A supplement to BLR publications

Top 10 Best Practices in HR Management For 2009

Prepared for the HR Daily Advisor

A supplement to BLR publications

Top 10 Best Practices in HR Management For 2009


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Top 10 Best Practices in HR Management for 2009

Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 #1 Compliance Focus: ADAAA and FMLA . . . . . . . . . . . . . . . . . . . . . . . . . . .1 How the Updated ADA Affects You . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 FMLA Changes Are Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 #2 Layoffs/Reductions in Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Worker Adjustment and Retraining Notification (WARN) Act . . . . . . . . . . . . . . . . . .7 Older Workers Benefits Protection Act (OWBPA) . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Preventing Discriminatory Layoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Outplacement Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Alternatives to Layoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Best Practice: Preserving Employee Morale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 #3 Health Care in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 2009 Healthcare Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Mental Health Parity Legislation Becomes Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Cutting Healthcare Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Best Practice: Improve Employee Benefits Communication . . . . . . . . . . . . . . . . . .15 President Obama’s Future Plans on Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Best Practice: Cancer Screening Saves Lives, Money . . . . . . . . . . . . . . . . . . . . . . . . .16 Wellness Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 #4 Retirement of Baby Boomers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Survey: Few Employers Capture Boomer Know-How . . . . . . . . . . . . . . . . . . . . . . . .18 Transitioning into Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Predicting the Future of Retiree Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Persuading Older Workers to Stay: Is It the Money that Matters? . . . . . . . . . . . . . . . .20 Succession Planning to Fill the Baby Boomer Gap . . . . . . . . . . . . . . . . . . . . . . . . . .21 Integrating a Multigenerational Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 #5 Recession Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Best Practice: Mandatory Vacations at HP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Best Practice:Teach Workers Economics 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Benefits and Retention Strategies in a Recession . . . . . . . . . . . . . . . . . . . . . . . . . . .25 #6 Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 No-Match Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 SSA No-Match Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 DHS No-Match Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

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Antidiscrimination Guidance for Employers Following the No-Match Letter Safe Harbor Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Federal Contractors Must Now Use E-Verify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 #7 Privacy and Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 New Federal Privacy Law Barring Genetic Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Employer Procedures for Handling Address Discrepancies on Consumer Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Most Workers Trust that Employers Protect Personal Info . . . . . . . . . . . . . . . . . . . . .37 #8 The Green Movement and Corporate Social Responsibility . . . . . . . . .39 Commuter Benefits Bring Financial and Environmental Relief . . . . . . . . . . . . . . . .39 Corporate Social Responsibility and Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 #9 HR Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 What to Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Types of Metrics Available to HR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Strategic Alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Measuring Your Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 #10 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Tools for Better Communicating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Organizational Success Through Honest, Ethical Communication . . . . . . . . . . . .50 Best Practice: Ethical Culture at All Levels of Organization . . . . . . . . . . . . . . . . . . .51 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52

Top 10 Best Practices in HR Management for 2009

The role of Human Resources is changing as fast as technology and the global marketplace. Historically, the HR Department was viewed as administrative overhead. HR processed payroll, handled benefits administration, kept personnel files and other records, managed the hiring process, and provided other administrative support to the business. Those times have changed. The positive result of these changes is that HR professionals have the opportunity to play a more strategic role in the business. The challenge for HR managers is to keep up to date with the latest HR innovations—technological, legal, and otherwise. This special report will discuss the top 10 best practices in HR management for 2009—in other words, how HR managers can anticipate and address some of the most challenging HR issues this year. This report will give you the information you need to know about these current HR challenges and how to most effectively manage them in your workplace.

#1 Compliance Focus: ADAAA and FMLA
The recent issuance of the ADA Amendments Act of 2008 and new regulations covering the Family and Medical Leave Act (FMLA) can affect your company in 2009.

How the Updated ADA Affects You
The ADA Amendments Act of 2008 (ADAAA), passed by the House and Senate in September, was signed by President Bush on September 25. The changes enacted by the ADAAA affect the core of the Americans with Disabilities Act (ADA) by expanding the definition of disability. The stated intent of the ADAAA is to restore the ADA’s definition of disability and to ensure that the amended ADA provides a“broad scope of protection.” Since the ADA’s enactment in 1990, the definition of disability has been narrowed through a series of U.S. Supreme Court decisions. The ADA defines a disability as: N A physical or mental impairment that substantially limits one or more major life activities N A record of such an impairment N Being regarded as having such an impairment The Court narrowed the definition with strict interpretations of the terms that determine whether an individual has a disability. The ADAAA expressly rejects the U.S. Supreme Court’s interpretations of the terms“substantially limits”and“major

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life activity.” It also rejects the standard set by the Court that required the consideration of the effect of“mitigating measures”in the analysis of a qualifying disability. In addition, the ADAAA broadens the definition of“regarded as having an impairment” and allows an episodic impairment to be considered a disability under certain circumstances. The ADAAA expressly seeks to shift the focus from whether individuals have a disability to“whether covered entities have complied with their obligations.” Under the amended ADA, many more employees will be deemed to have a protected disability, and employers will need to make sure they engage in the interactive process and provide reasonable accommodation to qualified individuals. Definition of disability. Under the ADAAA, the definition of disability is to be construed“in favor of broad coverage of individuals under this Act, to the maximum extent permitted by [its] terms.” This will likely result in a sharp increase in the number of individuals found to have a covered disability. Substantially limits a major life activity. In Toyota Motor Manufacturing v. Williams (122 S. Ct. 681 (2002)), the Court held that an impairment must“prevent or severely restrict”an individual in tasks that are of“central importance to most people’s daily lives,” rather than simply restricting the individual’s ability to perform tasks in a particular job. The ADAAA calls this interpretation“an inappropriately high level of limitation”and mandates an interpretation of the term“substantially limits”in a manner consistent with the findings and purposes of the ADAAA (i.e., to reinstate a broad scope of protection under the ADA). The ADAAA also rejects the EEOC’s definition of“substantially limits”as“significantly restricted.” (Note: The ADAAA also gives the EEOC authority to issue binding regulations consistent with the purpose of the amended ADA.) The ADAAA expands the term“major life activity”by adding activities to those already enumerated in EEOC regulations. The new activities include eating, sleeping, standing, lifting, bending, reading, concentrating, thinking, and communicating. Significantly, a major life activity also now includes the operation of a major bodily function, including functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive systems. Episodic impairments. Under the ADAAA, an impairment that is episodic or in remission is a disability if the impairment would substantially limit a major life activity when active. Mitigating measures. In Sutton v. United Air Lines (119 S. Ct. 2139 (1999)), the Court held that mitigating measures must be considered in determining whether an individual has a disability. Under the ADAAA, disability determination is made without regard to ameliorative effects of mitigating measures including hearing aids, medication, medical supplies, auxiliary aids and services (such as qualified interpreters for individuals with hearing impairments), reasonable accommodations, and“learned behavioral or adaptive neurological modifications.” It is likely that this last measure is intended to address the Court’s ruling in Albertsons, Inc. v. Kirkingburg (119 S. Ct. 2162 (1999)), where the employee’s brain subconsciously learned to compensate for his monocular vision. That compensation was found by the Court to be a mitigating measure, and using the Sutton analysis, the Court ruled that the employee did not have a disability under the ADA. The ADAAA excludes ordinary eyeglasses and contact lenses from the list of mitigating measures. Under the ADAAA, the employers may no longer take into account an individual’s use of
Top 10 Best Practices in HR Management for 2009

mitigating measures when considering whether an impairment substantially limits a major life activity. “Regarded as.” Sutton also held that“regarded as”means an individual was regarded as being unable to perform a broad range of jobs, not just the job in question. Under the ADAAA, an individual meets the requirement of being“regarded as” having a disability if he or she has been subjected to an unlawful employment action because of“an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.” In other words, if an employee is fired because he or she is perceived to have an impairment, the employee meets the requirement of being regarded as having a disability under the ADAAA. An impairment that is“transitory and minor”is not covered. A“transitory impairment”has an actual or expected duration of 6 months or less. The threshold issue of whether an individual has an ADA disability will no longer be the focus of most litigation. Instead, it is likely that the focus will be on the individual’s ability to perform the essential functions of a job and whether the employer has met its obligations to engage in the interactive process and provide a reasonable accommodation. In addition, there will probably be an increase in“regarded as”litigation, with employees claiming an adverse employment action was based on an employer-perceived impairment.

FMLA Changes Are Here
The U.S. Department of Labor’s (DOL) new regulations covering the FMLA and addressing new military family leave entitlements for employees were designed to clarify the requirements that the FMLA imposes on both employees and employers and to improve the communication between employers and employees. Here are summaries of some of the significant revisions included in the final rules. Serious health condition. While the rule retains the six individual definitions of “serious health condition,” it adds guidance on some regulatory matters. First, it clarifies that if an employee is taking leave involving more than 3 consecutive calendar days of incapacity plus two visits to a healthcare provider, the two visits must occur within 30 days of the period of incapacity. The first visit must occur within 7 days of the onset of incapacity. Second, it defines“periodic visits to a healthcare provider”for chronic serious health conditions as at least two visits to a healthcare provider per year. Intermittent leave. The final rule clarifies that employees who take intermittent FMLA leave have a statutory obligation to make a“reasonable effort”to schedule such leave so as not to unduly disrupt the employer’s operations. Employee notice. The final rule states that when an employee becomes aware of a need for FMLA leave less than 30 days in advance, it should be practicable for the employee to provide notice of the need for leave either the same day or the next business day. When the need for leave is not foreseeable, an employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances. Gaps in service. The final rule adds a new paragraph that addresses the requirement that employees are eligible to take FMLA leave only if they have been employed by the employer for at least 12 months and have at least 1,250 hours of service in the 12-month period preceding the leave. The final rule states that
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although the 12 months of employment need not be consecutive, employment before a continuous break in service of 7 years or more need not be counted. Light duty. Under the final rule, time spent in“light duty”work does not count against an employee’s FMLA leave entitlement, and the employee’s right to job restoration is held in abeyance during the light duty period. If an employee is voluntarily doing light duty work, he or she is not on FMLA leave. Perfect attendance awards. The final rule changes how perfect attendance awards are treated to allow employers to deny a“perfect attendance”award to an employee who does not have perfect attendance because he or she took FMLA leave—but only if the employer treats employees taking non-FMLA leave in an identical way. Medical certification. In the final rule, DOL adopted a change that allows employers to contact the employee’s healthcare provider directly. An employer may contact the employee’s healthcare provider for two purposes only: clarification and authentication of the medical certification. The employer may request no additional information beyond that included in the certification form. In response to privacy concerns expressed by employees, DOL added a requirement to the final rule that specifies the employer’s representative contacting the employee’s healthcare provider must be a human resources professional, a leave administrator, or a management official, but in no case may it be the employee’s direct supervisor. The revision also specifies that the employee is not required to permit his or her healthcare provider to communicate with the employer. However, if the employee denies the employer permission and doesn’t otherwise clarify an unclear certification, the employer may deny the designation of FMLA leave. However, before making any contact with the healthcare provider, the employer must first provide the employee an opportunity to resolve any deficiencies in the certification. Fitness-for-duty certification. The final regulation also clarifies that employers may require a fitness-for-duty certification to address an employee’s ability to perform essential job functions. However, if the employer does have such a requirement, the employer must provide the employee with a list of those essential job functions no later than the“designation notice”and specify in the designation notice that the fitness-for-duty certification must address the employee’s ability to perform those essential functions. Military caregiver leave. The regulation implements the requirement to expand FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 workweeks of leave in a 12-month period. Leave for qualifying exigencies for families of National Guard and reserves members. The law allows families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave to manage their affairs—“qualifying exigencies.” The rule defines“qualifying exigencies”as: (1) short-notice deployment, (2) military events and related activities, (3) childcare and school activities, (4) financial and legal arrangements, (5) counseling, (6) rest and recuperation,


Top 10 Best Practices in HR Management for 2009

(7) postdeployment activities, and (8) additional activities where the employer and employee agree to the leave. Intermittent leave. As previously mentioned, employees who take intermittent leave for planned medical treatment have an obligation to make a reasonable effort to schedule such treatment so as to not unduly disrupt the employer’s operations. This is a change from the old regulations. The old regulations said that the employee had only to“attempt”to do so. The rules clarify that temporary transfers are allowed for employees taking only planned intermittent leave (the Department declined to expand temporary transfers to unplanned, unscheduled, or unforeseeable intermittent leave). The final rule also clarified that accounting for leave need not be in the smallest increments that the employer’s timekeeping system can handle, but rather in the smallest increments the employer accounts for in other types of leave, provided it is not greater than one hour. This is a change from proposed regulations. The new rules prohibit employers from charging employees for the period of time that they are working (e.g., stop working ½ hour before end of shift, cannot be charged for 1 hour of leave). Substitution of paid leave. The rules clarify that an employee’s right to substitute accrued paid leave is limited by the terms and conditions pursuant to which the applicable leave is accrued, as long as those terms are nondiscriminatory. An employer may limit substitution of paid sick, medical, or family leave to those situations for which the employer would normally provide such paid leave (e.g., such policies may restrict the use of paid leave only to the employee’s own health condition or to specific family members). Employers must allow substitution of paid vacation, personal leave, or“paid time off”for any situation covered by the FMLA. In all cases, however, the normal procedural rules subject to which the leave was accrued apply—unless waived by the employer—regardless of the type of paid leave substituted. For example, if an employer’s paid sick leave policy prohibits the use of sick leave in less than full day increments, employees would have no right to use less than a full day of paid sick leave regardless of whether the sick leave was being substituted for unpaid FMLA leave. Similarly, if an employer’s paid personal leave policy requires 2 days’ notice for the use of personal leave, an employee seeking to substitute paid personal leave for unpaid FMLA leave would need to provide 2 days’ notice. Employers, of course, may choose to waive such procedural rules and allow an employee’s request to substitute paid leave in these situations, but they are not required to do so. Additionally, employers may choose to waive procedural requirements even in the absence of an employee request to do so. Employer notice requirements. The final rule consolidates all employer notice requirements into a“one-stop”section of the regulations to clear up some conflicting provisions and time periods. N The new regulations contain a new general notice prototype. If an employer has no handbook or other written materials, it must provide the general notice to new employees when they are hired. N Absent extenuating circumstances, the time frame for an employer to respond to an employee’s request for leave is extended from 2 business days to 5 business days of the employee’s request for leave or of the employer acquiring knowledge that the leave may be FMLA qualified.
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N A list of essential job functions must be provided with the designation notice if the employer will require that the fitness-for-duty certification addresses the employee’s ability to perform the essential functions of the position. N Only one designation notice is required for each FMLA-qualifying reason per leave year, regardless of whether the leave is taken as a continuous block of leave or on an intermittent or reduced leave schedule basis. N In situations in which the amount of leave to be taken is not known at the designation stage (e.g., when unforeseeable intermittent leave will be needed), the employer is to inform the employee of the number of hours counted against the FMLA leave entitlement only upon employee request and no more often than every 30 days if FMLA leave was taken during that period. N The employer may notify the employee of the hours counted against the FMLA leave entitlement orally and follow up with written notification on a pay stub at the next payday (unless the next payday is in less than 1 week, in which case the notice must be no later than the subsequent payday). Employer failure to provide notice. The updated rule contains technical changes to be consistent with the U.S. Supreme Court’s decision in Ragsdale v. Wolverine World Wide Inc. In light of the Court’s decision in Ragsdale, the Department stated that an employee isn’t automatically FMLA-eligible just because the employer fails to provide the required eligibility notices to employees or provides incorrect information. The rule clarifies that if an employee suffers individual harm because the employer fails to follow the notification rules, the employer may be liable. Military family and caregiver leave. In January 2008, President Bush signed a law that allows employees to take leave because of any qualifying exigency arising out of the fact that the spouse, son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the armed forces in support of a contingency operation. In the new regulations, a qualifying exigency leave is limited to service members called up to duty in National Guard and/or reserves, and certain retired members of service (not regular career service or state). It mimics the leave provision in 10 USC 101(13)(B)’s definition of“active duty.” The rule defines“qualifying exigencies”as: (1) shortnotice deployment, (2) military events and related activities, (3) childcare and school activities, (4) financial and legal arrangements, (5) counseling, (6) rest and recuperation, (7) postdeployment activities, and (8) additional activities where the employer and employee agree to the leave. The new law also allows eligible employees to take up to 26 workweeks for leave during a single 12-month period if the employee is the spouse, son, daughter, parent, or next of kin caring for a military service member recovering from an injury or illness suffered while on active duty in the armed forces. Under the new regulations for military caregiver leave, the term“active duty”includes members of the regular armed forces (not just Guard/reserves)—this differs for exigency leave. Similarly, for caregiver leave, the term“active duty”is more expansive than for exigency leave. Whether or not an injury or illness arose from active duty is a determination to be made by the treating healthcare professional as part of certification.


Top 10 Best Practices in HR Management for 2009

#2 Layoffs/Reductions in Force
A layoff is a termination of employment at the will of the employer. It may be temporary or permanent and can occur for a number of reasons, including downsizing, changes in market conditions, or new technology.

Worker Adjustment and Retraining Notification (WARN) Act
The WARN Act imposes restrictions on the way layoffs are handled. It is designed to give employees advance notice of the layoff in order to find another job, to seek retraining in a new occupation, and to give state dislocated-worker units adequate preparation to assist affected workers. Who must comply with the WARN Act? Employers must comply with the WARN Act if they have: N 100 or more full-time employees, or N 100 or more employees, including part-time employees who regularly work a total of 4,000 hours per week, exclusive of overtime. The Act defines part-time employees as those who work 20 or fewer hours per week and temporary employees as those hired with the understanding that their jobs will end when a specific project ends. Workers on temporary layoff who have a reasonable expectation of recall are counted as employees. An employee has a reasonable expectation of recall when he or she understands, through notification or industry practice, that his or her employment has been temporarily interrupted and that he or she will be recalled to the same or a similar job. In addition, an employer may have several sites of employment under common ownership or control, yet there is only one“employer”for purposes of the Act. 60 days’ notice. The law requires covered employers to give their affected employees 60 days’ notice of a“mass layoff”or a“plant closing”that is expected to last 6 months or longer. Employers must also notify local government officials and their state dislocated-worker unit. When all employees are not terminated on the same date, the date of the first individual termination within the statutory 30-day or 90-day period triggers the 60-day notice requirement. A worker’s last day of employment is considered the date of that worker’s layoff. The first and each subsequent group of affected employees are entitled to a full 60 days’ notice. The point in time at which the number of employees is to be measured for purposes of determining coverage under the Act is the date on which the first notice is required to be given. Employers must provide different types of information to employees depending upon whether they are unionized. Employers must always notify the state. Notice may be sent by any method designed to ensure receipt at least 60 days before separation, e.g., first-class mail, personal delivery, or insertion of a notice into pay envelopes.

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Union employees. If employees are unionized, only the chief elected union representative must be given notice. The notice must contain: N The name and address of the employment site where the plant closing or mass layoff will occur, and the name and telephone number of a company official to contact for further information; N A statement as to whether the planned action is expected to be permanent or temporary and whether the entire plant is to be closed; N The expected date of the first separation and the anticipated schedule for making separations; and N The job titles of positions to be affected and the names of workers currently holding these jobs. Nonunion employees. Employees who may reasonably be expected to experience an employment loss and who are not represented by a union must be notified individually in writing. While part-time employees are not counted in determining if a plant closing or mass layoff had occurred, these workers must get a notice if they will experience an employment loss. The notice must include: N A statement as to whether the planned action is expected to be permanent or temporary and whether the entire plant is to be closed; N The expected date when the plant closing or mass layoff will begin and the expected date when the individual employee will be separated; N An indication of whether bumping rights exist; and N The name and telephone number of a company official to contact for further information. State notification. Employers must always notify the state dislocated-worker unit and the chief elected official of the local government unit within which the closing or layoff will occur. The notice must include: N The name and address of the employment site where the plant closing or mass layoff will occur; N The name and telephone number of a company official to contact for further information; N The nature of the planned action including whether it is a plant closing or a mass layoff, and whether it is expected to be permanent or temporary; N The expected date of the first separation and the anticipated schedule for making separations; N The job titles of positions to be affected and the number of employees in each job classification; N An indication of whether bumping rights exist; and N The name of each union representing affected employees and the name and address of the chief elected officer of each union.


Top 10 Best Practices in HR Management for 2009

Older Workers Benefits Protection Act (OWBPA)
OWBPA, a 1990 amendment to the Age Discrimination in Employment Act (ADEA), prohibits age-based distinctions in the structure and administration of employee benefit plans, severance packages, and separation agreements including in cases of layoffs. The law protects individuals over the age of 40.

Preventing Discriminatory Layoffs
Employers should always avoid unlawful discrimination when considering layoffs. Each layoff decision should be made according to objective, business-related criteria and be well-documented. Layoffs following seniority are generally not discriminatory under the federal Civil Rights Act.

Outplacement Services
As a matter of goodwill, some companies provide outplacement services to laidoff employees. Outplacement counseling is designed to help terminated employees prepare themselves for a new job or a new career, to lend assistance in providing outside resources, to receive training, and to help employees cope with the stress of leaving the company. Outplacement services include assistance in rewriting résumés, job placements, career counseling, conducting employee skill surveys, and providing pre-layoff employment service registration. Larger organizations may hire outplacement services to assist employees, whereas smaller organizations may hire a single counselor or use existing resources to assist employees. Employers should consider providing outplacement services if employees have been working at the same company for a long period of time and may not have the tools necessary to successfully find another job.

Alternatives to Layoffs
There are alternatives to layoffs that employers can consider: Work sharing. Work sharing allows employees to share the work that remains after some jobs are lost due to adverse economic conditions. Under a work-sharing arrangement, employees may work a reduced week or work every other week. Their hourly pay remains the same, but reflects the reduced hours. In some states, the unemployment compensation laws allow employees to collect partial unemployment benefits during a work-sharing period. Reduced pay. A reduction in pay works best if it is shared by all employees, including management. It may be acceptable to employees if their unemployment benefits during a period of layoff would be less than the reduced pay. Early retirement. Some employers reduce their workforce by offering attractive incentives to employees who are about to reach retirement age. The advantage of retirement incentives is that they allow employers to cut costs without requiring employees to leave their jobs involuntarily. However, the employer may lose some employees it would prefer to keep.

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Best Practice: Preserving Employee Morale
There’s no escaping that the country is officially in a recession, and unfortunately for many businesses, that means having to lay off employees. No one enjoys the prospect of having to tell employees that the company is going to have to let them go, but it is important to stay well focused at a time like this and make certain that you handle the situation the best way you can. “This is such a tough job for managers to deal with,” says Patricia Berg, general manager for the Career Management Services division of Personnel Decisions International (PDI). Clear heads, however, need to prevail when laying people off, says Berg. “You need to take time to plan the layoff carefully and to meet with and prepare your managers for the process. It’s smart to hire a good outplacement service or career transition firm to help you through the process, and get them involved early on.” Berg and PDI have suggestions for handling the process well. The first is to provide notification training for your managers because this is such a difficult talk. You also need to allow adequate time to prepare for all the necessary contingencies, such as: N Giving as much warning as possible for mass layoffs, N Conducting a threat assessment to ensure the safety and security of all employees, and N Having information prepared in advance to give to employees regarding their severance, benefits, outplacement, or other information that will be important to them. Berg suggests that after you have put together your plan of action, the next step is to talk with employees. “You want your meetings to be one-on-one as much as possible, though that doesn’t always work,” she notes. The best idea is to sit down face-to-face, in a private office, with the individual and a Human Resources professional. Acknowledge the employee’s contributions to the company, and thank the employee for those contributions. If possible, have your outplacement company or career transition firm on-site to meet with employees. Explain to the employees the logistics of leaving the company, and make certain that you have clarified the separation date to make sure the news sinks in. Explain to employees the type of services you have available for them, including any outplacement services that are appropriate for the level of the employee. You should also provide references for them, if applicable. A few other general pieces of advice from Berg include: N Inform employees at the beginning of the workday, rather than at the end of the day. N Treat people with respect. N Use good listening skills and acknowledge employees’ reactions. “Survivors.” “You need to be as aware of the people remaining as you are about the people you are letting go,” says Berg. Employers“need to make sure they get information to the survivors about how they are supporting their colleagues who have departed. Then they need to stay very close to these employees in the weeks
Top 10 Best Practices in HR Management for 2009

that ensue in terms of focusing on the redistribution of work and redefining roles and responsibilities. They also need to be there to answer questions and to absorb some of the emotional impact the employees are feeling.” The survivors are wondering if there will be another round of layoffs and will their jobs be the next ones cut. Berg points out that“managers need to be prepared to deal with those questions without making any guarantees. Being there to answer questions, support the employees, and absorb some of the emotional impact really helps the survivors work through the process as well.”

The Workforce Investment Act of 1998 (WIA) reformed the federal job training system by consolidating about 70 federal programs into an integrated whole. The reformed system is intended to be customer-focused in order to help workers access the tools they need to manage their careers and to help employers find skilled workers. While WIA is a federal program, it will differ in how it is implemented by each state. The cornerstone of the WIA is the“One-Stop”service delivery system, which is designed to make information about and access to a wide array of job training, education, and employment services available for workers and employers at a single neighborhood location. “Core services”are provided at each One-Stop location and include: N Intake and orientation to the One-Stop approach N An eligibility determination N Initial assessment of skills and abilities N Access to job vacancy listings and job search and placement assistance N Information on providers of vocational rehabilitation activities and access to eligible training providers N Information on filing for unemployment insurance and availability of supportive services Through the One-Stop approach, employers have a single point of contact to provide information about current and future skills their workers need to possess and to list job openings.

#3 Health Care in 2009
The American economy is in trouble, and many people can’t afford health care. Employers are worried about their ability to compete on the global market when health care is costing them so much. Even before the fall, when some major banks failed or were bought and the stock market experienced dramatic downswings, a majority of American workers expressed concern about their financial situations and economic futures, according to the Rockefeller Foundation/TIME survey, Campaign for American Workers Survey.
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Some survey results. When comparing survey results from 2008 to 2007, several categories illustrated increased problems for workers who participated in the survey: N 25% did not go to a doctor because of cost (18% in 2007). N 23% went without health insurance (20% in 2007). N 23% did not fill a medical prescription because of the cost (17% in 2007). For Generation Y (survey respondents between the ages of 19 and 29), the future seems even more problematic. Of this group, 49 percent said that America was a better place to live in the 1990s, and 56 percent were worried about their own personal economic security. Also, 79 percent agreed that America was a lot less secure or somewhat less secure today than 10 years ago. “Americans want to work hard and improve their financial situations; 80 percent believe they are responsible for their own financial security,” according to the executive summary. Some solutions that survey respondents thought would help them secure their economic future include: N The government and employers providing basic necessities such as healthcare or retirement programs (70%) N New policies and programs that will create jobs (82%) N Initiatives to provide more access to family health care (77%) N Support to make it easier for people to work such as more paid family leave (68%) and government-funded child care (66%)

2009 Healthcare Trends
In the words of Samuel H. Fleet, president and CEO of AmWINS Group Benefits, in an article that he wrote for BLR, the country’s job-based system for health insurance is too entrenched to disappear. The healthcare industry generates about $2 trillion— that’s trillion, with a“T”—in economic activity annually, which means it has a strong interest in preserving the status quo. That means employers will be forced to continue down the path of using consumer-directed strategies and cost-sharing plans to escape the expensive, anticompetitive burden that health benefits have become. Expect continued pressure on healthcare providers to make their charges more transparent so that consumers can make choices based on real-cost comparisons. In addition, Medicare’s recent decision to force hospitals to absorb the cost of opportunistic infections, caused by pathogens at the hospital that compromise an unhealthy immune system, should raise consumer awareness of quality-of-care issues. The bottom line is that one-size-fits-all healthcare plans are a luxury of the past. Employer-provided health benefits will continue to become more customized as companies struggle to balance the competitive advantage of offering employees good, affordable health care with the increasing drag on their bottom line. Now, more than ever before, benefits professionals will have to become careful, discriminating shoppers who can sort through sales pitches to identify partners who can deliver value-enhanced offerings. What should you look for? Here are a few ideas:


Top 10 Best Practices in HR Management for 2009

N Deep discounts don’t add up to much if the underlying prices are inflated. Look beyond the promises of large insurers and examine the track record of third-party administrators who are eager for your business. Expect—in fact, demand—a partnership that focuses on synergies that drive down cost while simultaneously improving patient care by reducing the inappropriate and often wasteful use of resources. N Focus on proactive measures that rein in medical costs, rather than relying solely on controlling premium costs. Eighty percent of the average premium goes toward paying claims, providing a large target for money-saving strategies. Explore behavior management, such as wellness incentives and educating employees about the impact of their choices. N Demand accountability for claims management. Pharmaceutical and medical billing audits can reveal patterns of mistakes and process flaws that can be addressed to lower costs without affecting the quality of care.

Mental Health Parity Legislation Becomes Law
Insurance companies must cover mental and physical illnesses equally under a provision included in the so-called“bailout”legislation signed into law by President Bush (Emergency Economic Stabilization Act, HR 1424). The provision is the culmination of years of effort by legislators to expand on the 1996 Mental Health Parity Act, says Sen. Pete Domenici (R-New Mexico), who co-authored the 1996 Act and was a lead sponsor of the current parity legislation. “No longer will we allow mental health to be treated as a stepchild in the healthcare system,” Domenici said. “If you have insurance, then your mental-health care must be equal to the benefits you get for any other disease.” The new law expands parity to include: N Deductibles, N Copayments, N Out-of-pocket expenses, N Co-insurance, N Covered hospital stays, and N Covered out-patient visits. Companies with fewer than 50 employees are exempt.

Cutting Healthcare Costs
Knowing that healthcare costs will not decrease in coming years, the challenge for employers becomes learning how to keep the increases to manageable levels. There are a variety of strategies for cutting program costs. Among these are making changes in the areas of plan design, financing, purchasing, vendor management, care management, pharmacy, and retiree medical management. Consider the following specific steps in cutting program costs:

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HSAs. Many companies are implementing health savings accounts (HSAs), which are a cost-effective way to co-fund health care. HSAs are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. Network management. Also recommended are high-performance networks where experts analyze cost and practice patterns, weeding out from the network specialists who cost much more than others. These are specialists who tend to order more tests and require more doctor visits than others. By removing them, the total cost of health care for employers decreases. Surcharges. Another strategy for cost-cutting is introducing“dependent surcharges.” These are charges levied by companies to cover employees’ working spouses who could be covered under their own plan. The surcharge creates an incentive for the spouse to switch to his or her own plan. Volume discounts. Joining a coalition of employers that leverages volume to purchase health coverage on a group basis can also help employers reduce costs. Volume purchasing power when negotiating with community providers leads to lower overall costs. Consumer-driven health care. In order to curb rising healthcare costs, more employers are implementing consumer-driven healthcare plans (CDHPs). Dozens of concepts can hide under the trendy title of consumer-driven healthcare plans, from smoking-cessation, weight-loss programs, and health club memberships to three-tier pharmacy plans. But here’s a definition offered by the Washington, D.C.based National Business Group on Health:“Most plans include cost-sharing provisions, high deductibles, a health reimbursement account or health savings account (HSA), and tools and resources to help workers become more educated healthcare consumers.” BLR asked Steve Kraus, principal-in-charge of Deloitte Consulting’s Human Capital practice and leader of the study, for his reaction to that definition. He generally agreed with it, stressing that plans vary widely from employer to employer. The core principle, Kraus says, is“enabling employees to understand the true cost of healthcare services and the options available to them for receiving care while requiring [them] to take on increased financial responsibility for managing their health care.” These are the basic features, Deloitte Consulting’s Steve Kraus reports, for each participant in a consumer-driven healthcare plan. N A fixed annual allowance to cover“wellness benefits”preventive care such as physical exams and health screenings. N Enrollment in a high-deductible medical plan, such as a $1,500 deductible with coverage by a preferred-provider organization. N In larger companies, those with at least 1,000 employees, an employer-funded health reimbursement account (HRA), say of $1,000, for use in covering the deductible. N In smaller companies, an HSA that acts like a 401(k)-type retirement plan. Employees save their own money, which may be fully or partially matched by the employer.


Top 10 Best Practices in HR Management for 2009

N With either HRAs or HSAs, the employee pays $500 of his or her own money for the rest of the deductible. In theory, participants are more likely to ask a healthcare provider whether a test or treatment is really necessary or whether it can be obtained less expensively. N Unspent funds in both HRAs and HSAs can be rolled over from year to year. These are other features that either the insurer or the employer may add: N Third-party-provided pharmacy benefit management N Disease management, usually by nurse practitioners, for such chronic conditions as asthma, diabetes, heart disease, or cancer N Wellness benefits, such as a gym on the premises, and weight-loss and smoking-cessation programs N Behavioral health benefits that especially target depression Use a variety of methods. Not surprisingly, the experts maintain that no single method will reduce costs dramatically. Rather, implementing a variety of methods can help employers save money over the long term.

Best Practice: Improve Employee Benefits Communication
Ninety percent of employers that offer a consumer-directed health plan (CDHP) cited employee communication as their greatest challenge in introducing the CDHP and during the plan’s first year, according to a study conducted by Watson Wyatt Worldwide and the RAND Corporation. The study included 42 large employers that offer a CDHP to their workers. The study found that employers agree that getting employees to enroll in these plans can be difficult when they also have more traditional health plan options. Employers were most likely to achieve high levels of CDHP enrollment when they devoted additional time and resources to communication, forced employees to make an active choice at open enrollment, and offered financial incentives in ways that enhanced the appeal of the CDHP according to the study. , Another challenge that employers face when offering a CDHP is providing workers with information they need to help make good decisions about healthcare cost and quality, according to the study. The study found that employers are generally pleased with Web-based, out-of-pocket cost calculators for employees. However, they find that specific resources needed to help workers evaluate the cost and quality of care from specific providers are often lacking. Just 2 percent rated cost information about healthcare providers as excellent, and 5 percent rated it as good. Only 10 percent rated information on the quality of care as good, and none rated it as excellent. “Provider cost and quality tools that help employees make smart, cost-effective decisions need to be part of the consumer-directed health plan package,” says Melinda Beeuwkes Buntin of the RAND Corporation. “Better information tools would promote employee engagement and help workers select the health plan that is best for them.”

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President Obama’s Future Plans on Health Care
President Obama proposes a healthcare plan that would require employers to offer healthcare insurance to employees or pay a percentage of payroll to support a public healthcare plan. Small employers would be exempt. President Obama would also give a tax credit to small businesses to encourage them to offer healthcare insurance. All children would be required to have healthcare insurance, and the new president’s plan calls for subsidies for people who are unable to afford insurance. President Obama also has a plan that he says will reduce healthcare costs, including a change to allow Americans to purchase less expensive prescription drugs from other countries.

Best Practice: Cancer Screening Saves Lives, Money
C-Change, a national cancer coalition of key leaders from the government, business, and nonprofit sectors, recently launched an initiative designed to encourage employers to add cancer prevention and screenings to their health insurance policies and programs. Its white paper, “Making the Business Case for Cancer Prevention and Early Detection,” is available in its entirety at www.c-changeprojects.org/ MakingTheBusinessCase. With more than half of Americans covered by health insurance provided through employer plans, the costs associated with cancer have a direct impact on business’ bottom lines. Cancer is the second leading cause of death in the United States, after heart disease. Proper screenings can prevent cancer and improve outcomes where cancer is found. As such, screenings lead to lower costs and, of course, better outcomes for individuals, families, and businesses. C-Change says there are four prevention areas that can have the most impact: tobacco-cessation programs, breast cancer screening, colorectal cancer screening, and cervical cancer screening. A study by America’s Health Insurance Plans and the Kaiser Permanente Center for Health Research found that investing in tobacco-cessation programs reaps immediate results. “By investing 18 cents to 79 cents per member, per month, an employer can generate a cumulative savings of $1.70 to $2.20 per member per month after 5 years,” says C-Change. Death rates are reduced by about 16 percent in women over the age of 40 who have mammograms every 1 to 2 years. And the U.S. Department of Health and Human Services says that the death rate from colorectal cancer can be reduced by at least 30 percent with regular screening for the disease. Educating employees about when and why they should quit smoking or be screened for cancer is important, and there are simple, low-cost ways to do that. Invite a mobile screening unit, such as a mammography van, to come to the workplace. Send reminder cards around employees’ birthdays to encourage them to get screened. Include notices in newsletters, on the company intranet, and in break rooms about when and why employees should be screened. Offering time off to take advantage of cancer screenings can also encourage early detection.


Top 10 Best Practices in HR Management for 2009

Wellness Programs
There is little question that employers can have a positive impact on employee behavior. Done well, employer-sponsored wellness programs have been successful in helping employees make better choices. Some such activities are full-blown programs. Others are small, finite activities that are part of overall HR and safety. Wellness programs include: N Exercise and fitness N Smoking cessation N Blood pressure management N Weight management N Stress management N Cholesterol management N Nutrition Studies of the wellness plans of 200 companies completed by the American Journal of Health Promotion conclude that the return on investment (ROI) for employee wellness programs can be as high as 348 percent in 3 to 6 years. This figure certainly suggests taking a closer look at instituting a wellness program if you don’t already have one in place at your company. When wellness programs are not successful, it’s often because there’s a lack of senior management support and/or the original planning wasn’t as comprehensive as it should have been. Senior leadership must communicate the importance of the wellness initiative to employees up front. They should also participate in the program once it is up and running to set an example for other staff.

#4 Retirement of Baby Boomers
Are you prepared for the retirement of lots of your older workers? Never mind whether you can find warm bodies to replace them (and even that may be tough), but how will you fill the knowledge gaps left by their departures? There’s been much talk about phased or delayed retirement programs, but two topic experts provide a fresh perspective on surviving the brain drain. Misconceptions on both sides. Alan Bernstein and John Trauth, co-authors of Your Retirement Your Way (McGraw-Hill, 2006), since publishing their book, have shifted their focus to include both older employees and their employers. On the lecture circuit, they explain their recommendations, based on a good deal of research, for hanging onto the much-needed knowledge and talent of older workers. Employers, they say, have these wrong impressions about older workers: N Older workers can’t handle the physical demands of their jobs. In today’s service and knowledge economy, most employees can do most of the jobs they’ve always done.

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N Older workers are just coasting to retirement. In fact, they can be just as—or more—productive than younger workers. Their work tends to be more accurate and their decisions more thoughtful. N Older workers get hurt more often and heal more slowly. Instead, they’re less reckless than younger workers and subject only to repetitive strain, which can be eased. N Older workers can’t or won’t learn new skills. Instead, they do learn differently but continue to enjoy chances to learn something new. N Older workers are short-timers, so not worth the investment. The truth is that they are more loyal, have lower turnover, and have positive work values. Bernstein and Trauth think they have an effective answer to the looming talent crunch in which employers won’t be able to find enough workers with the right kinds of skills to fill needed positions. Here are elements of their program, MORe (Mutually Optimized Renewal), “a new retirement paradigm”for retaining older workers. The first step is to prepare a 5-year plan of business objectives for change and growth, including the employee skills that will be needed to get from here to there. Next, assume that all workers aged 59 or over now will retire before the end of the 5 years. Do any have skill sets and/or institutional knowledge that will be essential to keep? The answer is likely yes, and Human Resources should approach those people to discuss their retirement needs and wishes. Bernstein and Trauth see real problems with the phased retirement programs some large employers have used:There’s low enrollment, too-brief tenure, and failed mentoring processes. The authors believe the reasons are that older employees are burned out from doing their current jobs, they’ve not thought enough about what they want out of work and life in the future, and they haven’t been properly trained for mentorship. What should happen, Bernstein and Trauth advocate, is that chosen older workers take a 1- to 6-month sabbatical to assess their needs and wishes. That renewal break should be accompanied by completing a reliable personality profile that reveals the kinds of work they like best and what job aspects lead to stress. Based on those activities, the worker and the employer together structure a new, part-time job tailored to the worker’s personality and interests. The other part of the bargain is the one or more mentoring relationships that will aid the organization in transferring the older worker’s skills and knowledge to future leaders in the firm. Not only should the potential mentor be thoroughly trained in how to carry out the responsibility but the personalities and interests of potential mentees should be carefully assessed to find the right match or matches for the mentor.

Survey: Few Employers Capture Boomer Know-How
Only one quarter of large organizations are making an effort to transfer knowledge from retiring Baby Boomers to other employees, according to a survey of 2,046 Human Resources executives by Novations Group, a global consulting and training firm based in Boston.


Top 10 Best Practices in HR Management for 2009

The survey found that just 4 percent of respondents said they have created a formal process to pass on know-how, while 23 percent report doing so informally. Twenty-nine percent of respondents said that while they currently have no process for transferring knowledge from retiring Baby Boomers to other employees, they plan on developing one. Forty-four percent of employers said they have no process and have no plans to develop one.

Transitioning into Retirement
According to a recent survey by AXA Equitable Life Insurance Company, there is a disconnect between how you view the next step in the retirement process and how employees view it. In fact, they’re waiting for you to help them with the transition into retirement.According to Bill McDermott, executive vice president at AXA (www.axa-equitable.com), “71 percent of the employees we surveyed said they believe it is their employer’s responsibility to prepare them for retirement. “People have three critical decisions to get ready for retirement,” says McDermott. “The first is to save; the second is to invest, and the third is the distribution—how you’re going to live off of your savings.” Most companies are doing well at helping employees with the first two by providing a plan, encouraging saving, educating about investments, and even matching contributions. But when it comes time to think about the third decision, many companies are lacking. How to help employees near retirement prepare. There are several things near-retirees need to think about during the last few years of their working life. You can access tools through organizations such as AARP the company that provides , your retirement plan administration, or via the Internet. Many are low- or no-cost. AARP recommends that people start by thinking about how they want their retirement to look. The organization’s self-assessment tool, Retirement Roadmap, is available online (www.aarp.org) and leads people through a variety of questions in a dozen categories designed to guide the process. The answers help the employee think through possibilities and learn how much money those possibilities might take. AARP also suggests starting early to determine how much money to expect from Social Security and from the corporate plans. You can make that easier by providing benefit statements regularly. How to invest retirement funds. One of the critical decisions employees must make when retiring is how to invest their retirement nest egg so it will last their lifetime. HR can take steps in the right direction without having everything figured out at once. N Assess how you are doing in preparing employees to live off their retirement savings; N Contact your retirement administrator and ask if it can provide a speaker for a brown-bag lunch for employees over age 50; N Make sure employee benefit statements are provided regularly; and N Ask employees what they need from you.

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Predicting the Future of Retiree Health Care
Educating employees may be the most important thing you can do to help them plan for retirement health costs, says Robert Schmidt of Milliman. He expects that an unmarried employee retiring at age 60, with an initial insurance premium cost of $227 per month (subsidized by a generous employer) and assuming an optimistic health cost trend of 8 percent per year, can expect to need $205,000 for the purchase of health insurance if he or she lives to age 85. That’s a present value of $95,000 using a 5 percent discount rate. Of course, for married people, or those retiring from an employer that doesn’t subsidize part of the cost of coverage, the amount would be substantially more. That means retirement savings are more important than ever before. “Plan to just chop off $100,000 of your retirement savings to pay for health care,” Schmidt advises. Not only do employees and retirees need education about the cost of health insurance, they also need to be on board with wellness and disease management initiatives, says Schmidt. In a recent survey, Kaiser and Hewitt asked companies sponsoring retiree health benefits about their future plans. In the Kaiser/Hewitt Survey on Retiree Health Benefits, the highest percentage of respondents pointed to changes in their plan designs that will mean increased costs to retirees. For example, 80 percent said they will likely increase retiree premium contributions; 40 percent will increase cost-sharing requirements; 36 percent are likely to increase drug co-pays or coinsurance; and 30 percent will increase out-of-pocket limits. Fortunately for retirees, just 2 percent said they are likely to terminate all subsidized health benefits for current retirees. Robert Schmidt believes early retirees are more likely to maintain some form of employer-sponsored benefits. “I’m seeing a trend,” he says. “If companies are going to provide retiree health care, they’re providing it to early retirees, and letting post65 retirees go on their own. There are so many more options for them now.”

Persuading Older Workers to Stay: Is It the Money that Matters?
The Employee Benefit Research Institute (EBRI) asked workers who had retired in 2003 or later about company policies, practices, and incentives that would have encouraged them to delay retirement. The 4,981 respondents worked in the aerospace and defense industries and at the time of the survey, were between the ages of 55 and 65. Most (79 percent) were men, and 83 percent were married when they retired. Just ask. Nearly two-thirds said they would have seriously considered an offer from their employer asking them to stay on. You need me? Almost half (48 percent) of the retirees said that if they had felt truly needed for an assignment, that would have been extremely or very effective in encouraging them to delay retirement. Money please. However, money does enter the equation. Half of the respondents who had a defined benefit pension plan said that if they had been able to receive a full pension and still work part time, it would have been effective in getting them

Top 10 Best Practices in HR Management for 2009

to delay retirement. A partial pension had the same effect for 44 percent of respondents. EBRI points out, however, that this would require a change in federal law. Other compensation-related incentives may be almost as compelling, without requiring legal changes. One-third of the retirees said that a pay increase would have been an effective way to get them to stay, with 56 percent ranking it among the top two incentives. And nearly half (46 percent) said that they would be encouraged to continue working part time if the company continued to subsidize their health insurance benefits at the same level as full-time workers. Communicate early. If you’d like to encourage workers to stay with you a little longer, start your efforts early. According to the EBRI survey, the timing of the offer is important. Almost two-thirds (63 percent) of the survey respondents said that the offer would have been much more effective if they had known about it in the 2 years before they communicated their intention to retire.

Succession Planning to Fill the Baby Boomer Gap
Employers rightly fear the aging of the workforce and the significant“brain drain” many companies will experience as Baby Boomers begin to retire. Companies must plan not only for staffing needs at the top of the company, but must also identify and plan for future human capital needs at all levels—planning for the future growth and success of the company. If the company is not prepared and has not invested in its key employees, when the need to fill a position arises, the company will likely find itself paying top dollar to attract talent from outside the organization in a fierce competition with other public and private employers. Study the demographics. Early in the process, it is important to analyze the current workforce. Is brain drain going to present a significant problem for the company, and if so, when and in what areas or jobs? Knowing when and where there will be key vacancies or a need to replace accumulated skills and knowledge will help focus on future needs, as well as current vacancies when new employees are recruited and hired. Link strategic goals with human capital needs. Identify the talent, skills, and experience the company will need over the next 5 to 10 years in order to achieve goals and continue to be successful. This will include the knowledge, skills, abilities, experience, education, core competencies, and even personality traits that will be needed to fill top management positions and other positions that will be essential to the company’s long-term success. Senior management must play a role. Human Resources managers need to involve senior managers in the planning process so that succession planning and the development of employees are adopted as strategic goals. Senior management will be more likely to participate in the process if it is linked to the long-term strategic goals of the company. Succession planning as a retention strategy. In a highly competitive labor market such as the one predicted over the next 10 years, a working succession plan can have a significant impact on staff retention. Employees who feel the company is making an investment in their development and career planning are more likely to be committed to the organization long term.

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Measuring success. One way to keep the focus on succession planning and developing employees is to track and measure the success of the plan at the department and company level. One way to do this is through the use of metrics and another is to make sure managers are evaluated on how well they implement the plan. Suggestions include: N Measuring the total number of open positions identified as key positions in the succession plan that were filled by high-potential employees. N Using 360-degree reviews for evaluating the mentoring process by having the mentor evaluate the employee and vice versa.

Integrating a Multigenerational Workforce
As your“Radio Babies”(approximate ages 62 to 77) and Baby Boomers (roughly ages 43 to 61) retire or begin to phase out, Generation X (ages 30 to 42, give or take) simply can’t fill all the workforce gaps:That cohort is too small. So, despite problems your older staffers may think they’ve had in adjusting to Gen X, you’d better get ready to hire Gen Ys. They’re the biggest cohort since the Boomers, and you’re going to need them. How do you cope? In order to increase the amount of workplace interaction among employees of different ages, consider taking some of the following action steps: N Establish a series of mentor relationships that pair older workers with younger ones; encourage pairs to meet at least monthly for a year or more to work on career goals set by the younger workers. N Create focus groups of mixed generations to brainstorm ideas about achieving company objectives. N In populating ongoing project teams, strive for age diversity as well as diversity of levels, race, and gender in addition to appropriate functional and departmental representation. N Make it easy for older workers to obtain either in-house or external training in new technologies or methodologies. Pair older workers with younger workers who may have more experience with new technologies.

#5 Recession Help
Across the nation, employers find it nearly impossible to ignore dropping revenues and profits. A recent study by consulting firm Hay Group found that more than 30 percent of respondents are freezing or planning to freeze base salaries, with half that number doing so for all employees. And some 20 percent will either freeze workforce size or conduct layoffs in the near future. Respondents also reported they will change training and development programs (28 percent), change healthcare benefit plans (27 percent), or change retirement savings plans (20 percent). Furthermore, another survey done by Career Protection predicts a 37 percent increase in layoffs this year compared to last, making this year’s forecast the worst

Top 10 Best Practices in HR Management for 2009

in 5 years. Survey respondents were nearly 1,400 corporate executives nationwide. And DOL reported that the U.S. economy scuttled 80,000 jobs last March, boosting the unemployment rate to 5.1 percent from 4.8 percent. BLR subscribers have told us they’re considering such moves as suspending their company’s 401(k) match and whether they should warn employees that layoffs may be necessary. There’s a big contradiction here. The same Hay Group respondents who said they were considering layoffs and benefit reductions also said that their number 1 concern about the recession was how to retain and motivate their top performers. Clearly, then, employers have conflicting needs: they feel pressure both to cut costs, with human capital usually being the biggest drain on expenses, and also to hang onto the talent they really need. Manny Avramidis, senior vice president of Human Resources for the American Management Association (AMA), advises organizations to cope with the possibility or the reality of recession in several ways. Avramidis points out that a rising rate of unemployment doesn’t necessarily mitigate the war for talent; many available workers lack the skills that employers seek. After all, you’re not just looking for warm bodies. And, companies tend to be leaner than in past recessions because of outsourcing, global mergers and acquisitions, and layoffs they may have conducted in the early 2000s. “Companies should approach this downturn by continuing to invest in human capital,” says Avramidis. The first step in preparedness is a vibrant and accurate performance assessment process that identifies where every employee stands in terms of the organization’s goals, the employee’s contributions, and where he or she may need to improve. That process will inform both front-line supervisors and HR pros about the key players in the company, as well as who’s in line for important positions in terms of succession planning. Avramidis has been through at least one other recession, the one that began in 2001, in his tenure with AMA. He firmly believes that layoffs should be“resisted” because talent is so scarce that if a firm downsizes, it may not be able to rally when the recovery comes. The foundation of his approach to this recession is communication. “Be transparent,” he advises. Not only do employees need their individual feedback from the company’s performance management system but they also need to know virtually everything that top management knows about the organization’s ongoing results. Armed with that information, employees need to be engaged in developing strategies for the corporate response. Are there less profitable product lines that should be dropped, or should marketing efforts at least be cut back for them? Do workers have ideas about redundant processes or other kinds of activities that could be eliminated to save money? Given detailed and up-to-date information on their employer’s financial results, employees will be more prepared for news of layoffs should they be necessary. However, Avramidis suggests that employers go further by explaining beforehand exactly what will happen if layoffs are conducted. Are they expected to be temporary or permanent? Will outplacement services and/or severance packages be provided to those laid off? What services will be available for those not laid-off— the survivors?

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In addition, Avramidis recommends that the first candidates for layoff be chosen based on where they work in the organization. That is, target first the employees in less-profitable lines of business or activities the company may eliminate. Even then, don’t let a top performer go simply because he or she is in the wrong line of business. Then, if a second layer of jobs may need to be cut, shift the focus to where employees stand in terms of their performance. In order to resist layoffs, should employers take such preliminary measures as freezing salaries and/or reducing such benefits as healthcare coverage or retirement plans? Avramidis is reluctant to endorse such moves, because they penalize all employees the same way rather than differentiating among them based on their performance and their organizational roles. “Don’t force out your best people because they can no longer afford to stay with you,” he cautions. Only an employer that has developed significant credibility and employee loyalty may be able to get away with such across-the-board penalties, Avramidis believes. “Do your best to protect your most valuable human capital,” he concludes.

Best Practice: Mandatory Vacations at HP
Companies caught between a need to cut costs and a desire to avoid layoffs are turning increasingly to forced vacations, according to the Christian Science Monitor. These employers reduce their employees’ work hours by asking them to take vacations that are either paid or unpaid, depending on the company’s financial circumstances. “I’m advising companies that it’s an excellent idea,” says Bruce Katcher, president of The Discovery Group, a Boston-based consulting firm. “The advantage for the organization is that you still keep people around for when business turns around. And you’re telling employees that you still want them to be a vital part of your organization, that you’re committed to them.” Work slowdowns and subsequent cuts in employees’ workweeks are nothing new in the manufacturing sector. Yet experts tell the Monitor that this recession marks the first time a wide variety of businesses, both large and small and from many different sectors of the economy, have used employees’ time as a cost-cutting tool. Hewlett Packard (HP) asked its employees last April to voluntarily take an additional 6 days of paid vacation time off before the end of the fiscal year in October. In June, it asked them to voluntarily forfeit some earned vacation time, take a small pay cut, or do a combination of the two through the end of the fiscal year. And in December, HP closed all of its offices for a week at Christmas, which included 3 days off with no pay. HP tells the Monitor that 95 percent of its workforce joined in the June cost-cutting measure, saving the firm $130 million. The other measures also saved an undisclosed sum of money on two fronts. First, closing saved HP the cost of keeping offices open. Second, asking employees to take paid vacation time—instead of rolling it into another year—helped in accounting terms because paid vacation is a funded liability that carries over from year to year on the company’s books. Experts say the key to successful implementation of a time-off cost-cutting measure is in how it’s communicated to workers. The plan needs to be presented clearly, in advance, with assurances that the company is committed to its staff.


Top 10 Best Practices in HR Management for 2009

Best Practice: Teach Workers Economics 101
Amid all the bad economic news, some companies are giving their workers crash courses in basic economics and personal finance, so they will understand the tough decisions managers must make these days. One such employer, the Outokumpu American Brass factory in Buffalo, New York, is showing that giving employees the big picture can bolster their morale and even produce bigger profits, according to The New York Times. The factory was almost shut down in 1984 because of flagging sales and labor unrest. Local investors bought the plant and quickly turned it around. However, in 1990, they sold it to Outokumpu Oyj, a Finnish mining and metals conglomerate. Outokumpu had given the local investors a healthy profit, and it knew that it would have to raise workers’ productivity over the long haul to make the investment pay off. One way to do that:Teach workers the economic and financial basics of the company’s markets. When company-hired instructors from Cornell University’s School of Industrial and Labor Relations arrived, they found a high level of hostility toward Outokumpu. The workers“saw it as us against them, a takeover by this evil foreign company,” recalls Lou Jean Fleron, the school’s director. However, the Cornell instructors persisted and ended up teaching on everything from the impact of technology on the workplace and the dynamics of international competition to the intricacies of corporate income statements and the factors that influence the pricing of commodities. Before long, workers were seeing connections between the classroom discussions and their working conditions. After learning about manufacturing costs in other countries, for instance, they came away with a more sophisticated understanding of how their own wages were set.

Benefits and Retention Strategies in a Recession
The impact of current economic conditions is being felt in the workplace. In a breakout session at the 21st Annual Benefits Forum & Expo held in National Harbor, Maryland, HR and benefits professionals were given some valuable tips for retaining and engaging their workers during tough economic times. In the face of slow growth, that some organizations would take measures such as a reduction-in-force (RIF) is understandable, explains George Lane, principal at Mercer, and an RIF will have a near-term impact on the bottom-line. However, you must be careful not to lose valuable people that“you’ll need when you start up again,” he explains. According to Mercer’s 2008“Report on Human Capital Management for Slow Growth Times,” employers should: N Be looking for new ways to generate sustainable reductions in benefit costs using innovative strategies that do not adversely affect perceived value; N Implement creative, highly-targeted strategies to recruit and retain the optimal workforce for long-term success; and N Communicate often and honestly to employees to bolster flagging engagement and productivity.

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Lane asserts that you should be doing these three things all of the time, but a recession underscores the importance of such actions. Maia Lucier, director of compensation and benefits for Dimension Data, a global specialist IT services and solutions provider, explained how her company has added no- and low-cost ways to beef up its benefits in creative ways while continuing to strive to attract and retain talent against the backdrop of a troubled economy. Lucier emphasized the importance of frequent and effective communication to employees when it comes to their benefits, noting that the extent to which employees value and understand their benefits package impacts job satisfaction and loyalty to the organization. With this in mind, Dimension Data has leveraged its relationship with a financial advisor from its 401(k) plan, asking him to participate in new monthly“Think Financial Wellness”conference calls for employees. These 30-minute conference calls were created to address economic uncertainties for employees and consist of the following: N A 10-minute recap of recent economic developments (in plain English), N A 10-minute interpretation of“what does this mean for me,” including retirement and personal financial planning implications, and N 10 minutes of Q&A. Dimension Data is also providing health expense communications for employees, such as an“around the office”feature in its monthly newsletter. This feature provides a profile of an employee and might explain, for example, how he or she saved money by using mail order drugs. Showing how a specific employee utilized a benefit program that saved him or her money is much more effective than just explaining the benefit, Lucier has found. The company has also created“What you should know as a Dimension Data employee”webcasts which communicate to employees by promoting learning and development opportunities, showing them how they can utilize their benefits to the fullest extent, and communicating Dimension Data’s 401(k) investment review process and due diligence (something more employees ask questions about during tough times). Lucier also avidly supports the use of total compensation statements. She says that by providing detailed information regarding the value of their benefits, you may be able to hold onto valuable employees who would otherwise be tempted to take a job elsewhere for a small base salary increase. Finally, in terms of communication, Dimension Data has a“Leading Talent”program for its line managers. Dimension Data wants their managers to have the ability to manage the relationship between the employee and the company. In this program, managers are taught how they can help attract, engage, develop, and retain talent for high performance. They are also educated about company benefits so that they can communicate benefits value to employees.


Top 10 Best Practices in HR Management for 2009

#6 Immigration
Immigration was a hot topic in the recent presidential primaries and national election, and complying with immigration laws continues to be a challenge in Human Resources management.

No-Match Letters
The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to knowingly hire or to continue to employ an individual who is or may become an unauthorized alien. On August 15, 2007, the Department of Homeland Security (DHS) issued regulations that defined the term“knowing”to mean having actual or constructive knowledge. In a no-match letter, the Social Security Administration (SSA) or DHS informs an employer that the name and Social Security Number (SSN) reported for an employee or the immigrant status or employment authorization documents do not match their records. A“no match”does not mean that an individual is undocumented, but it could, in certain circumstances, constitute constructive knowledge that an individual is undocumented. DHS regulations set out steps that an employer may take after receiving a no-match letter from DHS or SSA. If these steps are followed, an employer may avoid being considered as having constructive knowledge that a particular individual is an unauthorized alien based on a no-match letter from one of these agencies. Regulations on hold. A federal district court judge has barred SSA from sending no-match letters on the grounds that DHS exceeded its authority in issuing the regulations. The bar will last at least until there is a full trial on the question or the order is reversed by a higher court. On November 23, 2007, DHS filed a motion asking the judge to suspend this case so that it could rewrite the regulation to address the court’s concerns, including conducting a survey of the impact of the regulation on small business. Regulations reproposed. In response to the lawsuit and the court order, DHS has issued a supplemental proposed rule that leaves the August 15, 2007, regulations intact. The preamble to the supplemental proposed rule includes an analysis of DHS’s authority to issue the regulation and an analysis of the impact of the regulation on small business intended to address the court’s concerns. The preamble does clarify that the obligation of an employer to provide prompt notice to an affected employee after the employer has completed its internal record checks and has been unable to resolve the mismatch will ordinarily be satisfied if the employer contacts the employee within 5 business days after completing its internal records review. In addition, DHS has made it clear that the regulation does not have application to no-match letters that reference employees hired before November 6, 1986, because the statutory bar against continuing to employ unauthorized workers does not apply to such employees.

The Suspended/Reproposed No-Match Letter Regulations
The status of the no-match letter regulations will likely be resolved by a final court ruling either barring DHS from implementing the reproposed regulation or that the reproposed regulations do address the court’s concerns and may go
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into effect. The following is an analysis of the reproposed regulation that DHS plans to implement. Safe harbor. The DHS regulations provide that by taking“reasonable steps”after receiving a no-match letter, the no-match letter may not serve as the basis for finding that the employer has constructive knowledge that an individual is working illegally. The DHS regulations set out the specific steps that, if taken, are automatically deemed to be such reasonable steps and provide the protection of a“safe harbor”from liability for violating IRCA based on a no-match letter. Note: Employers may come upon information that an SSN might be invalid in other ways—for instance, if two or more newly hired employees have the same or consecutive numbers. In such situations, employers should also follow the safeharbor procedure. However, knowledge that an employee is unauthorized must not be inferred from an employee’s foreign appearance or accent.

Procedures for Avoiding Liability
To qualify for the safe harbor, an employer must follow the procedures set out in DHS regulations. The procedures, while similar, vary somewhat depending on whether the no-match letter came from SSA or DHS.

SSA No-Match Letter
After receiving a no-match letter from SSA, employers should do the following:

Step 1—SSA No-Match Letter
N Check the employer’s records immediately to see whether the discrepancy was caused by a typographical, transcription, or similar clerical error in the employer’s records or in the employer’s communication to the SSA. N If there are no typographical, transcription, or similar clerical errors, move on to Step 2 immediately. Warning: Time is critical because if the employee confirms that the records are incorrect, the deadline to correct them is 30 days from receipt of the no-match letter. If there is a typographical, transcription, or similar clerical error: 1. Correct the records; 2. Inform the SSA; 3. Verify with the SSA that the discrepancy has been resolved; 4. Make a record of the manner, date, and time of the verification (this includes documentation of telephone conversations, correspondence, computer-generated printouts, e-mails, and Social Security Number Verification System screen shots); and 5. Store the record with the employee’s Form I-9. In the safe harbor. If these five steps are completed within 30 days of receipt of the no-match letter, the employer qualifies for the safe harbor.


Top 10 Best Practices in HR Management for 2009

Step 2—SSA No-Match Letter
N If the discrepancy is not resolved by following the procedures in Step 1, notify the employee promptly (ordinarily within 5 business days after completing the internal records review) of the no-match problem and request that the employee confirm that the employer’s records are correct. N If the employee confirms that the records are not correct, take the following steps within 30 days of receipt of the no-match letter: 1. Take the actions needed to correct the records; 2. Inform the SSA; 3. Verify with the SSA that the discrepancy has been resolved; 4. Make a record of the manner, date, and time of the verification (this includes documentation of telephone conversations, correspondence, computer-generated printouts, e-mails, and Social Security Number Verification System screen shots); and 5. Store the record with the employee’s Form I-9. In the safe harbor. If these five steps are completed within 30 days of receipt of the no-match letter, the employer qualifies for the safe harbor. N If the employee confirms that the records are correct, ask the employee to pursue and resolve the matter personally with the SSA within 90 days of receipt of the no-match letter. (Be sure to give the employee the date by which this must be completed.) The employee may pursue the matter by visiting a local SSA office and bringing original documents or certified copies required by SSA, such as documents that prove age, identity, citizenship or alien status, and other relevant documents, such as proof of a name change, or mailing these documents or certified copies to the SSA office, if permitted by the SSA. N The employer should then take the following steps to verify the employee’s information with the SSA: 1. Verify with the SSA that the employee’s name matches the number assigned to that name in the SSA’s records; 2. Make a record of the manner, date, and time of any such verification, as the SSA may not provide any documentation. (This includes documentation of telephone conversations, correspondence, computer-generated printouts, e-mails, and Social Security Number Verification System screen shots); and 3. Store the record with the employee’s Form I-9. In the safe harbor. If these three steps are completed within 90 days of receipt of the no-match letter, the employer qualifies for the safe harbor. Note: Employers may verify an SSN with SSA by telephoning toll-free 800-772-6270 weekdays from 7 a.m. to 7 p.m. EST. For information on SSA’s online verification procedure, go to www.ssa.gov. Employers should make a record of the manner, date, and time of any such verification, as SSA may not provide any documentation.

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If the discrepancy is not resolved within 90 days of receipt of the no-match letter either by the employer correcting the mistaken records or the employee pursuing and resolving the matter with SSA, the employer should move on to Step 3.

Step 3—SSA No-Match Letter
If the discrepancy is not resolved within 90 days of receipt of the no-match letter, the employer should complete a new Form I-9 for the employee as if the employee were newly hired, except that no document containing the SSN that is the subject of the no-match letter may be used, and no receipt for an application for a replacement of these numbers may be used to establish employment authorization, or identity, or both; and no document without a photograph may be used to establish identity or both identity and employment authorization. If a new I-9 is not completed within 93 days of receipt of the no-match letter, the employer should terminate the employee. In the safe harbor. If the new I-9 is completed or the employee is terminated within 93 days of receipt of the no-match letter, the employer qualifies for the safe harbor.

DHS No-Match Letter
After receiving a no-match letter from DHS, employers should do the following:

Step 1—DHS No-Match Letter
After receiving a no-match letter from DHS, employers should do the following: N Contact the DHS and attempt to resolve the discrepancy within 30 days; N Verify with the DHS that the employee’s name matches the number assigned to that name in the DHS records, or verify the authorization with the DHS that DHS records indicate that the immigration status document or employment authorization document was, indeed, assigned to the employee; N Verify with the DHS that the discrepancy has been resolved; N Make a record of the manner, date, and time of the verification (this includes documentation of telephone conversations, correspondence, computergenerated printouts, e-mails, etc.); and N Store the record with the employee’s Form I-9. You have now completed the process. In the safe harbor. If these steps are completed within 90 days of receipt of the no-match letter, the employer qualifies for the safe harbor. If the discrepancy is not resolved within 90 days of receipt of the no-match letter, move on to Step 2.

Step 2—DHS No-Match Letter
If the discrepancy is not resolved within 90 days of receipt of the no-match letter, the employer should complete a new Form I-9 for the employee as if the employee were newly hired except that the alien number that is the subject of the no-match letter and no receipt for an application for a replacement of these numbers may
Top 10 Best Practices in HR Management for 2009

be used to establish employment authorization, or identity, or both; and no document without a photograph may be used to establish identity or both identity and employment authorization. If a new I-9 is not completed within 93 days of receipt of the no-match letter, the employer should terminate the employee. In the safe harbor. If the new I-9 is completed or the employee is terminated within 93 days of receipt of the no-match letter, the employer qualifies for the safe harbor.

Antidiscrimination Guidance for Employers Following the No-Match Letter Safe Harbor Procedure
The U.S. Department of Justice (DOJ) Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) has issued guidance for employers explaining how to avoid being charged with discrimination while following the safe-harbor procedure. If an employer follows all of the safeharbor procedures outlined in DHS’s no-match rule but cannot determine that an employee is authorized to work in the United States, and, therefore, terminates that employee, and if that employer applied the same procedures to all employees referenced in the no-match letter(s) uniformly and without the purpose or intent to discriminate on the basis of actual or perceived citizenship status or national origin, OSC will not find reasonable cause to believe that the employer has violated the INA’s antidiscrimination provision. On the other hand, an employer that receives an SSA no-match letter and terminates employees without attempting to resolve the mismatches, or treats employees differently or otherwise acts with the purpose or intent to discriminate based on national origin or other prohibited characteristics, may be found by OSC to have engaged in unlawful discrimination. OSC is required to investigate charges of discrimination and determine whether there is reasonable cause to believe that the charge is true. OSC may, on its own initiative, also conduct investigations of unfair immigration-related employment practices. The guidance document notes, however, that it is OSC’s long-standing practice to examine the totality of relevant circumstances in determining whether there is reasonable cause to believe that an employer has engaged in unlawful discrimination. OSC will not act on an allegation of discrimination by an employer in applying the safe-harbor procedures until it determines that the alleged victim is an authorized worker who is protected from discrimination. Employers that can show that they followed the safe-harbor procedure uniformly and without intending to discriminate won’t be subject to discrimination charges by OSC.

Federal Contractors Must Now Use E-Verify
Effective January 15, 2009, many federal contractors and subcontractors are required to use the E-Verify system to verify their employees’ eligibility to legally work in the United States. The Federal Acquisition Regulation (FAR) has been amended to implement Executive Order 12989 as amended on June 6, 2008, directing federal agencies to require that federal contractors agree to electronically verify the employment eligibility of their employees (48 CFR Subpart 22). The amended regulations require federal contractors to agree, through language inserted into their federal contracts, to use E-Verify to confirm the employment
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eligibility of all persons hired during a contract term, and to confirm the employment eligibility of federal contractors’ current employees who perform contract services for the federal government within the United States. Federal contracts awarded and solicitations issued after January 15, 2009, must include a clause committing government contractors to use E-Verify. The same clause is also required in subcontracts over $3,000 for services or construction. The final regulation is designed to lighten the burden on small businesses that decide to accept federal contracts and provide contractors with flexible means of complying with the basic requirement that all persons working on federal contracts be electronically verified. Contract requirements. Covered contracts must include a clause that requires federal contractors to: N Enroll as federal contractors in E-Verify; N Use E-Verify to verify employment eligibility of all new hires working in the United States; N Use E-Verify to verify employment eligibility of all employees assigned to the contract; and N Include these requirements in subcontracts for commercial or noncommercial services, except for commercial services that are part of the purchase of a commercially available off-the-shelf (COTS) item (or an item that would be a COTS item, but for minor modifications), performed by the COTS provider, and are normally provided for that COTS item; and construction. Enrollment and verification requirements. If the contractor is not enrolled as a federal contractor in E-Verify at the time of contract award, the contractor must: N Enroll within 30 calendar days of the contract award; N Verify all new employees within 90 calendar days of enrollment and begin to use E-Verify to initiate verification of employment eligibility of all new hires who are working in the United States, whether or not assigned to the contract, within 3 business days after the date of hire; and N Initiate verification of each employee assigned to the contract within 90 calendar days after the date of enrollment or within 30 calendar days of the employee’s assignment to the contract, whichever is later. If the contractor is enrolled as a federal contractor in E-Verify at the time of contract award, the contractor must: N Either initiate verification of all new hires who are working in the United States, whether or not assigned to the contract, within 3 business days after the date of hire if the contractor has been enrolled for 90 days or more or within 90 calendar days after enrollment as a federal contractor in E-Verify, or N Initiate verification of each employee assigned to the contract within 90 calendar days after the date of contract award or within 30 days after assignment to the contract, whichever is later. Coverage. The federal contractor E-Verify requirement applies to prime contracts that exceed $100,000, but does not cover those that:


Top 10 Best Practices in HR Management for 2009

N Are only for work that will be performed outside the United States; N Have a period of performance of fewer than 120 days; N Are only for COTS items; N Are only for items that would be COTS items, but for minor modifications; N Are only for items that would be COTS items if they were not bulk cargo; or N Are only for commercial services that are part of the purchase of a COTS item (or an item that would be a COTS item, but for minor modifications), performed by the COTS provider, and are normally provided for that COTS item. Exception from requirement to verify all new hires. A contractor may choose to verify only new hires assigned to the contract if the contractor is: N An institution of higher education, N A state or local government or the government of a federally recognized Indian tribe, or N A surety performing under a takeover agreement entered into with a federal agency pursuant to a performance bond. Option to E-Verify all employees. Contractors may elect to verify employment eligibility of all existing employees working in the United States who were hired after November 6, 1986, instead of just those employees assigned to the contract. In such as case, the contractor is not required to verify employment eligibility of: N Employees who hold an active security clearance of confidential, secret, or top secret; or N Employees for whom background investigations have been completed and credentials issued pursuant to Homeland Security Presidential Directive (HSPD) 12. The contractor must initiate verification for each existing employee working in the United States who was hired after November 6, 1986, within 180 calendar days of enrollment in the E-Verify program, or notification to E-Verify Operations of the contractor’s decision to exercise this option, using the contact information provided in the E-Verify program memorandum of understanding (MOU). Enforcement. A contractor must comply with the requirements of the E-Verify program MOU for the period of performance of this contract. DHS or the SSA may terminate a contractor’s MOU and deny access to the E-Verify system if the MOU is violated. In such case, the contractor will be referred to a suspension or debarment official. During the period between termination of the MOU and a decision by the suspension or debarment official, a contractor is excused from the enrollment and verification requirements. If the official decides not to suspend or debar the contractor, the contractor must reenroll in E-Verify. Individuals previously verified. A contractor is not required to perform additional employment verification using E-Verify for any employee: N Whose employment eligibility was previously verified by the contractor through the E-Verify program;

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N Who has been granted and holds an active U.S. government security clearance for access to confidential, secret, or top secret information in accordance with the National Industrial Security Program Operating Manual; or N Who has undergone a completed background investigation and been issued credentials pursuant to HSPD 12, Policy for a Common Identification Standard for Federal Employees and Contractors.

#7 Privacy and Identity Theft
The increased role and use of computers in the workplace has presented employers with an entire set of new problems to worry about in the form of privacy issues, identity theft, and security breaches.

Several states have enacted statutory or constitutional provisions guaranteeing their citizens the right to privacy from certain intrusions. In the absence of a state constitutional provision or existing law, however, private employees enjoy relatively little freedom from workplace intrusion. Therefore, private employees must look to common or judge-made law to find privacy protections. There are essentially four common-law privacy claims available to private employees. These are: 1. Intrusion into an individual’s private solitude or seclusion. An employee may allege this form of privacy invasion when an employer unreasonably searches (e.g., a locker or desk drawer) or conducts surveillance (e.g., dressing rooms) in areas in which an employee has a legitimate expectation of privacy. An employer’s improper questioning of an employee (e.g., sexual habits or orientation) may also give rise to this type of claim. Under this claim, the employer’s intrusion into the employee’s private affairs must involve a genuinely private matter and must also be of such a nature that a reasonable person would deem the intrusion to be“offensive.” 2. Public disclosure of private facts. An employee may claim this form of privacy invasion when an employer publicly discloses private and arguably embarrassing facts about an employee to a wide audience without his or her permission. In order to sustain such a claim, however, an employee must be able to show that the information was genuinely private, the employer’s publication of the information was offensive by reasonable standards, and the employee suffered a resulting injury. 3. Portraying an individual in a false light. Under this theory, if an employer attributes a false or offensive conduct or characteristic to an employee that is not true (e.g., criminal activity), the employee may claim invasion of privacy. 4. Use of an individual’s name or likeness. When an employer uses an employee’s photograph, likeness, or attributes specific statements to an employee without his or her permission, an individual may have a valid misappropriation claim (e.g., the employer publishes an employee’s


Top 10 Best Practices in HR Management for 2009

photograph or likeness on company brochures without first obtaining the employee’s consent).

New Federal Privacy Law Barring Genetic Bias
The new Genetic Information Nondiscrimination Act (GINA) protects the confidentiality of individual genetic information. Under the law, “genetic information”is defined to include information about an individual’s genetic tests, genetic tests of family members, and a disease or disorder in the family. GINA applies to both insurers and employers. Group and individual health insurers are prohibited from using genetic information to determine insurance eligibility. Increasing an insurance premium based on genetic information is also prohibited. GINA prohibits employers from discriminating against employees or applicants based on genetic information. The law applies to all public employers, private employers with 15 or more employees, employment agencies, and labor organizations. Both insurers and employers are prohibited from requesting or requiring individuals to undergo genetic testing. However, an employer can collect information to monitor the biological effects of toxic substances in the workplace if: (1) written notice is given to the employee; (2) the individual gives written informed consent in advance or the monitoring is required by law; (3) the individual receives the results; (4) the monitoring is in compliance with federal or state regulations; and (5) the employer receives only aggregated monitoring results without information about specific individuals. There are other exceptions, including one for bona fide wellness programs that protect individually identifiable information. GINA also has confidentiality requirements. Any genetic information that an employer lawfully possesses must be treated as a confidential medical record. GINA’s requirements for confidentiality are the same as the requirements under the Americans with Disabilities Act (ADA). Therefore, if employers comply with the ADA’s confidentiality requirements and keep medical information on separate forms and in separate medical files, they’ll be in compliance with GINA. Covered employers should update their nondiscrimination policies to reflect GINA’s provisions. In addition, requests for information from healthcare providers should be reviewed to avoid obtaining genetic information from care providers. Specific language that reminds the provider not to send genetic information can be added, depending on the type of request. The law’s provisions for insurers take effect in June 2009 and for employers, in November 2009.

Employer Procedures for Handling Address Discrepancies on Consumer Reports
Under the federal Fair and Accurate Credit Transactions Act of 2003 (FACTA) (15 USC 1681c), two rules dictate how employers must handle address discrepancies on consumer reports. Section 113 applies to all employers. When providing a consumer report to an employer (or any consumer report user), a nationwide consumer reporting agency (CRA) must provide a notice of discrepancy to the employer if the address
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provided by the employer in its request for the report“substantially differs”from the address CRA has on file. All employers must develop and implement policies and procedures for verifying the identity of the consumer when there is an address discrepancy. These policies and procedures could include: N Verifying the address with the consumer about whom it has requested the report N Verifying the consumer’s identity in accordance with the requirements of the Customer Information Program (CIP) rules N Reviewing the employer’s own records (such as applications, change of address notifications, customer account records, or retained CIP documentation) to verify the address of the consumer N Verifying the address through third-party sources N Using other reasonable means After reconciling the address, an employer must send a confirmed address back to CRA if the following three conditions are met: 1. The employer has formed a reasonable belief that the consumer is in fact the same person as the person identified in the consumer report; 2. The employer has a continuing relationship with the consumer; and 3. The employer regularly and in the ordinary course of business provides information to CRA. FACTA Section 114 contains additional requirements for financial institutions and creditors. Financial institutions and creditors must also develop and implement a written Identity Theft Prevention Program that is designed to prevent and mitigate identity theft by detecting and responding to red flags that indicate there may be identity theft occurring in one or more of a company’s accounts (15 USC 1681m).

Identity Theft
The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. Identity theft has been the fastest growing crime in the United States for the past 3 years, according to the FTC, which predicts that in 5 years, the majority of Americans will have been victimized by identity theft. Much of the identity theft that occurs in the workplace happens when employees steal personal information of the company’s co-workers, customers, or clients via their employer’s computer system. Identity theft also threatens enterprise security, enabling corporate espionage and fraud, and theft of hard assets and intellectual property. Large scale or frequent identity thefts also result in significant negative publicity, impacting sales, partnerships, and employee recruiting and retention. Therefore, employers need to carefully control access to employee and customer financial information (via password protection); carefully control the transfer of such information; and carefully control the destruction and/or recycling of company documents.


Top 10 Best Practices in HR Management for 2009

Employers also suffer other significant costs when their employees experience identity theft. Conservative calculations based on current identity theft figures indicate that an employer with 1,000 employees, who make an average salary of $40,000 per year, should expect to incur productivity losses of more than $600,000 per year. Employers who are concerned about identity theft hire outside consultants to perform a“penetration test”to assess the security of their computer systems. Such consultants will try to hack into your computer system (and will most likely succeed) and in doing so, will discover your weak points and help you fix them.

Identity Theft Law Requires Employer Compliance
A provision of FACTA states that any employer whose action or inaction results in the loss of employee information can be fined by federal and state government and sued in civil court. An employee is entitled to recover actual damages sustained if his or her identity is stolen because of the employer’s inaction or statutory damages up to $1,000. Employees may also bring class action suits against employers for actual and punitive damages. In addition, federal fines of up to $2,500 per employee and state fines of up to $1,000 per employee also may be levied.

Protection as an Employee Benefit
One solution that provides an affirmative defense against potential fines, fees, and lawsuits is to offer some sort of identity theft protection as an employee benefit. An employer can choose whether to pay for this benefit. The key is to make the protection available and have a mandatory employee meeting on identity theft and the protection you are making available, similar to what most employers do for health insurance.

Most Workers Trust that Employers Protect Personal Info
Eighty-eight percent of employees are confident their company protects their personal information from identity theft, according to a survey by the American Payroll Association. The online survey asked respondents:“How confident are you that your employer adequately protects your vital personal information from data breaches/identity theft?”Nearly 40,000 of the 45,180 respondents indicated they were either confident or very confident that their employer adequately protects their personal information. When choosing the best alternative for protecting your employees and your company from identity theft, consider the four types of protection available: 1. Computer protection. Antivirus, antispyware, wireless security, etc. 2. Guidance on protecting against a variety of exposures of personal data from shredding documents, to opting out of marketing databases, to tracking data in Social Security, driver’s license, medical, and financial databases 3. Credit monitoring at varying levels of frequency, sometimes with alert services in the event of credit inquiries or changes

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4. Insurance coverage, sometimes including assistance with identity recovery activities A common theme to all of the“state of the art”issues discussed in this section is the balance between a company’s interest in operating a profitable and safe workplace and the employee’s interest in maintaining his or her privacy in an increasingly public world. When formulating policies that balance the employer’s interest with the employee’s interest in privacy, consider the following suggestions: N Create appropriate notifications to employees about what you will monitor and when you will have the right to search or conduct surveillance. Disseminate your policies frequently to reduce employees’ expectations of privacy. N Tell employees specifically how you will protect their personal health information. N Adopt a“minimum necessary”standard for monitoring, searching, or collecting medical information. Avoid using a baseball bat if a flyswatter would accomplish what you want. If you’re concerned only about computer visits to porn sites, say so, and don’t penalize people who shop online unless you note low productivity. N Implement other safeguards, beyond those for personal health information, to protect personal information such as Social Security numbers, home addresses, and other data that can be used in identity theft. N Train your supervisors and managers to abide carefully by your privacy policies. For example, remind them not to disclose a subordinate’s medical condition to co-workers or other supervisors without the employee’s express permission. Tell them to ask Human Resources should questions arise. N Review not only federal privacy protections but also, more importantly, the laws particular to the states where you do business.

State Data Breach Notification Laws
Most states now have laws requiring employers to give notice to affected residents in the event of a security breach. This is important in the context of HR records because these records often contain the personal information these laws aim to protect. Providing notice under these security breach laws is both time consuming and expensive. One way employers can help prevent identity theft and unauthorized access to confidential records is encryption software. Many state security breach laws provide an exception for records that have been encrypted, or rendered unreadable. The cost of purchasing and installing this type of software may save employers many headaches down the road. State data breach notification laws started in California, as so many trends, legal and otherwise, do. When most of us were just beginning to worry about identity theft, California passed a“breach of security”law. It required any business or industry that collects personal information about individuals to notify all affected individuals if it learns that those data have been stolen or accessed by an unauthorized person.


Top 10 Best Practices in HR Management for 2009

Although California’s law was passed in 2002, most other states didn’t begin enacting similar legislation until 2005 or later. There was a much-publicized trigger: Early in 2005, Georgia-based ChoicePoint confessed that it had inadvertently sold data on approximately 145,000 U.S. consumers to Nigerian thieves during the second half of 2004. But the company, which conducts background checks and drug tests and verifies identity and credentials for thousands of people, followed the only breach of security law that existed then—California’s. Individuals around that state whose data had been stolen were individually notified. That got the attention of legislators in other states, who have been rushing ever since to put their own notification laws in place. These statutes cover companies that maintain confidential data containing personal information, including an individual’s name accompanied by, for instance, a Social Security number, driver’s license number, credit or debit card or financial account information, and access code or password. Once the firm is aware that such data are no longer secure, it must determine whether there is a reasonable possibility that the data will be misused. If that’s possible, the company must notify all affected state residents as promptly as possible. In most states, notice must be given in writing, by telephone, or, if that’s the way the firm usually communicates with the consumer, by e-mail. Many statutes provide that if the number of individuals involved makes the notification overly burdensome, or the firm doesn’t have enough consumer contact information to handle the task, other media can be used—usually e-mail, posting on the company’s website, and notice in major statewide media.

#8 The Green Movement and Corporate Social Responsibility
While corporate social responsibility (CSR) plays an increasing role of importance in companies today, incorporating“green”environmental assurance functions into CSR programs will be a focus in 2009.

Commuter Benefits Bring Financial and Environmental Relief
While the definition of the word“green”has expanded in recent decades, if you provide your employees access to commuting benefits, you’ll actually be using two definitions of the word:You’re helping keep the environment cleaner, and you’re putting some cash back in employees’ wallets. Larry Filler, president and CEO of TransitCenter, Inc., says that you can provide commuter benefits at little cost, which goes a long way toward environmental and employee relations goals. TransitCenter (www.transitcenter.com) has been around for about 22 years and was originally intended as a way to reduce congestion in New York City. “There was a lot of driving coming into the central business district of New York, Manhattan really. We were looking for an incentive to get people to commute.”

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The program evolved from transit vouchers of $15 per month to include other forms of commuting benefits, and from transportation only in and around New York City to cities across the entire United States. Along with its role as an advocacy group for commuter benefits, TransitCenter is also a provider. TransitChek is the name of their nationally available program. “There are two basic parts of the commuter benefit,” says Filler. “There is the transit/vanpooling benefit, which is a tax-free amount up to $120 a month that employees can use to pay for expenses associated with either transit or vanpooling. The other part is commuter parking. Parking is set at $230 a month tax-free, to cover the cost of commuter parking”[dollar amounts for 2009]. If you’re wondering why the parking benefit, which after all, encourages people to drive, is set at a higher limit than is the transit/vanpooling benefit, Filler explains the history. Originally, the parking benefit was unlimited and there was no transit benefit. By 1993, the cap on parking was set at $155, and the transit benefit was $60 per month. The disparity continues, even as the figures are adjusted for the cost of living. “We’ve tried to narrow the gap,” says Filler. “We’ve been working the last 2 or 3 years with various members of Congress to equalize the benefits to promote transit over driving.” In the meantime, though, the allowable uses of the parking benefit are broader than you might expect. “It includes not only parking at a facility at or near a location where an employee works, but also it includes parking at a facility from which an employee commutes by transit, vanpools, or carpools. That is a result of our hope to support transit and ridesharing.” Study on commuter benefits. Many Americans are concerned about the high cost of gas continually inching upward, as well as global warming and how commuting by car contributes to the problem. Perhaps that’s why tax-free commuter benefits have risen to the number one new benefit that employers are planning to add to their employee benefits program, according to a recent study. The 2007 Commuter Impact Survey results state that the percentage of employers planning to add the benefit grew from 5 percent of respondents in 2006 to 17 percent in 2007. This survey of HR professionals throughout the United States at the 2007 Society for Human Resource Management’s annual conference also reported that in major U.S. metro markets, the number of employers offering tax-free commuter benefits has grown from 28 percent in 2006 to 44 percent in 2007.

Want to Attract More Generation Y Job Candidates? Go Green!
According to an April survey conducted by Experience, Inc., a provider of career services for college students and alumni, “84 percent of Generation Y individuals are actively concerned about the climate crisis—and many say the green movement relates to their career choices.” Other highlights from the survey include: N Eighty-one percent of respondents said it is important to work for a green company—meaning they are green-friendly, green-conscious, or green-certified. N Seventy-nine percent reported that they would be more likely to accept a job offer at a green company over another company when evaluating two similar job offers.


Top 10 Best Practices in HR Management for 2009

Generation Y respondents also noted that they wanted more green product options (20 percent) and wanted more education about actions they could take to help the green movement (19 percent). Also, 16 percent said they need to be better educated about the issues.

Corporate Social Responsibility and Ethics
After the recent publicity about the ethics and social responsibility of banks, brokerage houses, and mortgage corporations, companies will find these topics of increasing importance.

Employees Continue to Criticize Leaders’ and Staff’s Ethical Behavior
According to the Ethics Resource Center’s (ERC) 2007 National Business Ethics Survey® (NBES) released at the end of November 2007, “Six years after high-profile corporate scandals rocked American business, there has been little if any meaningful reduction in the enterprisewide risk of unethical behavior at U.S. companies.” The ERC conducts a survey every 2 years of U.S. public and private company employees; there were almost 2,000 for the last survey. According to the survey report, “More than half (56 percent) of employees surveyed had personally observed violations of company ethics standards, policy, or the law. Many saw multiple violations. More than two of five employees (42 percent) who witnessed misconduct did not report it through any company channels.”

Why Ethics Programs Fail and How to Help Yours Succeed
Lack of leadership buy-in, limited resources, and a misconception that certain decisions are solely business issues are among the common problems that derail workplace ethics programs, says Dr. Patricia Harned, ERC president. Harned says the generally accepted definition of an effective ethics and compliance program encompasses six key components outlined in the Federal Sentencing Guidelines, used by federal judges to evaluate whether a company has an effective program in place: 1. Written standards of ethical workplace conduct 2. A way for employees to report ethical misconduct anonymously 3. Ethics training for all employees and board members 4. A specific office, telephone line, e-mail address, or website where employees can ask ethics-related questions 5. Evaluation of ethical conduct as part of employees’ regular performance appraisals 6. Discipline for those who commit ethics violations In a recent study by ERC and the Society for Human Resource Management, “The Ethics Landscape in American Business,” only 23 percent of HR professionals indicated that their companies have implemented a comprehensive ethics and compliance program, and 7 percent said their organization did not have such a program. Harned offers a few tips to help HR and ethics professionals work together to promote an effective program:
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N Make sure the program is well implemented. Provide training and tailor the ethics message to different segments of the workforce. For example, senior managers need to understand that they set the tone for the entire organization; supervisors need to reinforce management’s ethics message; and nonmanagement employees should understand the company’s standards and the resources available to them. N Focus on the culture. Only 43 percent of HR professionals in the survey report that their organizations include ethical conduct in employees’ performance appraisals, but Harned says such accountability drives compliance. “What gets rewarded, gets done.” In addition, she says managers and supervisors can reinforce ethical conduct daily. For example, if employees ask hard questions during a staff meeting, managers can thank them for their courage. In cases where employees cut corners, she recommends making sure others understand that such behavior is not acceptable.

Establish a Code of Ethics
For senior management and HR executives of many small companies, it may seem a formidable task to undertake the development of a code of ethics. However, constructing one may have long-lasting, positive effects on the business culture in your organization. It may also enhance your employees’ dedication and commitment to their work and positively influence their behavior in the workplace. A code of ethics illustrates for customers, employees, and the community your organization’s expectations for corporate conduct. The code of ethics becomes the game plan from which employees can develop appropriate business strategies, and managers can implement work policies and procedures. The basis for the code of ethics should be the standard to which the organization aspires to reach and wishes to be measured against. For example: Our organization will put its customers first in respect to both service and the quality of the products that we sell. A code of ethics can be specific—denoting purposeful, detailed statements requiring adherence on the part of management and employees. Or, it can be more general. For example: We will respect every customer and every employee as a valued and equal individual with whom we interact every day, regardless of the rank of the employee or the amount of the customer’s business that we can expect to fulfill. We will stand behind the quality and value of the products that we produce and will be honest and forthright in our communication with customers, employees, and the community. One helpful resource that can be used by employers in developing their own code of ethics was developed by the U.S. Department of Commerce nearly a decade ago. This document encourages businesses to“adopt a code of conduct for doing business around the world.” The basic principles suggested by the Department were the following: N Provision of a safe and healthy workplace N Fair employment practices, including avoidance of any type of discrimination
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N A maintained responsibility for environmental protection and practices N Compliance with laws promoting good business practices and ensuring fair competition N Maintenance of a corporate culture that respects free expression consistent with legitimate business concerns and does not condone political coercion in the workplace; that encourages good corporate citizenship and makes a positive contribution to the communities in which the company operates; and where ethical conduct is recognized, valued, and exemplified by all employees Promoting the code. The CEO may introduce the new company code of ethics with great fanfare to all staff at an employee meeting, and HR may post it in prominent areas throughout the firm’s location(s). After the initial introduction of the code, it should be presented to all new employees during employee orientation, or even to employment candidates during the recruitment and interviewing process. Senior management should require that each employee review the code of ethics and sign a statement that requires him or her to agree to follow the code. Reviewing the code. Once a code of ethics has been put into place, HR executives and senior leadership should review the code on an annual basis and solicit employee feedback with a mechanism such as an anonymous employee survey or discussion facilitated by an outside objective resource. Such practices allow employees to share their experiences with adhering to the code of ethics and their observation of other employees and managers regarding their ethical behavior. Adjustments and changes to the code may be implemented as necessary to reflect any changes in the firm’s structure, business strategies, or in response to changes in the business environment. In addition, regular conversation about the code should be commonplace in department meetings and ongoing employee training. A code of ethics should not be a statement that is developed and put on the shelf. It should become a living document that is followed every day. Other statements on ethics. In addition to an ethical code, employers may wish to integrate ethics standards into other company messages and policies. The following are some other ethical messages your company might want to communicate in company publications, handbooks, and training and orientation sessions: N All company stakeholders (employees, management, stockholders, vendors, etc.) share the common goal of delivering the highest quality product or service on time and on budget. N Individuals are responsible and accountable for their actions and behavior as they relate to colleagues and the organization as a whole. N Fairness is a company focus requiring commitment and cooperation among all interest groups. N Illegal, immoral, and questionable behavior in the workplace will not be tolerated. N Good manners and respect for all other employees and customers are expected at all times. It is important to note that just saying that the company is committed to high ethical standards isn’t enough; the standards must be communicated frequently, clearly, and consistently.

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#9 HR Metrics
Metrics are not unique to the HR profession. They are used in almost every area of business, in government, and in education. A metric is simply a way to measure and track key performance indicators. In education, the key metric is often student performance on standardized tests, which is then used to drive educational priorities to improve performance on the next round of tests. In Human Resources, metrics are used to measure and track the performance of a company’s largest investment, its investment in human capital. More to the point, HR metrics measure the performance of a company’s investment in hiring, training, and retaining employees.

What to Measure
Deciding what to measure is very important. Metrics should be tied directly to the business issues facing the company. These might include a need to cut costs because of price competition, improve customer satisfaction, or develop new technology to keep pace with competitors. To be effective, the metric should not just report results, but should show a cause and effect relationship. In addition, to the extent possible, the HR professional should try to use formulas, ratios, and language commonly used by the organization’s other business leaders. For instance, ROI, or return on investment, is universally understood in the business world. A company’s investment in human capital (its employees) is usually its largest investment. And the HR professional needs to take the lead in identifying where these resources can best be allocated to meet the company’s goals and how to hire, develop, and retain the human capital the company needs to stay competitive now and in the future. A good metric is one that provides decision makers with the data needed to make fact-based decisions. One example of a metric is measuring turnover in an organization. It is helpful to know what percent of the total number of employees left the company during the year. However, it is probably more useful to know how many of those people left voluntarily as opposed to those who left involuntarily. When choosing what to measure in your organization, consider the following: N Use data that are readily available and can be gathered at regular intervals. N Use the ratios, formulas, key performance measures, and language used by business leaders. N Include measures of results and don’t limit the focus to costs. N Tie metrics directly to the key challenges facing the business and the results that must be achieved. N Use only metrics that add value in making decisions. N Keep it simple. Metrics don’t have to be complicated. N Identify and compare results to key competitors whenever possible.


Top 10 Best Practices in HR Management for 2009

N Measure ROI, cost/benefit ratios, and impact on problems identified by business leaders. N Avoid soft metrics based on feelings or intuition about a program, and use hard metrics or data to drive fact-based decision making.

Types of Metrics Available to HR
Metrics generally measure one of the following: N Increased job performance (e.g., new recruiting program resulted in new employees with first year job performance ratings that are 30 percent higher than under the old program) N Return on investment (e.g., new commission plan resulted in $100 of increased sales for each additional commission dollar paid) N Impact of a program on revenue N Decreased costs A potentially endless number of metrics are available to the HR professional. The key is to pick metrics that focus on key issues and tell the story. It may be that a series of single metrics when viewed together tell the story better than a single metric examined in isolation. Following are some of the metrics the HR professional may want to consider for each functional area of human resources:

Metrics for the Recruiting Function
The recruiting or employment area is focused on hiring the employees the organization needs to meet its goals. Measurements include: N Time to fill a vacancy N Quantity and quality of applications based on recruiting source N HR cost per hire N Voluntary turnover rate of new hires during first year of employment N Percent of new hires performing above average by the end of the first year N Percent of new hires performing below expectations by the end of the first year N Involuntary turnover rate during the first year of employment N Satisfaction of managers with the hiring process based on survey of hiring managers N Quality and retention rates of new hires by recruiting source N Diversity ratios of new hires In most cases, no single metric will adequately gauge the performance of the recruiting function. Rather, some combination of the metrics listed above along with others created by the organization will provide the information necessary to measure performance and effectiveness. The use of several individual metrics to

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measure a function is often referred to as an HR scorecard and will provide a more complete story of how the recruiting function is meeting goals.

Metrics for the Employee Relations Function
The employee relations function is different from the other HR functions in that it is a little harder to quantify. However, if the employee relations professionals are doing the job right, the company should see fewer lawsuits and complaints filed with state agencies, lower settlements when complaints are filed, and better outcomes when there are performance issues and/or conflicts in the workplace. Some of the metrics that can be used to measure employee relations include: N Number of complaints filed by employees N Percent of complaints that proceed to a state agency, court, or other external dispute resolution N Amount of time taken to resolve an internal complaint N Percent of cases resolved with no money paid out by the company N Percent of cases where large financial settlements or awards were made N Breakdown of the types of complaints made by employees by department (e.g., sexual harassment, race) N Costs associated with employee relations as percent of total operating costs N Percent of cases where documentation was inadequate N Number of sexual harassment complaints N Number of complaints of unfair treatment N Number of hours spent on training managers on employee relations issues N Data from employee surveys on various employee relations issues such as understanding of policies N Dollars spent on attorney’s fees N Dollars spent on attorney’s fees as a percent of total employee-relations costs As with recruiting, companies will probably want to use some combination of these metrics as their employee relations dashboard. Comparisons from year to year will help evaluate the effectiveness of the employee relations function.

Metrics for Compensation Programs
Compensation programs are all about the numbers and, as a result, metrics are relatively easy to apply. Measurements may include: N Compensation costs per dollar of profit N Compensation costs per dollar of revenue N Analysis of performance and production levels of employees paid in the top 30 percent of their salary range N Total compensation costs as a percent of total company operating costs


Top 10 Best Practices in HR Management for 2009

N Analysis of compensation levels to the marketplace and key competitors N Forecast compensation needs based on future plans N Compensation mix, meaning fixed salaries versus performance-driven compensation

Metrics for Training Programs
Training is another area that can be difficult to quantify. However, it may be helpful to look at metrics that target the type of training and what it was intended to accomplish. For instance, metrics for training programs can include: N Cost of sales training as a percent of total sales N Increase in hours of sales training compared to increases in sales N Changes in performance levels of employees who received training N Percentage of employees that cite lack of training or advancement as a reason for leaving N Identification of key employees and percent that have received training N Percent of performance appraisals that include training goals for employees

Strategic Alignment
The role of HR is changing as fast as technology and the global marketplace. Historically, the HR department was viewed as administrative overhead. HR processed payroll, handled benefits administration, kept personnel files and other records, managed the hiring process, and provided other administrative support to the business. These functions were viewed as administrative necessities but not as integral parts of the core business. Today, many of these old administrative functions have been automated and/or outsourced. The positive result of these changes is that HR professionals have the opportunity to play a more strategic role in the business. Business leaders focus on revenue, profit growth, market share, new products, and increasing capacity. These can all be measured using metrics that describe the current situation, compare current numbers with previous years’ or with a competitor’s position, and quantify goals and measure progress. By measuring the current situation compared with quantifiable goals, business leaders make data-driven decisions. In order to be a business leader, the HR professional must utilize a similar approach to decision making, one based on data and facts. Decisions related to the allocation of resources, technology purchases, succession planning, hiring and retention, training, employee performance, compensation programs, and outsourcing HR functions can all be based on data compiled through the use of appropriate metrics.

Measuring Your Results
Don’t forget that the quality of results is as important as quantity or cost. Calculate ROI whenever possible to make the business case for HR. Use metrics to identify

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trends and head off problems on the horizon. Don’t be afraid of data or of measuring results. Metrics can add to the HR professional’s credibility and garner support for HR programs.

#10 Communications
In most instances, when employees are asked what they like least about their jobs, they will cite a problem with communication. In fact, in BLR’s 2007 National Employee Attitudes Survey (NEAS), participating organizations across the board were rated lowest on questions related to communication, while at the same time, employees who took the survey said communication was very important to them. Because communication is a very important factor in employee satisfaction and engagement, making sure the right information is communicated effectively is very important to human resources professionals and managers. It is important to understand what types of information employees feel they aren’t getting. It might be that employees don’t have a good understanding of what is expected of them or how they fit in the organization. In other cases, it might be that management does not provide employees with information about how the organization is doing or the direction in which it is heading. Employees might feel they aren’t well compensated because they don’t have any information on the value of benefits and their total compensation package. They might feel they are not being acknowledged for their hard work. Another problem area related to communication is how conflict is handled in the workplace, which requires a unique set of communication skills. Effective communication is the foundation of positive and cooperative working relationships. Good communication benefits the workplace in many ways, including: N Improving the flow of vital information N Improving employee morale by making sure employees know what is expected and what the rewards are for a job well done N Serving as the basis of effective teamwork N Ensuring accountability in a department because all employees know who’s responsible for what N Providing greater consistency, because all employees have gotten the same messages about procedures and work rules N Leading to better quality because mistakes are avoided N Improving productivity

Tools for Better Communicating
It is important to consider your audience when you determine what communication tools you will use to communicate a certain piece of information. Do all of your employees have access to e-mail? Are all of your employees on-site? Do some of your employees work only on specific days? Do some of your employees have jobs on the
Top 10 Best Practices in HR Management for 2009

line that prevent them from attending meetings? Keeping these things in mind, there are a variety of methods for enhancing communication in the workplace. Intranet. A company intranet is a great place for posting information on a variety of topics for employees, particularly if most employees have a computer. For those employees without a computer, consider having one or a few computers, depending on the number of employees without computers, centrally located and available for employees to check the intranet. Company newsletter. Company newsletters are a great way to communicate changes, successes, and important information to your employees. Traditionally print newsletters are still used, but more and more companies are leaning toward electronic newsletters to either replace or supplement their print newsletters. Electronic newsletters are less expensive and information can be dispensed in almost real time if needed. Newsletters can be published daily, weekly, monthly, etc. Once again, it is important to make sure all employees have access to newsletters distributed electronically. Meetings. Meetings are an effective way to bring employees face-to-face, which is particularly appreciated when the news is good and the purpose of the meeting is to show employees they are valued. Meetings are also a good forum for allowing employee questions or discussion on a topic and for obtaining employee thoughts, concerns, and ideas. Meetings can be companywide, or held at the department, team, or individual level, depending on the nature of the information to be communicated. Meetings can be a difficult method of communication when certain employees are unable to leave their post—for example, employees working on an assembly line or on a customer service hotline. Telephone and conference calls. Telephones and conference calls are effective tools for communicating with individuals or groups of employees who are not present at the worksite. If materials or printed information will be distributed at a meeting, arrangements will have to be made to ensure access to the material for those participating by phone. Web conferencing and webinars. Web conferencing and webinars allow employees to hold live meetings or presentations over the Internet. Employees can sit at their computers at different office locations and attend a Web conference. This type of conference can be very effective when members of a team are working at different locations, or for those employees who telecommute. E-Mail. E-mail is an easy way to disperse information to a large group of people at once. Unfortunately, the overuse of e-mail can make employees feel isolated, lacking face-to-face contact. In addition, many people consider e-mail to be a casual form of communication and don’t take the time to make sure the information they intend to convey is actually conveyed. Often, a short, succinct e-mail is interpreted by the reader as a sign that the sender is unhappy. Because neither the sender nor the recipient of the e-mail can see or hear the other, there are no cues that would help them interpret the message. For this reason, the sender of an e-mail must take care to consider how the message might be received and whether it is better delivered in person or by telephone. Bulletin boards. Well-organized and up-to-date bulletin boards are an effective, convenient, and inexpensive way to communicate with employees, especially workers who do not have access to a computer at their workstations. Whether or

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not an organization provides separate bulletin boards for employees’ use, there should be a written policy on the type of information that may be posted and who must approve any information before it is posted. Internal podcasts. Daily, weekly, or as-needed podcasts can provide a venue for managers and executives to talk to their employees via the intranet. Employees can listen to the podcasts from their computers. While this is a great way to communicate with all employees at once, it shouldn’t be a complete substitute for face-to-face communication. Letters or memos to staff. Letters and memos to staff are a good way to document that a communication has been made. It is important that the communication be very clear. An unclear message provided in a letter or memo might leave employees feeling they have no way to ask questions or clear up any concerns. Employee surveys. Employee surveys can be an effective and efficient way to obtain information from a large group of employees. A well-written survey provides feedback on how employees feel about the organization, their role in the organization, their compensation and benefits, and communication at each level of the organization. For larger organizations, it may be possible to look at and compare results for different parts of the organization. In addition, conducting the survey year after year provides information on how management is doing in areas in which the survey results showed improvement was needed.

Organizational Success Through Honest, Ethical Communication
How can an organization become a place where everyone is focused on the best successes and outcomes for the entire organization, instead of every individual being out for him or herself? Honest, ethical communication between leaders and employees and among peers is the basis for a more successful organization. This communication, framed as adult-to-adult communication and described by Jamie Showkeir and Maren Showkeir in their book, Authentic Conversations: Moving from Manipulation to Truth and Commitment, replaces the traditional parent-to-child (or manager-to-employee) type of communication generally found in organizations, which does not bode well for organizational success. In many organizations, there are so many rules that workers may feel that they are not empowered to make any decisions at all. They may be inclined to pass every issue and customer concern up the ladder to someone else in a higher-level job. They may feel powerless. Human Resources can lead by example, making a fundamental shift in bringing people together by moving to adult-to-adult relationships within its own workforce, providing a role model for the rest of the organization, notes Jamie. Your organization or department can start changing its environment to become a more truthful, ethical, open one where adult-to-adult relationships reign. An important beginning is probably to create a more transparent environment. Maren suggests that the more transparent an organization, the better, and that HR can be instrumental in moving the organization in the direction to achieve adult-toadult relationships and communication. “The more people learn about each other and the organization’s place in the marketplace, the more powerful the organization

Top 10 Best Practices in HR Management for 2009

will become. Tell your employees how the business works; its place in the marketplace; and what risks there are,” Maren added. That provides staff with the background to make suggestions to improve business processes and serve customers better; empowers them to make important frontline decisions regarding customer or client service; and solidifies their feelings of being part of the organization’s team. Jamie suggests, “If we want to move toward a more ethical environment in our community [the organization], a fundamental element is to tell the truth. The second most important element is to try to get a good handle on what other points of view are and understand where other people are coming from so you can keep the [overall] good of the organization in mind.” In adult-to-adult communication, all opinions and ideas are sought, no matter what a person’s position is in the company hierarchy or what their functional role. The people closest to the front line, the customers, and the actual work are often the most knowledgeable and often have the best ideas that will positively impact the bottom line, help to solve business problems, and move the company to a higher level of success.

Best Practice: Ethical Culture at All Levels of Organization
Tough economic times are a true test of a company’s ethics program, says Allan McKisson, vice president of Human Resources for Manpower, Inc., in the United States. “It’s easy to be ethical and philanthropic when you’re making tons of money.” In spite of the economy, Manpower has not strayed from its commitment to ethics and social responsibility, according to McKisson. The global company, which was recently named to the second-annual World’s Most Ethical Companies list by the Ethisphere Institute, offers permanent, temporary, and contract recruitment; employee assessment and selection; training; outplacement; outsourcing; and consulting. Manpower was recognized because of its“impressive and meaningful ethical business practices”and because it goes“well beyond legal minimums, opting instead to bring about innovative ideas that contribute to the public well being,” says Alexander Brigham, executive director of the Ethisphere Institute. “We take a pretty visible stance on different issues. One is human trafficking,” McKisson explains, noting that Manpower has worked with the United Nations to prevent people from being moved from one country to another against their will. “We are very specific about clients we won’t work with that may, in fact, participate in that.” In addition, under the company’s“Right Clients, Right Terms”strategy in the United States, Manpower will not work with a client that, for example, operates an unsafe factory or that sells unsafe products, he says. Message relayed in various ways. Manpower’s commitment to ethics is relayed and reinforced during interviews and throughout employees’ careers. For example, during interviews for most management positions, Manpower uses a questionnaire to assess applicants’ honesty and integrity, asking what choices they would make in certain situations, McKisson says. The company plans to make that standard procedure in interviews for all positions.

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During the onboarding process, new hires learn about Manpower’s Code of Conduct and hear from senior leadership about the company’s“commitment to being ethical and doing the right thing,” McKisson says. Among other things, managers are trained on decision making and treating people appropriately, and each of Manpower’s approximately 30,000 internal employees is required to complete an online ethics training course annually. The online training addresses such topics as not compromising decisions based on personal gains, treating people fairly, avoiding harassment, and complying with the company’s Code of Conduct, according to McKisson. Although the company had considered offering the online training in alternate years, it decided to continue training annually. “It doesn’t take that long,” McKisson says, estimating that the course takes about 20 to 30 minutes to complete, and it’s a good way to reinforce ethics within the culture and demonstrate that Manpower is serious about it. The Code of Conduct, which is posted on the company’s website, addresses a variety of issues, including conflicts of interest, confidentiality, fair dealing, proper use of company assets, compliance issues, ways to report violations, and penalties. Employees who believe that a violation of the Code has occurred are encouraged to talk to their supervisor or HR representative for guidance on how to proceed, McKisson says. Those who believe that their supervisor or HR rep is involved in a violation, or those who are not comfortable talking with either of them first, are encouraged to call an anonymous hotline. Since the ethics message is so strong and so integral to Manpower’s culture, employees at all levels of the organization reinforce it and encourage new employees to make ethical decisions, too.

We hope that you have enjoyed this special report, and that you found the information contained in this report useful. BLR strives to provide Human Resources professionals with practical and easy-to-use information on a wide variety of topics. If you would like to see the complete library of publications available through BLR, please visit our website at www.blr.com or call our Customer Service Department at 800-727-5257.


Top 10 Best Practices in HR Management for 2009

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