people were no longer around. What would it be like on a day-to-day basis if you didn’t have access to their skills and knowledge?

Sometimes it will be fairly obvious what kind of knowledge is important (for example, knowing where to drill for oil). In many cases, there may be a fair amount of previously existing explicit knowledge that you can use to build the foundation of capturing employee knowledge. Sometimes, the tool may be a manual or a quick-reference card. Other times, an interactive, computer-based training tool might be more appropriate. Video or live telecasts are also good delivery vehicles. Apprenticeships and mentoring might also be appropriate.

The complexity of the process depends on the nature of the knowledge, where you are today in the process (has any of it been communicated?), how willing the expert is to contribute, and the caliber and skills of people you have to support the exercise.

Maintain relationships after employees leave.
George is looking forward to his retirement. He s buying that ranch he s always wanted and he plans on spending lots of time with his grandchildren—time he didn t have when he was up all hours of the night solving well problems. But the door that closes behind him doesn t have to slam shut. George may be interested in staying connected to what he knows best, and may be willing to continue work on an as-needed basis, so long as you re careful to structure the relationship in a way that gives him time for his new priorities and recognizes the value of his expertise.

Employment is no longer an either/or situation where you are employed or not employed. It takes on various forms including contracting and consulting, and may be part-time or every once in a while. The key is to make sure that when employees leave or change their employment status, they do so on good terms. Make a conscious effort to maintain relationships with former employees—not just with retirees, but with people of all ages who have worked for the company.

Think about it. When people leave your company for another job, chances are they’ll be doing new things that increase their knowledge. They’ll certainly have more external exposure, meet more people, use different kinds of technology, and so on. The knowledge they acquire could well prove useful to you at some time in the future.

Imagine a younger version of George who is potentially as knowledgeable, but you aren t able to give him or her the exposure to the full range of problems and geographies that another company could. George Jr. goes off to a new job or a few jobs for several years, and comes back to you later in his career with just the right knowledge at the right time.

December 1, 1999July 10, 2018

Dear Workforce Panelists

You’re asking questions about managing a workforce in a way that will help your organization. The following companies are joining Workforce.com in answering them.

Benchmark HR Solutions, Inc, Salem, N.H., is the nation’s only professional services firm wholly focused on providing integrated, outsourced employee recruiting and retention services to high-growth technology companies in the communications, software, Internet and professional services markets.

Deloitte and Touche, New York. Deloitte & Touche International Assignment Services supports the cross-border movement and management of their clients’ global employees.

The Herman Group, Greensboro, NC, a firm of Certified Management Consultants that helps organizations attract, optimize and hold their good workers by helping them embrace the emerging corporate culture and become Employers of Choice.

Personnel Decisions International (PDI) is a global management and human resources consulting firm. Since 1967, PDI has been helping organizations accelerate individual success, build talent, and improve decisions to achieve their business goals.

PricewaterhouseCoopers, Boston. Helps companies design, build and run cost-effective, targeted HR strategies.

The Segal Company, New York. Private, independent, national consulting firm, founded in 1939, whose Human Resources Innovation practice uses a multidisciplinary approach to HR strategies and solutions.

StressDoc.com, Washington, DC. Mark Gorkin’s Stress Doc.com contains his syndicated “Online Psychohumorist” writings and information on “Practicing Safe Stress” programs, conflict, change, and team building–with humor.

T. Williams Consulting, Collegeville, PA. A national strategic staffing consulting firm. Michael A. Sweeney is managing director, project staffing.

Work|Life Benefits. Helps companies increase employee productivity, retention and morale through customized, integrated work/life strategies.

December 1, 1999November 14, 2018

Compensation Budget Information

The amount of money companies spend on employee compensation each year represents a significant portion of operating expenses. Average payroll costs run anywhere from 23% (retail) to 41% (service firms) of the entire operating budget of an organization.

As a result, compensation planning is clearly one of the most important responsibilities of today’s compensation professional. Annual compensation planning involves preparing budgets to address salary increases, salary structure adjustments, promotion increases and variable pay expenditures. Typically, the budget process occurs well in advance of fiscal year end so that cost projections can be included in operating budget forecasts for the coming year.

Compensation professionals can access a multitude of resources to assist them in establishing realistic and competitive projections for the annual compensation planning process. These resources include published surveys from private research companies, surveys from professional affiliations, local area data from city or state entities, national information from government agencies, articles in industry magazines or professional publications. In addition, other methods include networking with other compensation professionals in their market or industry and attending a variety of seminars and presentations focusing on current trends and practices in compensation.

Compensation plans will undoubtedly be developed every year in consideration of the following practice trends:

Salary increases have remained relatively flat over the past two years, hovering at 4.0–4.5%. According to the American Compensation Association’s (ACA) 1999-2000 Total Salary Increase Budget Survey, which combines responses for cost-of-living adjustments, merit increases and equity adjustments, no significant change is projected for 2000:

Total Salary Budget Increases—United States

	Actual 1998	Actual 1999	Projected 2000
Nonexempt Hourly Nonunion	4.1%	4.1%	4.1%
Nonexempt Salaried	4.2%	4.2%	4.2%
Exempt Salaried	4.5%	4.4%	4.4%
Officers/Executives	4.6%	4.5%	4.5%

The same type of budget information is also available from ACA or other resources in various data segments including industry, region, and company size. In a recent survey from PricewaterhouseCoopers, Compensation Planning Survey: 2000, average projected merit increases for FY2000 by industry are as follows:

Industry	Executives	Mid Mgmt	Professional
Business Services	4.3%	4.2%	5.0%
Communications & Telecomm	5.0%	5.0%	4.8%
Computer, Electronic Equipment & Related Products	4.9%	4.8%	4.8%
Financial Services	4.1%	4.0%	4.2%
Healthcare	4.2%	3.7%	3.6%
Services—All Other	3.9%	4.1%	4.0%
Utilities	4.0%	3.8%	3.8%
Wholesale/Retail	4.4%	4.3%	4.3%

Companies with particular concerns regarding high tech, or information technology talent will be pleasantly surprised to find merit data readily available. The PWC survey reports planned increases for IT positions with hot skills at 5.6%, down from 1999 increases of 5.9%. Many other publications include comprehensive salary planning data for the information technology market as well.

Salary structure adjustments are typically applied in blanket fashion to all existing salary ranges within an organization, i.e., the adjustment amount is added to the minimum, midpoint and maximum of traditional salary ranges, or to the market anchor or broad range of a less traditional salary management structure. Salary structure adjustments have remained fairly steady over the past few years and typically lag merit increase budgets by approximately 1.0—2.0%. FY2000 is no exception as reported by PWC:

2000 Planned Salary Structure Adjustments
Executives	2.9%
Middle Mgmt	2.9%
Professional	2.9%

Only one area is experiencing a significant difference from the norm in salary structure adjustments, of course, information technology. More and more companies are reporting establishing separate salary range programs for IT positions, and adjusting those ranges at a more accelerated pace than the standard ranges. Survey data suggests IT ranges will move as much as 2.0% to 3.0% more than the ranges established for non-IT jobs.

Promotion budgets are typically calculated as a percent of base salaries and refer to the amount set aside or specifically budgeted for promotional increases throughout the year. Survey data indicates the following budgets planned for 2000 promotions:

Executives	2.3%
Middle Mgmt	2.2%
Professional	2.2%

Variable pay plans are designed to reward employees for achieving specific company and/or individual performance goals. This includes bonus or incentive plans that typically pay out in cash based on achievement of specific annual performance measures (although more frequent payouts may be made depending on business cycle and ability to measure results).

The size and amount of awards in incentive or bonus plans typically varies from period to period based on company and/or individual performance results. Variable or incentive pay plans are becoming a significant element of total compensation packages across all industries. Consequently, companies are reporting an increase in the amount of funds used for these plans.

In the US, 63% of ACA’s survey respondents currently use at least one type of variable pay plan. Variable pay is still most prevalent among management and exempt salaried employees. ACA’s respondents use across their organizations as follows:

74% use variable pay to award performance at management and exempt levels
43% use variable pay to award nonexempt salaried employees’ performance
38% use variable pay to award hourly employees’ performance

According to recent Hewitt Survey Findings: Salary Increases 1999-2000 the average cost of variable pay plans as a % of payroll was reported as:

	Actual 1999	Projected 2000
Salaried Exempt	9.3%	9.6%
Salaried Nonexempt	5.5%	5.4%
Nonunion Hourly	5.1%	5.1%
Union	4.7%	4.1%

A recent survey in the November 1999 IOMA’s Pay for Performance Report indicates that variable pay plans are No. 1 on HR/compensation manager’s wish list of items to adopt or expand the use of in their organizations.