All posts by Mark McGraw

Gaming the Gainsharing System

This is just a guess, but I’m going to say the mood throughout Whole Foods break rooms is less than festive this holiday season.

And if the claims made in a new lawsuit prove to be true, you couldn’t really blame the grocery store chain’s employees for not getting into the spirit this year.

Last week, one current and one former employee from a Whole Foods store in Washington, D.C. filed a federal class-action lawsuit claiming the Austin, Texas-based company “engaged in a nationwide scheme to strip hard-working employees of earned bonuses in order to maximize [its] own profit.”

More specifically, plaintiffs Michael Molock and Randal Kuczor assert that a group of managers gamed Whole Foods’ gainsharing program to avoid paying automatic bonuses to departments that came in under budget for the year, as reported by the Washington Post.

According to the lawsuit, the gainsharing program is intended to enable employees in such departments to share in surpluses. The plaintiffs claim, however, that Whole Foods avoided paying by shifting labor costs to other departments without properly accounting for it, as well as by creating “fast teams” comprised of employees who float from one department to another.

The complaint also alleges that company executives knew of the “illicit practice of shifting costs,” which the suit says has impacted as many as 20,000 past and present Whole Foods employees.

In a statement, Whole Foods acknowledges that some sort of bonus program manipulation took place, while maintaining that it was confined to a relatively small number of its stores. Nevertheless, Whole Foods says it is investigating the matter. And, as the Post reports, the organization has already terminated the nine managers known to have been involved.

The plaintiffs are asking for more than to see a few managers fired. The suit seeks $200 million in punitive damages and triple unpaid wages, among other relief, according to the Post.

“Defendants intentionally manipulated the program and illicitly engaged in a nationwide corporate practice of ‘shifting labor costs’ in order to pad its profits,” the suit claims, alleging that this “unlawful” maneuvering effectively wiped out surpluses in certain departments, “thereby robbing hard-working employees of earned bonuses.”

Mental Health Conditions and the ADA

Mental healthIn many cases, making reasonable accommodations for employees’ physical conditions should seem straightforward enough.

Provide a hearing-impaired worker with the necessary phone equipment, for example. Allow a blind employee to bring his or her service dog to work. Lower the height of a wheelchair user’s desktop.

Addressing the needs of individuals with mental health conditions—which can be difficult to understand or even recognize—is a bit trickier for employers. Recent history gives us examples (like this one) of how organizations can run afoul of the American with Disabilities Act when dealing with mental health issues in the workplace.

This week, the U.S. Equal Employment Opportunity Commission issued a resource document it hopes will explain workplace protections and appropriate accommodations for employees and job applicants with mental health conditions under the ADA.

Judging by recent EEOC data, many employers could use some guidance in this area.

During fiscal year 2016, the organization resolved nearly 5,000 charges of discrimination based on mental health conditions, and obtained roughly $20 million for individuals with mental health conditions who were unlawfully denied employment and reasonable accommodations. And, EEOC charge data show that claims of discrimination based on mental health conditions are on the way up.

Depression, PTSD & Other Mental Health Conditions in the Workplace: Your Legal Rights is geared toward the individual employee, but can also be instructive for businesses. For instance, the document offers examples of possible accommodations to help individuals with mental health conditions perform their jobs, such as altering break and work schedules (scheduling work around therapy appointments, for example), providing quiet office space or devices that create a quiet work environment, making changes in supervisory methods and granting permission to work from home.

It also outlines scenarios in which employees or job applicants are allowed to keep a mental health condition private, and details situations that permit employers to ask medical questions, including queries surrounding mental health.

“Many people with common mental health conditions have important protections under the ADA,” said EEOC Chair Jenny R. Yang, in a statement. “Employers, job applicants and employees should know that mental health conditions are no different than physical health conditions under the law. In our recent outreach to veterans who have returned home with service-connected disabilities, we have seen the need to raise awareness about these issues. This resource document aims to clarify the protections that the ADA affords employees.”

Now THAT’s Honest Feedback

There’s a saying that people want the truth until they get it.

Consider the leadership team at the Pennsylvania Turnpike Commission, who might regret asking interchange manager Michael Stuban to fill out an exit survey on his last day before heading into retirement.

Stuban, who spent 35 years with the organization, offered his two cents and then some.

In a recent interview with The Philadelphia Daily News, Stuban described the “brutal” frankness with which he approached the online questionnaire.

“When they asked for an honest exit interview, I gave them one,” Stuban told the paper, with a bit of a laugh. “I sent it minutes before I officially retired.”

For what it’s worth, the 58-year-old Stuban wrote that he didn’t really want to retire just yet, and that he actually liked his job.

He may have enjoyed his work, but it seems he wasn’t so crazy about the people he worked for.

The “out of touch” executive-level managers at the helm of the “rudderless” agency, for instance, are “only looking out for themselves,” according to Stuban. He characterized the past five years at the commission as “terrible,” with “no morale” among employees.

These same co-workers were asked to take part in classes “where we were told we are not political,” wrote Stuban, who opined that the commission frequently hires incompetent employees “based on political connections,” according to the Daily News.

Stuban didn’t mince words when it came to the idea that corporate politics were not at work within the organization.

“That’s bulls—,” he wrote. “Jobs/promotions are filled by the politicians … it’s who you know, not what you know. Positions [are] created for people who are not qualified.”

And, Stuban apparently felt so strongly about the thoughts he was sharing that he had to disseminate them throughout the organization. Stuban emailed his completed exit survey not just to the HR department from which it came, but to more than 2,000 colleagues as well, according to the Daily News.

At least one of them found some levity in Stuban’s sentiments.

“Want to get away? Southwest is offering great fares … ” replied the employee, in a reference to the airline’s well-known commercial tagline.

Turnpike Commission Chairman Sean Logan didn’t find Stuban’s candor quite so funny.

Logan, a former Pennsylvania State Senator, was equally blunt in his reply, which went out to those same 2,000-plus turnpike employees, the Daily News notes.

“Mr. Stuban … I don’t believe we ever met, and after reading your exit questionnaire, I am grateful that we didn’t.”

According to the paper, Stuban was made aware of Logan’s brusque response, and, perhaps not surprisingly, felt the chairman failed to see the point of his missive.

“If it was an effective company and someone told you there are problems and no morale, you don’t have to believe me, but maybe someone should check into it.”

No one outside this particular organization can really say how accurate Stuban’s depiction of its culture may or may not be. And who knows how the commission has responded, or plans to respond, to the issues that Stuban alleges exist within the agency.

But if morale really is a problem there, then Logan’s reaction to Stuban’s candid, albeit harsh, feedback probably won’t encourage other workers to offer their honest (and invaluable) opinions to those above them. And that’s the organization’s loss.

Undervaluing the Human Element

If you’ve heard it from one CHRO, you’ve heard it from a hundred: Our people are our greatest asset.

A new Korn Ferry Institute study suggests that most CEOs also appreciate the hard-working employees within the organizations they lead—just maybe not quite as much as they value technology.

More specifically, the recent survey saw 63 percent of 800 business leaders from multimillion-dollar global organizations saying that technology will be their greatest source of competitive advantage in five years. In addition, 67 percent said they believe technology will create greater future value than human capital will within their firms, and 44 percent said the prevalence of robotics, automation and artificial intelligence figure to make people “largely irrelevant in the future of work.”

As if that wasn’t hard enough for employees to hear, consider that people didn’t crack the top five in terms of assets that CEOs predict will be most critical half a decade from now. Technology ranked No. 1, followed by research and development, products/services, brand and real estate (offices, factories and land, for example.)

“CEOs have a significant blind spot in the way they perceive people,” according to the Korn Ferry Institute study, “tending to undervalue human capital.”

These “distorted perceptions” demonstrate the extent to which the individual is being pushed to the periphery of tomorrow’s workplace—and the danger in failing to recognize the potential of employees to generate value, the report continues.

In placing a greater emphasis on technology and tangible assets, chief executives “may be demonstrating, in a big way, what experts call tangibility bias. Facing uncertainty, they are putting a priority in their thinking, planning and execution on the tangible—what they can see, touch and measure.”

In the report, Korn Ferry Search Vice Chairman, CEO and Board Services Alan Guarino cautions against taking that approach while overlooking human capital.

“Leaders are placing a high emphasis on technical skills, technological prowess and the ability to drive innovation in their new senior recruits—elements critical for modern organizations,” says Guarino. “However, the financial reality proven by this study—that the value of people outstrips that of machines by a considerable distance—must give CEOs pause for thought.”

The ability to lead and manage culture—”so-called ‘soft skills,’ ” says Guarino—will become “critical factors of success for companies in the future of work, as they seek to maximize their value through their people.”

Who knows the organization’s people better than the HR executive? And, if what Guarino says is true, one could look at this study’s findings as a tremendous opportunity for the HR leader to help the CEO see the tremendous worth of human capital, and to help make the organization’s workers an irreplaceable, invaluable part of tomorrow’s workforce.

The EEOC Enforcement Agenda

Earlier this week, the Equal Employment Opportunity Commission issued its updated enforcement guidance on national origin discrimination.

(The EEOC also issued two resource documents to accompany the guidance: a Q & A publication on the guidance document and a small business fact sheet designed to illustrate the guidance’s chief points in plain language, according to the organization.)

The new guidance defines national origin discrimination as “discrimination because an individual (or his or her ancestors) is from a certain place or has the physical, cultural or linguistic characteristics of a particular national origin group.”

The documents also address Title VII’s prohibition on national origin discrimination as applied to a broad range of employment situations and highlight practices for employers to prevent discrimination, as well as discussing legal developments since 2002, when the EEOC issued the national origin discrimination compliance manual section that these new guidelines are intended to replace.

“EEOC is dedicated to advancing opportunity for all workers and ensuring freedom from discrimination based on ethnicity or country of origin,” says EEOC Chair Jenny R. Yang, in a statement.

“This guidance addresses important legal developments over the past 14 years on issues ranging from human trafficking to workplace harassment. The examples and promising practices included in the guidance will promote compliance with federal anti-discrimination laws and help employers and employees better understand their legal rights and responsibilities.”

This announcement comes just weeks after the EEOC unveiled its Strategic Enforcement Plan for fiscal years 2017 through 2021. One pillar of this plan is the agency’s expanding focus on protecting immigrant and migrant workers, such as those who are Muslim or Sikh or persons of Arab, Middle Eastern or South Asian descent, as well as those perceived to be members of these groups, as HRE’s Julie Cook-Ramirez noted earlier this month.

Of course, the EEOC’s new guidelines and its stated strategy for the next five years arrive almost exactly two months before the scheduled inauguration of President-Elect Donald Trump, who stands to significantly shake up the agency’s agenda.

In a recent blog post at www.law360.com, law professor Michael LeRoy explains how the incoming president could very well upend the EEOC’s enforcement agenda with regard to national origin (and other forms of) discrimination.

“Trump’s popularity derives in no small measure from people who are tired of ‘political correctedness,’ ” writes LeRoy, a professor in the School of Labor and Employment Relations and College of Law at the University of Illinois at Urbana-Champaign. “This concept is generally found in Equal Employment Opportunity Commission regulations that prohibit employers from creating a ‘hostile work environment.’ ”

That term applies to sexual harassment, but racial, religious and national origin harassment as well, adds LeRoy.

“A Trump EEOC could redline ‘hostile work environment,’ thereby signaling that no federal employment policy prohibits the type of degrading language that Trump has used against women, Mexican, Muslims and other groups.”

For that matter, President Trump will have the opportunity to appoint high-ranking personnel that could in turn impact staffing decisions throughout the EEOC, potentially shifting the agency’s enforcement priorities, as Seyfarth Shaw attorneys recently pointed out.

In addition to the possibility that President Trump could designate a new EEOC chair, the agency will see General Counsel David Lopez leave at the end of 2016.

“[Lopez’s] impending departure means that President Trump will have an early opportunity to appoint his successor,” Seyfarth attorneys wrote. “These leadership changes at the highest levels of the EEOC will undoubtedly impact the direction the agency takes in the future.”

A Trump administration could also signal budgetary constraints for the EEOC, which may alter the way the agency approaches enforcement of discrimination guidelines.

“Historically, the EEOC adapted by focusing its enforcement efforts on systemic litigation, meaning targeting high-impact cases that address policies or patterns or practices that have a broad impact on a region, industry or entire class of employees or job applicants,” Seyfarth attorneys note. “The theory was that large, high-profile cases, settlements and judgments would have a greater deterrent effect, and would therefore affect a larger number of workers and industries.”

Faced with the possibility of fewer resources and new personnel, however, the EEOC of the near future could be forced to find “new and creative ways to adapt its enforcement program (and its own political viability) to the new reality.”

 

Taking Time Off for Election Day

I got to my local polling place at 6:50 a.m. today, pretty pleased with myself for having the foresight to show up 10 whole minutes before the polls opened.

I knew I wouldn’t be the first in line. But, based on what I saw as I pulled into the parking lot, I’d say at least 150 to 200 of my fellow Harleysville, Pa., residents had thought much further ahead than I had.

As heartened as I was by the sight of democracy in action, I wasn’t as excited about standing in the line that snaked down the sidewalk outside of Oak Ridge Elementary School. Sub-40 degree temperatures and cranky back aside, my biggest worry was that I might wind up getting to work later than I had planned when I carefully mapped out my election day schedule last night.

Petty concerns on a day of this magnitude, to be sure. And I was actually able to wrap up my civic duty and get on my way to work in about 25 minutes. And, we have flexible schedules here at HRE headquarters anyway, so it really didn’t matter when I showed up at the office. I just didn’t want to feel like I was running behind all day long.

Some workers won’t face such dilemmas today.

As the Washington Post reports, a handful of companies including General Motors, Patagonia and Western Union are giving employees the day off so they can go vote. (Patagonia “is taking it a step further and closing its stores,” according to the Post.)

These organizations are among the 330 joining a Twitter campaign that maintains a running list of companies that offer employees time off in order to vote, according to the Post, which notes that the social media movement began this summer when venture capitalist Hunter Walk asked California-based start-up founders to provide employees with time off on election day.

Arlington, Va.-based Distil Networks is one of these companies. CEO Rami Essaid, 33, came to America from Syria at a young age and, with early help from government technology funding, founded Distil in 2011 and has since grown it to include a few hundred employees, the Post notes.

Coming from a country that’s currently wracked by civil war and a subsequent refugee crisis, the gravity of this election isn’t lost on Essaid. He tried to impress its importance on Distil employees in an impassioned, companywide email.

“Once every couple of years, we get a chance in the U.S. that many people around the world don’t ever get the opportunity to experience,” he wrote, “and that is to choose who will represent us nationally and globally.

“ … As a Syrian-American, I can’t take the opportunity to vote for granted and I ask that you don’t either,” continued Essaid. “On election day, DO NOT come to work UNTIL you vote.”

Essaid, who in an interview with the Post declined to express support for either candidate, told the paper that Distil is also sponsoring an election day happy hour for employees showing their “I voted” stickers.

Encouraging or even incentivizing employees to vote is one thing. Trying to influence who workers choose at the ballot box is quite another, of course. Reston, Va.-based technology company Canvas is treading lightly.

According to the Post, Canvas chief executive James Quigley has given all employees the day off today, “but not before he made them check their voter registrations online, handing out mobile devices for them to do so.”

While noting that Canvas employees are generally “aware of some company leaders’ [political] leanings,” Quigley also pointed out that he hasn’t “explicitly push[ed] employees” to vote for one candidate or another.

“Clearly we live in a very blue area, and the company in general has more of those values,” Quigley told the Post. “It was clear what some members of our senior staff thought, but we tried to be soft about pushing people one way or the other.”

Trading PTO for Perks

It happens all the time: The end of the year rolls around, and busy employees find themselves with handfuls of unused vacation days, and too much work to feel good about cashing them in.

But what if they could still get something of value in exchange for that paid time off?

A new start-up is enabling employees to do just that.

As recently reported in the Washington Post, PTO Exchange has just begun working with Premera Blue Cross to let the health insurer’s workers trade in the value of their unused paid time off for other perks, which could include added contributions to 401(k) accounts, putting money toward college tuition expenses, getting reimbursement for travel expenses or making a donation to a favorite charity.

While Premera Blue Cross is PTO Exchange’s first and only client thus far, co-founder Rob Whalen told the Post that PTO Exchange has heard from “150 interested companies, including large retailers and pharmaceutical firms, and is in advanced discussions with several major [HR] consulting firms.”

Organizations are “trying to offer flexibility to their employees,” Whalen told the paper. “They currently have this benefit on the books, and it’s budgeted—they might as well find ways to use it.”

The notion of offering workers the opportunity to swap paid time off for other perks “is a brand new concept meant to meet an emerging workforce need,” says Craig Dolezal, senior vice president at Lincolnshire, Ill.-based Aon Hewitt.

We could very well see others emerging to provide a similar service, he says.

“Like all innovations in benefits, there typically is a leader that drives a potential solution first, with others more than willing to create their own version once there is a real market need. … If more adopt [the PTO Exchange] model, we will most certainly see others build comparable solutions.”

Whether that happens, of course, is predicated on the idea that exchanging PTO days for other needs or wants passes all legal, administrative, compliance and financial tests, adds Dolezal.

Indeed, employers and HR have much to consider before rolling out such a benefit to the workforce.

“The very first place to focus is on the alignment with an employer’s business, cultural and human capital strategies,” says Dolezal. “Does this type of total benefits flexibility benefit the organization and [its] people? Does the exchange work in concert with [the company’s] broader workforce management approaches?”

If the answer to those questions is yes, then the company “would need to explore the legal and financial viability of the exchange and test the administrative approach,” he says, “to ensure this potentially new benefit can work seamlessly alongside other total rewards programs.”

 

Recruiting Takes to the Air

Recruiters dreaming up new ways to reach passive talent are going to have to dig down pretty deep—or go sky high—to top Kiwi.com.

The online travel agency, based in the Czech Republic city of Brno, recently deployed a fleet of “HR drones” in hopes of catching the attention of technology developers who were about to be relieved of their jobs at a handful of area companies.

Just to clarify, the agency sent actual drones—unmanned aerial vehicles, not spiritless employees from the HR department—to hover around the nearby offices of organizations such as AVG Technologies and NetSuite, after catching wind that the recently-acquired companies were laying off developers.

These drones came with a message, delivered via the blue banners affixed to each of the undersized aircraft. On one side: SMART PEOPLE WANTED, along with the email address join@kiwi.com, for interested applicants. The other, meanwhile, promoted the company’s website, www.kiwi.com.

Captured for a YouTube video, the recent “stunt,” as it was described in a Kiwi.com statement, was meant to give would-be candidates a taste of the creative climate they would find if they became one of the organization’s roughly 750 employees.

“To get smart people, sometimes you need to do something really stupid,” according to a Kiwi.com employee appearing in the video, which notes that the competition to find developers is “fierce” in Brno, “the Silicon Valley of Central Europe.”

“Recruiting the best in the industry is always a challenge, as smart people need to work somewhere that challenges and inspires them,” adds Kateřina Gábová, head of HR at Kiwi.com. “We wanted to dramatically show that, at Kiwi.com, we foster an environment in which clever people will thrive, and that we are looking for the brightest new talent in technology.”

This recruitment mission just took place less than one week ago, so we’ll have to wait and see if it ultimately draws developers to Kiwi.com. But you have to give the company credit for trying something bold to set itself apart from the pack.

Overtime Rules and Flexible Work

The U.S. Department of Labor’s proposed overtime rules may or may not go into effect on Dec. 1 of this year.

But if the new regulations do become reality, large employers could face unintended and unanticipated consequences, according to new WorldatWork research.

The Scottsdale, Ariz.-based non-profit HR association’s recent Quick Survey on Implementation of New FLSA Rules survey polled 948 WorldatWork members with compensation and HR generalist in their titles.

When asked how they are addressing or plan to address employees that were exempt under the old overtime rules who fall below the new standard salary level threshold, 73 percent of employers said they did or will raise some to the new minimum threshold, while reclassifying others to non-exempt. (Fifteen percent indicated that they did or will raise all to the new minimum salary threshold and maintain exemption, while 9 percent intend to reclassify all to non-exempt, and 4 percent said they were unsure of their plans.)

Among those who plan to reclassify employees to non-exempt, 49 percent said their workplace flexibility options will decrease. The number of large organizations planning to go this route is “of particular concern,” according to a WorldatWork statement summarizing the findings.

For example, 62 percent of responding companies with 10,000 to 39,999 employers said they intend to reduce the flexibility options they offer workers.

“The fact that larger employers are more likely to decrease flexibility will obviously affect more employees,” says Kerry Chou, senior practice leader at WorldatWork. “That being said, this result could be a byproduct of the fact that larger organizations are more likely to have formalized flex programs as opposed to ad hoc programs.”

Naturally, the new rules figure to have a significant financial impact on employers, with 69 percent of respondents telling WorldatWork that their overall costs have already increased or will increase as a result of the new standard salary-level threshold. Just 13 percent said that net costs have stayed or will stay the same, and they won’t require taking separate actions such as reclassifying employees as non-exempt to contain costs.

Some employers may look at cutting flexible work options as one way to offset additional expenses connected to new overtime rules, says Chou, adding that workplace flexibility can be a big factor in recruiting and retaining talent.

As such, companies that choose to offer fewer flexible work options may ultimately see higher turnover and greater difficulty in attracting replacements for departing employees, he says.

“The increased cost of overtime compliance, coupled with high turnover—or at least lower job satisfaction of current workers—are consequences that will need to be addressed.”

What HR Wants in Entry-Level Workers

If new SHRM research is any indication, HR professionals have a pretty good idea of the attributes they’re looking for in entry-level job candidates.

HR leaders aren’t quite so sure, however, of their organization’s ability to spot the skills they’re searching for.

Produced in collaboration with Mercer, SHRM’s just-released Entry-Level Applicant Job Skills Survey polled 521 HR professionals. Overall, 97 percent of respondents said dependability was very or extremely important in determining whether an applicant possessed the necessary qualifications to be hired into an entry-level position, according to SHRM. Eighty-seven percent said the same about integrity, with 84 percent and 83 percent saying that respect and teamwork, respectively, were very or extremely important.

In addition, 78 percent indicated that dependability was one of the three most important traits an entry-level candidate can possess. Forty-nine percent placed integrity in their top three, with 36 percent considering teamwork a top-three quality.

Looking ahead at what skills and traits would best serve entry-level job seekers in the coming three to five years, 62 percent pointed to adaptability, while 49 percent singled out initiative and 49 percent said critical thinking skills would be most desirable.

Respondents were also asked to gauge their faith in the methods their firms use to assess the aforementioned qualities (and a handful of others, such as professionalism and customer focus). Their confidence levels aren’t exactly off the charts.

With regard to evaluating the integrity of an entry-level candidate, for instance, a mere 15 percent said they thought the phone interviews they conduct with these applicants were effective. Just 13 percent of HR professionals reported confidence in their company’s ability to accurately assess integrity through telephone screens.

A simple phone conversation will only tell you so much about a candidate, of course. Respondents did feel that they could get a good sense of an applicant’s character in person, with 96 percent saying they were very or extremely confident or moderately confident or confident in on-site interviews as a way to assess integrity. Ninety-five percent expressed similar belief in panel interviews, with 97 percent saying the same about situational judgment tests.

Still, just 20 percent of those surveyed described themselves as being very or extremely confident in their organization’s ability to effectively assess the overall skills of entry-level applicants, while 11 percent said they were not at all confident or only slightly confident.

Such findings “may be due to an over-reliance on applications and resumes, even though most HR professionals believe them to be ineffective in assessing entry-level candidates, simply because they are ingrained in our culture,” says Evren Esen, director of workforce analytics at SHRM.

“This is a clear indication for a need for new, more effective approaches,” says Esen, noting that improvements in the use of predictive data modeling and assessment technologies could begin to influence the methods HR professionals use to evaluate entry-level candidates.

“Although few HR professionals indicated that their organizations currently used data-based assessment methods such as personality and cognitive tests or simulations,” adds Esen, “the use of these tools may grow in the future.”