Posts belonging to Category HR profession



Another EEOC Setback in the Courts

I can’t help but think this latest slap on the wrist of the Equal Employment Opportunity Commission (as documented by HR Morning) will only embolden the agency.

121266265-soc media and hiringThat has been the sentiment after past EEOC court defeats, including this one I blogged about several months back.

In this latest case, a federal appeals court upheld the dismissal of a lawsuit filed by the EEOC against Kaplan Higher Education Corp., claiming the company improperly used credit histories to screen job applicants.

The agency claimed Kaplan discriminated against black candidates applying to senior-executive, accounting and other financially sensitive positions. The EEOC, meanwhile, hired a third party to prove the credit checks had a disparate impact on black applicants, but the court found the third party’s research process — which included examining driver’s licenses to determine race, a technique it calls “race rating” — was flawed and unreliable.

What’s more, the court found, the EEOC was making charges about a background-check technique it employs. And that’s not all the problems found by the court.

As quoted from the ruling, care of HR Morning:

In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.

… We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

This piece from Forbes offers additional details and perspective about the case.

From my limited perspective, I’m starting to see enough of these failed EEOC prosecutions to think the agency might have better luck returning to the old days of helping employers comply rather than looking for ways — even paying third parties to find ways — to nail them.

Another Drowsy Day at the Office

sleepy employeeFor the average employee, a truly good night’s sleep may seem like a distant memory from the days before adulthood arrived with all sorts of grown-up problems in tow.

So, employees adjust and learn to function at high levels, even with less quality rest. But the effects of losing sleep to financial, familial and other worries can still be seen at work.

The Virgin Pulse Institute—the new research arm of Framingham, Mass.-based Virgin Pulse—recently surveyed 1,139 workers at three companies, in an effort to better understand sleep disturbances and offer insight on how to help employees sleep more soundly.

The study found nearly 30 percent of employees reporting they were “unhappy” or “very unhappy” with the quality or quantity of their sleep. More than 75 percent said they feel tired “many days of the week,” with 15 percent saying they doze off at work during the day at least once weekly.

What keeps employees tossing and turning at night, and, in turn, leaves them sluggish at their desks the next day? Environmental factors identified in the study as sleep disruptors included room temperature (85.2 percent), partners (71.9 percent), noise (68.6 percent), bright lights (52.8 percent), mattresses (40 percent) and young children (35.9 percent).

These findings only make sense, and it’s natural that poor sleep can lead to poor performance at work. But what can employers do about it? How can you help encourage employee behaviors that result in better-rested and, therefore, more alert and productive workers?

Jennifer Turgiss, vice president of health solutions at Virgin Pulse, director of the Virgin Pulse Institute and lead author of the study, offers a few suggestions.

“Employers have lots of opportunities to encourage employees to improve their sleep habits,” says Turgiss. “First, they can focus on creating awareness. Provide employees with tips and information about how to improve sleep. Host a brown-bag lunch with a sleep expert. Encourage employees to share tips on what works for them.”

She also urges HR professionals to review internal policies, to ensure the organization has procedures in place to help support improved sleeping habits among the workforce.

“For example,” says Turgiss, “a company could put in place a policy that makes it clear that managers don’t expect employees to respond to emails after certain hours or on weekends. This can help alleviate the worry and concerns that keep people up at night.”

Finally, she recommends that companies provide programs focused on improving sleep habits; an especially important offering at firms employing workers at risk of sleep deprivation—shift workers or frequent overtime workers, for instance.

Physical appearance and behavior are “great indicators” of an individual suffering from poor sleep, and HR and other leaders in the organization should also be asking themselves a variety of questions to help identify the signals of sleep-starved employees, says Turgiss.

Do [employees] look tired or sleepy? Do they fall asleep in meetings? Do they seem more irritable? Have they missed more days of work or has their output decreased significantly? Are they forgetful? Do they have trouble recalling details of projects? Have they made more mistakes than usual?”

Some workers may function better than others with little sleep, she says, ”but the telltale signs are usually there.”

HR Shakeup at GM

General Motors announced in a statement yesterday that it is replacing the executive in charge of human resources effective immediately, ”as it struggles with a string of embarrassing recalls that have led to congressional hearings and federal investigations,” according to the Associated Press.

John J. Quattrone takes over as senior vice president of global human resources for the car maker. Quattrone, formerly the executive director of human resources for global product development, purchasing and supply chain organizations, succeeds Melissa A. Howell who is leaving GM to pursue other interests.

“John brings to the job a deep and rich breadth of experience across all levels of the enterprise,” said GM CEO Mary Barra. ”This background is invaluable as we create lasting change that puts the customer at the center of how we work and how we measure ourselves going forward.”

Quattrone received his Bachelor of Science degree from Le Moyne College and earned a Master of Science degree from West Virginia University. Quattrone serves on the board of directors of American Society of Employers and previously served on the board of directors of Health Grades, Inc.

Barra praised Howell’s contribution at a key time for the company. “Through Melissa’s passion, the values that make up today’s GM are now becoming a central part of how we develop and guide our employees around the world,” said Barra. ”We are deeply grateful for her dedication to GM and all that she did to help build a stronger HR function to support our people and business.”

Howell joined GM in 1990. She was named senior vice president of global human resources in February 2013.

GM is in the midst of a crisis over safety of some of its older-model vehicles, the AP reports, including 2.6 million small cars worldwide that have been recalled to replace faulty ignition switches. GM says at least 13 deaths have been linked to the switch problem. Family members of those killed say the death toll is much higher.

GM spokesman Greg Martin told the AP the move is not linked to the recalls. He attributed them to CEO Mary Barra, who took over in January, making her own hires in key positions. “The changes are part of what any company expects during periods of transition, and Mary is building her own team,” Martin said.

But in response to the recall debacle, Barra also promised employees on a company blog that the company’s senior leadership will react quickly to tips from employees about safety problems; GM announced last Thursday a program to recognize and reward employees who speak up when they see something that could affect customer safety.

“This program is an important step toward embedding the customer- and safety-centered culture in every aspect of our business,” Barra said in the blog post.

Your Words Matter

leadership wordsIt’s not news that men still outnumber women in leadership roles.

New research, however, suggests fewer women even apply for management positions. Why? Part of the reason may be found in the way companies word their job postings.

A team of scientists from the Technische Universitat Munchen in Munchen, Germany recently found women feel less inclined to respond to employment ads containing words such as “determined” and “assertive,” because such words are “linked with male stereotypes,” according to the researchers.

In their study, the TUM team showed fictional employment advertisements to approximately 260 test subjects, in an effort to study how leaders are selected and assessed. If an ad described a large number of traits—assertive, independent, aggressive and analytical, for example—commonly associated with men, female participants found the ad less appealing and were less likely to apply, according to researchers, who note that women responded more positively to words such as “dedicated,” “responsible,” “conscientious” and “sociable.” Male test subjects, however, found a job advertisement’s phrasing to be of no consequence.

In addition, investigators found that women may be selling their on-the-job abilities short. In conjunction with researchers at New York University, TUM conducted a separate poll of approximately 600 Americans of both genders, in which respondents considered women and men to be equally competent, productive and efficient on a fundamental level. Both genders, however, rated men’s leadership skills more highly. Women also reported believing themselves and other women to be, on average, less capable in terms of leadership abilities than male respondents perceived themselves and other men.

Such findings seem to echo an all-too familiar refrain in our workplaces, with regard to gender equality: We’ve come a long way, but still have a long way to go.

Claudia Peus, chair of research and science management at TUM, and lead author of the study, suggests that employers can help close this gap by choosing their words carefully when crafting employment ads.

“A carefully formulated job posting is essential to get the best choice of personnel,” said Claudia Peus, in a statement. “In most cases, it doesn’t make sense to simply leave out all of the male-sounding phrases. But without a profile featuring at least balanced wording, organizations are robbing themselves of the chance of attracting good female applicants. And that’s because the stereotypes endure almost unchanged, in spite of all the societal transformation we have experienced.”

Marking National Equal Pay Day

In honor of National Equal Pay Day, President Obama is set to sign two executive orders later today.

According to this CBS News report, one of the executive orders will prohibit federal contractors from retaliating against employees who discuss their salaries, while the other will mandate that the Labor Department collect data on the compensation for federal contract workers, organized by race and sex.

“These executive orders continue a trend by the administration to place new requirements on the federal contracting community similar to pending federal legislation,” said Connie Bertram, head of Proskauer’s Washington-based labor and employment law practice and co-head of management-side law firm Proskauer’s Government Regulatory Compliance & Relations Group. “In February, for example, President Obama issued an Executive Order to increase the minimum wage for employees of federal contractors and subcontractors to $10.10 an hour after a bill that would have imposed such a requirement on all employers failed to pass Congress.”

And while the debate rages on whether such executive orders will ultimately move the needle in favor of equal pay, the CBS News report also noted the White House is suffering through its own pay scandal of sorts:

The White House, meanwhile, found itself defending its own pay strategies after a study by the American Enterprise Institute found that female staffers in the White House earn 12 percent less than men, on average, or 88 cents on the dollar.

White House spokesman Jay Carney noted that figure was better than the national average, but that there had been extensive efforts to ensure pay equity at the White House. Case in point, he said: the White House has both a male and female deputy chief of staff, who earn the same pay.

“Everybody at every level here at the White House is paid the same for the same work, male or female, and that is reflected at the most senior levels here, where half or more than half of the department heads are women,” Carney told reporters Monday. “When it comes to the bottom line that women who do the same work as men have to be paid the same, there is no question that that is happening here at the White House at every level.”

Latest Wrinkle in Employers’ Severance Policies

More of a case has been made for some much-needed and immediate reviews of employers’ severance policies.

476619387 -- money and gavelAs this story from Bloomberg lays it out, the U.S. Supreme Court just decided in favor of the Obama Administration and its Internal Revenue Service in a dispute over taxes on severance compensation, overturning a lower-court decision that could have forced the IRS to refund more than $1 billion.

In its ruling in the case of Quality Stores Inc., the court has said payments to laid-off workers are subject to Social Security and Medicare taxes under the Federal Insurance Contributions Act. In essence, the defunct company fired 3,100 workers when it closed its stores in 2001 and 2002, paid the taxes on their severance and then asked a bankruptcy judge to order the IRS to refund $1 million.

Obviously, this is a huge victory for the IRS, which has been fighting more than 2,400 refund claims from companies and their ex-employees. It’s also a huge wake-up call in the business community. As Bob Hertzberg — the lawyer representing Quality Stores before the Supreme Court — told Bloomberg: “The decision is a huge blow for employers and employees alike. In addition to the impact on Quality Stores and its former employees, this ruling has far-reaching implications for the thousands of other organizations and workers fighting for refunds.”

This news comes right on the heels of a news analysis by HRE Staff Writer Mark McGraw about a U.S. Equal Employment Opportunity Commission lawsuit against CVS Pharmacy Inc. that experts say could also shake up how companies approach severance agreements.

In that case, the EEOC is charging that CVS “conditioned the receipt of severance benefits for certain employees on an overly broad agreement set forth in five pages of small print,” and interfered with their right to file discrimination charges and/or communicate and cooperate with the EEOC, according to the suit.

As A. John Harper III, a partner in the labor and employment practice group in the Houston office of Haynes and Boone, told McGraw, the provisions in the CVS separation agreement coming under scrutiny are “common in many severance and other employment-related agreements.”

Comments he got from Robert Hale, a Boston-based partner and chair of Goodwin Procter’s labor and employment practice, are worth repeating, too:

If the EEOC wins here, that would make it difficult for employers to reach agreements that prevent former employees who accept severance pay [from making] disparaging statements or [disclosing] personnel information that many employers understandably view as confidential.”

At the very least, as this case makes its way through the courts and as the Quality Stores decision continues reverberating, employers should be closely evaluating their severance agreements. As Hale puts it,

HR should work with counsel to take a hard look at existing severance agreement forms to determine whether any steps should be taken to reduce the risk that a decision in this case would make those existing agreements more vulnerable to legal challenge.”

Paying CEOs to Find Their Replacements

successorWant to pave the way for the organization’s next leader and light a fire under your current chief executive in the process? Rewarding your CEO for helping to find and groom a successor may be one way to go.

A recent Wall Street Journal article calls this practice the “hottest corporate fad,” citing firms including Avnet Inc., Intel Corp. and Marriott International Inc. as examples of large companies offering incentives to chief executives for their efforts in ensuring a smooth transition when they eventually turn over the organization’s reins.

Motivated at least in part by “investors’ anxiety over rocky corner office transitions,” these and other companies have taken to linking CEO performance awards to succession planning, with 16 Fortune 1000 firms disclosing such links in their latest regulatory filings, the article notes.

At the Santa Clara, Calif.-based Intel, for instance, now-former CEO Paul Otellini has received $4 million in stock and cash since January 2013 for his part in bringing along Brian Krzanich, who took over Otellini’s old post in May of last year, according to the Journal. Otellini, who has already gotten $1 million in cash, can sell half of his $3 million worth of shares this May.

Other organizations are taking a slightly different tack. Phoenix-headquartered electronic component distributor Avnet is basing chief executive Richard Hamada’s next annual raise partly on his succession planning prowess. Promoted to CEO in July 2011, the 56-year-old Hamada told the Journal he “hopes to run Avnet for a total of eight to 10 years,” but noted that he now gives detailed succession updates at every board meeting.

Board members at Marriott International believe that “continuity of management is critical,” David Rodriguez, the Bethesda, Md.-based hotel chain’s CHRO, told WSJ.  As such, CEO Arne Sorenson’s ability to secure the board’s approval of his CEO transition agenda factored into the amount of his bonus in 2012, according to Rodriguez. He estimated that roughly 10 percent of the nearly $1.95 million bonus bestowed upon Sorenson reflected such individual achievements.

The Journal article may describe the practice as a fad, but, as directors become more involved in grooming future leaders, this type of reward system “will be commonplace in a decade,” Dennis Carey, vice chairman at Los Angeles-based Korn/Ferry International, told the paper.

In fact, the number of companies taking this approach is poised to triple in the next five years, according to Patrick McGurn, special counsel for proxy advisory firm Institutional Shareholder Services Inc.

Time will tell if that prediction is on the money, but McGurn makes a compelling—not to mention concise—argument for tying a CEO’s pay to his or her role in succession planning efforts.

“Nothing tends to focus CEOs’ attention,” he told the Journal, “like … good, swift kicks to their incentives.”

A Message Worth Repeating?

In case you missed it (apparently I did), Jack and Suzy Welch crafted a LinkedIn post last week that again spoke to the importance of HR.

188065235“HR should be every company’s ‘killer app,’ ” they wrote in the piece, titled So Many Leaders Get This Wrong.

“What could possibly be more important than who gets hired, developed, promoted or moved out the door? Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.”

Considering this, the two noted, it’s too bad “HR rarely functions as it should” and is often relegated to the background. “If you owned the Boston Red Sox, for instance, would you hang around with the team accountant or the director of player personnel?” they ask.

They continue …

Sure, the accountant can tell you the financials. But the director of player personnel knows what it takes to win: how good each player is and where to find strong recruits to fill talent gaps. Several years ago we spoke to 5,000 HR professionals in Mexico City. At one point we asked the audience: ‘How many of you work at companies where the leader gives HR a seat at the table equal to that of the CFO?’ After an awkward silence, fewer than 50 people raised their hands. Awful!”

They then go on to propose how to fix this mess …

It all starts with the people they appoint to run HR — not kingmakers or cops but big leaguers, men and women with real stature and credibility. In fact, managers need to fill HR with a special kind of hybrid: people who are part pastor (hearing all sins and complaints without recrimination) and part parent (loving and nurturing, but giving it to you straight when you’re off track).”

Of course, these comments are right in line with others offered up by Jack and Suzy Welch in the past. In a 2004 story we ran, Jack Welch shared an anecdote similar to the one in Mexico City, pointing out that having a scorekeeper in baseball who’s more important than the director of player personnel on a team is crazy.

Also, this isn’t the first time Jack and Suzy Welch referred to HR as a “killer app.” (One reference I found dates back to 2006.)

I’m sure some of you may be scratching your heads, wondering why the two are revisiting this subject once again. But considering how many organizations have yet to adjust their thinking, I think a case could easily be made that it’s a message worth repeating. (In case you were wondering, last count, the LinkedIn piece received 163,376 eyeballs, 2,679 likes and 565 comments.)

Adding one more point of view to this discussion, Bloomberg TV interviewed former GE executive and former Home Depot CEO Robert Nardelli yesterday, asking him to share his thoughts on the couple’s piece. Nardelli, who is now founder and CEO of the investment banking firm XLR-8,  said he was in complete agreement. (No surprise there, considering he describes Jack Welch as a mentor.) Companies, he said, “will spend an inordinate amount of analysis on your physical capital, and yet it’s your human capital that brings that to life.”

Legislation to Counter ‘Ambush Election’ Rule

Last week, House and Senate Republicans announced the introduction of legislation intended to counter the National Labor Relations Board’s controversial
“ambush election rule,” the law firm Ballard Spahr recently noted in a legal alert.

(Eagle-eyed HREOnline.com readers will remember we recently covered the topic in a news analysis piece titled “Are Employers Being Ambushed?”)

The NLRB’s proposed rule, which was re-issued on Feb. 5, would significantly
reduce the time in which a union election can take place after the filing of an
election petition. Under the proposed rule, elections could take place in as few as 10
days after the filing of a petition. This would constitute a significant change
in the timing of union elections as they currently take place under the
existing regulations

In its alert, Ballard Spahr says “many employers oppose the proposed ambush election rule and believe that it undermines the rights of both workers and employers,” and to that end, Congressional Republicans have introduced two bills aimed at changing the proposed rule:

The Workforce Democracy and Fairness Act (H.R. 4320) requires at least a 35-day window between the filing of an election petition and the union election. This bill would preserve an s ability to litigate challenges to the petition and proposed unit in  pre-election hearings and would provide the NLRB adequate time to rule on any  outstanding issues.

The Employee Privacy Protection Act (H.R. 4321) would enable employees to choose in writing what type of personal contact information the employer is required to provide to the union after the processing of a representation petition. This package of legislation would nullify the NLRB’s proposed ambush election rule.

Stay tuned as this legal picture continues to develop…

Different Views of Retirement

88366557 -- retirement optionsTwo somewhat divergent reports on retirement vehicles crossed my desk this past week — underscoring the differences in demographics and philosophies that seem to be a part of the overall retirement picture.

One, a release from Towers Watson, shows sharp improvement in the financial health of America’s 100 largest pension plans and even possible pension de-risking ahead should this improved financial picture continue.

This is great news for pension plans, probably the best we’ve seen since the Great Recession. As Dave Suchsland, senior consultant at Towers Watson, says:

The rising stock market, combined with higher interest rates for the first time in five years, pushed funding levels significantly higher. This is good news for employers, as stronger pension fund balance sheets will reduce required cash contributions in the near term while lower pension costs will improve corporate earnings.”

More specifically, the analysis of year-end corporate disclosures found the pension deficits for these largest pension sponsors among U.S. publicly traded organizations fell 57 percent, from $295.5 billion at year-end 2012 to $125.9 billion at year-end 2013, a decrease of $169.6 billion. As the release puts it:

The pension deficit for these companies hasn’t been this small since 2007, when plans had a surplus of $82.3 billion. Meantime, the overall average funded status jumped 13 percentage points, from 78 percent at the end of 2012 to 91 percent at the end of 2013. That is the best funding level since the end of 2007, when the average stood at 103 percent. Additionally, the number of plan sponsors with fully funded plans surged from five at the end of 2012 to 22 at the end of 2013. At the end of 2007, half of these 100 plans were fully funded.”

In the words of Alan Glickstein, senior retirement consultant at Towers Watson, these improved funding levels — combined with recent increases in Pension Benefit Guaranty Corp. premiums and a newly released Society of Actuaries mortality study — ”will make de-risking actions very attractive in 2014.”

Then there’s this, a white paper from Buck Consultants showing younger workers — specifically millennials — prefer defined-contribution plans — specifically 401(k) and 403(b) plans — given their predisposition for mobility.

Here are some of the things Buck says employers should consider as they design the kinds of retirement plans that will attract and retain millennials (born early 1980s to early 2000s):

  • Attractive web portal that is easy to use and navigate. Millennials pride themselves on being tech-savvy and are used to state-of-the art retail websites, so websites should have links to frequently asked questions or pop-up windows with additional information.
  • Automatic enrollment with an escalating contribution feature. This is an important feature for millennials who tend to act later rather than sooner, and may not take the time for the thoughtful analysis needed for retirement planning.
  • Make it an outcome-based plan. Millennials will appreciate a DC plan that comes “fully loaded” with pre- and post-retirement features, helping individuals better prepare for retirement.
  • ROTH savings option. Millennials will likely be in a higher tax bracket as they approach retirement age. Showing the benefits of ROTH savings should improve overall satisfaction with the plan.

While pension plans are clearly not on the fast track to extinction we anticipated not that long ago, clearly worth noting in Buck’s piece is the importance of recognizing who you’re serving with what retirement vehicle.

Just my humble — hopefully not-too-convoluted — observation.