Our Unemployment System Today
As a business owner, you probably already realize the cost of unemployment benefits ultimately lies with you. Costs are determined by a company’s experience rating, which is determined by the amount of benefits the state pays your former employees. A few interesting unemployment statistics were announced recently that all business owners should be concerned about. They include:
* Spending on unemployment compensation rose from $31 billion in 2008 to approximately $160 billion in 2010.
* On average, state unemployment taxes increased by 34% as a percent of total wages from 2009 to 2010, and are expected to continue to increase.
These increases in unemployment costs will eventually increase state and federal UI taxes, as the interest on the federal loans to states become due later this year. The impact to business owners will be an increase in hiring and administrative costs. To keep your unemployment costs under control business owners should:
Review and verify tax rate notices & employee classifications
Ensure reported wages are correct
Complete UI claims forms correctly and on time
Be sure incorrect determinations are appealed
Notify the UI agency of rehires and offers of employment that are refused
Review hiring procedures & performance appraisals
Train Supervisors and Managers to ensure proper documentation of employment actions, such as disciplinary and termination procedures.
Call Kellie at 717-855-5589 today to discuss how your company can reduce unemployment costs!
We have all heard the horror stories. Company XYZ hired their next “star employee,” everything was great for the first few months, and then they really got to know the person. Now they wish they hadn’t hired this so called “star” and want to terminate as soon as possible. It happens to the best of us. No matter how solid your hiring practices and employability radar are, bad hires happen.
If, or perhaps I should say when you find yourself in this position, remember these ten tips to try to prevent a lawsuit. After all, you will be spending enough of your time and hard earned money just to replace the person. The last thing you need is to spend hours digging for the documentation to support your decision and paying an attorney to defend it in court.
1-Have a company handbook issued to every employee with expectations and disciplinary procedures clearly spelled out. Be sure to include an “At Will” employment policy, if in fact you are an at will employer. Have all new hires sign an acknowledgement that they understand and agree to abide by these policies or they will face disciplinary action accordingly.
2- Issue clear warnings to all employees (not just the bad hires) when expectations are not met and/ or procedures are not followed in accordance with the handbook. Written warnings with employee signatures that go into their personnel file will ensure the employee understands the severity of the situation and gives them an opportunity to correct the behavior. Upholding these policies regardless of who is violating them will show you are consistent and fair in your disciplinary actions, which will help if the employee claims you discriminated against them.
3- Investigate. Use due diligence to determine if there is an explanation for the employee’s unsatisfactory performance or behavior. Ask around to determine if there were extenuating circumstances that need to be considered.
4- Interview all Supervisors of this employee to ensure the employee has not made any negative comments or brought any concerns to their attention. If the employee’s behavior is a result of discomfort because they have felt harassed, unfairly treated, or felt unsafe and they informed a supervisor of the situation, the termination could result in a retaliation claim. This means the employee feels they were terminated for complaining about the harassment, unfair treatment, or unsafe condition. Terminating them in retaliation for speaking up or taking FMLA is against the law.
5- Collect and Review the documentation that supports your decision- ALL of it! Do not put off filling out the necessary documentation. Your memory will not be the same a week later, if you even come back to it that soon. Once you have all the documentation, compare the situation to similar ones, specifically how those employees were disciplined and how many prior warnings had been in their files. Then keep it all together in their personnel file in the event you need to refer back to it.
6- Seriously consider all employment laws, especially the American’s with Disabilities Act, Anti-discrimination laws, and the Family Medical Leave Act. Even if you know the termination has nothing to do with an employee’s protected class, the courts may not agree. If there is even a slight chance that some one may believe the termination is related to an employee’s disability (or regarded disability,) discrimination, or leave of absence it would be in your best interest to consult your attorney.
7- Do not wait to long to terminate. This is important for a couple of reasons. First, you do not want to give the employee more opportunities or time to do damage to the company. Secondly, if other employees feel like this employee is getting away with something, it will bring down the morale of the group, decreasing their productivity. And last but not least, if a long amount of time has passed since the incident happened that you wish to terminate for, the employee may be suspicious of your reasoning and contact an attorney.
8- Plan for the meeting. As mentioned earlier, have any documentation or “proof” ready in the event the employee denies allegations or asks to see it. Know what you are going to say and think about how they may respond so you can be prepared for any situations that may arise. Also, have a witness present whenever possible. If the employee gets violent or claims you said something that you didn’t say, this person will be able to defend your position.
9- Keep your focus during the termination. Treat them with respect and explain exactly why you are terminating. Keep your cool and do not apologize for the decision. You may however, wish them well on their way out the door.
10- Ensure final pay/ wages and COBRA notices are delivered to the terminated employee as timely as possible. This includes any unused sick, personal and/ or vacation time (according to your company policy.) You obviously do not want to give them any additional ammunition.
When you started your business, you looked forward to the day that you were busy enough to need to hire an employee. This would mean business is booming and the money is rolling in. Now that this day has come, you feel a little differently about the situation. You obviously cannot do it all, but how will you find someone you can count on to be trustworthy and work hard? After all, your business and reputation are on the line. Try some of the hiring hints below to sway the odds in your favor.
* Conduct a Job Analysis- Your first step should be to determine the knowledge, skills, abilities, and duties required to successfully complete this job opening. Putting these details into a written job description will benefit both the employer and the candidates.
* Recruit Smart- Recruiting can be done through a variety of formats including Newspapers, Internet Job Boards, Public & Private Agencies, Labor Organizations, Networking, Referrals and Word of Mouth. Consider the cost and number of candidates you might receive from each before spending any money.
* Consider Diversity- Having a diverse team of employees leads to greater creativity, increased opportunities, and preventing discrimination suits.
* Screen Applications & Resumes- Blanks on the application tell hiring managers that the candidate may be trying to hide something negative about their work history or that they were just too lazy to fill out the paperwork. Resume typos show the candidate may not pay enough attention to detail. Many HR professionals use these errors as a method for minimizing the candidate pool when they have several qualified candidates to choose from.
* Confirm Gaps in Employment and Reasons for Leaving Previous Jobs- Determining the reason for gaps and/ or leaving previous positions can tell you plenty of information about a candidate. Weigh these reasons with what you value most.
* Ask Behavioral Interview Questions- Behavioral type interview questions will determine what a candidate did or would have done, if they came across the situation presented in the question. If the response you receive is what you would have done or expected from the candidate, that is a great sign!
* Avoid Questions With Regard to Protected Classes- Questions that will indicate a person’s age, religion, marital status, race or other protected class should be avoided to prevent disrimination claims.
* Conduct At Least Two Interviews For Each of the Finalists-When two or more Supervisors feel good about a candidate, that is another good sign. If a top manager is torn between two or more candidates this is especially helpful.
* Check References- Reference checking is not always possible. Some organizations will only confirm dates, titles, and/ or salary to avoid defamation lawsuits. When companies do give performance information, weigh it carefully since it may be subjective.
* Consider Cultural Fit- Try to determine if the candidate will “fit in” with the current group of employees. For instance, if they prefer to work on their own and your company works in teams, they may not be the best person for the job.
* Pre-Employment Testing- An organization may want to consider pre-hire testing, such as background checks or drug screens, if drug use or criminal activities may impact business outcomes in a negative way. Just be sure all testing is relevant, reliable, and valid.
* Be Consistent. It is considered discriminatory to only ask certain candidates to take tests, or to make certain practices required by some candidates and not others.
The truth is we may all make a poor hiring decision at some point in our lives. Those who utilize the practices above consistently should find those poor decisions fewer and farther between.
Positives Reasons for Creating a Job Description
Job descriptions are crucial to a successful hiring and retention plan. It defines the responsibilities assigned to an employee, sets expectations for everyone in the company and can protect your organization from discrimination claims. Other positive aspects of having clearly written job descriptions include:
1. Providing an opportunity to clearly communicate your company direction and tell the employee where he or she fits inside of the big picture.
2. It helps you cover all your legal bases.
3. Whether you’re recruiting new employees or posting jobs for internal applicants, it tells the candidate exactly what you want in your selected person.
4. Well-written employee job descriptions help organization employees, who must work with the person hired, understand the boundaries of the person’s responsibilities.
What Job Descriptions Should Include
Job descriptions should include the following details. This template should also give you an idea about what other organizations expect from employees doing the featured job.
1. The job title.
2. The company name.
3. The location of the job and amount of travel required.
4. Job Type :Full Time or Part Time (Hours of work)
5. Years of experience required.
6. The position in the company, including the job title of the person to whom the employee will report and of those who will report to them.
7. A list of the main duties or responsibilities the employee must be able to complete with or without accommodations, also known as essential functions.
8. Skills, physical requirements and abilities (This includes safety, supervisory level, managerial requirements, any working relationships and may also include your corporate/individual objectives.)
9. The knowledge, training and education needed to fulfill the job.
10. What brief description of what workers do on the job.
11. Working conditions (such as temperature, heights, or other physical conditions.)
12. Describe the compensation type (hourly or salary) and salary range. In addition it may include both standard benefits and any fringe benefits associated with the position.
Job descriptions should be created and/ or updated prior to posting or advertising a job opening to ensure all parties involved are on the same page and to prevent turnover or discrimination issues.
If you need assistance creating job descriptions or have any questions regarding the details listed above, please give Alternative HR, LLC a call today!
The first rule to creating an effective performance appraisal is to base it off of an accurate job description. This will help in determining the actual duties and responsibilities that must be performed for one to be successful. The importance of each activity (for instance, how much time is spent on it, how difficult the activity is, consequences of errors, etc…) should also be determined so that the performance appraisal is objective and fair.
The second rule of thumb would be to create a program that allows for consistency. Some questions you may ask yourself to determine if your reviews are consistent include:
* Is the same system used for all employees…or do some job descriptions warrant the use of a different system?
* Have appraisers been trained (with refreshers?)
* Is anyone responsible for cross-checking for consistency?
* How often are job descriptions and the related appraisal updated?
Some managers and organizations do not feel performance appraisals are useful. In fact, for many companies they may not be. It is really up to the organization and its management team to ensure the usefulness of the performance appraisal system. The most important question to ask yourself “is do the managers and employees understand the system?” If not, the review will be a waste of everyone’s time. Secondly, you need to make sure you are applying objective feedback for each employee. If a manager is telling an employee they have good customer service skills, but that is not an important part of their job…or it is important but the organization has no objective way of measuring what “good” performance is, then the appraisal may be less than helpful. We must make sure that the areas of performance we are measuring are the most important aspects of the employee’s job.
Effective performance appraisals can improve employee morale, by helping employees see how what they do every day leads to the success of the organization as a whole. They can also protect the organization from a discrimination or wrongful termination suit.
The following is a list of questions each organization should ask when creating or updating a performance appraisal system:
1. How often and/ or what time of the year will employees be evaluated?
2. What form will be used? Is it different for different job descriptions?
3. Will a development plan be attached (a follow-up for less desirable results?)
4. Who will take part in the process (manager, HR, self evaluation, 360 degree?)
5. Who will have overall responsibility/ administration of the system?
6. Will merit increases be realized based on the results?
7. Will a “chart” help those responsible determine amount of increase based on score? If not, who approves them?
8. When will increases be applied?
Performance appraisals can be very time consuming, but having an effective plan from the start will ensure less headaches for everyone involved when the time comes.