Sieving Through the EEOC’s Data

Yesterday, the U.S. Equal Employment Opportunity Commission released its breakdown of workplace-discrimination charges that the agency received in fiscal year 2015 (Oct. 1, 2014, through Sept. 30, 2015)—and, to no one’s surprise, retaliation charges topped the list, representing 44.5 percent of all charges.

ThinkstockPhotos-177129299What is somewhat notable about the number of retaliation charges, however, is the fact that it climbed 5 percent from a year earlier. (Only disability charges, ranked third on the list after race, climbed more, at 6 percent.)

Thomas B. Lewis, a shareholder with Stevens & Lee law firm in Lawrenceville, N.J., is among the ranks of those not surprised by the number of retaliation claims being filed.

“In my view,” Lewis says, “retaliation is the most subjective charge that can be filed, because employees have different definitions of what retaliation means. Oftentimes, if employees haven’t been given a raise or given a promotion, they’re going to believe they’re being retaliated against… . It all comes down to what the employee believes is happening.”

Lewis adds that the 5 percent jump from the year before is significant. “There are retaliation claims out there in which employees believe they are being retaliated against just by the way the manager looks at them.”

Of the charges on the EEOC’s list, he adds, retaliation claims are extremely difficult to prove, both for the company and the employee.

We also probably shouldn’t overlook the fact that 10 percentage points separate retaliation claims from the next nearest category of charges: race. That’s a pretty noticeable gap between No. 1 and No. 2.

In its release, the EEOC reports that it resolved 92,641 charges in fiscal year 2015, and secured more than $525 million for victims of discrimination through voluntary resolutions and litigation. However, as might be expected, most of the charges were resolved through mediation.

The agency, in fact, filed 142 merits lawsuits last year. Sure, that was an increase of nine from a year earlier, but still represents only a small portion of the 89,385 claims filed. “For a national organization covering all 50 states and trying to protect the rights of employees from all forms of discrimination,” Lewis said, “it’s [noteworthy] that so few discrimination claims actually resulted in the EEOC taking a position and advocating that position on behalf of employees.”

In case you’re wondering, the majority of the lawsuits filed alleged violations of Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act.

Of course, if you’re an employer, it’s hard to find comfort in the number of claims being filed these days, especially the increase in retaliation claims. But for anyone who finds himself or herself on the receiving end of one or more claims, Lewis’ advice is to do your best to try to resolve them amicably. And if you can’t? Then try to resolve them through mediation, an approach, Lewis said, the EEOC will often push for.

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CFOs Not Just Focused on Numbers

You might think that controlling costs is the primary concern of the nation’s chief financial officers when it comes to health benefits, but a new survey from the Integrated Benefits Institute reveals otherwise.

HCSC Social-179275875The survey, which polled 345 CFOs and other senior finance executives at some of the largest U.S. companies, shows that while cost management is a major concern, other goals also rank high — including using health benefits to attract and keep top performers and helping employees better manage their health. The survey also illustrates the big impact the Affordable Care Act has had on corporate health benefits.

Nearly half (44 percent) of the respondents cited controlling costs as the most important of their company’s top five goals for health and related benefits. However, almost as many (36 percent) selected other goals as the most important, including attracting, retaining and satisfying talent (15 percent), helping employees become better healthcare consumers (10 percent), helping enrollees become healthier (9 percent), and improving workforce productivity (2 percent).

The survey found that 24 percent of CFOs said the finance function’s role in benefits decision-making has expanded since the ACA’s passage, compared to only 5 percent who said it has shrunk since then. Cost-sharing is also on the rise since the ACA: About half the CFOs said their company is increasing its offerings of high-deductible healthcare plans for employees and their dependents and raising premium shares and out-of-pocket expenses.

The ACA has also spurred more companies to up their wellness game: More than half the CFOs said their company has enhanced its health and well-being programs since the law was enacted and more than one-third enhanced incentives for adopting healthy lifestyles and wellness-program participation.

Interestingly, CFOs who said their companies place great importance on attracting and retaining talent and improving productivity said their organizations were less likely to shift healthcare costs to employees.

The survey results demonstrate that CFOs understand the importance of health-management strategies, says IBI President Dr. Thomas Parry:

These findings go against the popular notion that CFOs demand a hard ROI from health promotion programs, and that companies are scrambling for the cheapest options. If we want to understand where companies are going with health benefits, we need to think of them within the context of business strategies beyond cutting costs.

Parry and two CFO panelists will discuss the role of health and benefits at the upcoming Health & Benefits Leadership Conference on April 1 in Las Vegas.

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Changing Culture, Improving Performance

New research from the Hay Group division of Korn Ferry describes culture as “the invisible glue that holds an organization together.”

HR leaders have been singing a similar tune for years, but the Los Angeles-based executive recruitment firm’s Real World Leadership study seems to suggest that the rest of the C-suite is joining the chorus.

In polling more than 7,500 executives representing organizations in 107 countries, the survey found that “driving culture change” ranks among the top three global leadership development priorities among respondents.

Culture “is no longer an afterthought when considering the business focus of an organization,” says Noah Rabinowitz, senior partner and global head of Hay Group’s leadership development practice, in a press release highlighting a few of the findings.

Culture, says Rabinowitz, “is the X-factor … and ultimately makes the difference between whether an organization is able to succeed in the market or not.”

The survey also “affirms the critical role that leaders play in steering culture,” according to Korn Ferry, with executives citing “communications” as the most widely used strategy to improve culture, as well as “leadership development” and “embedding culture change in management objectives.”

And why are executives focused on improving their organizations’ culture? Primarily to “improv[e] organizational alignment and collaboration,” followed by “improving organizational performance,” the poll finds.

That said, organizations that are able to align strategy and culture are “more often the exception than the rule,” according to Korn Ferry. The firm cites its own 2014 research that found 72 percent of more than 500 executives saying that culture is “extremely important” to organizational performance. Just 32 percent of those same respondents, however, said their culture aligns with their business strategy.

Culture doesn’t necessarily align with strategy, per se, but “with the identity of the firm in the minds of key customers,” says David Ulrich, the Rensis Likert professor of business at the University of Michigan and a partner at the RBL Group.

In turn, “the firm’s brand with customers becomes the culture identity among employees,” he says. “As such, culture is a major form of competitive advantage, beyond talent.”

To gain such an advantage, Rabinowitz suggests that more organizations make culture change a bigger part of their leadership programs and overall leadership agendas.

“Culture change occurs, ultimately, when a critical mass of individuals adopt new behaviors consistent with their organization’s strategic direction,” he says. “Leadership development can be the most effective tool to change behaviors. And when leaders change their behaviors, others do so, too.”

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What Caused the Shake-Up at Zenefits?

The news broke earlier this morning that Zenefits CEO Parker Conrad has exited the web-based benefits and payroll provider, and COO David Sacks is taking over his role. Conrad is also stepping down as a director of the company, according to a news release by the company.

(The company also named three new directors to its board this morning: Valor Equity Partners managing partner Antonio Gracias; TPG managing partner Bill McGlashan; and PayPal co-founder Peter Thiel.)

Compliance issues that have plagued the company apparently contributed to Conrad’s exit. Zenefits has also hit significant snags, including missing revenue targets and also in its dealings with regulators, according to numerous reports.

One of the most-often quoted lines of the day came directly from a memo by Sacks that was sent to all Zenefits employees, explaining the reasons for the change in leadership:

The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.

The company has been on HRE‘s radar for a few years now, starting with our HR Technology Columnist Bill Kutik, who first wrote about Zenefits back in November 2014, and included this interesting quote from the now-sacked Conrad:

[Conrad] Parker started Zenefits with one purpose in mind: “solving all the little headaches and annoyances that sucked up time for me at my last start-up; I get a perverse pleasure from stamping out each of these problems, one by one, for the next guy.”

Another HRE columnist, Steve Boese, wrote a short profile of the company and included Zenefits in the “Awesome New Technology”  session at the  2014 HR Technology®  Conference and Exposition:

Zenefits has the potential, in many ways, to significantly alter the way in which enterprise HR software is purchased and implemented.

Only time will tell whether today’s shake-up will help Zenefits unlock that potential that many industry experts — including ours — saw in them when they first launched.

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Maersk Goes Global with New Maternity Benefits

You might say the parental-benefits bandwagon has just charged into the world arena. Copenhagen, Denmark-based Maersk Group 505017852--pregnancyannounced recently that, starting April 4, it will be implementing a new global guaranteed 18-weeks-minimum, fully paid maternity leave  for all its female employees.

Worldwide, the maternity policy would affect more than 23,000 employees. Once implemented in the United States, it will boost the current six-weeks leave to 18 for more than 1,200 women. It will also improve terms for women working for Maersk in at least 51 countries.

In addition, it will include a return-to-work program, giving onshore employees the opportunity to work 20 percent fewer hours at full contractual pay within the first year of birth or adoption.

“This new policy supports our aim to retain our talents and attract even more in the future — this way, strengthening our business results,” says Michael White, president and CEO of Maersk Line North America.

Maersk Line’s Asia Pacific Chief Robbert Van Trooijen, in a recent story on Seanews.com, says the new policy “supports our aim to retain the talented women working in the group and attract even more to gain access to future and wider talent pools … .”

The move was predicated on research conducted for Maersk by New York-based KPMG suggesting maternity-leave policies have an influence on the labor-market participation by contributing to higher employement rates of women.

The move doesn’t mark a first in the recent march by large, big-name companies to enhance parental-leave benefits in an effort to boost retention, reputation and employer brand. A search of this HRE Daily site yields numerous posts about this march, some might say race, to board the parental-leave bandwagon. So too does a search of HRE‘s website, HREOnline.com.

So will there be more bandwagon jumpers globally, what with Maersk leading the charge? I put this question to Kenneth Matos, senior director of research for the New York-based Families and Work Institute. What he had to say is worth sharing, particularly as it applies to HR leaders:

“I do believe that more multinationals will be pursuing improved maternity-leave and other benefits policies. One, because centralized and standardized benefits programs are easier to manage than a grab bag of varied policies impacted by an array of international legal frameworks. Offering everyone a high-end multinational program is easier to manage, avoids lawsuits from accidentally violating a country’s laws with a policy legal in another country, and avoids organizational culture clashes as employees around the world compare their benefits.”

He goes on:

“I believe that a single, affordable, multinational benefits program is the holy grail of the benefits industry. Second, there has been a recent wave of organizations attempting to outdo each other on employee benefits. The battle for talent is reigniting as the predicted retirement boom begins to pick up steam — reducing the size of the workforce –and more jobs require uncommon skills that take years of education or experience to cultivate — a major problem for a shrinking labor force.

“Organizations will want to be seen as leaders and many HR executives and benefits teams should prepare for calls from senior executives to benchmark their benefits programs against their competitors.  It is essential for HR executives to keep cool heads and examine their benefits in terms of what their people want and need rather than offering extensive benefits just to make a social or political statement. Especially if the organizational or local  cultures will suppress the usage of these elaborate offerings or interest will wane over time and leaders might call for a reversal if the benefits structure doesn’t work for their organization and staff.”

Sounds like advice worth heeding, or at least considering.

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Pay for Performance is Given a Poor Grade

Money on hand.

Money on hand.

Employers have long embraced the notion of paying for performance. But are these programs really making a difference? Are they really leading to better employee performance?

If we’re to believe the latest survey of 150 companies coming out of Willis Towers Watson, the impact these efforts are having on organizations leaves something to be desired.

According to the Arlington, Va.-based consultancy, the vast majority of North American employers say their pay-for-performance programs are falling short when it comes to driving individual performance.

Moreover, the survey finds that only one in five companies (20 percent) find merit pay to be effective at driving higher levels of individual performance at their organizations. Further, just under one-third (32 percent) report their merit-pay programs are effective at differentiating pay based on individual performance.

Nor are employers the only ones giving these programs low marks. Only about half of employees say these programs are effective at boosting individual performance levels; and even fewer (47 percent) believe annual incentives effectively differentiate pay based on how well employees perform.

Why the low marks?

Part of the reason is employers are either trapped in a business-as-usual approach or suffering from a me-too mentality when it comes to their programs, according to Laura Sejen, global practice leader for rewards at Willis Towers Watson.

Sejen elaborates …

“Pay-for-performance programs, when designed and implemented effectively, are great tools to drive performance, and recognize and reward employees. However, conventional thinking on pay for performance is no longer appropriate. Companies need to define what performance means for their organization[s] and how managers can ensure they are driving the right performance, and re-evaluate the objectives of their reward programs to ensure they are aligned with that definition.”

Nearly two-thirds (64 percent) of those surveyed say managers at their organization consider the knowledge and skills required in an employee’s current role when making merit-increase decisions, according to the study. That compares to fewer than half (46 percent) who say their programs are designed to take these performance indicators into consideration.

The Willis Towers Watson findings probably shouldn’t come as a huge surprise to those in HR, since they echo the findings of other studies we’ve reported on in the past.

Roughly a year ago, for instance, we reported on research by Organizational Capital Partners and the Investor Responsibility Research Center Institute that found 80 percent of S&P 1500 companies are not measuring the right metrics, over the right period of time, for performance-based executive compensation.

So what’s the key takeaway here? Well, if we’re to believe the research, it’s the fact that employers clearly have a lot more work to do when it comes to pay for performance—and no one knows this better than the companies themselves.

But, of course, knowing and doing something about it are two entirely different things.

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Bill Gates’ Ruthless Management Style of Yore

DAVOS/SWITZERLAND, 26JAN12 - William H. Gates III,  Co-Chair, Bill & Melinda Gates Foundation, USA captured during the session 'Global Economic Crisis: Role and Challenges of the G20' at the Annual Meeting 2012 of the World Economic Forum at the congress centre in Davos, Switzerland, January 26, 2012. Photo by Sebastian Derungs

Bill Gates at the Annual Meeting of the World Economic Forum in Davos, Switzerland, January 26, 2012. Photo by Sebastian Derungs

These days Bill Gates is known primarily as the benevolent overseer of the Bill and Melinda Gates Foundation, the philanthropic vehicle through which the world’s richest man (estimated net worth: $56 billion) tackles poverty and disease and seeks to improve education. But back in the early days of Microsoft, Gates was known as a fearsome manager.

“I worked weekends, I didn’t really believe in vacations,” Gates recently told an interviewer for the BBC’s Desert Island Discs program, in which celebrities disclose which music and books they’d take with them to a desert island. This work-all-the-time mindset was applied to his employees, too: “I knew everybody’s license plate so I could look out at the parking lot and see, you know, when people come in.”

Peter Holley, a writer for the Washington Post, recently compiled some anecdotes about Gates’ old management style from people who worked with him. The stories suggest a man for whom work/life balance wasn’t just an afterthought, but a  totally alien concept. This is in stark contrast, of course, to the professed mindset of so many of today’s New Economy companies that are offering unlimited paid family leave, for example.

He cites Microsoft co-founder Paul Allen, who wrote a piece for Vanity Fair a few years ago about how Gates would “prowl” the parking lots on weekends to see who had come in to work. One employee put in 81 hours in one week finishing a project, only to be asked by Gates “What are you working on tomorrow?” When the employee replied that he was planning on taking the day off, Gates asked “Why would you want to do that?”

“He genuinely couldn’t understand it; he never seemed to need to recharge,” Allen writes.

Gates also had a harsh leadership style that included the frequent deployment of f-bombs, with one of his favorite sayings being “That’s the stupidest f—- thing I’ve ever heard!” writes Allen.

These days people with a management style like Gates’ are condemned as “toxic bosses.” But the sentiment is hardly universal. Holley notes that the authors of the book Primal Leadership described Gates’ style in a Harvard Business Review essay as “harsh” and yet, “Gates is the achievement-driven leader par excellence, in an organization that has cherry-picked highly talented and motivated people. His apparently harsh leadership style — baldly challenging employees to surpass their past performance — can be quite effective when employees are competent, motivated and need little direction — all characteristics of Microsoft’s engineers.”

Of course, Steve Jobs was another tech titan with a famously acerbic management style, one that reportedly left many people in tears (interestingly enough, Jobs himself also cried frequently, according to Walter Issacson’s biography Steve Jobs). Gates and Jobs are visionaries, the type who attract people willing to forgo things like having family time, or being treated with some semblance of respect, in the furtherance of building a company or product they believe will change the world (the promise of hefty stock options no doubt can make it a little more bearable, too). But visionaries don’t have to be nasty in order to get people to accomplish great things — and even Gates himself has acknowledged he’s changed and mellowed a lot in the intervening years. With the rise of social media, I would suspect it’s a bit harder to get away with a management style like that today and still be able to attract great candidates.

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The Ramifications of Stacked Rankings

It’s fair to say that employee-ranking systems are controversial and pretty unpopular. But illegal?

A former Yahoo! Inc. employee contends the Sunnyvale, Calif.-based technology company’s quarterly performance reviews violate state and federal laws, and claims as much in a lawsuit filed Monday in San Jose, Calif.

The reviews, which rate every Yahoo! employee on a scale of 1 to 5, have been one of Marissa Mayer’s “signature policies” since taking over as CEO in 2012, according to the New York Times.

Earlier this week, the Times summed up the suit filed by Gregory Anderson, in which he challenges Yahoo!’s performance review system as “discriminatory and a violation of federal and California laws governing mass layoffs,” according to the paper.

Anderson, an editor who supervised a handful of Yahoo! sites before his November 2014 firing, charges that the company’s senior managers “routinely manipulated the rating system to fire hundreds of people without just cause to achieve the company’s financial goals,” notes the Times.

Such cuts, Anderson claims, amounted to “illegal mass layoffs.”

As the paper points out, California law mandates that employers making layoffs that involve more than 50 employees, and take place within 30 days at a single location, must provide workers 60 days advance notice. On the federal level, the Worker Adjustment and Retraining Notification Act obliges employers to offer advance notice for a layoff of 500 or more employees.

According to the Times, Yahoo! never provided such notices when it let go of 1,100 employees between late 2014 and early 2015, “ostensibly for performance reasons.” The company is now faced with the prospect of paying each affected employee $500 a day in addition to back pay and benefits for each day of advance notice it failed to provide, the Times reports.

For its part, Yahoo! maintains that its rating system is sound. In a statement, the company says its performance review process “also allows for high performers to engage in increasingly larger opportunities at our company, as well as for low performers to be transitioned out.” In regard to Anderson’s legal complaint, the company says his specific allegations are groundless, and claims that Anderson unsuccessfully sought a $5 million settlement before filing the suit.

It could be a while before this case winds its way through the legal system. And we’ll certainly be following it here. (In fact, come back to HREOnline early next week for a more in-depth analysis of Anderson’s claims, including some expert insight into the nuances of the lawsuit and its chances of succeeding.)

In the meantime, the stacked rankings that have been a hallmark of Mayer’s tenure at Yahoo! will likely remain a polarizing concept. Although the stacked ranking system has never had a shortage of detractors, a claim that such rankings are actually illegal seems unique. It will be interesting to see how this one plays out.

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Getting Agile in an On-Demand World

It’s not often you read a Harvard Business Review article and stumble across a quote from a famous Hollywood actor within the text, but this is the Internet, after all…

Perhaps some context is in order:

The aforementioned article — “Managing On-Demand Talent” — was written by John Younger and Norm Smallwood and focuses on companies that are experimenting with new ways of filling critical skill gaps while staying lean. It’s a phenomenon they call “agile talent.” (Coincidentally, it’s also the name of their new book.)

In researching their book, they found that over half executives report increasing their use of outside expertise and sourcing talent from the cloud:

While cost is clearly a consideration, managers describe the primary benefits of agile talent as increasing flexibility, speed, and innovation. In short: it’s better, not cheaper.

It is the job of middle managers to roll out effective implementation of any agile talent program, the authors say, and to that end, they have uncovered seven things managers do that set up their external experts for success.

The first thing, “building a talent network,” is where we have our in-print celebrity encounter:

The actor Rob Lowe once said it straight: “Ninety percent of moviemaking is casting.” Mid-level managers depending on Procurement or Human Resources to find agile talent are behind the curve; smart middle managers tend to their network as a means of ensuring the right agile talent — with the right technical skill and way of working — is hired.

The other six “things” are well worth the time to read for yourself. But read quickly, because, as the authors note:

While the transformation of today’s workforce to a mostly agile one will take time, many more organizations are ramping up their use of “expertise on tap” in order to acquire and master the capabilities they need to perform and grow.

 

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Xerox’s Move to Split Into Two

The spin-offs keep spinning.

Friday’s announcement by Xerox that it will separate into two entities caps a lot of spin-off activity of late. This latest, as announced here on USA Today‘s website, will 504855042--splitseparate the office-equipment giant into two companies, an $11-billion document-technology company and a $7 billion business-services company.

The company says the transaction into two independent publicly-traded companies is expected to be completed by the end of the year.

These “significant actions … define the next chapter of our company,” Chairman and CEO Ursula Burns told the paper in a conference call Friday morning.

This certainly underscores the spin-off mania that Will Bunch’s September cover story in HRE, “Split Decision,” alluded to. His focus, of course, was on the impact these mega-transactions are having on human resource departments and their leaders. As his piece puts it:

“Most of the headlines over the big, high-profile spin-offs — the Hewlett-Packard split, eBay and PayPal, General Electric and its credit-card unit Synchrony Financial, Time-Warner and its publishing unit Time, Sears and Land’s End — have focused on what the moves could mean for investors. But when they say — as in the words of the old Neil Sedaka song — that “breaking up is hard to do,” in the business world they’re probably talking about the HR department.

“Indeed, much of the heavy lifting for these spin-offs — deciding who stays with the old company and who goes, filling vacancies and new positions, making critical decisions about pay and benefits, and fostering employee enthusiasm and answering anxious questions while developing a new, unique culture at the spin-off — falls upon HR executives.”

Although early reports don’t include specifics about the impact this division will have on Xerox’s HR function — now functions, no doubt — Burns did tell the paper that the two post-split companies will be “more flexible, more responsive and essentially more fit and focused for the market that we are attacking.”

The report also notes Xerox’s 140,000 employees worldwide will be divided up thusly: About 104,000 will be part of the business-services outsourcing company and the other 40,000 will make up the document-technology company.

It will be interesting to see how this latest in the spin-off string plays out, especially as it relates to HR. As Bunch notes in his story:

“HR executives who’ve worked through the spin-off process say the biggest personnel changes don’t usually affect the operating infrastructure of two companies — manufacturing and sales, for example — because those functions tend to stay largely intact. It’s a different story, they say, with shared services and in the corporate offices.”

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