Вы находитесь на странице: 1из 144

Contents | Zoom in | Zoom out

For navigation instructions please click here

Search Issue | Next Page

HR MAGAZINE

SEPTEMBER 2011

SEPTEMBER 2011

SHRM.ORG
_______

$8.95

Do You Know
How Much
Cost?

ABSENCE MANAGEMENT

PUBLISHED BY THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT

The trouble with


target-date funds
How health care reform
affects retiree benets
HR lessons
from Sept. 11

Contents | Zoom in | Zoom out

For navigation instructions please click here

Search Issue | Next Page

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

POWER
TOOLS
FOR
POWER
HR.

ULTIPRO. Beyond Human Capital Management


we deliver Human Capital Intelligence. Thats power.
With UltiPro from Ultimate Software, you get more than just a powerful recruitment-through-retirement HCM engine.
With UltiPro, you get HCM business intelligence, so you can instantly see whats going on in all the areas that affect your
workforce recruiting, employee performance, compensation, tenure, benets, payroll, and more. UltiPro delivers the
power, exibility, reporting tools, and analytics you need to make decisions informed by insight the kind of decisions
that build a better company.
www.ultimatesoftware.com

1-800-432-1729
Brought to you through the convenience of Software-as-a-Service.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Humpty Dumpty sat on a wall.


Humpty Dumpty had a great fall...
Well, we wouldnt exactly call it a great fall. Neither would Humpty Dumpty. Thankfully,
human resources acted quickly and his long-term disability benets were administered just as
he expected them to be. While the kingdom launched an inquiry into the height and weight
restrictions associated with the wall, human resources made sure that the legendary wall
incident was reported in compliance with industry regulations and best practices. They also
helped Humptys managers recruit and hire a shiny new egg swiftly and successfully so that
everyone could move forward with the peace of mind that all was well in the kingdom...

Epicor Human Capital Management:


One Software Solution. All the Answers.

Your Business Runs on Human Resources.

epicor.com/hcm

Copyright 2011 Epicor Software Corporation or a subsidiary or afliate thereof. Epicor and the Epicor logo are registered trademarks of Epicor Software Corporation. All rights reserved.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

_________________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

PRUDENTIAL GROUP INSURANCE

CHALLENGE US TO HELP YOU


OUTSMART, NOT OUTSPEND,
ON VOLUNTARY BENEFITS.
Escalating costs have many employers cutting back on workplace benefits. Today, Prudential offers smart, cost-effective
solutions that can help you meet your benefits challenges.
And help employees meet their needs for protection.
A robust portfolio of voluntary benefitsLife, Disability,
Long-Term Care and Dental*backed by the strength of a
recognized brand can help businesses attract and retain the
top talent they need to stay competitive, while minimizing
costs and administrative burdens.
With 95 years of group insurance experience, Prudential
knows the key to a successful and financially strong voluntary
benefits plan is high participation. Innovative enrollment
solutions that educate employees on the value of benefits
will maximize plan participationand result in a win-win for
both employee and employer.
Life-stage and educational communications
targeted to employee needs
Multi-year and off-cycle enrollment periods
Online tools and toll-free customer service
Consultative, administrative and marketing
support from experts

Contact Bob Patience, Vice President, Voluntary Benefits,


Prudential Group Insurance at 973-548-6233.

Download our Fifth Annual Study of Employee Benefits:


Today & Beyond at www.prudential.com/group

2011 Prudential Financial. Group Life, Disability, Dental and Long-Term Care Insurance. *All products may not be available to companies of all sizes. Group Insurance
benefits are issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102-3777. Prudential, the Prudential logo and the Rock symbol
are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
0200698-00003-00

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

M
q
M
q

M
q

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

MqM
q
THE WORLDS NEWSSTAND

SEPTEMBER 2011 VOLUME 56, NUMBER 9

Contents
28

COVER PACKAGE: BENEFITS


34 Gone but Not Forgotten
Minimize the substantial cost of missing
workers.
By Robert J. Grossman

49 Target-Date Funds: On Target


or Out-of-Date?
The investment vehicle comes under
scrutiny by plan sponsors, regulators and
employees.
By Scott Ladd

34

57 Exit Strategy
Health care reform may accelerate the
decline of employer-sponsored retiree
health benets.
By Joanne Sammer

49
70 Q&A
Youthful Paradigm

FEATURES
33 PROFILE
General Mills HR Recipe
CHRO Michael Davis uses the Jolly Green
Giant to enliven his companys recruiting
message and acts to align employees work
with the organizations core values.
Interview by Rita Zeidner

Aging workforces drive globalization, which


in turn cuts older workers out and reduces
wages, says author Ted C. Fishman.
Interview by Alice Andors

64

AGENDAS
101 HR MANAGEMENT
Auditing Your HR Department

64 SAFETY AND SECURITY


COVER ILLUSTRATION BY JOHN R. ANDERSON JR.

Rising from the Rubble


After the Sept. 11 terrorist attacks, HR
professionals started rebuilding devastated
companies.
By Tamara Lytle

An audit can provide information about your


departments effectiveness in key areas
and ag problems.
By Eric Krell

105 COMPENSATION
Clawing Back Compensation
Dodd-Frank nancial reform rules make
long-term executive compensation plans
trickier to design.
By Joanne Sammer

101
September 2011 HR Magazine 5

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

PREVISOR AND SHL ARE NOW ONE

CONNECTING PEOPLE INTELLIGENCE


TO YOUR BUSINESS RESULTS
^,>Ws


'
Proven results

^
/

__________________ 1 800 367 2509

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Contents
ADVICE AND ANALYSIS
26 SOLUTIONS
HR metrics, benets brokers, workers in the
European Union
By Yvette Lee, PHR, GPHR, and Shari Lau,
GPHR, SPHR-CA

109 HR TECHNOLOGY
Good Vendor Relations
With consolidation in the technology
industry and growth of software-as-aservice, managing relationships with
vendors has never been more critical.
By Bill Roberts

115 LEGAL TRENDS


Sticks and Stones
An expansive federal denition of
workplace violence can lead to broad
interpretations of the general duty clause.
By Arthur G. Sapper

122 MANAGEMENT TOOLS


Prod the Turtle
Be a more effective leader by confronting
your tendency to hide from difcult
situations.
By Karen Foster and Jeff Freedman

NEWS YOU CAN USE


15 HR NEWS
Study: Employees trust in leaders has
declined; settlement highlights need for
ADA accommodation; more.

24 EXECUTIVE BRIEFING

109

26
112 COURT REPORT
Employers investigation untainted by
discriminatory bias; employers must
compensate employees for time spent
donning and dofng protective gear; more.

129 WHATS NEW


Compensation and benets; employee
recognition; stafng; more.

PERSPECTIVES
10 FROM THE CEO
Labor Day Salute to Impact-Makers
By Henry G. Jackson

136 FUTURE FOCUS


Undereducated
Fewer employers are providing educational
assistance benets.
By Jennifer Schramm

CEO dismissals up; most costly cities for


expatriates.

HR Magazine (ISSN 1047-3149) is published monthly by the Society for Human Resource Management, 1800 Duke
St., Alexandria, VA 22314, (703) 548-3440, to further the professional aims of the Society and the human resource
management profession. Members of the Society receive HR Magazine as part of their annual dues, $55 of which
is allocated for the subscription to HR Magazine, which is nonrefundable therefrom. Nonmember subscriptions are
available from the Circulation Department at the following rates: Domestic (U.S. and its territories)$70 per year.
Canada$90 per year. International (via airmail)$125 per year. Published articles do not necessarily represent the
views of the magazine or the Society. Society for Human Resource Management 2011. Periodicals postage paid
at Alexandria, VA 22314 and additional mailing offices. POSTMASTER: Send address changes to HR Magazine,
Circulation Department, 1800 Duke St., Alexandria, VA 22314. Publications Mail Agreement No: 40041558. Please
send returns to BleuChip International, P.O. Box 25542, London, ON N6C 6B2.
This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is published with the
understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is
required, the services of a competent professional person should be sought.

115
BOOKS IN BRIEF
Books in Brief is online. See www.shrm.
org/publications/hrmagazine/books for
summaries of Groundswell, Scenario
Planning in Organizations, BusinessFocused HR, Business Literacy for HR
Professionals and What Color is Your
Parachute: Guide to Job-Hunting Online.

SHRM RESOURCES
125 INSIDE SHRM
Is the FLSA showing its age?; protect
veterans like other groups; new member
benet features internships; more.

135 HR JOBS

SPECIAL SECTION
131 EDUCATION & TRAINING BUYERS
GUIDE
September 2011 HR Magazine 7

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Staying ahead of employee issues requires the right


solutions, the right support and the right resources.
As the worlds largest provider of employee assistance
programs, and the pioneer in fully integrated EAP,
behavioral health, work-life and wellness solutions,
ComPsych partners with more than 13,000
organizations and 35 million individuals to help
employees stay more productive and focused.
Our industry-leading, Build-to-Suit, solutions under
the GuidanceResources brand seamlessly integrates
information, resources, tools and expert advice to
help employees perform their best while reducing the
overall cost of doing business. Thats how our
innovative solutions help you stay ahead.
Find out how ComPsych GuidanceResources can
help your organization.

800.851.1714

EMPLOYEE ASSISTANCE PROGRAMS

HR Magazine

www.compsych.com/hrmag

BEHAVIORAL HEALTH

WORK-LIFE

WELLNESS

FMLA MANAGEMENT

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

HR SOLUTIONS

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Click for More


A spotlight on resources available on SHRM Online

Rethinking Retirement Again


The latest stock market ups and downs are causing people to rethink their retirement investment
strategies. That means employees are looking to you and your providers for guidance. Here are
some ideas:
EMPLOYERS RETIREMENT ROLE
Companies are adding features, making plan
design changes and providing education
aimed at boosting savings rates and promoting
responsible investing.
www.shrm.org/benefits/retirementrole

INVESTMENT ADVICE
Offering professional investment advice to
employees can improve savings rates and
increase yields. So why is it so hard to get
employees to take advantage of these
services?
www.shrm.org/benefits/advice

HEALTH SAVINGS ACCOUNTS


BOOST 401(K) PARTICIPATION
Studies find that employees who participate
in both health savings accounts and
401(k)s accrued more than twice as much
in their retirement accounts as the average
401(k)-only participant.

FORGET ABOUT 65?


Plan participants relying on their 401(k)
accounts as a primary retirement vehicle will
not be able to retire until age 73. And thats
not just because of how their portfolio is
performing.
www.shrm.org/benefits/retirementage

www.shrm.org/benefits/boosting401k

VIDEO: RETIREMENT CONFIDENCE


Use employees pessimism about the future
of retirement as a starting point to boost their
engagement in retirement planning.

Scan this code with your mobile device


bar-code reader to get links to all of these
items and more.

www.shrm.org/video/retirementconfidence

PLUGGING 401(K)
PLAN LEAKAGE
Participants who tap into their retirement savingsfor loans, hardship withdrawals and
cash outs when changing jobscan drain their
retirement income security.
www.shrm.org/benefits/leakage

September 2011 HR Magazine 9

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

From the CEO

Labor Day Salute


To Impact-Makers
he end of summer, the start of the school
year, the beginning of the football season
and the celebration of employees everywhereit all says September and Labor Day.
If you observe its historical origins, this month
would be marked by a picnic, an abundance
of cigars and lager beer kegs. Thats how the
media of the day characterized one of the first
Labor Day celebrations about 130 years ago.
At the Society for
Human Resource
Management (SHRM),
we make it a point to
recognize and applaud
the contributions of
every workerand
the human resource
professionals who have
helped that employee
succeed, whether at
work or in supporting a
family.
In the U.S., Labor
Day was created in the
late 19th century by
the union movement,
specifically the Central
Labor Union of New
York City, to celebrate
the impact of workers
on the strength, prosperity and well-being of
the nation.
History isnt definitive on a date for the first
celebration. However, most accounts credit a
parade of 10,000 workers that the local union
staged in New York City on Sept. 5, 1882. Yet
a few suggest that the first observance was an
1872 paradein Toronto, Canada. Wherever
the first Labor Day was observed, the presence
of cigars and beer seems to be the only constant.
Local and state governments soon began

declaring the first Monday in September as a


holiday for workers. On June 28, 1894, after
more than 30 states had established their own
laws, Congress passed legislation creating the
national holidaymeaning workers no longer
had to forfeit a days pay to march in Labor
Day parades.
Since those times, the HR professionborn
of personnel administratorshas had its
own impact in improving the lives of workers
and their families. Thats not to take anything
away from the labor movement, which brought
an end to 12-hour days, seven-day weeks, children in factories and other workplace abuses.
But it was HR professionals who took the
next steps: improving workplace conditions,
providing training, and guiding and shaping
careers. And, with the crafting and implementation of expanded benefits packages, those professionals touched the welfare and happiness of
entire families, even whole generations.
Today, in developed nations like the U.S.,
worker abuse is, for the most part, a footnote in
history and benefits packages are a given. Now
our profession struggles to get people back to
work after a crippling recession whose impact
is still painfully evident. Our members in the
C-suite lead businesses and organizations in
preparing for the workplace of the future.
Today, the constant is HR.
Its fitting that Labor Day may have originated in Canada, because SHRMs members
are improving lives around the world.
The U.S. Department of Labor says Labor
Day recognizes workers who have created the
highest standard of living and the greatest
production the world has ever known. We say
the same can be said for many places globally
wherever HR professionals are at work.
Salute yourselves, as we at SHRM salute
you.

PHOTOGRAPHY BY CADE MARTIN

By Henry G. Jackson

10 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Whats Missing From Your Benets Program?


Allstate Benets. We have the most comprehensive benets portfolio
in the business. Including the #1 critical illness product in America.
Its no wonder were one of the fastest-growing benets providers
in the country. Call an Allstate Benets Representative today and let
the Good Hands go to work for you.

Youre in Good Hands.

1-877-750-0467
or allstateatwork.com

Life Disability Critical Illness Accident Medical Gap


Sources: Allstate Benets Internal Data 2010; LIMRA. Allstate Benets is the marketing name used by American Heritage Life Insurance Company (Home Ofce, Jacksonville, FL), a subsidiary of The
Allstate Corporation. 2011 Allstate Insurance Company. www.allstate.com or www.allstateatwork.com

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

WHERE WILL YOUR FUTURE SENIOR LEADERS COME FROM?

Bosses Get Busy over Weekends


By Bram Lowsky, Executive Vice President Americas, Right Management

One in three employees often get emails from their boss over
the weekend and they are expected to reply, according to a new
survey we recently conducted at Right Management.
An additional one-third of survey respondents also
reported getting emails from their boss on the
weekend, not often, but just from time to time. More
than 560 employees throughout North America
responded to the poll which was conducted in May
and June.

Continuous, borderless communications are now


a workplace fact of life. It is possible that weekend
emails serve to smooth out the pressures of a
Monday morning, but likewise they may become
an intrusive nuisance. We know workers are feeling
exceptional pressures, and so many weekend
emails may be counterproductive.

DOES YOUR BOSS SEND YOU WORK-RELATED


EMAILS DURING THE WEEKEND AND EXPECT
YOU TO RESPOND?

Employees need to discuss communication expectations with managers and agree on what is realistic
and what is not, and gain a mutual understanding
for when something really warrants the employees
response over a weekend and when it doesnt.

33%

Yes, often

30%

Only from time to time

37%

Never

The survey findings are another indication of an


increasingly 24/7 workplace. Everybody once thought
technology would reduce the drudgery and make
the workplace more efficient. Sure, technology has
delivered great benefits to employees, but it also
crosses the boundary between the workplace and
the workers own private space. It seems one can
no longer get away at all from work or responsibility.
We specifically asked if workers were expected to
respond to the emails from their boss. So we were not
talking about broadcast emails or purely informational
communications, but those intended for a particular
person and looking for a response. Its now taken for
granted that everyone has to check their work email
during the weekend.

HR Magazine

Managers need to set clear expectations about what


really needs to be addressed over the weekend.
And if items might just as easily wait until Monday,
say so. If you dont have to send an email on the
weekend, dont send it. Create it in draft form and
hit send on Monday morning. Workers need down
time. Weekends should be a time to re-energize.
When bosses expect employees to be constantly at
attention, you wind up with burned out employees
and productivity loss.
So, under what circumstances should employees
reply to a Saturday morning email right away?
Basically, employees should respond if the manager
marks it as Urgent or if it directly relates to a
project the employee is driving and has implications
on anticipated results from that initiative. Otherwise,
it can wait until Monday morning if its not timesensitive or mission critical.

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Human Potential
SEPTEMBER 1415, 2011
NEW YORK CITY
Right Management is proud
to be a GOLD SPONSOR
of The Economists Human
Potential Event.

Talent.
On a planet of nearly 7 billion,
its still your most precious resource.

Its bigger than all of us. The fact that companies today must do so much
more with so much less. Which puts a premium on the performance of
everyone in your organization. Its why Right Management makes sure
your talent strategy aligns with your business strategy. So each person
in your company can reach their full potential. The world of work is
changing. Is your company ready? Sample our thinking on the subject
at Right.com/talent

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

1HHGDJRRG
UHDVRQWR
EULQJ\RXU
WUDLQLQJRQOLQH"

/V^HIV\[KV\ISPUN`V\YYL]LU\L&
;OH[Z[OLYLZ\S[[OH[ZVTLVMV\YJ\Z[VTLYZHYLNL[[PUN[OHURZ[V.V;V;YHPUPUNZ9L]:[YLHT
MLH[\YL^OPJOHSSV^ZSLHYULYZ[VYLNPZ[LYHUKWH`PUVULLHZ`Z[LW:V`V\JHUHKKMLLIHZLK
[YHPUPUN[V`V\YTP_^P[OUVZWLJPHSHJJV\U[PUNHUKUV[OPYKWHY[`ZVM[^HYLULLKLK
(UK.V;V;YHPUPUNTHRLZP[MHZ[LHZ`HUKJVZ[LMMLJ[P]L[VVMMLY[Y\S`PU[LYHJ[P]LZLZZPVUZ
^P[OSLHYULYZPUHU`SVJH[PVU;YHPUJSPLU[ZPUNYV\WZSHYNLHUKZTHSSHUKRLLW`V\YV^UZ[HMM
\W[VZWLLK[VV
2SHQXS\RXUEXVLQHVVWRDEUDQGQHZUHYHQXHVWUHDP

:K\VKRXOG\RXEULQJ\RXUWUDLQLQJRQOLQH"
-PUKV\[H[.V;V;YHPUPUNJVT-PUK@V\Y9LHZVU
____________________________


HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR News

For the latest HR-related business and government news, visit www.shrm.org/hrnews

Trust Issues
Employees are losing confidence in their leaders, according to recent research from
Maritz. Few respondents agreed with the following statements:
My companys leaders are ethical
and honest

14%
My employer genuinely listens to
and cares about its employees

12%

Verizon Settlement
Highlights Need For
ADA Accommodation
Verizon Communications payment of $20 million to resolve a
nationwide class disability discrimination lawsuit filed by the U.S.
Equal Employment Opportunity Commission (EEOC) would consti-

I trust management to make the right


decision in times of uncertainty

tute the largest disability discrimination settlement in a single

10%

lawsuit in EEOC history. The settlement is pending court approval.

Senior managements actions are


consistent with their words

7%
Source: 2011 Employee Engagement Poll, Maritz Research.

The underlying suit, which was filed pursuant to the Americans


with Disabilities Act (ADA) against 24 named subsidiaries of Verizon Communications, alleged that the company unlawfully denied
reasonable accommodations to hundreds of employees and disciplined or fired them under Verizons no fault attendance plans.

Study: Employees Trust


In Leaders Has Declined
poll of 1,857 U.S.-based employees has identified another
issue for employers to worry about: a lack of employees trust
in management.
The 2011 Employee Engagement Poll released by Maritz
Research in July found that the American workforce is less engaged
with its employers than it was in 2010, despite a slight improvement
in business conditions. Furthermore, one in four employees has less
trust in management than they did in 2010.
Poor communication, perceived lack of caring, inconsistent
behavior and perceptions of favoritism were cited by respondents as
the largest contributors to their lack of trust in senior leaders.
Also troubling: Of those respondents who said their trust in
management had increased from 2010 to 2011, just 31 percent said
their personal values were aligned with their companies values. Of
those who said their trust level was the same as in the previous year,
just 13 percent reported alignment between personal and company
values.
Just 2 percent of those who said their level of trust had declined
said personal and company values were aligned.
A strong indicator of management mistrust is lack of shared
values, Rick Garlick, senior director of strategic consulting and
implementation for Maritz, said in a statement. Companies must
align their overall values as an organization with those individual
values of their people. Knowing that you work for a company
whose values are similar to yours drives loyalty and strengthens
trust.

By Rebecca R. Hastings, SPHR, an online editor/manager for SHRM.

The EEOC charged that Verizon violated the ADA by refusing


to make exceptions to accommodate employees with disabilities. Under the attendance policy, if an employee accumulated a
number of chargeable
absences, Verizon
placed the employee
on a disciplinary step,
which ultimately could
result in more-serious

$20M
Amount paid by Verizon
Communications to settle a
nationwide class disability
discrimination lawsuit

consequences, including termination. The EEOC claimed that Verizon failed to provide
reasonable accommodations for people with disabilities by refusing
to make exceptions for individuals whose chargeable absences
were caused by their disabilities.
Employers need to make sure they are engaging in an interactive process with employees to identify reasonable accommodations, and they must take into account the more liberal definition
of what constitutes a disability under the recent ADA Amendments
Act, said Robin Shea, an attorney with Constangy, Brooks & Smith
in Winston-Salem, N.C.
But an employer need not excuse an employees absence
indefinitely, Shea noted. Most court decisions that have addressed
attendance under the ADA say that regular attendance is a necessary function of most jobs, she said. You may have to provide
telecommuting, but you dont have to put up with someone who
can never come to work.
By Joanne Deschenaux, J.D., SHRMs senior legal editor.

September 2011 HR Magazine 15

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine
HR News

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

2012 Compensation
Budgets Stay Lean
s the economy slowly improves, pay raises will
followand more so for top performersas
organizations struggle to balance relatively stable
compensation planning budgets with retention of critical talent.
According to Mercers 2011/2012 U.S. Compensation
Planning Survey report, 97 percent of U.S. organizations
are planning to award base pay increases in 2012.
Half of the organizations that project higher 2012
pay increases than those granted in 2011 cited expected
labor shortages and greater competition for workers as
the main reasons. The survey includes responses from
more than 1,200 mid-size and large employers across
the U.S. and reflects pay practices for more than 12
million workers.

Worker Segmentation

Percent

The risk of losing key employees weighs heavily on


employers as their compensation budgets remain flat,
said Catherine Hartmann, a principal with Mercers
rewards consulting business. Employers realize that in
order to hang on to their best employees, theyre going
to have to reward them. And while noncash rewards,
such as training
and new opportunities, enhance
Average Base Pay Increase
retention, base
3.0
pay is still the
2.5
most important
2.0
element of the
1.5
employment
1.0
deal.
Mercers
0.5
survey results
0.0
show that
2012
2011 2010
the highestSource: Mercer.
performing
employees (8
percent of the workforce) received average base pay
increases of 4.4 percent in 2011 compared with
2.8 percent for average performers (54 percent of the
workforce) and 0.4 percent for the weakest performers
(2 percent of the workforce).
Differentiating salary increases based on
performance has become a necessity with limited
resources. In this less-than-robust environment,
top-performing employees are an employers
competitive weapon, and [employers] are doing their
best to reward them accordingly, Hartmann said.

Benefits Briefs
For full versions of these articles and others, visit www.shrm.org/
hrdisciplines/benefits.

Rewards Impact Perceptions of Fairness


When it comes to how employers reward their workers, neither total pay
nor salary increase has the biggest impact on employees concerns about
fairness. That honor goes to career development opportunities, according
to a July research report by WorldatWork, an association of total rewards
professionals, and pay consultancy Hay Group. The report, Reward Fairness: Slippery Slope or Manageable Terrain?, was based on a survey of
500 WorldatWork members, 75 percent of whom are based in the U.S.
Employees top five reward concerns with regard to fairness are:

Career development opportunities.


Merit increases.
Base pay amounts.
Nonfinancial recognition.
Employee development and training.

Matches, Taxes Drive 401(k) Participation


Company matching dollars and the opportunity to defer taxes are incentives
for employees to enroll in workplace retirement savings plans, according to
research by Fidelity Investments.
Fidelity surveyed 1,000 working plan participants in the first quarter of
2011. When asked about top reasons for participating in their plans:

92 percent indicated it was important or very important not to lose out on


company match dollars.

90 percent said the plans were a good tax-deferred way to save.


Fifty-four percent of working respondents said they would contribute more
to their 401(k)s if they could.

401(k) Auto Enroll May Not Help Savings


Automatic enrollment may not help employees save enough to ensure a
secure retirement, says Jean Young, senior research analyst for the Vanguard
Center for Retirement Research. According to a 2010 Vanguard Investments
survey of more than 2,000 U.S. defined contribution plans managed by
Vanguard, 73 percent of plans use default contribution levels of 3 percent
or less. Only 27 percent set the default rate at 4 percent or more. However,
employees need contributions (theirs plus employer matching) that total
12 percent to 15 percent or more of pay annually. Automatic escalation can
help employees catch up, if employers set the default auto enrollment rate at
6 percent, match at 3 percent and then automatically escalate the contribution by 2 percent annually, Young said.

By Stephen Miller, CEBS, an online editor/manager for SHRM.

16 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Keep them smiling


all the way through
the screening process.
HireRight Applicant Centera better experience for everyone.
Dont lose your best candidates to a poor experience during the screening process.
HireRights award-winning technology and passion for service help make the background
check as easy and transparent as possible for your applicants. With HireRight Applicant
Center, your applicants get a personalized online portal that provides valuable updates
and insight into the screening process, all the while managing communication the way
they want it. The end result? A screening experience that enhances your employment
brand and creates smiles along the way.
To learn how we can deliver a great screening experience to you and your candidates,
call us at 1-800-400-2761 or visit us at www.hireright.com.

2011 Employment Screening Benchmarking Report


To get your free copy, scan here or visit
www.hireright.com/benchmark

Hire Safe. Hire Smart. HireRight.

SM

Copyright 2011 HireRight, Inc. All rights reserved.


HireRight is an Altegrity Company. Certain Altegrity companies provide investigative services.
State licensing information can be found at www.altegrity.com/compliance.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine
HR News

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Employers Worried About


Wage and Hour Changes
articipants of a U.S. Department
of Labor Wage and Hour Division
web chat in July peppered Deputy
Administrator Nancy J. Leppink with
queries about right to know rulemaking that would update the recordkeeping
regulations under the Fair Labor Standards Act (FLSA).
Based on a previous notice of
proposed rulemaking, the proposal likely
will require employers to disclose to
workers whether they are classified as an
employee or an independent contractor.
If they are classified as an employee, the
employer would have to disclose how
their pay is computed. The proposed
rule likely would require employers to
notify employees as to whether they are
considered exempt from the minimum
wage and overtime provisions of the
FLSA and, if so, the basis for their
exemption.
Questioners wanted to know the
level of detail that would be required in

the job classification analysis, whether


exempt and nonexempt employees will
be included in the proposal, and if the
requirements would apply retroactively
to existing jobs.
Leppink said that because the
proposal was still under development,
she would not discuss it. However, she
said, as a general principle,
[the Department
of Labor]
believes

essential information about an


employees earnings and employment
status should be made available to the
worker and that this greater transparency
will provide employees with essential
information about their earnings.
By Roy Maurer, a staff writer for SHRM.

EEOC Warns Employers About Combining Health Records


A U.S. employer that retains an employees personal and occupational

access to occupational health information by individuals providing health

health information in a single electronic record runs the risk of violating

services unrelated to employment is strictly limited under both the ADA and

federal disabilities bias law, the federal genetic discrimination law or both,

GINA, Mastroianni wrote. Therefore, maintaining personal health information

according to an opinion letter issued by the U.S. Equal Employment Opportu-

and occupational health information in a single [record], particularly one that

nity Commission (EEOC).

allows someone with access to the [record] to view any information contained

The opinion letter, dated May 31 and signed by EEOC Legal Counsel
Peggy R. Mastroianni, informs an unidentified writer soliciting an opinion

therein, presents a real possibility that the ADA, GINA or both will be violated.
The letter comes at a time when the Obama administration is urging

that though U.S. employers and some

greater use of electronic medical

health providers have legitimate rights

records to make health care more

to access personal health informa-

efficient and less costly. However,

tion under certain circumstances, a

Mastroianni wrote, if an employer

combined electronic medical record

maintains medical information and

could lead to violations of the Ameri-

genetic information electronically, it

cans with Disabilities Act (ADA) and the

must ensure that it is kept confidential,

Genetic Information Nondiscrimination

and disclosed only to the extent permit-

Act (GINA).

ted by the ADA and GINA.

An employers right to access


personal health information about
applicants and employees and to allow

By Steve Bates, SHRMs manager of online


editorial content.

18 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Thats why, if someones sick or injured, we pay cash directly faster than our top
competitors. Aac is like a safety net, helping pay costs that major medical doesnt cover;

When it comes to claims, no one likes pit

stops.

and we pay claims in an average of four days, speeding your benets into victory lane.
Because when it comes to your employees and their families, second place isnt good enough.
Race over to aac.com/paysfast and get started.

Individual coverage underwritten and offered by American Family Life Assurance Company of Columbus. In New York, coverage underwritten and offered by American Family Life Assurance Company of New York.
Some policies may be available as group policies. Group coverage underwritten and offered by Continental American Insurance Company. Policies may not be available in all states. Aac pays cash benets direct
to the insured, unless assigned. Aac processes most claims in an average of four days. For Continental American Insurance Company, the average is ve days.
NAD1122

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine
HR News

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Poll: Hiring Picks Up for College Grads


new Society for Human Resource
Management (SHRM) poll
released in July appears to have
some good news for college students
and graduates who are looking to enter
the job market. The poll of nearly
350 HR professionals throughout the
United States revealed that the number
of employers hiring undergraduates in
2011 jumped more than 36 percent when
compared to the results of a similar poll
conducted in 2010.
In the 2011 poll, 41 percent of
the respondents reported that their
organizations had hired one or more
undergraduates in 2011compared

the economic climate will continue


to 30 percent of respondents in 2010.
to pose employment challenges for
The number of businesses hiring
undergraduates and graduates. And
postgraduates also increased, from
20 percent in 2010 to 26 percent in 2011. more than one-third (37 percent) of the
participants reported that
The poll found that
undergraduate and graduate
slightly more than
job applicants were likely
three-quarters (76
to be underqualified for the
percent) of college
of respondents organizapositions they are seeking.
undergraduates
tions hired one or more
Only 16 percent of the
and graduates were
undergraduates in 2011.
respondents reported that
hired to fill full-time
undergraduates or graduates
positions, which was
possessed advantages over other job
a modest increase from the 2010 polls
applicants.
results of 74 percent.
More than two-thirds (69 percent)
By Bill Leonard, a senior writer for SHRM.
of the 2011 poll respondents said that

41%

U.S. Relocations Surge in First Half of 2011


he percentage of unemployed U.S. managers and executives relocating for new positions in the first half of 2011
jumped to its highest level in nearly two years, according
to survey data released in late July from global outplacement
consultancy Challenger, Gray & Christmas Inc. The increase
could be signaling employers growing willingness to help
newly hired employees relocate as well as job seekers willingness to take a loss on the sale of their homes.
During the first two quarters of 2011, an average of
9.4 percent of job seekers finding employment relocated for
their new positionsup from an average relocation rate of
7.6 percent during the same period in 2010, according to the
latest Challenger Job
Market Index.
The percentage of
job seekers relocating
plunged in the wake
of the housing market
collapse. Beginning
with the fourth quarter
of 2009 through the
end of 2010, the
quarterly relocation
rate averaged just 7.5
percentthe lowest
annual average since
the firm began tracking
job seeker relocation
in 1986. From the
first quarter of 2005
through the third
quarter of 2007, an
average of 16.1 percent

of those finding employment each quarter relocated for the new


positions.
Since there has been little improvement in the housing
market in 2011, one might conclude that the increased
relocation in the first half of the year is due to the fact that
prolonged unemployment is compelling more job seekers
to relocate, despite the challenges of selling a home in this
market, said John A. Challenger, CEO of the firm, in a news
release. At some point, the job seeker may simply conclude
that it is worth taking a loss on a home sale to get back on the
payroll.
SHRM Online staff

20 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

You give us
less money.
We give you
more
assessment.
Introducing Manager ReadySM, a totally new approach to assessing frontline leaders.
Get the quality of insights offered by an assessment centerfor 75% less. Plus, comprehensive reports
and actionable development guides that cover every critical frontline leadership competency.

Weve taken assessment to the next levelheres whats in it for you.


Better hiring and promotion decisions and a more capable pool of frontline leaders.

Manager Ready

SM

Contact us today for a personal demo: 1-800-933-4463


or www.ddiworld.com/managerready.

The Talent Management Expert

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Identify, Treat And


Prevent Employees
Aches and Pains
mployers are more aware than ever of musculoskeletal disorders, or MSDs. Employees who develop them can experience
significant pain, and their days away from work lead to higher
health care costs and lower productivity.
Employers who help employees identify and treat MSDs before
they become debilitating will be ahead of the game, say workplace
health experts. Even better: preventing MSDs before they can start.

Gas Prices
Affect Employees
Commute to Work
Gas prices are expected to climb again in the second half of 2011.
Workers intent on cutting the flow of dollars from their pockets into
their gas tanks are changing driving and spending habits, according to a ComPsych Corp. survey released in July.
The average price for a gallon of regular gasoline was $3.70
on Aug. 2, which is 14 cents higher than a month earlier and more
than a dollar more than the same month in 2010, according to
National Public Radio.
The continued climb of fuel costs has caused employees to
rethink their commute as well as their household expenditures,
Richard A. Chaifetz, chairman and chief executive officer of
ComPsych, said in a news release. ComPsych is a provider of
employee assistance programs.
The financial calls we receive have shown a renewed interest
in budgeting as families and individuals struggle to offset the gas

The U.S. Occupational Safety and Health Administration


(OSHA) has proposed adding a column to Form 300, the
workplace illness and injury log, in which employers would place
a check mark to denote MSDs. The proposed rule would define
an MSD, for recordkeeping purposes only, as a disorder of the
muscles, nerves, tendons, ligaments, joints, cartilage or spinal discs
that was not caused by a slip, trip, fall, motor vehicle accident or
similar accident.
Employers can reduce and prevent MSDs in their workplaces by
hiring workers who are qualified for the jobs at hand, conditioning
employees to do the job and modifying the work area if needed,
said Kevin Schmidt, senior vice president at WorkWell, an occupational health services company. Make sure hiring managers and
HR professionals have complete job descriptions that denote all the
physical capabilities employees must have, he said.
Third-party administrators can help track injuries and illnesses,
said Todd Hohn, vice president of strategic resources at PureSafety,
a safety and health training management software provider.
Insurance companies can identify, evaluate and control MSD
injuries as part of an employers coverage package. Or employers
can turn to an occupational health consultant, who can work with
employees to improve their strength and wellness.

premium by saving in other areas, he added.

By Beth Mirza, senior editor for HR News.

By Kathy Gurchiek, associate editor for HR News.

ComPsych conducted the survey from June 6 to July 1, e-mailing it to about 10,000 e-mail addresses taken from 8 million U.S.
employees who have access to ComPsychs services.
Among the surveys gas price-related findings:
41 percent of workers drive less often or combine trips
because of rising gas prices.
22 percent have cut spending in other areas.
16 percent have not changed their habits.
13 percent have postponed or canceled vacations or other
trips.
8 percent carpool to work, use public transportation or telecommute when possible.
Other alternative methods to reduce gas consumption for
commuting include employer-sponsored bike-sharing programs,
staggered shifts to circumvent rush hour traffic and remote
offices.

22 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR News

FROM THE STATES

Overtime Laws
Apply Across
State Borders
he overtime provisions of the California Labor
Code apply to work performed in the state by
three employees who were not California residents, the California Supreme Court ruled unanimously in Sullivan v. Oracle Corp. (No. 06-56649,
June 30, 2011). Three instructors who worked
for Oracle Corp., a company headquartered in
California, were therefore entitled to overtime pay
for any work exceeding eight hours in a workday,
as required by state law, even though two of the
instructors lived in Colorado and the third lived in
Arizona, the court concluded. The three instructors
primarily worked in their home states, though they
also worked in California and other states.
This decision will probably give rise to more
lawsuits against employers, said Anthony Oncidi,
an attorney in Proskauer Roses Los Angeles
office. It applies to anyone working in the state
for a California employer. Even if youre just
in California to work at a convention, if you are
eligible for overtime, the states overtime laws apply
to you, he noted.
And plaintiffs lawyers could try to take the
ruling even further, said Laura Maechtlen, an
attorney in Seyfarth Shaws San Francisco office.
Although the holding is limited to California-based
employers, out-of-state employers could face claims
by employees performing work in California in an
attempt to expand the holding, she cautions.
The decision shows that Californias
anti-business rules are not limited to its borders,
Oncidi said. Employers should make sure that they
have an up-to-date policy and they monitor hours
closely. They also need to keep good records of who
is working and when they are working.
t
Maechtlen added that
ma sure they
employers should make
have internal mechan
mechanisms for
filing a complaint so th
that potential
problems can be addre
addressed before
a lawsuit is filed. Im not sure
what direction this ruling
might take em
employers, but
it opens u
up a lot of
questio
questions,
she
sai
said.
Joanne
Deschenaux

State Workplace Law News


For state workplace law developments, visit
www.shrm.org/LegalIssues/StateandLocalResources.

CONNECTICUT LAW RESTRICTS USE OF


CREDIT REPORTS IN EMPLOYMENT DECISIONS
A new law in Connecticut generally prohibits employers from using credit reports
in making employment decisions regarding existing employees or applicants. The
law, effective Oct. 1, applies to all employers in Connecticut that have at least one
employee. It exempts financial institutions and allows the use of credit information
when the report is substantially related to the employees current or potential job or
when the employer has a substantially job-related purpose for using information in
the report.

NEVADA RECOGNIZES CREATIVE PROFESSIONAL


EXEMPTION FROM OVERTIME REQUIREMENTS
Gov. Brian Sandoval has signed Senate Bill 328, which revises the definition of the
professional exemption from overtime compensation requirements to include individuals employed in creative arts. Prior to the enactment of the law, the statute defined
professionals only to include lawyers and other professionals who are regulated
by state statute, such as architects, engineers and medical professionals. The law
changed the definition of professional to include creative professionals as described
in federal law.

NEW JERSEY SUPREME COURT EXPANDS SCOPE


OF STATE WHISTLE-BLOWER LAW
The New Jersey Supreme Court has expanded the scope of the states whistle-blower
law, the Conscientious Employee Protection Act, by deciding that an employee can
recover lost wages under that law without also having to claim that his employer
discharged him. The courts decision expands the scope of adverse action under
the whistle-blower law by ruling that it encompasses not only discharge but also false
accusations, negative performance reviews, suspension and pretextual mental health
examinations.

MONTANA HIGH COURT: SPECIFIC-TERM, AT-WILL


CONTRACT ALLOWS WRONGFUL DISCHARGE CLAIM
An employee hired for a specified term under an employment contract that also
had an at-will provision may bring a claim for wrongful discharge because the
contracts at-will provision trumped the definite employment term, the Montana
Supreme Court has ruled. The court interpreted Montanas Wrongful Discharge
from Employment Act, which provides that an employee who has completed a
probationary period can be discharged only for good cause, but which expressly
does not apply to an employee covered by a written contract of employment for a
specified term.

September 2011 HR Magazine 23

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Executive Brieng
By Dori Meinert

CEO Dismissals Up
uring the recent financial crisis,
more than 75 percent of departing
chief executive officers at Standard
& Poors (S&P) 500 companies were
likely dismissed in disciplinary actions,
according to a recent report by The
Conference Board.
In addition, 25 percent of incoming
CEOs in 2009 and 2010 were outside
hires, continuing an upward trend seen in
the past two decades, researchers found.
One of the most strategic risks
that a corporation must manage is the
succession of its chief executive officer. This is true today more than ever
due to the recent challenges posed by
a variety of economic factors, says
Jason Schloetzer, assistant professor at
the McDonough School of Business at
Georgetown University and a co-author
of the report. Board members should
understand not only the technical knowledge and experience necessary to effectively lead the company into the future,
but also the context and practices of the
succession planning process.
During the past decade, the rate of
CEO retirements declined, from a high of
37 percent of all successions in 2004 to a
low of 16 percent in 2008. From 2006 to

2009, roughly the same time


as the financial crisis, the
decline in departing CEOs
of retirement age suggests
an increase in dismissalsmore than 75 percent
of the 214 CEOs departing
over the four-year period.
Researchers must deduce
the reasons for CEO departures because companies
often dont disclose them,
Schloetzer says.
Not surprisingly, the
probability of CEO turnover
is higher in companies that
perform poorly. The succession rate in companies with
poor stock performance
from 2000 to 2010 averaged 14 percent
compared to an average of 10 percent for
better-performing companies, according
to the 2011 CEO Succession Report. The
CEO departure rate at poor-performing
companies ranged from a high of 21
percent in 2002 to a low of 10 percent in
2009 compared to a range of 7 percent
to 12 percent for better-performing S&P
companies. (In 2009, the poor performers
had a lower CEO succession rate, which

researchers speculated was a response to


the turbulence of the financial crisis.)
In a closer look at 56 recent CEO
departures, researchers found that 38 percent left immediately. When companies
announced the departure in advance, the
median lead time was two months but
ranged from two weeks to six months.
The average tenure of departing CEOs
has declined from 10 years in 2000 to
eight years in 2010.

High-Cost Living
Luanda in Angola is the worlds most expensive

ence cost of living for expatriates. It is essential

city for expatriates, according to Mercers 2011

that employers understand their impact for cost-

Cost of Living Survey.

containment purposes, but also to ensure they

San Francisco (106th).


Chicago and Washington, D.C. (108th).
Winston-Salem, N.C., is the least expensive
U.S. city on the list.

Tokyo is in second place, with NDjamena

retain talented employees by offering competitive

in Chad coming in third. Next are Moscow and

compensation packages, says Nathalie Constan-

Geneva.

tin-Mtral, the senior researcher at Mercer who

cities on five continents and measures the cost of

compiles the list.

more than 200 items in each location, including

New to the top 10 list of costliest cities in the


world are Singapore, eighth, and So Paulo in
Brazil, 10th.

New York remains the most expensive city in


the United States, although it dropped five places

Currency fluctuations, inflation, political instability and natural disasters are factors that influ-

to rank 32nd worldwide. Its followed by:

Los Angeles (77th).

The survey, conducted in March, covers 214

housing, transportation, food, clothing, household


goods and entertainment.
New York is used as the base city; all cities
are compared against it.

24 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

*(7&(57,),('
*(7127,&('
2XUFHUWLHG+5SURIHVVLRQDOVKDYHWKHLU+5FHUWLFDWLRQVWRULHVWRVKDUH-HQQLIHU'REELQVLVRQHRI
WKHQ:LOO\RXKDYH\RXUFHUWLFDWLRQVWRU\3URIHVVLRQDOLQ+XPDQ5HVRXUFHV 3+5 6HQLRU
3URIHVVLRQDOLQ+XPDQ5HVRXUFHV 63+5 RU*OREDO3URIHVVLRQDOLQ+XPDQ5HVRXUFHV *3+5 WR
VKDUH ?

1RUWKHDVW)ORULGDKDVPDQ\WDOHQWHG+5SURIHVVLRQDOV+DYLQJP\
3+5FHUWLILFDWLRQKDVKHOSHGZLWKP\FUHGLELOLW\DVD+5OHDGHU
0\FHUWLILFDWLRQKDVFRQWULEXWHGWRP\SURIHVVLRQDOVXFFHVVVKRZQ
LQFRQWLQXHGJURZWKLQSRVLWLRQVFRPSDQLHVDQGUHVSRQVLELOLWLHV
&RQILGHQFHDQGUHVSHFWWKH3+5FHUWLILFDWLRQDOORZHGPHWRKDYH
LWDOO Jennifer Dobbins, PHR

APPLY FOR THE 2011 HR CERTIFICATION EXAMS TODAY.


WINTER
Exam dates*:

'HF-DQ

Applications accepted:

-XO\2FW

Late applications due:

1RY

9LVLWZZZKUFLRUJFHUWLHGKUP
_______________________
IRUPRUHLQIRUPDWLRQRQRXU+5
FHUWLFDWLRQV

GPHR exams are held December 131, 2011.


A US$75 late fee will be assessed on applications received after the regular deadline.
FOLLOW US ON
DQGRXU CERTIFICATION MATTERS BLOG
:HEVLWHZZZKUFLRUJ+5&,
_______
&

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Solutions

HR Metrics, Benefits Brokers,


Workers in the European Union
Decide what data must be collected
and what collection methods are available. For instance, will all data for costper-hire be captured in human resource
information systems? Or will some data
need to be obtained from another department?
Decide how often HR metrics information will be collected and reported.
Will it be monthly, quarterly or annually?
Choose what format will be used
to report the data and who will receive
the report. Will it be part of a regular
operations report or scorecard? Will it
be a stand-alone document? Who will
receive the report?
An effective HR metrics reporting
practice will be valuable in assessing
HR strengths and weaknesses. For
example, if corporate leaders want to
open new locations each year for the
next few years, measuring the cost for
each new hire and the new-hire turnover rate may be important. Cost-perhire metrics will assist in budgeting. An
increase in the new-hire turnover rate
How do I determine the HR metrics that are most helpful for
may indicate problems with the hiring
my company?
process or managers at the locations.
hen corporate executives ask the HR team to start measuring the departUnderstanding this information will
ments performance, some HR staffers scramble to figure out what they
help HR professionals revise hiring proshould measure. A good approach is to focus on the metrics that impact
cesses and retention strategies.
progress toward business goals. However, assessing what data
HR metrics
are meaningful, determining how to measure them and chooscan help pinpoint
Online Resources
ing appropriate communication methods can seem daunting.
where human
For help in choosing what HR metrics to focus on, consider
capital issues exist
For additional questions and answers
the following:
and allow HR staff
and more information about topics in
this column, please go to www.shrm
Review business strategy and goals with C-suite executives
to monitor trends.
.org/templatestools. For answers to your
and determine how HR can best support these strategies.
Information from
own questions, visit www.shrm.org
Identify the HR functions to be measured that align with
appropriate HR
/hrinfo or call (800) 283-7476, option 5.
objectives. Show how these HR metrics would provide the most
metrics can be
relevant information about how those functions impact busiused to assess, plan
ness objectives and strategies.
and improve HR
Define each HR metric and its formula. Not all companies define metrics the
as well as business strategies and objecsame way or use the same formulas. For example, some companies measure the cost
tives.
for each new hire without including payment for recruiters as a related expense.
Yvette Lee

ILLUSTRATION BY RICHARD BORGE

26 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

THE WORLDS NEWSSTAND

What should a companys


leaders consider when selecting a benefits broker?
ost HR professionals want to
ensure that benefits provided to
employees fit the needs of the employees and the budget as well as the company culture. So, it makes sense for many
employers, particularly those with small
HR teams, to work with benefits brokers
who are familiar with insurance carriers
for all lines of coverage: health, wellness,
dental, life, disability, long-term care and
voluntary benefits. Brokers can provide
quotes from multiple carriers with different
plan designs and risk-sharing ideas.
Brokers also can evaluate the costs and
plan designs of major insurance carriers
in an employers region. Some brokers are
paid on commission by insurance companies, and the commissions can be reflected
in premiums. More often, they are paid by
a flat-fee structure such as one based on the
number of employees and months covered.
To determine the best benefits broker
for the company and its employees, an
employer may evaluate brokers by inviting
them separately to discuss the services they
offer.
Here are some questions to ask:
What services and knowledge does the

Can citizens of the European


Union work in any European
Union country?
es. Every person holding the nationality of a country that is a member
of the European Union (EU) is
automatically an EU citizen. Citizenship
establishes a right for the inhabitants in
the 27 member countries to travel, live and
work anywhere in the EU. For example,
a citizen of Poland has the legal right to
move to Spain and work or retire there. EU
citizenship is not a separate national citizenship but relates to the individuals rights
in any of the 27 countries. Therefore, such
citizenship supplements national citizenship and does not replace it.
The EU member states are united
with the European Economic Area and
the three European Free Trade Association States of Iceland, Liechtenstein and
Norway, allowing goods, services, capital

M
q
M
q

M
q

MqM
q

Some brokers are paid on commission by


insurance companies ... more often, they
are paid by a flat-fee structure.
broker provide? Will the broker evaluate
the costs and plan designs of several major
insurance carriers in the companys region?
Is the broker able to provide advice on
how to comply with federal and state laws?
Is the broker familiar with federal
health care law requirements?
Can the broker explain what changes
current plan sponsors should make to ensure compliance?
Will the broker assist with evaluating
health-related risks and offer suggestions
on how to reduce the companys exposure?
Will the broker assist with open enrollment communication?
Will the broker assist with resolving
claim problems?
What licenses does the broker hold?
Are they current?
What are the costs of the brokers services? Is the broker paid commissions by
the insurance companies or a flat fee?
Is the broker familiar with the companys industry?

Is the broker willing to provide refer-

and people to move freely about in an open


and competitive market. This concept
is referred to as the four freedoms. In
addition, the EU has established agreements with other countries. For example,
Switzerland is not part of the European
Economic Area but has a bilateral agreement with the EU that allows for the free
movement of people to work and reside in
member countries. Employers must check
the restrictions of agreements. Workers
from some countries, such as Bulgaria and
Romania, may face temporary restrictions
when working in Switzerland, Iceland,
Lichtenstein and Norway.
The rights of family members and
nationals from outside of Europe also
are considered. When an EU national is
working in another EU country, family
members have the right to reside and work
in that country, regardless of their nationalities, and the children have the right to be
educated there. For nationals of countries

with no EU agreement, the right to work


in an EU country mainly depends on the
laws of that country.
Each country has its own rules on
registration, the waiting period before a
resident is allowed to apply for citizenship
and other requirements. Employers must
check for specific country restrictions. For
example, Finland provides the right to
work freely for three months. After that, an
individual must register.
As politicians change, so do the labor
accords between countries. Employers
must always check with the embassy in
the countries where employees are working and residing for rules and agreements
between countries and the EU and European Economic Area.
Shari Lau

ences from current and former clients?

Are there disciplinary actions on file


with the state insurance commissioner?

Does the broker understand the companys needs? Does he ask relevant questions about benefits preferences? Does he
ask what company officials like or dislike
about their current benefits plans? Does he
ask about the culture? Can he summarize
the companys overall needs or wants?
How will the broker determine what
benefits plans to recommend to the
company?
How will the broker communicate with
HR managers? By phone or e-mail? How
often? How quickly will the broker respond
to HR managers inquiries?
By asking the right questions and taking
adequate time to evaluate the information
received, employers can increase their
chances of finding good brokers for their
companies.
Yvette Lee

Yvette Lee, PHR, GPHR, and Shari Lau,


GPHR, SPHR-CA, are HR knowledge advisors in
SHRMs HR Knowledge Center.

September 2011 HR Magazine 27

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

When employees have a


wide variety of benets choices
It can be hard to know what ts best
But with smart educational
materials from Unum
Everyone can appreciate the
beauty of your plan

When employees understand why nancial protection is so important, theyll appreciate


their benets more. But employees needs are never one-size-ts-all. To help them see
the options that suit them best, Unum provides comprehensive, yet easily understood
educational materials. And our interactive learning center and convenient enrollment
options make the entire experience seamless. The result? A plan that gives everyone the
benet of condence in their coverage. To learn more, visit unum.com/education.
D I S A B I L I T Y L I F E LO N G T E R M C A R E ACC I D E N T C R I T I C A L I L L N E SS
2011 Unum Group. All rights reserved. Insurance products are underwritten by the subsidiaries of Unum Group.
Unum is a registered trademark and marketing brand of Unum Group and its insuring subsidiaries. NS11-293

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Special Advertising Supplement

The clear benefits


of being a company
that cares
As businesses prepare for the future,
companies that show employees they are
valued will have an important edge

One of the best-kept secrets of attracting and retaining employees isnt


really a secret at all: People want to work for a company that cares about
them, and employers know how important it is to create a culture where
employees work is valued and their financial stability is protected.
In a recent study by Monster.com3,
job hunters were asked what they
value most in a potential employer.
Eighty-seven percent said its very
important to work for a company
that cares about their well-being. In
fact, that quality led the list of attributes prospective employees are
seeking, rating higher than job security and much higher than a high
base salary.

A recent survey of human resources executives conducted by


Harvard Business Review Analytic
Services1 showed that 78 percent
said the key to motivating and
engaging employees was to demonstrate how much the company
cared.

In these volatile times, employees need to feel that their employers have their best interests at
heart. But do company interests

Given that company culture is


so critical, human resources profesVLRQDOV FDQ GHQH DQG VKDSH WKHLU
total compensation packages based

align with what employees want in


a company?
Yes. They align perfectly.

on the qualities that demonstrate


caring. And when employees unGHUVWDQG WKH YDOXH RI WKH EHQHWV
their employers offer beyond the
paycheck, companies experience
an increase in employee engagement and satisfaction.2
When you take care of the people who take care of your business,
HYHU\ERG\EHQHWV

How to demonstrate
that you care
7KH FRQQHFWLRQ EHWZHHQ EHQHWV
and caring is clear. Eighty-six perThe clear benets of being a company that cares | 29

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Special Advertising Supplement

Nearly 80% of human resources executives said a key


to keeping employees engaged and motivated is showing
them that the company cares about their well-being.
Harvard Business Review Analytic Services/Unum
cent of human resources leaders indicated that making sure employees
and their families are taken care of
should something happen to them
is an important reason for providing
QDQFLDOSURWHFWLRQEHQHWV3
As the cost of medical care rises,
HPSOR\HHV QHHG QDQFLDO SURWHFWLRQ PRUH WKDQ HYHU EHIRUH $QG
with health care reform coming,
QR RQH LV FHUWDLQ ZKDW OLHV DKHDG
So providing access to choices for
PHGLFDO GHQWDO GLVDELOLW\ FULWLFDO
illness, accident and life insurance

is an important way to demonstrate


your companys commitment to the
QDQFLDOVWDELOLW\RIWKHSHRSOHZKR
KHOS\RXUEXVLQHVVWKULYH
%XWWKHUHLVPRUHWRDJUHDWEHQHWVSODQWKDQMXVWRIIHULQJWKHULJKW
FKRLFHV *UHDW EHQHWV SODQV KDYH
WZR PDLQ FRPSRQHQWVJUHDW EHQHWVDQGJUHDWEHQHWVHGXFDWLRQ
There are striking differences in
WKH ZD\V EHQHW SURYLGHUV ZRUN
with employers and their employHHV7DNLQJWKHWLPHWRQGDSDUW-

QHU WKDW HPEUDFHV D FDULQJ FXOWXUH


PD\EHRQHRIWKHEHVWLQYHVWPHQWV
\RX FDQ PDNH )LQG D SDUWQHU WKDW
makes processes easier and that
ZLOO EH ZLWK \RX HYHU\ VWHS RI WKH
ZD\ )LQG D SDUWQHU WKDW ZLOO WDNH
care of your employees when they
QHHGKHOSPRVW
Determining the right mix of
EHQHWV IRU \RXU HPSOR\HHV LVQW
VLPSOH %XW \RXU FRPSDQ\ ZLOO EH
regarded as caring if you can address the diverse needs of your
entire employee population and
SURYLGH WKH DSSURSULDWH QDQFLDO
SURWHFWLRQ RSWLRQV WR W HDFK W\SH
RIQHHG$QGYROXQWDU\EHQHWVFDQ
HQDEOH\RXWRRIIHU\RXUHPSOR\HHV
more protectioneven though they
KDYHWRVKDUHLQWKHFRVW,WVDJUHDW
RSWLRQ IRU UHGXFLQJ EHQHW FRVWV
while still providing much-needed
FRYHUDJH

The science of choice


Benets education is critical because research has shown that people presented with
complex buying decisions face a number of
barriers to making good choices.
One is inertia, or the tendency to take
no action at allfor example, keeping current benets elections rather than making a
change.
Another barrier is the prospect of too
many choices. While theres no doubt that
consumers want options and that choice is
generally perceived as a good thing, prob-

lems arise when consumers are faced with an


overwhelming number of options.
A third barrier is the individual's own
rules of thumb that are used to guide the
decision process. We use these reference
points to evaluate anything new in terms of
what we already know. When we lack complete information on something new, our own
rules of thumb can cloud our decisionmaking ability.
A nal barrier to making good choices
about benets is that many people make de-

30 | The clear benets of being a company that cares

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

M
q
M
q

M
q

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

MqM
q
THE WORLDS NEWSSTAND

Special Advertising Supplement

Why benefits education


is as important as the
benefits themselves
While its great to offer a range of
EHQHWV RSWLRQV HPSOR\HHV PD\
QRW XQGHUVWDQG WKHLU EHQHWV DQG
KRZ YDOXDEOH WKH\ FDQ EH 7KDWV
ZK\ D VPDUW FRPSUHKHQVLYH HGX
FDWLRQ SURJUDP LV VR FULWLFDO 1RW
RQO\GRHVLWKHOSHPSOR\HHVXQGHU
VWDQGZKHWKHUWKH\QHHGWKHFRYHU
DJHDQGKRZPXFKWKH\QHHGEXW
LWDOVRUHHFWVZHOORQHPSOR\HUV
7KHUHV D VWURQJ FRQQHFWLRQ EH
WZHHQHIIHFWLYHEHQHWVHGXFDWLRQ
DQGKRZHPSOR\HHVSHUFHLYHWKHLU
HPSOR\HUV (PSOR\HHV ZKR EH
OLHYHGWKHLUEHQHWVZHUHHIIHFWLYH
O\ FRPPXQLFDWHG ZHUH PRUH OLNHO\
WR IHHO WKHLU HPSOR\HU YDOXHG WKHLU
ZRUNDQGFDUHGDERXWWKHLUZHOOEH
LQJDQGWKRVHHPSOR\HHVVKRZHG

Graph 1A: Among employees


who rate their benefits
education excellent/very good:
80%

31%

34%

35%

Good

Fair/Poor

16%

4%

Excellent/Very
Good

Good

Fair/Poor

Rating of employer as a place to work

Excellent/Very
Good

Rating of employer as a place to work

Source: Employee Education and Enrollment Survey, Unum/Harris Interactive, 2010

cisions based on emotions, not on logic. As a


result, they may put off decisions about life,
disability and critical illness insurance because it forces them to think about grim situations.
To help employees navigate their choices,
consider these tips:

Offer a maximum of four or ve benets at

Graph 1B: Among employees


who rate their benefits
education fair/poor:

a time. Consider enrolling some benets at


different points in the year.
Provide context and guidance. Set default

options, offering employees examples of typical coverages chosen by people with their
income levels and personal circumstances.
Share some comparisons. Offer pricing information for varying levels of coverage so
employees can evaluate options on their
own.
Tell stories. Describe benets using explanations employees can relate to their own
circumstances.
Source: The Science of Choice: Guiding employees
to wise benefits decisions, Unum, 2010

The clear benets of being a company that cares | 31

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Special Advertising Supplement

higher levels of engagement. In


fact, 80 percent of employees who
UDWHGWKHLUEHQHWVHGXFDWLRQKLJK
ly also rated their employer as an
excellent/very good place to work.2

How to communicate
benefits to your employees
Offering employees the right tools
DQGDOORZLQJWKHPHQRXJKWLPHWR
IXOO\ XQGHUVWDQG WKHLU FKRLFHV DUH
FULWLFDO HOHPHQWV RI HIIHFWLYH EHQ
HWVHGXFDWLRQ
(PSOR\HUV VKRXOG SURYLGH DW
OHDVW WKUHH HGXFDWLRQDO UHVRXUFHV
WRVXSSRUWGLIIHUHQWOHDUQLQJVW\OHV
DQG VKRXOG RIIHU LQIRUPDWLRQ DW
least two to three weeks before
HPSOR\HHV KDYH WR PDNH EHQHWV
decisions. Printed materials are a
key component, giving employees
the chance to bring materials home
WR GLVFXVV EHQHWV FKRLFHV ZLWK
their families.
(PSOR\HHVZKRUHSRUWHGDSRVL
WLYH EHQHWV HGXFDWLRQ H[SHULHQFH
FLWHGDFFHVVWRFRPSUHKHQVLYHPD
WHULDOV DQG SHUVRQDOL]HG JXLGDQFH
and information from an employer.

Across the ages


Employees in all age groups
said they are placing more
value on benets.
Employee Perspectives
on Benefits, LIMRA,
April 2011
And when employees reported a
negative experience, they often
FLWHGDODFNRIXVHIXOUHVRXUFHV2
6RPHRWKHUWLSVIRURIIHULQJHP
SOR\HHV HIIHFWLYH EHQHWV HGXFD
WLRQLQFOXGH

Select a provider who can offer


RQHWRRQH PHHWLQJV ZLWK HP
ployees

$VN \RXU &(2 RU &)2 WR HQGRUVH


WKHEHQHWVE\VHQGLQJDQRWHWR
employees

0DNHVXUH\RXJHWELOLQJXDOPD
terials if necessary

\RXUFRPSDQ\DQG\RXZDQWWRGR
everything to help provide them
ZLWK QDQFLDO SURWHFWLRQ %XW EXG
JHWFRQVWUDLQWVDQGDYRODWLOHHFRQ
omy have made it a challenge to
RIIHUWKHEHVWEHQHWSODQV
7KH WUXWK LV WKDW D OLWWOH ELW RI
caring goes a long way. Employees
ZLOO DSSUHFLDWH \RXU HIIRUWV LI \RX
MXVW OHW WKHP NQRZ \RX DSSUHFLDWH
WKHLUV &UHDWH D FXOWXUH WKDW YDOXHV
them. Help to protect them with
EHQHWVWKDWWKH\OOYDOXHDQGHGX
FDWHWKHPVRWKDWWKH\XQGHUVWDQG
MXVWKRZPXFKWKHLUFRPSDQ\FDUHV
for them.
Giving employees the tools to
PDNHJRRGEHQHWVFKRLFHVVKRZV
WKDW\RXUFRPSDQ\FDUHVDERXWWKHLU
ZHOOEHLQJZKLFKKHOSV\RXUHFUXLW
and retain the very best talent.
1.

The New Employee Relationship, Harvard


Business Review Analytic Services/Unum,
2011

2.

Employee Education and Enrollment Survey,


Unum/Harris Interactive, 2010

3.

What Matters Most: Attracting Talent in the


Recovering Economy, Monster.com/Unum,
2011

The bottom line


(PSOR\HHV ZRUN KDUG IRU \RX DQG

To read the complete studies,


visit unum.com/education.

Graph 2: The heightened importance of benefits for jobseekers


Question: Compared to two to three years ago, to what extent do you agree/disagree with each of the following statements?
I am more interested in knowing what all my insurance benefits cover and how they work
(employed respondents)

82%

I am more aware of what benefits I have and do not have with my current employer
(employed respondents)

74%

I review and evaluate information provided on a prospective employers benefit plan more thoroughly

74%

I take benefits less for granted than I did in the past

59%

Agree strongly or somewhat

Source: What Matters Most: Attracting Talent in the Recovering Economy, Monster.com/Unum, 2011

32 | The clear benets of being a company that cares

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Prole
Michael Davis
Education: 1977, Bachelor of Science degrees in industrial
management and computer science, Purdue University; 1981,
MBA, University of Chicago.
Current Job: 2008-present, senior vice president, global
human resources, General Mills, Minneapolis.
Career: 2005-08, vice president, HR, U.S. Retail; 2004-05,
vice president, compensation and benets and corporate
HR; 1996-2004, vice president, compensation and benets,
all at General Mills, Minneapolis. 1981-96, compensation
consultant, Towers Perrin, in the Chicago, New York and
Minneapolis ofces.
Personal: Born in Chicago; age 55; married with two
daughters.
Diversions: Running, walking, hiking, cooking, reading, travel.
Connections: www.generalmills.com; (763) 764-3173.

ager is not brain surgery; some of the


things weve focused on are basic, such
as coaching skills and making sure
employees know that you are actually
listening to them.

General Mills
HR Recipe
Interview by Rita Zeidner

pen your pantry or your refrigerator


and youll probably see at least one
product from General Mills, maker
of brands such as Cheerios, Haagen-Dazs,
Betty Crocker, Pillsbury and Green Giant.
The Minneapolis manufacturer is equally
as ubiquitous in HR circles, winning
kudos as a great place to work. Michael
Davis, General Mills chief human resource officer, also gets around, sharing
his expertise with groups such as the Employee Benefit Research Institute and contributing to The Chief HR Officer (SHRM/
Jossey-Bass, 2011). We caught up with
him earlier this summer, just as hed returned from a business trip to China.

PHOTO COURTESY OF GENERAL MILLS

You say that HR leaders must define


their organizations employment
value propositionwhat employees
value in working there. Has communicating General Mills value proposition

been as important when unemployment


is high?
A business like ours is countercyclical to
the recession. People have gone back to
cooking at home. Everything thats sold
in the middle of the grocery storeour
core productsis doing well. As a result,
we didnt have the layoffs and salary
freezes experienced at other companies.
So yes, our value proposition has been
important. We still have to recruit and
retain workers.
What initiatives support retention?
When people have a bad experience
with their manager, they cant think of
anything else but leaving the company.
So our biggest HR initiative is focused
on building great managers within HR
and throughout the organization who
inspire people to achieve and develop
to be their best. Becoming a good man-

Your company recently updated its core


values for the first time in 20 years.
How did that come about?
Were not a sexy company, we make
food. So when we recently updated our
core values, we wanted to keep them
simple and tie them to our overarching
mission of nourishing lives. We came
up with five core values: Do the right
thing, all the time; build our great brands;
innovate in every aspect of our business;
strive for consistently superior performance; and respect, develop and invest
in our people.
How do you make 33,000 culturally
diverse employees understand and embrace these core values?
I questioned if this was possible. I
wondered how dissimilar or similar the
various workforces are. But Ive found
there are fundamental things people
look for in an employerthey want to
be listened to, they want to grow in their
careers, they want to add value to the
company, and they want to be treated
with dignity and respect. Whenever I
talk to employees, I talk about how core
values relate to what employees are
looking for.
The interviewer is a former senior writer for
HR Magazine.

September 2011 HR Magazine 33

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Gone but Not Forgotten


You may think you know what employee absences cost your
company; chances are you dont. Heres how to minimize losses.
By Robert J. Grossman

he crazy quilt of leave entitlements drive even the most detail-oriented HR


manager bonkers. Applying them is challenging, complicated and vexing.
Ever-changing, overlapping federal, state and municipal laws, regulations
and court decisions can be confusing, conflicting and open to interpretation. And dealing with irritated supervisors trying to fill staffing gaps that result from
employee absences is one of HR professionals most thankless tasks.
Consider the Family and Medical Leave Act (FMLA) and the intermittent leave it
permits. Managers are very frustrated with workers who they believe are playing the
game, says Sandi Boller, vice president of human resources at St. Louis-based U.S.

The author, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at
Marist College in Poughkeepsie, N.Y.

34 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

September 2011 HR Magazine 35

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Bank, which has 62,000 employees. The


employee simply has to call the manager
and say, Im not coming in. So long as
the doctor provides documentation confirming the employees need to take four
or five days off per month, theres no further medical documentation required.
And FMLA leave can be taken in
small increments. It could be from
three to five minutes, says Cheryl Pasa,
SPHR, executive director of People Services at USAA, a San Antonio-based provider of financial products and insurance
to members of the U.S. military. Once
they get certified for an FMLA condition,
they can be gone whenever they want.
And you have no choice; you cant discipline them or consider their absences in a
transfer or promotion decision.
C-suite executives, even chief human
resource officers, tend to assign absence
management low priority, seeing it as
encompassing uncontrollable, transactional activities that they must endure
as a cost of doing business. It is a pain
to deal with, so it tends to get pushed
down in the HR hierarchy, says Marcia
Carruthers, chief executive officer and
president of the Disability Management
Employer Coalition in San Diego.
For HR executives such as Loyd
Hudson, integrated disability manager of
American Electric Power in Columbus,
Ohio, such lack of interest represents a
lost opportunity to maximize productivity, achieve millions of dollars in savings,
and instill fairness and equity in the way
employees are treated.

HR Professionals Estimates of
Costs of Employee Absences

Dont know
49%

More
than $5 million
2%

$100,000 to
$1 million
44%

$1 million
to $5 million
5%

Source: The Missing Piece of Absence Management,


Liberty Mutual Group, 2011.

comp cost was $16 million. Today with


18,700 employees, 7,000 more than then,
its only $8.9 million. In 1997, workers
comp was 1.3 percent of payroll; last year
it was 0.55 percent. Long-term disability
was 0.9 percent in 1997; now its 0.57
percent.
The absence rate on any given day at
American Electric Power is 3.6 percent
of staffabout half of what experts say
is the norm, he says. That means more
people are here and contributing than
before; Im not having to pay overtime,
over-staff or fill their positions some
other way.

U.S. Department of Labor studies


show that absences are a substantial and
growing expense of doing business, costing employers nationwide perhaps as
much as $100 billion per year.
Labor officials estimate that 3 percent
to 5 percent of an employers workforce
was absent on any given day in 2010.
Other experts project the average daily
rate as high as 8 percent.

Strategic Wasteland
Despite the benefits of approaching
absence management holistically, many
employers arent doing so. There are
chances to achieve savings and be more
efficient, but employers arent taking
advantage.
With limited exceptions, there is
no strategy at the employer level, says
Kevin Curry, national practice leader of
the Reed Group in Westminster, Colo.
Few executives are asking if their systems are efficient, up-to-date technologically or building in meaningful metrics.
Most employers are not tracking
absence-related expenses, confirms Cara
Bass. Maybe one in 10 HR people
know about these costs, says the health
and benefits business leader for Mercer,
based in Interlachen, Fla. Every CEO
knows that health care costs 13.6 percent

Types of Absences
Mercer researchers place absences in four categories:
Planned. Costly, but the least disruptive. They are likely to be scheduled and approved
in advance.

A Powerful Case
More than a decade ago, Hudson began
integrating 42 separate leave programs
into a Recovery Center where HR staff
coordinate all leave management from
the time an employee is absent until he
returns to work. The savings have been
impressive.
If you manage such an initiative carefully, you can cut your absence rate and
reduce spending in other ways, Hudson
says. When I started in 1998, workers

Unplanned, incidental. Absences of up to five workdays where the occurrence was not
known and approved ahead of time. Sick days are an example.
Extended. Absences lasting beyond one week, often unplanned and generally due
to a disability or qualifying as leave under the Family and Medical Leave Act or a state
equivalent. These leaves are often paid through short-term disability, long-term disability,
workers compensation, accrued sick days or salary continuation.
Intermittent. Absences that may last minutes, hours or days, caused by a previously
certified medical condition. The employer may know when the absences will occur, as when
an employee makes an appointment with a therapist or doctor, or may receive no advance
notice when a particular condition such as a migraine flares up.

36 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

__________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Online Resources
of payroll, and they pay plenty of attention to managing it. But ask them what
unplanned and intermittent absence is
costing and theyre in the dark. Its a
huge number: 8.7 percent of payroll.
In an April survey conducted by
Liberty Mutual Group, 49 percent of
respondents said they do not know what
their organizations absence-related costs
are. Respondents were HR and benefits
executives and financial managers representing 331 organizations of all sizes
from a cross section of industries and
geographic locations.
Even those who claim to know their
organizations costs often underestimate
them. Fifty-one percent of the employers
claimed to have a handle on costs. Of
these, 86 percent said they were spending less than $1 million per year. In fact,
based on direct-cost estimates alone, even
small employers surveyed understated
their costs by millions.
According to Mercers Survey on
the Total Financial Impact of Employee
Absences, employers direct costs of all
absences reached 12.2 percent of payroll
in 2010. Thus, an employer that has 500
employees and pays an average annual
salary and benefits of $60,000 would
spend $3.7 million per year on folks who
did not work. Employers with 5,000
employees would spend $37 million.
The direct cost of an absence is the
compensation an employee receives for
time not worked. It may be full-salary
continuation for vacation, sick leave,
personal leave or short-term disability, or
a separate benefit paid by a disability carrier. If an employee earns $200 per day
and receives a disability benefit of 75 percent of pay, for instance, the direct cost is
$150 per day.
There are also indirect costs, especially for unplanned absences: what
it costs to continue operations while
employees are on leave. Employers may
hire temporary or replacement workers,
offer overtime, add responsibilities to
supervisors, or carry additional workers
on the payroll in anticipation of absences.

To share and discuss your experiences


with absence management, see the online version of this article at www.shrm.
org/hrmagazine/0911Grossman.

Or they may opt to do nothingleading


perhaps to lower productivity, revenues
lost because fewer customers are served
or fewer products manufactured.
All organizations incur direct costs
linked to absences. The types of indirect
costs vary. They depend on how the
gaps are filled. HR professionals in some
industries, such as health care and retail
operations, need to have boots on the
floor or butts in the seats, Bass says. They
are likely to offer overtime or add temps.
Project-based operations, such as consulting and professional services, are more
likely to coast and minimize additional
costs.
The Mercer survey, similar to others
conducted by the Disability Management
Employer Coalition and the Integrated
Benefits Institute in San Francisco,
aggregates all employers and estimates
average direct and indirect costs of all
categories of absence at about 35 percent
of payroll. That means a 500-employee
company dedicates $10.5 million per
year to dealing with absences, while a
5,000-employee company spends
$105 million.

Why the Inaction?


Most employers spend more money
for people not to work than they think.
And the impact goes well beyond lower
productivity, lost revenue and decreased
customer service. It gets to the heart of
employee engagement, particularly if
executives think theyre treating all leave
applicants comparably. Odds are theyre
not. How come?
Silos impede sharing. When
responsibility for absence management is
dispersed across departments, turf issues
inevitably arise. Payroll, benefits, HR
and risk managers all have involvement
in the process. People prefer to work in

their comfort zones and not to share their


data, says Dan Lyons, vice president
and manager of national accounts for
Liberty Mutual in Boston.
Plans overlap and meshing them can
be problematic, Hudson adds. Assume,
for example, you had an accident in the
parking lot at work in West Virginia, you
lost fingers on your right hand, and your
doctor authorized your claim for workers compensation. In a siloed world, I
would deny the claim because the accident did not happen while you were at
work. End of conversation.
In contrast, if the employee called
us at our Recovery Center, wed say,
We dont believe you have a workers
comp claim, but heres what we can do
for you. Well start your sick pay and

Does Your Organization Track


The Indirect Costs of Unplanned
Absences?
No, but plan to in the
next 12 months 7%

Yes 32%
No 61%

Source: Absence Management in the Workplace poll,


Society for Human Resource Management, June.

short-term disability pay and look into


FMLA eligibility. Because the injury is
serious, he would qualify for 12 weeks of
FMLA job protection, which would run
concurrently. For the employee, its onestop shopping and he knows hes getting
comprehensive advice.
Metrics are missing or underutilized. Many HR professionals are only
beginning to collect the data they need
to manage and benchmark leave. Others
have the data but are not using it to the
fullest extent. We dont measure some

38 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

The Hartford Voluntary Benets

IT TAKES MORE
than exceptional benets to retain employees.
Now you can

DO EVEN MORE than provide them.

Partner with The Hartford, a leader in group benets, to help ease the burden of administering
voluntary solutions. In addition to providing innovative coverage and a exible enrollment
process, we offer your people value-added services, like travel assistance, that go beyond
the benets. Because just meeting expectations is never enough.

Contact your benets consultant today, or visit thehartford.com/groupbene


ts.
__________________________

___________

HR Magazine

With The Hartford behind you, achieve whats ahead of you.

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Frequency of Complaints, Grievances and

HR-related activities sometimes


only a few days off, they reason.
Lawsuits Related to Absence Management
because its hard to do so objecIs it really worth a protracted
Participants
tively, Hudson says. Thats not
legal fight?
experiencing
Complaints
Grievances
Lawsuits filed
true for absence management
Paul DeCamp, a partner at
the effects of integrated manageJackson Lewis LLP in Reston,
None
60%
74%
85%
1 to 2 per year
24
15
12
ment are pretty easy to assess.
Va., and leader of its Wage
3 to 5 per year
9
6
3
In June, the Society for
and Hour Practice Group, says
More than 5 per year
7
5
0
Human Resource Management
employers grumble but usually
surveyed 302 members about their
give in. Where you have these
Source: Survey on the Total Financial Impact of Employee Absences, Mercer, 2010.
absence management practices.
borderline issues, the dollar value
Eighty-two percent said they track
is usually small, so the employer
absences or plan to track them in the next
ments Wage and Hour Division reported rolls over. The worker calls in, says, I
12 months. Most said the purpose of track- that 53 percent of the 1,889 complaints
think I have the flu. If the supervisor
ing is driven by the need to be in complifiled by employees for violation of the
says, No, you have to come to work, he
ance with state and federal regulations.
FMLA were valid. Back wages for the
has to do the FMLA paperwork and refer
Less than half track indirect costs.
workers totaled $1.5 million.
them to HR. When HR gets the call, she
How effective tracking is in ensuring
Employers are gun-shy. When it
thinks about calling the lawyer to figure
compliance remains uncertain. In 2008,
comes to approving leave, employers are
out whether job-protected leave can be
the year for which the most recent statisconcerned about the potential costs of litidenied. Especially if the leave is unpaid,
tics are available, the U.S. Labor Departgation when denials are challenged. Its
its easier to let it slide.

Make the Business Case


Offer a compelling case for integrated absence management that

he says. Youve got to let them know theyre asking for a benefit, not

demonstrates return on investment by:

an entitlement.

Showing the financials. The only way to get through to people

How much will you save? Without in-house metrics to prove the

who control the dollars is to show them what [the employer] will

case and monitor over time, no one can be certain. But there are

save in lost time and expenses, says Marlene Dines, director of work

some rules of thumb. Marcia Carruthers, chief executive officer and

absence management at Kaiser Permanente. If I dont come up with

president of the Disability Management Employer Coalition, says

a financially sound business case, nobody will take me seriously.

an employer that integrates leave administration can anticipate a

The cost numbers are what get attention, agrees Karen


Trumbull English, a partner at Spring Consulting Group. The

10 percent reduction in payroll expenses allocated to leaves.


Spring Consulting Group estimates the figure at 11 percent.

most important metrics are the direct costs of absences and your

Hudson predicts you can increase the number of full-time

ability to show reduced lost time and increased return-to-work

equivalent workers who are on the job by 2 percent. In 2010, at

rates, she adds.

American Electric Power, that meant 382 full-time employees were at

The savings can be found in the roughly 8.7 percent of payroll that

work instead of on leave.

companies are shelling out for unplanned incidental, intermittent and

Mitigating risk. Integration ensures consistency in application

extended leaves. These leaves include people calling in sick, people

of leave programs and policies, making it less likely that people will

taking personal days, those injured on or off the job, and those

receive unequal treatment or receive benefits others are denied. If

invoking the Family and Medical Leave Act.

you mess up, you can get lawsuits, warns Sandi Boller, vice president

Loyd Hudson, integrated disability manager at American Electric

of human resources at U.S. Bank. I cant put a dollar figure on the

Power, says about 18 percent of his employees are prime targets

litigation outlays weve saved, but it would be huge. Not being able

for attention within these leave categories. Theyre good employees


who want to do the right thing but believe theyre owed something,

CASE, continued on page 42

40 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Employee Purchase Programs


from Purchasing Power.
Purchasing Power is the fully-administered, fastest growing
employee purchase program of choice for Fortune 500
companies, hospitals and government agencies. For more than
10 years, Purchasing Power has provided employees with an easy
and responsible way to buy products from brands like Dell, HP
and Kenmore through payroll deduction. With little to
no administration or liability to the employer.

Learn More Today!


1.855.543.5102
PurchasingPower.com/themissingbenefit3
COMPUTERS

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Any time workers can decide for


themselves when they cant work,
the employer is in a tough position,
DeCamp continues. Everyone accepts
serious conditions under the FMLA
like chemotherapy. But as conditions
get closer and closer to the linesuch
as chronic pain, headaches and severe
coldstheyre more difficult to verify
and theres more room for worker abuse.
Theres a real tension between wanting
the employer to have a chance to verify
versus the pushback from the doctor who

says, Ive already said this person has


migraines, and I dont need to repeat my
diagnosis.

tain number of days.

Requiring review by an independent

Get Started

physician.

So how can HR managers best deal with


absences and manage their costs?
Review internal policies. Look at
your policies carefully. Are your leave
policies serving you optimally? Look to
best practices for effective leave strategies that you can control. For instance,
employers that account for sick leave try

CASE, continued from page 40

to minimize the impact by:

Requiring a doctors note after a cer-

Accurately monitoring leave days


taken, in a timely manner.
Most employers want to know when
someone will be absent so they can
consider coverage and check eligibility
against the menu of mandated leaves that
may apply. By qualifying an employee
for a particular kind of leave, the

handing off leave management to a central HR unit or outsourcer,


says William Espino, senior director of HR technology at the

to fight a case if something isnt processed properly or equitably is


something you really want to avoid.

Chesapeake Energy Corp. in Oklahoma City, Okla.


Theyre delighted at not having to deal with frequent fliers who

Respondents to Mercers 2010 Survey on the Total Financial

they may view as harmful to morale and productivity. Its difficult to

Impact of Employee Absences said settlements typically ranged

pinpoint how many people are gaming the system, but experts agree

between $10,000 to $30,000 each.

the number is relatively smallless than 2 percent. Still, a few bad

Potential damages can be much more: Last November, Verizon

apples can be morale busters. They have a major impact, Boller

agreed to pay more than $6 million to current and former California

says. On a given day, if we have 800 people out on an unplanned

employees to settle a class-action lawsuit filed by the state

leave, probably 797 have valid reasons. Its those three others

Department of Fair Employment and Housing. The suit claimed that

that continue to be the managers nightmare.

Verizon denied or failed to timely approve class members requests

Improving customer service. Employees dont really care about

for leave for their own serious health conditions, to care for a family

the intricacies of various leave policies. They want to know if they

member with a serious health condition or to bond with a child.

qualify, and what benefits and compensation they can receive. U.S.

Verizon settled the case without admitting wrongdoing. If an

Bank, through its outsourcer The Hartford, offers one-stop shopping.

employer loses a case at trial, costs can balloon to double the

If they went to different vendors, they could be confused, Boller says.

actual damages and attorneys fees for both sides.

Satisfaction surveys and follow-up suggest that employees like

And now, the U.S. Labor Department is changing its approach to

the convenience. For example, American Electric Powers separate

handling FMLA complaints in ways experts fear are likely to increase

leave programs were integrated into a Recovery Center where HR

litigation. In December 2010, the agency introduced its The Bridge

staff coordinate all leave management from the time an employee is

to Justice program. Federal officials will now refer some of the

absent until he returns to work. Every employee who uses the center

35,000 annual Family and Medical Leave Act complainants directly

completes a survey. On a scale of 5, they rate us 4.4, Hudson says.

to lawyers. Previously, theyd tell a complainant to seek a lawyer;

Refocusing HR strategy. When HR is able to offload routine

now, theyre partnering with the American Bar Association to make

absence management responsibilities to specialists or outsourcers,

it easier for complainants, explains Cara Bass, health and benefits

it frees them up to focus on other activities. Prior to moving all

business leader for Mercer. Also, the departments Wage and Hour

our business to The Hartford, I would spend the majority of my

Division is launching a mobile application that allows workers to

day dealing with issues that were processed incorrectly or not

record their time at work as a check against employers data.

in compliance, Boller recalls. Four years later, I spend my time

Freeing up supervisors. Supervisors welcome the idea of

dealing with policy.

42 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

THE VSP EFFECT


Its what happens when smarter vision
care doubles as preventive medicine.
VSP Vision Care doctors can detect early signs of chronic conditions like hypertension and
diabetes. Then they share that information with primary care physicians to prevent serious
conditions from going untreated. Its one more way that we keep members healthy, while
reducing healthcare costs. To nd out how the VSP Effect can help reduce healthcare costs,
call 877.393.2273 or visit vspeffect.com.
2011 Vision Service Plan. All rights reserved.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Outsourcing of FMLA Administration

employer may save money through


before choosing the outsourcing
insurance reimbursements and may
route with The Hartford. We
Employer Size
2007
2010
track the days of eligibility each
knew what it was costing to do it
All employers
14%
25%
person has for a given leave such as
ourselves and found it more cost100 to 999 employees
5
13
FMLA.
effective to put it together under
1,000 to 4,999 employees
11
29
Tear down silos. If you do not
one vendor, Boller explains.
5,000 to 9,999 employees
25
37
have integrated absence manageRelationships vary, with
10,000 or more employees
24
39
ment, set up monthly meetings
vendors tackling absence manSource: Survey on the Total Financial Impact of Employee Absences, Mercer, 2010.
with risk, benefits, HR and safety
agement from different perspecprofessionals. Youll find a lot of the
tives. Some companies, such as
information you need to manage
Kronos Inc., specialize in payroll
absences in different buckets.
health care, where intermittent absences
and time management as well as absence
Collect and analyze data. Build a
can cripple coverage, have been among
management. Insurers such as Liberty
database that you can benchmark against
early adopters of FMLA administration
Mutual and The Hartford, HR benefits
to support the business case. When
outsourcing. Kindred Healthcare, which
providers like Aon Hewitt and Mercer,
youre in a position to benchmark against has 46,000 employees and operates nursand third-party administrators such as the
yourself, youre on the right track, says
ing, rehabilitation and assisted living
Reed Group and Matrix Absence ManJulie Norville, senior vice president of the facilities nationwide, outsources most
agement Inc. of San Jose, Calif., offer
National Absence Management Practice
of its leave management to an insurer.
integrated solutions.
at Aon Hewitt Consulting in Atlanta. At
Employees who need to take leave call
Vendors will tailor their services by
a minimum, you should know:
an 800 number. Were dealing with the
selling software, services or both. Costs
How many people are on leave.
elderly and sick and have to be on top
vary, depending on the vendor. Most
How many days of work youre losing of our attendance on a daily basis, says
vendors price services on a per-personon a full-time equivalent basis.
Peter Corless, senior vice president of HR per-month rate. Depending on the leave
How much youre spending to replace and administration at the Louisville, Ky.- coverage youre seeking, the average cost
or compensate for absent workers.
based employer.
is $1.50 to $3.50 a month per person.
What units or jobs have attendance
In general, vendors say giving them
Seek robust claim reviews and
problems.
your business will, at worst, cost you
administration. Outsourcers say they
Once youve got the data, you can
what youre spending now for adminare tougher and more persistent. We
figure it per hundred employees; study
istration; at best, it will enable you to
will deny more leaves than an average
it across units, offices and job titles; and
capture significant savings while limiting
employer, says Mercers Bass. Our
look for trends, Lyons says.
risk and improving customer service. For
denial rate is 25 percent. Most employers
Consider full or partial outsourcexample, U.S. Bank had been adminisdeny 10 percent. Bass cites a situation
ing. Nearly half of the respondents to the
tering absence management internally
where Mercer found a health care client
Mercer survey said they have integrated
tracking and management of all types
of absences in one department. Some
do it themselves, developing their own
HR professionals at USAA take a mixed approach to absence management. We want our
software and systems, while others outsource it all. Still others adopt a mixed
employees to be at work, focused and effective, says Cheryl Pasa, SPHR, executive director
approachoutsourcing some leave catof People Services at USAA. Employees contact a central unit to report unplanned absences.
egories and retaining others in-house.
Theres no need to differentiate among types of leaves. In our integrated model, the message is
According to the results of a 2010
The person is not at work. How can we get them here?
survey conducted by Spring Consulting
When an employee notifies Pasas hub of a pending absence, one of eight staff members
Group in Boston, 42 percent of midsize and large companies were using
springs to action. Their manager knows within 15 minutes that theyll be absent and weve
outsourcers for some aspects of absence
updated the scheduling to make sure we have coverage. Then, we do outreach by e-mail and
management. Outsourcing of FMLA
phone to find out whats causing their absence and help the people figure out what they can do
administration has increased significantly
about it. We call it proactive intervention. Pasa outsources some disability leave management
during the past three years.

Hybrid Solution

Companies in industries such as

to Liberty Mutual Group.

44 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

WITH A FULL SUITE


OF BENEFIT SOLUTIONS,
WE CAN OFFER YOU
EXACTLY WHAT YOU NEED.
PRETTY MUCH EVERYTHING.
retire the status quo

With a full suite of integrated benefit plan offerings to choose from, we can help
you find the solution thats right for you and your employees. One thats not only
good for right now, but one that can grow and evolve with your business today and
tomorrow. Whether youre looking for broad-based retirement plans or plans for key
employees, we can help you implement the right solution. To learn more, and to find
out why more and more businesses are choosing us as their benefits provider, visit
baml.com/fi
nancialwellness
__________________

DEFINED CONTRIBUTION | DEFINED BENEFIT | HEALTH BENEFIT ACCOUNTS


EQUITY COMPENSATION | NONQUALIFIED DEFERRED COMPENSATION | EXECUTIVE SERVICES

Bank of America Merrill Lynch is a marketing name for the Retirement Services businesses of Bank of America Corporation. Banking and fiduciary activities are performed globally by banking affiliates of Bank of America Corporation,
including Bank of America, N.A., Member FDIC. Brokerage services are performed globally by brokerage affiliates of Bank of America Corporation, including Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). MLPF&S
is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.
Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value 2011 Bank of America Corporation. All rights reserved. ARU160Z0

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

with 55,000 employees to have unnecessarily approved 1,540 of 7,700 leaves.


The cost difference between tolerating
absences and managing them was
$4.6 million in the first year.
We pick up situations that would
be undetected, unmanaged, and where
employees are misusing or abusing leave,
says Marge Savage, director of total
absence management at the Hartford
Group Benefits Division in Simsbury,
Conn. The employee says, Ill be late
because my child is sick, and the HR person doesnt push back. When they call us,
we say, Tell us which child is sick. Well
need a doctors certificate on file that says
he has a serious medical issue.
Such systems may help employers
home in on patterns of potential abuse.
It will show you what people are claiming, says Joyce Maroney, senior director of customer experience and services
marketing at Kronos in Chelmsford,
Mass. If you have a policy, [a system]
will apply it equitably. It doesnt capture
deliberate abuse, but by managing the
data it gives you information that tells
you where absence is occurring, what
days of the week, and whether people are
leaving early on certain days.
Confidentiality issues surrounding
the Health Insurance Portability and
Accountability Act constitute another
reason to consider outsourcing medical
leaves. The outsourcer provides a firewall between you and the medical information your employees have provided,
Boller says.
In addition, the cutting-edge knowledge that vendors can provide can be
hard to replicate in-house. When youre
in 50 states, making sure you have the
expertise to understand the FMLA and
all the state issues as well as having the
medical resources available is essential,
says USAAs Pasa. We already had a
call center in place, but the expertise we
needed was lacking.
Target training. Consider training and certification for your HR staff.
The Disability Management Employer

Coalition and the Insurance Educational


Association in Orange, Calif., offer a
three-course online training program
that leads to a certified professional in
disability management designation.
Tuition is $195 per course. Currently,
667 certified disability managers are in
the workforce.
Though their responsibilities should
diminish in an integrated absence
management system, supervisors still
need training and regular updates. At

evaluate and adjust as you go forward.


No doubt, there is some value to just tearing the Band-Aid off and jumping in, but
when you do it all at once, there can be
communication and evaluation issues.
Some HR professionals begin with
problematic job categories or titles where
there may be a lot of absence claims.
They focus on them for a couple of years.
Then, if theyre effective at cutting costs,
they move on to another group. Others
look at absences by leave program. They

Tough sell: The cost of switching to


integrated absence management.
22,000-employee USAA, for example,
managers are required to complete online
courses that cover the FMLA, the Americans with Disabilities Act and military
leave. In addition, Pasas unit provides
90 minutes of face-to-face training for
supervisors
Employers that have a unit dedicated
to absence management need to get
people using the system up to speed and
keep them current. At American Electric
Power, In the first year, they learn the
database and what questions to ask when
someone calls, Hudson says. The
second year, they start to understand
the intricacies of the various leaves and
programs. They move from being transactional to grasping the coordinating
responsibilities.

Move Incrementally
Despite a strong financial argument,
convincing top executives to take on the
initial costs of switching to an integrated
system can be a tough sell. Carruthers
recalls a major failure at a California utility that tried to do too much too quickly.
Lyons recommends an incremental
approach: It allows you to measure,

may hire a vendor to manage FMLA


leave and see if the results increase efficiency and cut costs. Later, they integrate
workers comp or other forms of shortterm disability.

Plan Ahead
Effective absence management is a delicate balance of competing interests. Life
happens; people get sick, pregnant, called
to military duty, says Marlene Dines,
director of work absence management in
the HR Service Center Operations at Kaiser Permanente in Alameda, Calif. We
must find ways to balance the support
we want to provide for employees who
arent here with the operational needs
to keep our 24/7 health care life-saving
activities going.
So, in painting a return-on-investment
picture that will interest the C-suite,
dont undersell the many nonmonetary
advantages of integrating absence management. From an administrative perspective, it is the best way to maintain the
balance Dines describes.
Even if you just break even, the many
other benefits for your company and its
employees should tip the scale in favor.

46 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Elena discovered Steves goal in life is


to be a hero. Especially to his 3 little boys.

Even heroes need the right protection. At Colonial Life, our highly trained benefits
counselors meet with every employee 1-to-1learning who they are and whats important
to them. That way, we can recommend the best voluntary benefits possible. And you can
show the people who care for your community how much you care about them.
Reach out to us by emailing PersonalBenefi
ts@ColonialLife.com to learn more.
_______________________
2011 Colonial Life & Accident Insurance Company. Colonial Life products are underwritten by Colonial Life & Accident Insurance
Company, for which Colonial Life is the marketing brand. Products may vary by state and may not be available in all states.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

_____________________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Target-Date Funds:
On Target or Out-of-Date?
Set-and-forget funds still require some attention.
By Scott Ladd

he global financial meltdown left investors in free fall.


That wasnt supposed to be the case with target-date fund retirement
plans. They were built to provide financial stability and a softer landing as
employees parachute into life after work.
In some cases, with retirements looming and the funds target dates coming up
quickly, investors watched as their nest eggs shranknot as dramatically as riskier
investment vehicles, but with substantial losses nonetheless. If target-date funds were
designed to avoid dramatic asset loss close to retirement, they fell well shortat least in
the short term.

The author is a freelance business writer in New Jersey.

September 2011 HR Magazine 49

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Online Resources
Their poor performance resulted in
expanding regulatory and legislative
oversight. Senate hearings and federal
reviews are shining a spotlight on how
such funds are packaged, managed and
explained to participants by plan sponsors. Thus, HR professionals will need to
track how their funds comply with rules.
For instance, officials at the U.S.
Department of Labors Employee Benefits Security Administration are working
on rule changes that would enable participants to better understand target-date
funds and similar investments in 401(k)type retirement plans. Transparency has
become the watchword among retirement
plan monitors.
Also under consideration are amendments to existing regulations that would
enhance and provide specifics regarding
information to be disclosed to plan participants and beneficiaries. Proposed amendment of two regulations would require
that plan sponsors provide investors with:
Narrative explanations of how the
funds asset allocations work.
The dates when each fund will reach
its most conservative position.
Better explanations of the relevance of
those dates.
Jan M. Jacobson, senior counsel for
the American Benefits Council, praises the
push for additional disclosure. She forecasts that regulators interest is unlikely
to abate, given the markets propensity
to change rapidly. She points toward the
potential for additional regulatory oversight from the Department of Labor and
the Securities and Exchange Commission.
Some critics say these regulators could
have been more vigilant in their oversight
of target-date funds long before now.

Building a Better Fund


Target-date funds are long-term investments that feature a mix of equities, bonds
and other assets. The principles behind the
development of any such fund are caution
and security. The funds are built to reduce
risk. As participants target dates for retirement draw closer, the funds investments

For more information about target-date


funds, see the online version of this article
at www.shrm.org/hrmagazine/0911Ladd.

might be changed to make the plans even


more risk-averse.
The rationale: As participants near
retirement, they are less likely to be able to
recover from severe losses of the kind triggered by the recent economic meltdown
and stock plunges.
According to a late-2009 report by the
investment research company Morningstar Inc., fund managers at a number of
companies that handle target-date funds
have shifted asset allocations to better
adapt to market volatility. Many funds,
experts say, have been changed to absorb
strong financial head winds, putting
greater emphasis on diversification while
still using equities as the bedrock.
Joseph C. Nagengast, founder and
principal of the California-based Target
Date Analytics, says that while no retirement fund is perfect, target-date funds
are a pretty good bet. But, he added that
HR managers should be looking to better
balance the connection between the dates
listed in the funds and the investment
strategies applied. About 80 percent of
the products on the market are designed
wrong, he says.
As a result of the funds enduring
popularity, heightened federal scrutiny
and their post-recession financial recovery, public perception of their value has
rebounded, experts say.
Recent studies reflect the rise in

$16.6B

Inflow of target-date fund


contributions during the first
quarter of 2011,
the highest quarterly
amount since the fourth
quarter of 2007.

target-date fund investment. An analysis


by Ibbotson Associates, a Morningstar
division, reported a nearly $16.6 billion
inflow of target-date fund contributions
during the first quarter of 2011, the highest
quarterly amount since the fourth quarter
of 2007.
The Investment Company Institute, a
retirement funds trade group, estimated
that more than $300 billion was invested
in target-date funds during the third quarter of 2010. That marked a 30 percent
increase above third-quarter results the
previous year.

Growing the Alternatives


These funds have been a fixture on the
retirement investment landscape since the
mid-1990s. First offered by Wells Fargo
and a few other financial institutions, they
were an extension of the decade-long evolution of 401(k) plans that afford investors
diversity and the ability to manage their
funds directly. But personal investment
can be complicated and time-consuming,
and not everyone wants to be fully
involved.
As Nagengast and others note, many
participants find themselves content to
have others pick up virtually all fund
management responsibility. Target-date
investments are considered ideal for investors who prefer to set it and forget it.
Participants usually prefer to establish
markers along the path to retirement when
their funds become more stable and conservative as the end of working days come
into view.
It is not foreign to people as they age
and get closer to the need for the money
that they want to manage their risk, says
Eric Levy, senior vice president and head
of defined contribution products for the
Lincoln Financial Group in Philadelphia.
A target-date fund with a well-defined
glide path will do that.
In 2003, Levy says, about $20 billion
in assets were sitting in U.S. target-date
funds, accounting for an estimated 2
percent of the total assets in retirement
accounts. By the end of 2010, that figure

50 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

UPSIZE YOUR 401(k) BENEFITS.


DOWNSIZE YOUR FEES.
Dont let high fund expenses and other
participant fees cost your employees their
retirement.

ShareBuilder 401k from ING DIRECT


typically lowers your 401(k) fees so your
money works harder. We also reduce your
business risks when offering retirement
benets. Well manage your 401(k) plans
investment line-up and model portfolios,
reducing your workload and your
duciary duties.

t Cut 401(k) costs now, plus your pricing


will continue to lower as your assets grow.
t Reduce your business and duciary risks
associated with 401(k) plans.
t Receive complete employee guidance
and education services.

Now thats a plan that can


benet everyone!

It takes just ve minutes to receive an online needs assessment and quote:

sharebuilder401k.com/benets
Or speak to one of our advisors today at 1-800-225-2203

Advisory services are provided by ShareBuilder Advisors, LLC, a registered investment advisor and subsidiary of ING Bank, fsb.
401(k) plans are: Not FDIC insured Not Bank guaranteed May lose value

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

was in the neighborhood of $400 billion,


making up about 12 percent of the retirement asset pool.
Jacobson and other long-term observers and participants note that the popularity of target-date funds continues to soar
after passage in 2006 of the Pension Protection Act, which designated these funds
as a qualified default investment alternative. Jacobson says after the Department
of Labor issued regulations governing
the alternatives, employers were left with
three types of investments to offer: target-

date funds, balanced funds and managed


accounts. That made it easier to enroll
employees in such plans automatically
once they joined a company and began to
build retirement portfolios.
But, with the financial turbulence in
the latter part of the decade, questions
cropped up with increasing frequency
about the stability and viability of funds
some managers had once thought safe.
A hearing chaired by Sen. Herbert
Kohl, D-Wis., exposed weaknesses,
inconsistency and a lack of transparency

for consumers of target-date funds. Red


flags raised by the Senate proceedings
were passed along to federal regulators
who were asked to propose guidelines that
would ensure greater transparency in how
funds were developed and constituted,
and to make the process of selection more
transparent for participants.

Tailoring the Funds


HR executives crafting retirement plans
must ensure that the products match the
needs of the workforce. In fact, some large
employers work with providers to create
custom target-date funds geared specifically to their employee demographics.
If workers are older and generally
closer to retirement, the investment strategy for the plan may be different than if
employees are mostly 20-somethings.
HR professionals might want conservative plans to ensure a more stable rate of
return.

$400B

Amount in U.S. targetdate funds, about


12 percent of retirement
assets.

________________

Understand whats available, Nagengast advises. HR professionals should


know that their choice of a target-date
fund is more flexible than they might
think.
It used to be that you could only use
the target-date funds of your plan administrator in your platform, Nagengast says.
If you had a Fidelity plan, you could
only use Fidelity plan funds. If you had a
Vanguard fund, you could only use Vanguard funds. But its starting to be more
open.
Christina Casey, former vice president
of human resources at Chelsea Property
Group Inc., a subsidiary of the Simon
Property Group in Indianapolis, says educating employees on the risks and rewards
of each plan remains an important role for
HR managers.
We never advised employees which
fund or funds to choose, Casey says.
Rather, we educated them on the risk52 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Our innovative approach to dental wellness


can lead to a healthier bottom line for you.
Research tells us that serious dental problems can increase the risk of other diseases and illnesses
that could skyrocket your medical costs. Thats why you need a company that can motivate your
employees to improve their overall oral health. Along with a growing network of 73,000 dentists at
over 149,000 access points, and 40-plus years of experience, we offer a wide range of educational
materials, along with plan design features that reward employees for maintaining a healthy oral
lifestyle. Call your broker or consultant today and make prevention a part of your plan.

DENTAL
ADV-0054 0611 - This advertisement is not an offer of coverage or proposal of insurance. The Group Policy or Contract and Certificate of Insurance (Plan
Documents) include a complete listing of covered services, limitations, exclusions, cancellation and renewal provisions. In the event of conflict, the Plan
Documents will govern. United Concordia dental products are underwritten by one or more of the following subsidiaries of United Concordia Companies,
Inc. (UCCI): United Concordia Insurance Company, United Concordia Dental Corporation of Alabama; United Concordia Life and Health Insurance
Company, and United Concordia Insurance Company of New York. United Concordia Insurance Company is not licensed in AL, DE, DC,IL, KY, MD, MO, NJ,
NY, NC and PA. All products are not available in all jurisdictions. United Concordia policies cover dental benefits only. For acomplete listing of the products
and services available in your area, the specific UCCI company licensed to provide those products, and exclusions, limitations, renewal, cancellation and
cost information, contact a United Concordia account representative or log on to our website at www.ucci.com. United Concordia Insurance Company,
California certificate of authority number 3739-0, is domiciled in Arizona at its statutory address, 2198 East Camelback Road, Suite 260, Phoenix, AZ
85016. Available Concordia products are underwritten by United Concordia Insurance Company in OK and written on OK policy forms OK9802 (11/07)
and OK9802L (11/07). The administrative office of UCCI and/or its licensed corporate affiliates is located at 4401 Deer Path Road, Harrisburg, PA 17110.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

reward relationship and advised them to


choose funds based on their particular risk
tolerance and life situation.
We felt that companies should not
offer more than 10 to 12 funds. Too many
choices are just too confusing for employees, she adds.
Which target-date funds are the best
is subject to discussion, though Vanguard
funds stand at or near the top of several
lists. Morningstar, in the late-2009 report
on the target-date fund market, concluded
that Vanguard offered the best selection of
target-date funds, while Fidelity received
mixed reviews.
Vanguard, for example, held a relatively high proportion of its target-date
fund assets in stocks during the financial
collapse, but investor losses in 2008 stood
at 21 percent, below the stock-loss average overall, according to the Morningstar
study. Researchers also noted that the
cost of managing Vanguard target-date
funds is comparatively low.

Eric Freedman, chief investment


officer of Raleigh, N.C.-based CAPTRUST Financial Advisors, says assessing the proper fund asset allocation over
timealso known as the glide path
depends on understanding employee
demographics.
One consideration: whether the fund
is managed with a glide path to or
through retirement. A fund with a
glide path to retirement anticipates
that employees will withdraw their assets
at the stated retirement date, while a
through fund anticipates that participants will remain in the fund past the
target date with the expectation that it
will continue to provide asset growth
through retirement years. A through
fund would hold a higher percentage of
stocks, despite the increase in volatility
that brings.
U.S. Treasury bonds have traditionally been the gold standard for many
fund managers when it comes to provid-

ing a safe investment harbor. Perhaps


too many target-date fund managers had
relied more extensively on other, less
conservative sources, such as corporate
bonds or high-yield bonds. But Freedman says there is no guarantee, given the
financial environment, that treasuries are
a slam dunk.
There is speculation that Treasury
bonds might be more vulnerable in a
higher [interest] rate environment,
Freedman says.
According to Levy of Lincoln Financial, HR executives who handle retirement plans should be able to quickly
adapt to changing market forces and plan
developments. Work with providers to
get the right information to participants
for the best decision-making, he advises.
Ask, Will these funds change in the years
ahead?

54 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
EX EM
CL BE
US R
IV
E

HR Challenges
Got You Puzzled?
Free HR Help for SHRM Members
Ask your HR question at
www.shrm.org/assistance

Ask Us!
HR Knowledge Center Advisors

Margaret Fiester, SPHR

Rue Dooley, SPHR

18 Years of Experience

16 Years of Experience

Including Margaret, Rue,


Elaine and Edward, we
have 18 advisors that have
hands-on human resource
experience in areas such
as manufacturing, retail,
education, private- and
public- sector HR and
much more.
Exclusive to SHRM
members is an opportunity
to receive condential
assistance from the HR
Knowledge Advisors of the
SHRM Knowledge Center.

Edward Yost

15 Years of Experience

17 Years of Experience

10-0755

Elaine Bryant, SPHR

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

_____________________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

Exit Strategy
Employers planning to end retiree medical benefits look to
health care reform to fill the void.
By Joanne Sammer

ompanies are revisiting and rethinking their strategies for managing retiree
medical benefits.
Employers have been easing away from offering these benefit plans since
the early 1990s. Thats when they were first required to account for future
retiree medical benefit liabilities on their balance sheets. Now that the Patient Protection
and Affordable Care Act of 2010, otherwise known as health care reform, is taking hold,
the landscape for retiree medical benefits is changing again.
The reform law includes provisions to help employers manage their retiree medical
The author is a New Jersey-based business and financial writer.

September 2011 HR Magazine 57

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

plans. But it may not be enough to stem


the tide away from offering these benefits.
It is difficult for companies to keep
their past promises to pre-65 and post-65
retirees if they intend to be globally competitive, says Paul Kersting, a principal
with Buck Consultants in New York
City. More employers will move away
from sponsoring plans if they can.
Roughly 60 percent of employers are
reconsidering their approach to providing
retiree medical benefits or plan to do so
within the next two years, according to a
2011 survey of 248 companies conducted
by Towers Watson and the International
Society of Certified Employee Benefit Spe-

coverage in light of enhancements to the


Medicare Part D program.
Health care reform can serve as a
catalyst for employers to rethink their
benefit strategies in a way to create as
much predictability in their health care
for retirees as possible, says Jim Parker,
president of Health Market Strategies,
an Indianapolis-based health consulting
firm. Some provisions of the reform law
will actually facilitate that.

Changes, Now and Later


The challenge for employers is to review
their retiree medical plans and develop
long-term strategies in light of health care

Retiree Health Benefits: Companies React to Reform


Percentage of respondents whose companies are:
Assessing the impact of federal subsidies
for providing benefits to pre-65 retirees

87%

Dealing with the potential impact of the


excise tax on high-cost Cadillac plans
Rethinking retiree prescription
drug coverage

73%
58%

Source: Redefining Retiree Medical Strategy, Towers Watson and the International Society of Certified Employee Benefit Specialists,
June.

cialists. Many employers see health care


reform as a way to exit plan sponsorship by
relying on state health insurance exchanges
and other innovations in the reform law to
ensure that retirees have access to affordable
coverage. The exchanges are slated to begin
operating in 2014.
But, according to the survey, employers already are:
Assessing the impact of temporary
federal subsidies for providing medical
benefits to retirees under the age of 65a
program so popular that it is no longer
open to new employers.
Measuring and dealing with the
potential impact of the excise tax on
high-cost Cadillac plans.
Rethinking retiree prescription drug

reform. Companies need to see what


opportunities brought about by health
care reform they can take advantage of,
says John Grosso, leader of the Health
Care Practice for Aon Hewitt in Norwalk, Conn. No matter what direction
companies take, several provisions of the
reform law will influence their strategies.
Prescription drugs. One of the most
immediate impacts of health care reform
affects prescription drug benefits for retirees. Employers currently receive a federal
subsidy equal to 28 percent of the cost of
providing prescription drug coverage for
retirees. This federal subsidy serves as an
important incentive to employers to offer
retiree drug coverage, but the reform law
eliminates the tax benefit of the subsidy.

Even though the tax benefit does not go


away until 2013, there is an immediate
effect on companies that continue to
receive the subsidy because they must
account for future retiree medical liabilities on their balance sheets.
In addition, the health care reform
law slowly closes a gap in coverage
under Medicare Part D known as the
doughnut hole. The gap will be narrowed between 2011 and 2020 through
a combination of federal subsidies and
manufacturer discounts on brand-name
drugs. Beneficiaries now pay for the costs
of their prescription drugs after the first
$2,830 in costs and benefits are paid by
Medicare; then, after a $6,440 threshold
is reached, Medicare resumes paying for
benefits. This makes the Medicare Part D
program much more expensive for retirees compared to coverage under a typical
employers prescription drug plan. The
closing of the doughnut hole is likely to
make the program more attractive. This
is designed to encourage employers to
take a second look at the Part D program
as a solution for the retirees currently
receiving retiree coverage, Parker says.
Reinsurance program. To encourage
employers to continue offering medical
benefit plans to pre-65 retirees, the reform
law includes a temporary $5 billion early
retiree reinsurance plan. The program
reimburses employers for a portion of the
cost of providing health benefits for pre65 retirees and their spouses, surviving
spouses and dependents. Specifically, the
program reimburses up to 80 percent of
certain medical claims between $15,000
and $90,000.
The reinsurance subsidy is designed
to keep pre-65 retiree medical benefit
programs going until state health insurance exchanges begin operating in 2014.
However, with so many employers taking advantage of this program, its funds
are not expected to last that long. About
$2.7 billion of that money has already
been used, and the rest is expected to
run out in 2012, Kersting notes. As of
March, more than 1,300 employers were

58 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Smarter is a health plan that


thinks outside the office.

Aetna Mobile is the #1 app in Health care.1 It makes managing health easier and can help save
your employees money, even when theyre on the go.
% Find in-network doctors and pharmacies just about anywhere.
% Look up prescription costs before purchasing.
% Pull up your medical history to talk to your doctor/ask questions
before you leave the ofce.

See the proof and the savings at smarteris.aetna.com/mobile, or just scan the code.
1

Among mobile apps offered by health care providers.

2011 Aetna Inc. Plans offered by Aetna Life Insurance Company and its afliates. Health insurance plans contain exclusions and limitations.
Providers are independent contractors and are not agents of Aetna. Provider participation may change without notice. The Aetna Personal Health Record
should not be used as the sole source of information about the members medical history.
2011108

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

participating in the program. In May, the


program stopped accepting applications.
Excise tax on Cadillac plans. Employers need to start planning for the
so-called Cadillac taxa 40 percent
nondeductible tax on the annual value of
employee health plan costs in excess of
$10,200 for single coverage or $27,500 for
family coverage.
Companies with pre-65 programs
are looking long and hard to understand
exactly how the excise tax might affect
their plans, Grosso says. Even though
the tax does not begin until 2018, it can
have an immediate and negative accounting impact. Companies can take a hit
to their current accounting statements
because of future liabilities created by the
Cadillac tax, Grosso notes.
By evaluating the impact of the Cadillac tax now, employers have plenty of
time to develop a strategy and make
plan changes to avoid or minimize the
tax. Companies may be surprised at the
results of their evaluations, according to
Ed Pudlowski, a principal with Ernst &
Young in Dallas. Our analyses suggest
that more than 50 percent of all employer

Online Resources
For more information on retiree medical
benefits and health care reform, see the
online version of this article at www.shrm
.org/hrmagazine/0911Sammer.

plans will likely be impacted by the


Cadillac tax in 2018 if employers make
no changes to the current coverage.
State health insurance exchanges.
Perhaps the biggest change to the retiree
medical benefits landscape will be
the creation of state health insurance
exchanges. These will be marketplaces
open to small businesses and individuals shopping for insurance. Those who
buy insurance on an exchange could be
eligible for tax credits and federal subsidies. If health care exchanges are up
and running as planned in 2014, they will
provide access to guaranteed issue plans
and to federal subsidies, Grosso says.
We expect to see a number of companies send their pre-65 retirees to the state
exchanges to get coverage.

Employers struggling to maintain


retiree medical benefits are likely to find
that the exchanges will ensure that their
pre-65 retirees have access to quality
plans, says Helen Darling, president and
CEO of the Washington, D.C.-based
National Business Group on Health, a
coalition of large employers. Retirees
will benefit from having access to the
exchanges because they will be able to
get coverage that is likely to be better for
them than what they would normally get
on their own, Darling says.
To facilitate this shift, employers may
be more willing to increase the financial
help they provide to retirees through
health savings accounts or other vehicles.
Since pre-65 retirees will have access
to the insurance exchanges, it could be
much easier for an employer to provide
some financial assistance in an account
rather than coverage through their own
plans, Darling says.

Life on an Exchange
Although the first state health insurance
exchanges wont be up and running until
2014, private Medicare exchanges are

The Communication Challenge


Making changes to retiree medical benefits is always a challenge.

specifics of the law. Employers need to communicate the impact of

The affected population tends to be older and more focused on the

the changes that are outside of their influence, such as the role of

importance of their health care coverage.

the state health insurance exchanges and any plan design changes

When Houghton Mifflin Harcourt moved its post-65 retiree


population to a private Medicare exchange, the company used a

that may need to occur because of health care reform requirements,


says Ed Pudlowski, a principal with Ernst & Young.

range of communications to ensure that retirees questions were

Involving employees and retirees in this process as early as

answered. The company began by sending out printed material to

possible and with as much transparency as possible is critical. These

all retirees so they could review the information with their family

changes will be significant for some people, so it is important to give

members and caregivers and involve them in the decision-making

them an opportunity to understand and internalize these changes

process. In addition, the company hosted meetings in several cities

and choices, says Jim Parker, president of Health Market Strategies.

in which it has a large concentration of retirees. These meetings

Whatever a company does, it should keep in mind that retirees

provide tremendous value, says Carl Cudworth, Houghton Mifflin

will not be the only ones monitoring the companys actions. These

Harcourts director of benefits. You can see their faces and see

changes will be watched very closely by current employees, too, and

whether they are understanding what is going on.

how you manage those changes can also affect the good will and

Communicating about health care reform extends beyond the

loyalty of the current workforce, Parker says.

60 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Proven portfolio.
Dedicated service.
Voluntary benet experts.
How do you know when an insurance company is
serious about serving you? When it provides the
benefits employees seekwith the savings and
expertise employers need.
Thats Washington National Insurance Company.
Our insurance products include important features
such as our popular wellness benefits and premiumreturn optionat prices employees can afford.
And with our coverage options, enrollment support,
flexible billing and dedicated claims service, youll
find its easy to offer and maintain a successful
employee benefits program.

Choose a company that is serious


about employee benefits and service.
Call (877) 841-6001.

accident | cancer | critical illness | gap | heart/stroke | hospital indemnity | life | short-term disability
These are limited-benet policies that are subject to limitations and exclusions. Products and benets
are subject to state availability. For costs and complete details of coverage, contact an agent.
Policies underwritten by Washington National Insurance Company (home ofce, Carmel, IN).
GAP Insurance underwritten by Fidelity Security Life Insurance Company, Kansas City, MO.
2011 Washington National
11-2563

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Cover Package
BENEFITS

already operating. When its national


insurance carrier stopped offering its
post-65 retiree health plan, Boston-based
publishing firm Houghton Mifflin Harcourt turned to Extend Health Inc., a
private Medicare exchange, rather than
choosing another national plan. The
companys former national plans provider network was not broad enough to
meet the needs of the companys far-flung
retiree population. In addition, Houghton Mifflin Harcourt wanted to provide
individual retirees with the opportunity
to choose from an array of health insurance plans based on their own needs. The
Medicare exchange plans also cost less
than or no more than what retirees had
been paying for the national plan.
Moving to the Medicare exchange
was just one change of many to Houghton Mifflin Harcourts retiree medical
benefits. The company began freezing
the benefits several years ago, which has
created different levels of benefits among
employees and retirees. The first group
includes those who were grandfathered
into the original retiree medical program
and have 100 percent of their retiree
medical premiums covered. Retirees in

Private Medicare Exchanges


As retiree health care evolves, private Medicare exchanges are assuming a role in the
marketplace. Medicare exchanges offer an administrative platform to help retirees
understand and evaluate plans available in the individual market. By moving retirees to
an exchange, employers can eliminate the need to maintain a national plan for these
individuals. For example, Extend Health Inc., which bills itself as the largest private Medicare
exchange, provides access to plans offered by 74 carriers to individuals living in 44,000
ZIP codes. Another private Medicare exchange, My Medicare Advocate, says it can provide
access to a nationwide network of Medicare plans to ensure coverage for retirees in any
location.
The private exchange model might also work for groups that are not eligible for
Medicare. For example, such a private exchange could provide health plan choices for
pre-65 retirees. This type of exchange would be particularly attractive to employers with
operations in several states that do not want to deal with multiple state health insurance
exchanges for pre-65 retirees.
the companys pre-65 retiree group. If
the state exchanges function in much the
same way as the post-65 retiree market
currently functions, that would certainly
be a game-changer, Cudworth says.
Cudworth says leaders in many companies would be interested in providing
pre-65 retirees with access to guaranteed

Medicares rollout was similarly chaotic,


but it settled down after a few years.
another, post-freeze group receive a specific contribution to their retiree medical
premiums on a sliding scale based on
years of service and hire dates. The companys most recent changes to its retiree
medical program provide pre-65 retirees
with access to group medical coverage
after retirement with a discretionary company subsidy.
Based on his experience with the private Medicare exchange, Carl Cudworth,
Houghton Mifflin Harcourts director of
benefits in Austin, Texas, is keeping an
eye on the state insurance exchanges to
see if they could be a viable option for

issue medical coverage through the


state exchanges. The exchanges could
provide retirees with the opportunity to
select plans and carriers based on their
individual needs, and to do so costeffectively while allowing companies to
provide subsidies, he says. That would
be an exciting environment to be working in.

Uncertain Future
Many questions remain about the future
of health care reform and its implementationand not just the elements affecting retiree medical benefits. However,

Cyndy Nayer, president and CEO of The


Center for Health Value Innovation, a
nonprofit health care think tank based in
Estero, Fla., notes that a bit of chaos is to
be expected with such a major change.
Medicares rollout was similarly
chaotic, but it settled down after a few
years, she says.
One thing Cudworth believes is
unlikely to change: the move toward
defined contribution approaches in
retiree medical benefits. In fact, with
more companies offering high-deductible
health insurance plans with either
health savings accounts or health reimbursement accounts, future retirees are
likely to make the transition away from
employer-sponsored retiree plans much
more easily.
No matter what health care reform
brings, employers need to keep tabs on
what is happening with their retiree medical plans. Look at everythingeducation, the cost-effectiveness of the plan,
plan designs, contributions, cost sharingand see if it all makes sense, says
Jim Miller, a consultant with brokerage
firm The Graham Co. in Philadelphia.
Are retirees in a position to choose benefits that make financial sense?

62 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND



* 
'#*(* 
'& 


 

 

 
  

  
)*"'&*(!!')%&*(%*)( &*'%#"(%!)
!(%*( )*&)*')")%!)*)&))%*$'%
$
")*"$&)!&)*(%* %$'%*&(&*$*(")
)*$)"*(*"$(*"(%)*$*'%%$(&')*)"#$%(
(!!')%&*(%*# ))%&( *)( &*!$)"()
#$ &'$%#*&$*))&*&)*')"#)*%))#*$*'%''( #
(%*$"(%'(&'$%#** #*! ('#*#)"'!)#*&(&*(
( )*))"*#&)*$*&)*(* )("%*$")*(&
  

 
   
_______________________________

 *"$!&#*(")*"'&&)%**'%#"(%!)*!$(%*##''("')#*$"*(' '(&)#*$*("&'#*%!*
$)"()*(*%$&*)*((' ( )*'%*( *"'#'!&'$%#*(%*'#*#)!&*&$*(!&( *$ '!* (%()*
$"*('&'$%( *'%$"(&'$% * )(#)*'#'&*$"*)#'&)*(&*!("&'#'%#"(%!)!$
_____________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

PHOTO: ROBERT CUMM/123RF.COM

RISING FROM

64 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Safety and Security

THE RUBBLE
Ten years after the Sept. 11
terrorist attacks, HR professionals
review lessons learned.
By Tamara Lytle
en years ago, Fred Alger Management
Inc. was a highflying Wall Street investment company whose profitability was
driven by the people who worked there. But
when the Twin Towers at the World Trade
Center collapsed in a devastating cloud of
debris on Sept. 11, 2001, the core of Algers
staff, working on the 93rd floor in the doomed
North Tower, perished.
Taking 35 people away from the companyits like running on one tire. Thats the
lifeblood of the company, says Robert Isacco,
senior vice president and director of human
resources at Alger.
Many companies lost workers that day
when nearly 3,000 people died in New York,
Virginia and Pennsylvania, as terrorists
crashed four airplanes in a coordinated attack.
In terms of percentage of workforce lost, Alger
was among the hardest hit companies. It lost
almost all of the investment teamthe heart
of the operation.

The author is a freelance writer in the Washington, D.C.,


area.

September 2011 HR Magazine 65

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Safety and Security

You really cant anticipate every


contingency. But if you have a team
in place and a plan that addresses
how to start the ball rolling,
thats half the battle.

PHOTO: YEVGENIA GORBULSKY/123RF.COM

But its remaining employees helped the company rise from the ashes of the worlds worst terrorist
attack. Forty-one survivors remain with the company
today. The number of Alger employees has risen from
136 before the attacks to 235. Total assets under company management have increased from $13 billion to
$17 billion.
The survivors, including some who were away from
their desks that day and others who worked in a Jersey
City, N.J., office, pressed through grief and long hours
to rebuild the company and honor their dead colleagues.
President David Alger died in the attack. His brother, founder
Fred Alger, came out of semi-retirement to lead the company
through the crisis. Alumni who had left for other jobs returned to
the fold. That meant experienced people could step in quickly,
calming the fears of investors and readying Alger to go back to
managing clients money when the financial markets reopened
Sept. 17.
People who had left the company came back and are still
with us today. They came back because they wanted to see the
company rebuild, Isacco says.
Ten years later, employees still remember. At Algers new
Manhattan offices, a painting hangs prominently in the main

How HR Leaders Responded to the


Sept. 11 Terrorist Attacks
Percentage of 306 respondents whose companies:
Updated disaster preparedness plans

52%

Provided more crisis management training

48%

Developed business continuity plans

47%

Developed emergency communications plans


Updated backup data storage systems

42%
30%

Source: September 11th 2001 Attacks and SecurityTen Years Later, SHRM poll, released
September 2011.

hallway and features 35 candleseach one a little different, just


like the individuals who perished. Its a very emotional thing
here, says Isacco, who joined the company in 2007, drawn by
the strong bonds between the employees.

Dealing with the Fallout


Although the Sept. 11 attacks were unforeseen, Alger leaders
had a crisis management plan that helped them cope and rebuild.
The plan included employee assistance programs and a vacant
duplicate trading office ready for use in an emergency. Crisis
management experts say human resource departments can do
plenty to prepare their companies to deal with the fallout of a
disaster.
The Sept. 11 attacks brought that message home to many
businesses. A recent Society for Human Resource Management
(SHRM) poll found that roughly half of the respondents organizations updated their disaster preparedness plans as a result of
the attacks. Nearly half opted for more crisis management training. Businesses also updated continuity plans, emergency communications plans and backup data storage systems.
But 10 years after the terrorist attacks, many leaders still dont
have continuity or crisis management plans. Some started to make
plans only to put them on the back burner, says Philip S. Deming, SPHR, principal of Philip S. Deming & Associates in King
of Prussia, Pa., a consultancy that specializes in human resources
and security risk management. The anniversary is a good reminder
that companies need a plan to respond to disaster, he says.
George Bou, SPHR, vice president of human resources at
Stiles Corp. in hurricane-prone Fort Lauderdale, Fla., says the
art of crisis management involves setting up the right team of
people in advance and thinking through what might be needed.
For Stiles, a real estate development and property management
company, that means counselors are on call, cleanup crews and
roofers are under contract, and leaders think through what might
affect workers, says Bou, a member of SHRMs Employee
Health, Safety and Security Special Expertise Panel.
People want peace of mind that their workplace has a high
degree of safety, Bou says. You really cant anticipate every
contingency. But if you have a team in place and a plan that
addresses how to start the ball rolling, thats half the battle.

66 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

LAST YEAR, A CUSTOMER ACHIEVED


A POSITIVE ROI IN 2 YEARS.
(ACTUALLY IT WAS 2 MONTHS, BUT WE DIDNT THINK YOUD BELIEVE THAT.)

BELIEVABILITY

High

Not So
High

SANTA

VISIT KRONOS.COM/STORIES3
______________

ROI

TO LEARN HOW COMPANIES OF ALL TYPES AND SIZES HAVE ACHIEVED EYE-POPPING ROI USING KRONOS

How can a customer achieve these eye-popping results? With our fully integrated suite that makes it easy to do things like track
employee time and set schedules. Streamline HR and payroll processes. Hire better people. And make better decisions. All of the
tools that you need to manage your workforce, from the company that is proving workforce management doesnt have to be so hard.

TIME & ATTENDANCE

SCHEDULING

ABSENCE MANAGEMENT

HR & PAYROLL

HIRING

LABOR ANALYTICS

2011 Kronos Incorporated. Kronos and the Kronos logo are registered trademarks of Kronos Incorporated or a related company. All rights reserved.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

PHOTO: JOERG HACKEMANN/123RF.COM

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

Bruce Blythe, chief executive officer of Crisis Management


International Inc., a consulting company in Atlanta, had 204
clients in New York City who needed help after the Sept. 11
attacksso many that he had to rent space in a hotel there.
Blythe says the first step is to have a crisis management plan
and a process guardian who is in charge. HR leaders need to
make sure there are redundancies in the crisis management team
so if someone is injured or away when disaster strikes, theres
a backup. The process guardian ensures that emergency drills
are practiced, employees are trained to respond to disasters, and
phone lists are up-to-date and printed out.

Accounting for People


After the Sept. 11 attacks, Ron Lopian, regional human resources
director for Aon Risk Solutions in New York City, was grateful that in an electronic world he still had a paper copy of every
employees home phone number. Aon Risk Solutions, an Aon
Corp. business, lost 176 workers in its World Trade Center office.

Lopian was Aons regional HR director at


the time of the tragedy. He was in the lobby
of the South Tower when the plane hit that
building. He escaped to the nearby New York
City Hall Park, where he stayed with Aon colleagues until the towers started to collapse.
Then he walked and ran uptown and took a
ferry back to his home in New Jersey. From
there, he spent a great deal of time communicating with the families of those Aon colleagues who were directly impacted.
Immediately following the attack, cell
phone service was spotty, computers were
destroyed and f leeing survivors were scattered. Figuring out who survived and how to
get in touch with them is a keyand often difficultjob for HR managers after a disaster.
For Lopian, it would have been even harder
without the paper phone list. Even with the
computer servers down until the following
weekend, We could continue to reach out to
our New York colleagues, Lopian says.
If you cant account for people, you cant
respond to them, Blythe notes. People are
desperate at that time to find out where people
are. The human side is often the most overlooked piece of preparing for a crisis, and HR
managers have a crucial role in making sure
employees are informed and helped during a
disaster, he says.
HR leaders should think in advance
about how they will reach people in an emergency, says Deming, a member of SHRMs
Employee Health, Safety and Security panel. They must
decide, for instance, whether to contact employees by social
media or to put word of a missing colleague on Facebook or
Twitter. To keep up with changing technologies, its a good idea
to update emergency plans periodically, he says.
At Stiles, each business unit head initiates a calling tree to
track down workers after a disaster, Bou says. The company
bought 50 corded land lines for key personnel. When cell towers are down and electricity is out, some types of older phones
still work.

Moving Forward
On Sept. 12, 2001, Alger survivors headed to an emergency
recovery office in Morristown, N.J., to start answering calls
from family members looking for loved ones. Ten years later,
company executives are still in contact with those family members. As head of HR, Isaccos job involves working with survivors groups and organizations that honor the victims. He has

68 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Safety and Security

also been taking Alger employees to the 9/11 Memorial at the


site of the former World Trade Center complex to see it before it
opens to the public this month.
Isacco is in charge of Algers facilities, including the companys recovery office. The usually unoccupied office is stocked
with resources to keep the company runningfrom coffee to
computers. Alger can switch its phones to the recovery office and
run its trading desk from there in the event of a disaster. Twice
a year, Isacco operates a disaster recovery test to make sure
theres space for everyone to work and that all files are backed
up and available from the Morristown office. He also makes
sure employees can dial in to company computers from
home, if needed.
Executives at other companies might balk at the
price of rent on an empty office. But Isacco says Algers
leaders learned its value firsthand.
And Alger uses vendors for payroll and benefits,
thereby ensuring that data are available in case company servers are wiped out.
In terms of hiring, Aon filled the slots of its 176 lost
employees gradually as the company rebuilt itself. Our
HR team has had a strong role in that, says David P.
Prosperi, vice president of global public relations.
Alger weighed whether prospective hires would fit
a company culture Isacco describes as that of a closeknit family with an attitude of doing whatever it takes to get the
job done. Building the right culture requires hiring people who
have a deeply rooted sense of loyalty, Isacco says. Survivors and
returning workers instilled that in the new hires after the terrorist attacks, he says.

jam phone lines. In a high-tech world, employees expect to get


information quickly. A website can list what benefits are available, when the organization will reopen and whether hourly
workers will be paid if the business is closed.
The people who did it right in New York were pushing the
information out, not just responding to inquiries, Deming says.
HR professionals also need to think about how they will
deal with the families of employees who are victims and keep
updated records of how to reach next of kin.
At Aon, HR established teams of colleagues to work personally with families of the employees who died, Lopian says.

Think about whether counseling


will be expanded after a crisis;
many companies in New York City
offered enhanced counseling
benefits after the Sept. 11 attacks.

Pushing Information Out


In the aftermath of a disaster, leaders need to keep communication flowing. A hotline can push information out. Automated
phone systems can
help account for
Online Resources
workers by ca l ling employees and
For more on crisis management and
ask ing them to
disaster planning, including the results of
respond. That type
a poll on disaster planning, see the online
of proactive comversion of this article at www.shrm.org
/hrmagazine/0911Lytle.
mu n ic a t io n le t s
employees k now
when and where
they are expected to go back to work and how to access benefits.
Coordinate emergency communication with contractors if
their workers regularly work alongside company employees.
Unions should be kept up-to-date, too. Many hourly employees
will call union officials before turning to company managers.
The more information thats out there, Deming says, the less
likely calls from employees seeking answers to questions will

Blythe says family representative programs, started first by airlines, can be useful. Each victims family is assigned a team
preferably a man and a womanthat stays in contact with the
family through the grieving process. The teams serve as a conduit of information from the company to the family. Their tasks
range from explaining available benefits to doing small but helpful jobs to assist the family at home.
They are employees of the company who get trained in
advance and volunteer for it, Blythe says. Its a tough job, but if
you do it right, its extremely rewarding. Few companies have a
family representative program, he notes.
HR professionals also can make sure proper crisis counseling
is available. They should check in advance with the employee
assistance program provider to see what type of training its
psychologists have in crisis counseling. Think about whether
benefits like counseling will be expanded after a crisis; many
companies in New York City offered enhanced counseling benefits after the Sept. 11 attacks, Blythe says.
Helping employees and looking out for their safety builds
trust and loyalty, adds Bou of Stiles. It creates more employee
engagement to know management is looking out for their
safety.
And HR professionals play a huge role.
HR managers have an opportunity to be crisis champions by
being prepared for the human side of crisis, Blythe says. Crises
are times that are going to lift you up or take you down.
September 2011 HR Magazine 69

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Q&A

Youthful Paradigm
Globalization is a sophisticated form of age discrimination, one author contends.
Interview by Alice Andors

he statistics are startling: By 2050, there will be


twice as many people over age 60 as under age 15
in developed countriesa ratio that will demand
new economic and social arrangements and will increase
the pace of globalization, predicts author Ted C. Fishman.
In his latest book, Shock of Gray (Scribner, 2010), Fishman
contends that economic growth, production and employment will move continuously around the world in search
of younger, less expensive workers. A former trader and
member of the Chicago Mercantile Exchange, he calls this
phenomenon age arbitrage. The books subtitle says the
resulting struggle pits young against old, child against parent, worker against boss, company against rival, and nation
against nation.

PHOTOGRAPHY BY ALAN THOMAS

Is age arbitrage a new phenomenon?


Its not new, but its acceleratingin part because the aging of
the worlds population is accelerating. Demographic shifts are
reshaping the global economy. In the next 40 years, well see
a sevenfold increase in centenarians around the world, from
450,000 today to 3.2 million in 2050. By 2025, China will be
home to one-fifth of the worlds population, but home to onefourth of all people over 65.
What is the business strategy behind age arbitrage?
Age arbitrage is an essential strategy for businesses
that compete globally. It makes enormous economic sense for money and jobs to move
where workers are young and eager. In
developed countries, the most expensive
workers are older workers who have
decades of salary increases and cost the

The interviewer is a freelance writer in


Arlington, Va.
Ted C. Fishman

70 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

most to insure. Moving production to


grants. But if youth unemployment canOnline Resources
not be lowered, it could rob the U.S. of
China, for example, or buying goods
from Chinese suppliers gives companies
the benefits of having a relatively young
For additional resources on globalizalabor force.
leverage to rewrite the terms of employtion and age discrimination, see the
ment with their older workers at home.
online version of this interview at www
.shrm.org/hrmagazine/0911Andors.
In the extreme, they can push those
What impact does, or might, age arbiworkers off the payrolls altogether.
trage have on employment practices in
The Economic Policy Institute says
the United States?
America lost 2.3 million jobs to China between 2001 and 2007. The Management might look for ways to jettison older, higher-wage
stubbornly low U.S. employment rate, particularly among those workers. Those displaced workers will take jobs that might otherwithout college degrees, is evidence that many of the jobs lost are wise go to younger workers herebut under different terms. Older
not coming back.
workers tend to accept more-flexible conditions: part-time contingent work, self-employed contract work and temporary agency
Are there industries where age arbitrage is most apparent or work. The transformation of older workers into a giant contingent
advantageous?
workforce is still taking shape.
Its most evident in the manufacturing sector, and places with proportionately bigger older populations suffer the most aggressive What is the top human resource or staffing management chalforms of age arbitrage. Whole industry sectors move out of these lenge HR professionals face as workers age?
places with more older people to new locales well-stocked with Businesses that rely on the expertise their workers have acquired
younger, eager workers.
from years on the job face a frightening prospect: Much of that
Rockford, Ill., was a thriving industrial city and one of the coun- expertise will leave the workplace as Boomers age, starting now and

Older workers tend to accept more-flexible conditions:


part-time contingent work, self-employed contract work
and temporary agency work.
trys wealthiestonce the screw capital of the world because of
the nuts and bolts and screws that were made there. One by one, the
citys industrial companies were absorbed into global conglomerates or private equity firms. They cut workers, outsourced abroad,
automated manufacturing, consolidated plants, and pruned wages
and benefits. Tens of thousands of Rockford workers whose jobs
once matched their skills are now counted as underemployed.
Are any industries immune?
Service industries, which depend on knowledge, are somewhat
immune. Thats good news for older workers, whose greatest asset
is the knowledge theyve acquired. That kind of knowledge is not
easily transferred. In contrast, a production line can be moved to
another locale.
What, if anything, might slow the trend?
The United States is not aging quite as rapidly as Western Europe
and East Asia, primarily because of the influx of younger immi-

continuing for 20 years. Other companies that face skilled competition nimble at age arbitrage will urgently need to drive down the pay
of older workers, shop for younger workers elsewhere, automate or
find other ways to dramatically increase productivity.
What are the next global hot spots for age arbitrage?
A generation ago, the worlds favorite young, low-cost locales
were Taiwan, Hong Kong, Mexico, Central America and the
Philippines. They got a little older and more expensive. Mexicos population is now aging faster than the U.S. population.
Places like China, Vietnam, India and Bangladesh became the
new hot spots. China continues to attract global companies
looking to escape their obligations to aging workers at home.
Interestingly, in Chinas case, the one-child-per-family policy
is quickly aging its population, but it still has hundreds of millions of young people who have stepped, and will step, into the
global workforce. And many countries in Africa look like they
are at the beginning of a development boom.
September 2011 HR Magazine 71

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Relocation Provider Profiles Special Advertising Section

Choose A Trusted Partner For Your


Companys Relocation Needs

ayflower knows your employees wellbeing is of the utmost importance during


their move. From full-service to do-ityourself, across the street or around the world, our
experienced movers are dedicated to an efficient
move, every step of the way. Whether youre
relocating an executive or an entry-level employee,
you can expect quality services and choices from
Mayflower.
For an employee trying to make the most of a
lump sum move, Mayflower offers do-it-yourself
options. Mayflowers do-it-yourself moving and
storage containers let the employee pack at their own
pace, without the worry of renting and returning a
truck. And, if your employee needs a little extra help
with some of the heavier items, he or she can enlist
the help of Mayflowers trusted movers for packing,
loading and unloading assistance.
For employees who need a full-service move,
they can take advantage of the services that have
made Mayflower a household name quality
packing, loading and unloading. Additionally, a
professional move coordinator will serve as your

employees single point of contact to ensure that the


move is simple and stress free.
Mayflower also offers your employees a variety
of options to help them manage their move from
beginning to end options that come at no cost to
you. With CityPointe, your employees can find a
realtor, create a budget for their move and earn cash
back on the sale of their current home and purchase
of a new home, when they move with Mayflower.
In addition to our moving services, Mayflower
is proud to offer services that help your relocating
employee settle in to their new home faster with
services like home theater assembly, cleaning
services and more.
Mayflower has specialized in moving household
goods for more than 80 years. Our experience
has given us the expertise we need to guide your
employees through every step of the relocation
process. For more information about how
Mayflowers trusted movers can help you create
a unique relocation package for your company,
contact 800-283-5715 or mayflower.com/HRmagazine.

72 HR Magazines3EPTEMBER

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

___________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

_________________

74 HR Magazines3EPTEMBER

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Extending
Your Reach
Paragon speaks relocation through our unique approach
to recognize and respond to all our customers and their
specic needs in the relocation process. In addition,
we provide total program management of all core
components of your engagement including Relocation
Services, Information Management, Payroll and Payment
Processing and Reporting, and Corporate Relocation
Funds Management. For more than 20 years, clients have
trusted Paragon to manage their global mobility program
in the most efcient, cost effective manner possible.
We are a full service global Relocation Management
company offering:

Global Mobility Consulting Services


Domestic Relocation Services
International Relocation Services
Global Assignment Services
Worldwide Destination Services
Group Move Management
Mortgage Services
Visa and Immigration Services

Services Worldwide
The Americas
APAC
EMEA
t: +1.949.635.6000
t: +852.2907.5880
t: +353.1.811.6630
w: paragonrelocation.com e: info@paragonrelocation.com
__________________
Simply hold your
Smartphone over the
Microsoft Tag
Get the Free Mobile App at http://gettag.mobi

PR201-031411-Sept11 HR

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Relocation Provider Profiles Special Advertising Section

A History of Excellence
AIReS Celebrates Three Decades of
Stellar Relocation Services

ounded in 1981, American


International Relocation Solutions,
LLC, or AIReS, is proud to
celebrate 2011 as our 30th anniversary
of providing relocation solutions. Three
decades ago, our founder embarked
on a mission to build our organization
based on superior customer service and
a commitment to excellence. His vision
and leadership launched us on a path to
become the multi-million dollar company
we are today. Current AIReS President
Bryan Putt looks back on the last 30
years of success with pride. We built
our culture on an absolute commitment
to delivering a consistent standard of
excellence, he says. We focus on taking
care of our clients first and foremost,
recognizing all benefits are a result of that
relationship.
AIReS is a stable, growing company
that has been profitable every year
since our inception. Our growth over
the last few years has been recognized
with awards and accolades including a
ranking on the Inc. 500/5000 List of the
fastest growing companies in America.
This growth is calculated and part of an
organic methodology that has allowed
us to avoid a single layoff and any
mergers or acquisitions. Weve been
adding staff to the team to ensure that
we are always ready and able to exceed
client expectations. Our service offerings
continue to grow as we look for greater
and more innovative ways to support our
clients programs.

The AIReS service delivery model for


all clients is composed of an integrated
process management administered
through a Central Point of Control. In
other words, our clients work directly with
their AIReS counselor exclusively. We
provide our full suite of services to our
clients throughout the U.S. and in over
170 countries around the world.
Some of the most common services
offered by AIReS include:
 Relocation Program Management
 Household Goods Forwarding
 Policy Review & Development
 Real Estate Services
 Property & Tenancy Management
Services
 Inspection Services
 Cost of Living Studies
 Expense Management
 Home Sale/Purchase
 International Compensation
Administration
 Risk Management & Insurance
 Move Management
 Reporting
 Post-Relocation Survey
 Destination Services
 Settling-In Services
 Ongoing Assignment Support
 Visa, Passport, & Immigration
Assistance
 Cultural Training
 Language Training
 Repatriation Assistance

76 HR Magazines3EPTEMBER

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

___________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Relocation Provider Profiles Special Advertising Section

Tailor Your Relocation To Serve


Every Employees Needs

o two employee relocations are alike. While


you may provide a lump sum for your entrylevel new hires, you are looking for a complete
relocation package for your executives. And even
though you offer different options, quality customer
service is important at every level. United Van Lines
has developed a range of innovative, quality services
to fit every of your transferees needs. Uniteds
relocation professionals will help you customize a
package that suits each of your employees needs.
For your entry-level employees, help them make
the most of their relocation dollars with Uniteds
portable moving and storage containers. They can

pack and load at their own pace without the hassles


and dangers of driving a rental truck. If they need help
with the heavy lifting, Uniteds unique Do-it-Yourself
Plus service will provide professional movers to help
pack, load or unload.
United also works with CityPointe to help
employees manage their relocation. CityPointe.com
_________
will help your employees choose a realtor, plan their
budget and even earn cash back on the sale of their
home or the purchase of a new home. These services
come at no cost to you.
For your executives, you can count on Uniteds
traditional full-service move. Through packing,
loading, transport and unloading, a professional move
coordinator will serve as your employees single point
of contact to ensure that the move is simple and stress
free. In addition to our moving services, United is
proud to offer settling in services through its trusted
providers. Help your executives settle into their home
and their new job faster with computer and home
theater assembly, cleaning services and much more.
A company relocation is a reflection on the
company and how it values its employees. United
understands this, which is why quality and customer
satisfaction are at the heart of every move we make.
For more than 20 years, United has fine-tuned a
quality process, establishing standards that have made
us Americas #1 Mover.
United has earned the business of more than 400
of the Fortune 500 companies. Contact United for
more information about how a customized relocation
package can work for your company. Call us today at
800-283-5717 or visit our website at unitedvanlines.com/
HRmagazine.
_______

78 HR Magazines3EPTEMBER

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Up-and-comer.

Big shot.

Different needs. Different solutions.


From full-service to do-it-yourself moving and storage, United offers an unsurpassed
range of services to meet the needs of any employee. For professional, efficient and
flexible relocation solutions, count on United. To learn more, call United at 800-283-5717
or go to unitedvanlines.com/HRmagazine. Theres moving. And theres moving United.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

To: Carol Paulsen


From: Ted Jordan
$100 Best Buy e-Gift Card
Carol: Thanks for participating in
our program. We truly appreciate
your involvement. Please enjoy
this reward you deserve it!
- Ted

Introducing Best Buy e-Gift Cards


Take a moment to make someones day with Best Buy e-Gift Cards. Just order, add a
personal message and get quick, online delivery. Theyre redeemable at any Best Buy store
in the U.S. or online at BestBuy.com. Learn more at CorporateGiftCards.BestBuy.com/HR.
No fees. No expiration dates. Just happiness at exactly the right moment.

BEST BUY, the BEST BUY logo, the tag design and BESTBUY.COM
_____ are trademarks of BBY Solutions, Inc. 2011 BBY Solutions, Inc. All Rights Reserved. 11023

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

THE POWER
OF INCENTIVES
SPECIAL ADVERTISING SUPPLEMENT

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Over the last ten


years, O.C. Tanner
has created more
appreciation
experiences, for
more people around
the world, than all
other companies
in the recognition
industry combined.
TO FIND OUT WHY, VISIT OCTANNER.COM
_____________

O.C.Tanner Company

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

THE POWER OF INCENTIVES


SPECIAL ADVERTISING SUPPLEMENT

CONTENTS
84

Wellness Incentives: Healthy for


Business, Health Care Reform
Employers are nding that adding incentives to
the mix dramatically increases wellness program
participation and return on investment. Getting
politicians to understand the correlation between
healthier employees and corporate protability
would create a favorable climate for companies
to continue these initiatives.
By Barbara Hendrickson, CPIM

Eployee Engagement
Caught in the Undertow

90

Statistics show that employees


are doing 30 percent more
work and have not yet begun to
reap rewards for their efforts.
Whats more, engagement
studies prove that nancial
compensation is not a silver
bullet for employee motivation.
Todays employees are more
inclined to stay engaged when
they have a sense of purpose
and community and when
they feel that their efforts are
genuinely appreciated.
By Susan Adams

94

Mobile Technology and


Recognition: A Paradigm Shift
Your employees are using web-enabled mobile
phone technology to help manage their busy
lives. As human resource managers struggle with
budgetary constraints and increasing competition,
employing mobile incentive capabilities as new
and advanced means of employee recognition
and other types of pay-for-performance programs
makes sense.
By Alex Calicchio

Illustrations by Nate Williams

11-0305

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

83

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

Wellness Incentives:
Healthy for Business, Health Care Reform
By Barbara Hendrickson, CPIM, Design Incentives.
President of the Incentive Marketing Association

Corporate America is embracing employee wellness. And, although 90 percent of companies that offer wellness
programs rely on them to lower costs,
its just as much about reduced absenteeism, increased productivity, lower turnover and an improved quality of life for
employees. Employers are nding that
adding incentives to the mix dramatically
increases wellness program participation and return on investment. Getting
politicians to understand the correlation
between healthier employees and corporate protability would create a favorable
climate for companies to continue these
initiatives.
Wellness Programs by the
Numbers
In a study by Fidelity Investments and
the National Business Group on Health,

84

74 percent of the employers surveyed


offered 19 or more health improvement
programs in 2010. Half of all employers
added one new wellness program during
2010, and 63 percent are expected to do
the same by the end of 2011.
The average return on investment in
employee wellness within 3 to 5 years of
program launch is $4 in health care costs
and $5 in reduced absenteeism for every
dollar invested.
In 2010, 62 percent of companies surveyed provided some type of incentive for
participation (compared with 57 percent
in 2009). Half of the companies that offered incentives to employees also offered
incentives to dependents of employees, at
an average value of $420.
According to separate research from
StayWell Health Management, 17 percent of companies with 500 or more

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

employees and 23 percent of companies


with more than 20,000 employees offer incentives in conjunction with their
wellness program.
Employers spent an average of $220
per worker on wellness incentives in
2010, up 35 percent from $153 in 2009.
Of the companies surveyed, 11 percent
spent over $500 per employee on wellness incentives.
Getting Started: A Case Study
Cleveland-based Eaton Corporation
sent the word out to its various locations
in 2010 that getting healthier would
be a priority. Eaton partnered with the

COMPANIES ARE FINDING


NONTRADITIONAL
WAYS TO ENCOURAGE
PARTICIPATION IN THEIR
WELLNESS PROGRAMS.
Cleveland Clinic to provide an informational website and periodic newsletters
on a corporatewide basis, but each Eaton
campus is charged with planning and executing its own wellness initiatives. On
the Southeld, Mich., campus, the initial goals were simply to start educating
employees and building awareness. The
food in the cafeteria and vending machines were identied as red (eat rarely),
yellow (eat occasionally) and green (eat
all you want!). And, a few team events
were planned, such as local races or
walks, with modest participation.

86

In 2011, spearheaded by Wellness


Council team leader Bill Spurrier, a
more comprehensive plan was developed in conjunction with the companys 100th anniversary. Their program,
called 100 Days of Fitness, tracks
participant progress from Memorial
Day through Labor Day, with employees earning shoes for each activity
completed. The objective is to earn 100
shoes in the 100 days of the program.
The shoes, which convert to points and
tie into Eatons current employee incentive program (E-Star), can be redeemed
for gift cards and merchandise.
Wellness Council team member Janie
Sre says the team deliberately let participants set their own goals and earn incentives for behavior and lifestyle changes
rather than nal results such as a weightloss number. The team wanted to make
the program as inclusive as possible so
that it appealed to everyoneespecially
those who are not into tness. We
wanted to remove any barriers to participation, Spurrier noted. Over 40 percent
of the employees are active participants.
They earn shoes for traditional tness
activities such as walking, running and
cycling, and also for less traditional activities like gardening, spending time at
an amusement park, canoeing and volunteering at a food bank.
The Role of Incentives
Since participation dramatically impacts
the success of a wellness program, identifying ways to increase participation is
critical. One study conducted by MEDSTAT of Ann Arbor, Mich., documents
an almost 250 percent increase with the
introduction of noncash incentives.
Incentives can help drive participa-

tion in the following areas:


Prevention, which can include an
initial health risk assessment as well
as u shot clinics and health fairs.
Lifestyle changes such as smokingcessation, weight-loss, nutrition or
stress management classes.
Management of specic conditions,
such as having access to nurse phone
lines to manage treatment for diabetes.
Education, which includes intranet
websites with program details and
additional information that employees can access as well as attendance
at lunch-and-learn programs.
Cash is not necessarily king when
it comes to wellness incentives. Companies are nding nontraditional ways
to encourage participation in their
wellness programs. AstraZeneca Pharmaceuticals invited employees in their
Wilmington, Del., headquarters to
participate in healthy cooking classes
hosted by local celebrity chefs and to
attend a health tips seminar given by
an Olympic runner. Employees accrue
points for engaging in healthy activities
that they can redeem for gift cards. A
farmers market is set up on site in the
summer months to make it convenient
and affordable to nd fresh produce.
What Types of Incentives
Work?
The best incentive is always the one
that appeals to your audience! Involve
potential participants in the incentive
decision process to make sure youre
offering something they nd valuable.
Some ideas are:
Name-brand merchandise.
Gift cards or other cash equivalent.

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

SP ECIAL ADVERT ISING SUP P LEME N T

Corporate-identied merchandise
like tote bags and apparel.
Reduction in insurance premiums.
Increased company contribution to
HSAs.
Additional health plan benets.
Perks unique to the company, such
as prime parking spots, preferred vacation times, etc.
Employee recognition by management and peers.
One-on-one time with the CEO or
other executives.
Reduced co-pay or deductibles.
How to Incorporate Incentives
into Your Program
Consider the following:

Make the reward (and how to earn


it) easy to understand and easy to
communicate.
Involve employees in the incentive
discussion to make sure what youre
offering appeals to your audience.
Make sure the reward is commensurate with the effort/behavior thats
required to earn it
Test the program to make sure
employees cant beat the system
and earn rewards without actually
changing behavior.
Choose an incentive and approach
that can be sustainedits much
easier to add an incentive once you
see how the program is going than it
is to take one away.

What to Avoid
Drawings or sweepstakes-like awards
where the incentive is based on probability are less successful than those
based on individual behavior. Items
such as cookbooks, water bottles and
pedometers are better used to promote
the kick-off of the program than as rewards or incentives for participation.
Many companies nd that one-sizets-all programs purchased from vendors with less direct employer involvement do not offer as high a return on
investment as those where the health
message comes from the top and the
program is customized to the employee
base. The leaders of the organization
must walk the talk: simply requesting

_______________

__________

_____________

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

87

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

a health risk assessment and setting up


an informational website wont inspire
participation.
Best Practices
Some wellness programs may have only
a modest impact on health care costs
because of low participation rates, but
the Fidelity Investments study indicates
that incentives are starting to make
a real difference in employee interest
and engagement. A full 56 percent of
the companies surveyed agreed that
incentive-based programs had a betterthan-expected success rate at increasing
employee participation.
Other ways to ensure the success of
your wellness program include the following:
Get buy-in from the top, not just
lip service. It should be obvious that
the company values and supports a
healthy lifestyle. If the CEO is overweight and smokes two packs a day,
that organization is unlikely to have
a culture of tness. Likewise, if employees see the CEO working out in
the company gym or participating in
community 5k races, theyre more
likely to follow suit.
Encourage accountability. We pay
attention to what we measure.
Create a healthy corporate culture.
Designing and implementing a wellness program for employees while
continuing to serve high-fat foods
in the company cafeteria will send a
mixed message.
Communicate, communicate, communicate. The program (whats required) and incentive (how to earn
it) messages must be simple, clear
and consistent.
Foster one-to-one employee out-

88

reach. A mentor or tness buddy


can be very useful in keeping employees accountable and on track
with their goals.
Offer a choice of options to interest
all employees. Some options: tness
walks, lunch-and-learn programs,
smoking-cessation and weight-loss
classes, yoga and relaxation sessions,
etc.
Get employee input. Figure out what
incentives employees nd valuable.
The more involved they are in the
process, the more engaged theyll be.
Track key participation and tweak
the program as you go.
Establish specic program goals and
measure against them.
Consider working with a wellness
consultant who can offer ideas, direction and proven strategies.

The Impact of Legislation


The Incentive Federation launched an
Incentive Legislative Awareness campaign, lobbying in Washington to increase awareness of the benets incentive
programs can bring to the corporate bottom line. Tax advantages for safety and
service awards were implemented with
great success (IRS Code 274(j)). The
Incentive Federation is now hoping to
encourage Congress to build on that success by enacting legislation offering tax
advantages for wellness programs.
George Delta, Executive Director of
The Incentive Federation, Inc., asserts
that President Obamas Patient Protection and Affordable Care Act advocates
universal coverage but doesnt do much
to address costs. Wellness programs reduce health care costs and help motivate
employees. If Congress authorizes employers to provide nontaxable tangible

(noncash) merchandise incentives, it


will create the incentive for companies
to maximize the benets of their wellness programs and provide the environment to reduce costs.
Employers are also keeping an eye
on the potential impact of the health
care reform laws 2014 mandate. Once
insurance exchanges offer federally subsidized coverage to most workers, employers will have the exibility to terminate group coverage. Many employers
are very concerned about the increased
costs and additional administrative obligations that health care reform will
require of them.
Incentives for Politicians
The health care reform bill includes
several provisions tied to health promotion. One provision would allow employers to offer employees a premium
discount of up to 30 percent (up from
20 percent) for positive lifestyle practices or participation in health promotion
programs.
And, Senator Tom Harkin (D, Iowa)
has introduced the Healthy Workforce
Act, which would provide a 50 percent
tax credit for companies that offer a
comprehensive wellness program to
their employees. Harkin said, It simply
makes sense to partner with employers
and leverage the place where Americans spend the majority of their waking
hoursthe workplace.
Employers that have successful wellness programs in place should let their
representatives know that the results and
cost savings are signicant. What better
incentive for a politician to get behind
wellness legislation than the anticipation
of protable companies in their district
able to pay more taxes?

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

Employee Engagement
Caught in the Undertow
What companies can do to re-engage
employees in the current economy

By Susan Adams, Dittman


Incentive Marketing, Recognition
Council Executive Vice President

90

As organizations pull away from the


nancial precipice of the recession, the
resulting work environment may be
challenging for many. They see projects
beginning to conrm instead of cancel and revenue streams beginning to
steady, but statistics show that employees are doing 30 percent more work and
have not yet begun to reap rewards for
their efforts. Whats more, engagement
studies prove that nancial compensation is not a silver bullet for employee
motivation. Todays employees are more
inclined to stay engaged when they have
a sense of purpose and community and

when they feel that their efforts are


genuinely appreciated.
During this critical transition period, organizations must reach out to
their workers in meaningful ways, or
retention will become a serious issue.
Valued employees have experienced
salary freezes, withdrawal of matching
401(k) contributions, increased health
insurance costs, etc. During the recession, they stayed because there was no
place to go. Now, they are ready to take
advantage of new opportunities and are
likely to be the most employable members of the workforce.

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

91

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

Besides ensuring that compensation


and benets are competitive, todays
business leaders need to realize that
recognition is a proven tool that can
deepen employee engagement, rekindling employees sense of connectedness and revitalizing their commitment
to the organization.
To aid in the recovery process, leaders of the Recognition Council, a strategic industry group of the Incentive
Marketing Association, have joined together to identify retention challenges,
make recommendations to business
leaders and provide effective tools for a
strong recovery.

FINANCIAL INCENTIVES
ARE NOT ALWAYS THE
WAY TO REACH THE
HEARTS AND MINDS
OF EMPLOYEES.

Retention Recession
In his recent paper, Raise the Red Flag
The Retention Recession, Rideau Recognition President and CEO Peter Hart
sounds the alarm. Hart writes, Executives can lament all they want about
what they did at the height of the recession in order to keep their doors open.
They can rationalize how they had to
cut employee recognition costs to get to
a nancially healthier place. But in the
end, how ironic will it be if their doors

92

close due to low morale and its byproductturnover and lack of talent?
Hart points to a recent Deloitte Talent edge 2020 study showing that almost
two out of three employees (fully 65
percent) of those surveyed are passively
or actively testing the job market and
that approximately 29 percent will act
on their turnover intentions and walk
out the door.
As CEO and founder of I Love Rewards Razor Suleman sees it:
Smart companies understand that
engaged employees are without a doubt
fundamental to business success. They
understand that Employee Experience
(EE) is critical and, in order to be truly
strategic, the main priority of any organization should be to recruit, retain and
inspire its people. This approach doesnt
refer to an empty promise or a set of
quirky values hanging on a plaque at the
front of the ofce. It refers to a motivated workplace with engaged employees creating value every day. EE professionals are the second most important
position next to the CEO, because they
drive employee performance.
So What Do We Do Now?
Hart highlights the top ve retention
strategies cited in the study:
Job advancement.
Additional compensation.
Financial incentives.
Support and recognition from supervisors and managers.
Additional benets such as health
insurance and pensions.
Hart notes that specically, 30 percent of the respondents found support
and recognition from supervisors and

managers as one of the key drivers that


compel them to stay with an organization. Further to that, women found support and recognition to be one of the
most valuable retention methods.
Its Not About the Money
Among HR strategists, it is well-known
that nancial incentives are not always
the way to reach the hearts and minds
of employees. Even in difcult economic times, employers may be able to reach
out to their employees with advancement and/or enrichment opportunities.
At the very least, they can acknowledge
important contributions with direct,
thoughtful recognition.
O.C. Tanner Vice President of Business Development Michelle M. Smith
tells us:
A little appreciation, guidance and
feedback from leaders will go a long
way in keeping employees motivated
and on the job. According to a survey
of working Americans conducted by
Kelton Research and sponsored by Cornerstone OnDemand, just over half (56
percent) of workers said that, aside from
compensation and benets, being appreciated would motivate them to stay
in their current positions, and 46 percent said they would rather be appreciated than have an opportunity to advance in their careers. The survey found
that escalating workplace demands have
created environments where employees
dont feel they are valued appropriately
by executives and superiors, and that
employers are overlooking simple solutions to improve employee morale and
loyalty. Companies seeking to avoid
turnover need to close the communi-

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

THE WORLDS NEWSSTAND

cation gap and empower employees to


perform well in their roles.
Beth Schelske, Vice President of
Performance Solutions at ITAGroup
Inc., writes:
Building employee loyalty takes
more than just celebrating longevity.
High-performing organizations engage
employees so that they have an emotional and intellectual connection to
their work, they are aware that their
contributions matter to the organization and they are rewarded for behavior
that benets the organizations bottom
line. Tactically, these organizations
build connections among employees by
honoring teams and supporting initiatives that provide a healthy work-life
balance. Transparent communication is
also common, so employees know the
stakes involved in their actions. And,
they provide multiple channels for sincere recognition that builds trust and
appreciation throughout the organization.
Ellen Reichert, Director of Solution
Design for Staples Promotional Products, rightly points out the importance
of the employee-manager relationship
in these times: The focus of engagement is in the relationship between
the employee and his or her manager.
This relationship reects the leadership
of the company, the truth behind the
companys values, and the heart of the
companys mission and goals. In short,
the relationship between the manager
and the employee is the employees relationship with the company. She further
asks, When was the last time we focused on developing and rewarding our

managers in an effort to retain our best


managers and the talented people who
work for them?
Nows the Time to Get It Right
MotivActions Beau Balin surmises, Its
really pretty amazing when you consider
how dramatically we as individuals have
changed our approach to job search,
job function and job communications,
while, on the ip side, hiring practices,
compensation and employer-employee
communications remain almost unchanged. So how do companies re-engage their employees? It is actually quite
simple; it just requires a more current
approach.
As the Recognition Council stated
in its recent paper, Credibility Crisis:
Leadership, Trust and Strategic Recognition in the Workplace, Strategic recognition is a powerful community-builder.
Few other business tools can as clearly
and effectively reach out to employees
to say: you matter, we noticed how hard
you worked through this, and were going to get through it together.
Explaining what employees need
to become loyal and productive contributors, O.C. Tanners Smith tells us
that since the 1990s, research has also
informed us that work has become a
greater part of establishing and maintaining our individual self-identity
than either family or community inuence, so meeting these employee needs
in the workplace can have furtherreaching consequences than job performance. With that in mind, leaders
would be well-served to embrace the
opportunity to help employees become

enriched human beings who can more


richly contribute to their jobs, their
families and friends, and their communities.
End Result
A well-designed recognition program
that really conveys a message about the
value of the individual and community
participation will go a long way toward
staving off a loss of talent and allowing
an organization to seize emerging business opportunities by leveraging the human knowledge and talent that make up
as much as 85 percent of a companys
assets.
As Rideau Recognitions Hart puts
it:
To position your organization for
success, you must recognize your employees by creating a clear career path,
developing a robust leadership pipeline,
inspiring trust in leadership, focusing
on top performers and communicating
effectively. Simply put, engage your employees through caring, coaching and
counseling. Care about your employees
on a human basis and they will care
about you. Give them the proper tools
to excel in their jobs. And, most importantly, provide them with daily encouragement and motivation by recognizing
your employees and, in so doing, inspiring greatness.
The Recognition Council is a strategic
industry group within the Incentive
Marketing Association (http://www.
incentivemarketing.org). The Councils
_____________
purpose is to educate and promote the
benets of recognition and rewards to the
worldwide business community. More
information about the Recognition Council
is available at www.recognitioncouncil.org.

The Power of Incentives 2011

HR Magazine

M
q
M
q

M
q

MqM
q

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

93

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I AL A DV E RT I S I NG S UPPLEM ENT

Mobile Technology
and Recognition:
A Paradigm Shift

By Alex Calicchio, C2
Consulting Services, LLC,
Incentive Gift Card Council
Director of Education

94

The introduction of the iPhone a few


years back forever changed the way we
use our phones. In the U.S., 74 million (26 percent) of the 285 million cell
phones in use are Internet-enabled, and
that gure could double to 158 million
(55 percent) by 2015 (The Raymond
James Report: 2010). Though we call
these devices phones, they provide a
service more akin to a portable personal
computer.
Your employees are using web-enabled mobile phone technology to help
manage their busy lives. For example,
the technology can assist them with the
selection of a restaurant, allow them to

view the menu and get directions to the


location, comment on their culinary experience, and share it immediately with
friends. They can receive special notices,
coupon offers and even gift cards for
the restaurant via their phone.
As human resource managers struggle with budgetary constraints and increasing competition, employing mobile
incentive capabilities as new and advanced means of employee recognition
and other types of pay-for-performance
programs makes sense. Delivery time
is quicker, you can add a delivery message so the recipient is clear as to what
they did to deserve this reward, and the

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S P E C I A L A DV E R T I S I N G S U P P L E M E N T

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

95

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S PE CI AL A DV E RT I S I NG S UPPLEMENT

RETAILERS NEED TO REMAIN AWARE OF THE


DOWNSTREAM EFFECT THAT PURCHASING
ENHANCEMENTS WILL HAVE ON THEIR
POINT OF SALE SYSTEMS.
reward is always with the recipientas
long as they carry their phone. Most
important, its easier for the human resource manager to maintain and analyze
mobile programs. Some may even argue
that its a sexier product. If the whole

idea of motivation is supposed to elicit


a wow factor response, mobile is certainly the answer.
Choosing the right mobile solution
is critical. As retailers create robust mobile applications that include product

HOLIDAY GIFTS MADE EASY!

Butterball Turkey Gift Checks


The Ideal Employee Gift!
>
>
>
>
>

Butterball is Americas favorite whole turkey


Gift Checks available in any quantity (minimum of 20)
Gift Checks in any face value up to $50
Customized with your companys name
Redeemable at food retailers across the USA

Visit www.giftcheckprogram.com, or call 630-986-5081.


Butterball is a registered trademark of Butterball LLC. Copyright 2010 Butterball LLC.

searches, gift card purchases and redemptions, coupons, price comparisons,


and other such functionalities, they need
to remain aware of the downstream effect these enhancements will have on
their point of sale systems. Consumer
expectations for a speedy checkout process mean retailers rely on bar codes
and bar code scanning. Evan Shumans
Storefront Backtalk e-commerce site
in November 2010 reported that of 66
major retailers surveyed in September
2010, 59 percent want to be able to
scan mobile bar codes within the next
year and another 15 percent within two
years. Thats 74 percent of retailers who
want to scan mobile bar codes; however,
barely 2 percent can do it today. This
illustrates the signicant gap between
the number of consumers with smart
phones and the number of retailers who
can actually accommodate the expectations associated with their use.
More evidence along these lines was
provided late last year when Forbes
Insights sponsored a report
by Research in Motion
(manufacturer of the
BlackBerry). The report, which captured
survey responses from
more than 300 U.S.
retailers with multiple
locations and annual
revenues of over $100 million,
found that 73 percent currently support
a mobile initiative and 20 percent are in
the evaluation process. The ndings of
this study are similar to those of Forrest
Research Inc. and Shop.org (the digital division of the National Retail Federation), which found that 74 percent of
retailers have an online mobile strategy

96

HR Magazine

The Power of Incentives 2011

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Get a Head Start on


Your Certication
With the SHRM Learning System

The #1 PHR/SPHR Certication Prep Tool

Earning a Professional in Human Resources (PHR)


or Senior Professional in Human Resources (SPHR)
certication will increase your credibility and ensure
you stand out in the competitive eld of HR.

Experience the SHRM


Learning System
Through Our Free Demo
;OPZ\UPX\LKLTVJVTIPULZHN\PKLK
[V\YVMWYVNYHTJVTWVULU[ZH
ZUHWZOV[VMUL^MLH[\YLZHUKHU
V]LY]PL^VM[OLSLHYUPUNVW[PVUZ

The PHR and SPHR exams have been designed to


be challenging and SHRM can help you pass them
the rst time with the SHRM Learning System.
Choose from four easy ways to prepare:

s/NYOUROWN WITHTHESELF STUDYPROGRAM


s!TACOLLEGEUNIVERSITY/NLINEORONSITE
s!TA DAYCERTIlCATIONPREPCOURSE
s/RGANIZATIONALTRAININGFORMULTIPLEEMPLOYEES

Visit www.shrm.org/learning
to try the demo.

11-0260

For additional information on learning options and


to order, visit www.shrm.org/learning.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

S PE CI AL A DV E RT I S I NG S UPPLEMENT

but only 20 percent are implementing


such a strategy.
Consumers are becoming increasingly empowered by the capabilities
their mobile phones provide, and retailers need to move quickly to ensure
that consumers experience at the point
of sales is not disappointing. Managers
of recognition and incentive programs
must be careful to choose a mobile solution that will support employees expectations.
Your employees are consumers, and
they have spoken. They are embracing the idea of shopping, receiving

coupons and using their loyalty cards


through mobile technology, and are
becoming increasingly receptive to different variations of the mobile experience. They are leading this shopping
paradigm shift, pushing all of us to a
new level. We should listen and respond, quickly.
Incentive Marketing Association
Business improves when employees and
customers are recognized, rewarded and
engaged through effectively structured
programs with dened goals and
proven returns. The Incentive Marketing
Association (IMA) is comprised of
companies that are leaders in the incentive

industry. IMA publishes a quarterly


magazine for senior-level people-centric
leaders titled Return on Performance
and provides education, resources and
research to promote the use of incentive
programs to the business community. Visit
us at www.returnonperformance.org.
Incentive Gift Card Council
The Incentive Gift Card Council is a
strategic industry group within the
Incentive Marketing Association that was
created to provide an awareness of gift
cards/certicates as a viable option for
use in premium and incentive programs.
The council educates the industry on the
benets of gift cards/certicates, including
choice, value and service, and on attributes
recipients say they want their awards to
have. Visit www.usegiftcards.org.

VIEW POINT
Whats The
Next Big Thing
For The Gift Card
Industry?

The popularity of instant gratication continues to grow. Incentives


that can be ordered, personalized
and deliveredfastare a huge
benet for forward-thinking companies. From last minute gifts for
workplace celebrations to on-thespot recognition, HR professionals
can count on e-gift cards to reach
recipients and reward as soon as possible. With e-gift cards, you
can also avoid shipping costs, wait times and large inventories to
manage. Starting this fall, Best Buy Gift Card Incentives will offer
e-gift cards for businesses. One feature that distinguishes Best
Buy e-Gift Cards is personalization. As part of the ordering process,
you can add a personal message to each e-gift card, expressing
thanks or appreciation. The recipient can then redeem it online or
at any Best Buy store.
Best Buy e-Gift Cards express appreciation when team members
perform above and beyond expectations. Rewarding employees
has never been easier. Simply order online, add a personal message, and its delivered via e-mail.

98

The Power of Incentives 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

8,)2)<8+)2)6%8-32
3*'31198)6&)2)*-87
,%7%66-:)(

-RXVSHYGMRK8VERWMX'LIO1SFMPI
3YVTS[IVJYPRI[QSFMPIWMXIMWSTXMQM^IHJSVSRXLIKSIQTPS]IIWIPJWIVZMGI8VERWMX'LIO1SFMPI
LIPTWWEZIXMQIERHVIHYGIW]SYVSZIVEPP[SVOPSEH )QTPS]IIWGER
)RVSPPER]XMQIER][LIVI
'LIGOFEPERGIWSRXLIKS
B )EWMP]QEREKITPERHIXEMPWERHFIRIXEQSYRXW
B
B

8LI8VERWMX'LIOGSQQYXIVFIRIXWTVSKVEQGERWEZI]SYVIQTPS]IIWYTXS SRXLIGSWX
SJXLIMVHEMP]GSQQYXI)ZIRFIXXIVMXGERWEZI]SYVGSQTER]QSRI]F]VIHYGMRKTE]VSPPXE\IW
8LI]WEZI=SYWEZI2S[XLEXWE[MR[MRWMXYEXMSR
'EPPYWEX',)/  XSPIEVRLS[8VERWMX'LIOGERWEZIXMQIERHQSRI]
JSV]SYERH]SYVIQTPS]IIW

*SPPS[YWSRX[MXXIVGSQ8VERWMX'LIO
__________________________

XVERWMXGLIOGSQRI\X
______________________

-RHMZMHYEPTIVGIRXEKIWEZMRKWQE]ZEV]FEWIHYTSRXE\FVEGOIXWXEXISJVIWMHIRXEQSYRXSJHIHYGXMSRWERHSXLIVJEGXSVW
8VERWMX'LIO MWEVIKMWXIVIHXVEHIQEVOSJ8VERWMX'IRXIV-RG'ST]VMKLX8VERWMX'IRXIV%PPVMKLXWVIWIVZIH

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

_____________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Management Agenda

Auditing Your HR Department


Evaluate your practices and policies by getting an independent review.
Claremont Savings now conducts HR
audits every three years, in addition to
the annual HR reviews that the banks
internal audit function conducts. Widger,
like many HR professionals, believes that
external expertise is crucial to the success
of the audit. HR auditors are well-versed
on compliance requirements, risks and
current best practices.
Obtaining the results of your HR
audit will give you factual information
about where you are and where you
could be, notes Patricia Maley, first vice
president, human resources manager, for
CoBiz Financial Inc., a Denver-based
financial services company. HR professionals can transform information into
action by sharing the audit results with
HR staff and executive management, creating specific action plans, and designing
longer-term plans for continuous
improvement.

Triggers and Types

By Eric Krell
ike most taxpaying citizens, human resource professionals often recoil at the
A wordaudit.
You can get really stressed about the fact that the auditor is visiting you,
says Beverly A. Widger, SPHR, senior vice president, human resources, at Claremont
Savings Bank in New Hampshire.
Having gone through an HR audit two years ago designed to scrutinize current
practices, review compliance capabilities and identify process improvement opportunities, however, Widger views the process differently today. Its actually very
helpful, she says. For example, the auditor, who works for an external firm with
specific HR and payroll expertise, showed Widger how to confirm that the banks
outsourced payroll provider was submitting federal tax payments as required by law.
As nerve-wracking as an audit might be, it winds up being very reassuring, she adds.
After the first time I went through it, I realized that the process helped protect us
from potential regulatory risks.

ILLUSTRATION BY MIKE AUSTIN

There are different types of, and approaches to, HR audits, as demonstrated
by Maleys and Widgers experiences.
CoBiz Financial, a public company
with 560 employees, conducts three
separate HR audits: an internal audit; a
compliance audit that focuses on relevant
regulatory requirements; and a processesand practices-focused audit that external
provider Denver-based Mountain States
Employers Council Inc. conducts every
two to three years.
Claremont Savings, with about 110
employees, conducts an annual internal
audit of HR as well as an external audit
that includes compliance and process
The author is a business writer in Austin, Texas,
who covers human resource, finance and social
marketing issues.

September 2011 HR Magazine 101

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Management Agenda
improvement elements.
David de Wetter, a Dallas-based
senior consultant in Towers Watsons
talent management and organization
alignment practice, identifies two types
of reviews: risk mitigation HR audits
and value creation HR audits.
Risk mitigation HR audits, which
may or may not be triggered by a specific
compliance violation or another major
problem related to the violation of an HR
rule or principle, are designed to ensure
that existing policies and procedures are
effective and followed. For example, an
HR auditor may discover that an average
of 45 days elapses between the day that
a company selects a candidate and when
the new hire actually starts work, due
to background checks and other preemployment protocols. If the industry

broadly at how HRs activities correlate


with business priorities and how these
activities might be performed more effectively and efficiently.
Many organizations leaders regard
the auditing exercise as a source of continuous improvement, de Wetter says.
CoBiz Financial, for example,
uses many of the recommendations identified in the
audit report produced
by Mountain States
Employers Council
to determine a more
clear-cut, effective,
efficient and beneficial way to provide an
enhanced perspective
to an already acceptable
process, according to Maley.

Improving a Process
Among the benefits of conducting an HR audit are the recommendations within the
findings that can improve specific policies and processes. When Denver-based CoBiz
Financial Inc.s HR audit was completed, the two-person audit team at Mountain States
Employers Council conducted a three-hour debriefing session with CoBiz Financial First
Vice President, Human Resources Manager, Patricia Maley and her colleagues. The
sequence of discussion centered on current practices, findings and recommendations.
What follows is a section of the report on staffing processes:
Application Process
Current Practices: CoBiz defines an applicant as anyone whose resume has been
reviewed and meets the minimum qualifications.
Recommendations: Consider narrowing the definition of what the organization
considers an applicant. For example, applicants could be individuals who apply in
response to a request for applicants, are qualified for a certain position and whose application is retained.
Rationale: This satisfies requirements of the federal affirmative action law and may
reduce the amount of paperwork kept.

average for this hiring metric is 15 days,


the company may risk losing new hires
to competitors while failing to meet the
businesss talent needs. But the metrics
real impact, notes Diane Youden, a principal in PricewaterhouseCoopers people
and change practice, is that it can have a
negative impact on a companys employment brand.
Value creation audits look more

Claremont Savings approach of


integrating risk mitigation and value creation elements into its HR audit makes
sense, given its size.
With small or single-person HR
departments pedaling as fast as they can
week in and week out, it isnt easy to
stay abreast of ever-changing regulatory
compliance and human resource best
practices, says Marc Lubline, SPHR,

manager, HR professional staffing and


career services, for Mountain States
Employers Council. Audits bring HR
expertise into the picture and can jumpstart needed discussions and process
changes for small companies.
Larger companies frequently opt for a
more comprehensive audit initially, Maley reports, before
refining subsequent
audits to focus on
more-specific areas.
Claremont
Savings comprehensive HR audit
included reviews
of the companys
affirmative action
plan, equal employment opportunity plan,
401(k) plan, I-9 documentation,
pension plan, and many other aspects of
compensation and benefits, payroll, and
more. For example, the auditor reviewed
which benefits employees had signed up
for and then confirmed that the correct
amount of money was being deducted
from their paychecks.
The auditor also spent a significant
amount of time on payroll, reports
Widger, who counts payroll as a functional responsibility. He told me that I
would be amazed at how many times he
finds issues with people inappropriately
taking money through payroll.
Payroll frequently represents a major
component of HR audits, says Protiviti
Executive Vice President and Head
of Global Internal Audit Bob Hirth,
because it represents the single largest
expense in many organizations.
HR audit vendors include public
accounting firms with HR practices, HR
consulting firms, and other professional
services firms with HR and risk management expertise. Most vendors offer a
range of different audits and can tailor
the audits scope to address an organizations structure and needs.
For example, Mountain States

Online Resources
For additional information about HR
audits, see the online version of this article
at www.shrm.org/hrmagazine/0911Krell.

102 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Employers Council provides the following types of audit services:


Compliance audit. Covers federal and
state regulations that impact recordkeeping, reporting and HR program administration.
Benefits program audit. Reviews plan
design, regulatory compliance, benefits
processing and administration, and reporting.
I-9 audit. Reviews active I-9 forms,
terminated I-9 forms or both.
HR program or function audit. Covers a review of any individual HR-related
functional area.
Full HR audit. Covers a review and
evaluation of areas noted above as well
as an audit of all other HR functional
areas, including staffing and recruitment,
job analysis and descriptions, compensation and benefits programs, performance
management, training and development,
employee relations and policies, and HR
metrics.
Some audits or their focal points arise
as a result of regulations or business
trends. Given the rise of data privacy
rules in Europe as well as the growing
risks around information security, Hirth
reports that more audits now scrutinize
data and privacy controls related to
HR records. Additionally, Hirth notes
that more audits include verification of
dependents under the 2010 U.S. health
care reform law, which allows children
up to age 26 to be covered by a working
parents medical insurance.

Audits in Action
HR professionals should be prepared for
the long hours an audit requires.
We pretty much have to clear
our schedule, Widger says about the
annual three-day HR audit. The auditor
gave us a checklist of the items that
he wanted ready ahead of time. But
you have to be available the entire time
because he always needs more information.
Maley agrees that the on-site phase of
the audit is intense. They said that they
would need two days of pure, concentrated time in a conference room, and
they were right on, she recalls. We
took breaks for lunch and a couple of
other short breaks, but it was two very
full days.

The specific steps of the HR audit


that Maley describes are nearly identical
to the steps set forth by the Society for
Human Resource Management:
1. Determine the scope and type of
audit.
2. Develop the audit questionnaire.
3. Collect the data.
4. Benchmark the findings.
5. Provide feedback about the results.
6. Create action plans.
7. Foster a climate of continuous
improvement.
Audit experts say the first step is particularly important because it influences
each of the subsequent steps. Youden
estimates that the planning phase typically represents 20 percent to 30 percent
of the entire effort.

boss, the banks president, before writing


his report. We were given the opportunity to clarify anything that was not
clear, Widger says.
CoBiz Financials two-person
audit team took six weeks to produce
a final report and have it reviewed by
the internal legal function. They then
returned and sat down with Maley to
present their findings.

Follow-Through
Both Maley and Widger say the audit
findings prompted changes.
There needs to be a genuine commitment to make these changes, Hirth says.
This includes specifically identifying
who is responsible for the change, what
exactly needs to be changed and when

More audits include verification of


dependents under the 2010 U.S. health
care reform law.
It is critical to set
clear objectives for each
audit at the outset,
Hirth notes. Ask
questions such as,
Why are we doing
this audit? What risk
or other information placed this type
of audit on our radar
screen in the first place?
What do we intend to
achieve? And, is there any information available that might confirm the
need for this audit, or indicate that it is
not necessary?
In Maleys case, the auditor presented
a rough outline of the process and the
types of hard-copy and digital documents
his team would request once they were
on site. Widger received a much more
detailed checklist of document requests.
In both cases, the external auditor
spent several weeks preparing the audit
report immediately after the on-site visits
concluded.
Claremont Savings auditor first
presented his findings to Widger and her

that change will be made.


Then, there should be
some follow-up to verify
that the recommendations have been properly and effectively
implemented.
This type of followthrough distinguishes
an effective audit
practice, Hirth and others
say. Another leading practice
involves incorporating reports of
post-audit process improvements in
what de Wetter describes as a State of
HR Report that tracks and reports on
ongoing changes, improvements and
relevant benchmarks related to the audit
over the long term.
Some chief HR officers share these
findings with their team and key partners
on a regular basis, says de Wetter, who
notes that the reports typically are presented annually.
By knowing what to expect and being
open to changes, HR leaders can smile,
rather than panic, when they hear the
A word.
September 2011 HR Magazine 103

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

THE WORLDS NEWSSTAND

___________

HR Magazine

M
q
M
q

M
q

MqM
q

Compensation by

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Compensation Agenda

Clawing Back Compensation


Executive compensation plans have become trickier to design
under legal requirements that seek to avoid premature payouts.
What They Are

By Joanne Sammer
hen executives get paid based on company performance and, much later,
that performance turns out to be illusory, does the executive have the right
to keep that money?
According to the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, the answer is no. Just how companies are going to deal with Dodd-Franks
requirement that they claw back executive pay following a financial restatement
remains to be seen, however.
In general, Dodd-Frank requires publicly traded companies to adopt executive
compensation provisions that allow the company to recover any incentive-based pay
that was paid out during the three years prior to any financial restatement, if it would
not have been paid out under the restated financials. This so-called clawback provision
applies to all of a companys executive officers.
While this broad outline of the clawback provision is included in the law itself,
several questions remain. At least some of these questions will be answered by regulations the U.S. Securities and Exchange Commission (SEC) plans to release this year.
Until then, it is up to HR executives to prepare for this change while they await
answers to some important questions surrounding the clawback requirement.

ILLUSTRATION BY MICHAEL MORGENSTERN

Clawbacks are a relatively new phenomenon. A clawback is a mechanism included in an executives employment contract
that allows the company to recover payments made through performance-based
incentives under certain circumstances.
When Congress passed the SarbanesOxley Act of 2002 in the wake of the
Enron and WorldCom scandals, the
clawbacks required in that law affected
only the chief executive officer and chief
financial officer, and only if these individuals were found to have profited as a
result of misconduct, such as lying about
or manipulating company performance.
The original concept of clawbacks
under Sarbanes-Oxley was more punitive
to prevent executives from doing bad
things to enrich themselves, says Steve
Seelig, executive compensation counsel
in Towers Watsons Center for Research
and Innovation in Washington, D.C.
Clawbacks are also required for
the top 25 executives in any company
participating in the Troubled Asset Relief
Program (TARP).
The Sarbanes-Oxley and TARP
requirements have been the primary
drivers of more widespread use of
clawbacks, according to a review of the
2010 proxy disclosures of 85 Fortune 500
companies in a variety of industries. The
review, conducted by New York Citybased executive compensation consultants
Compensation Advisory Partners, found
that 80 percent of the companies have
some type of clawback provision. The
Dodd-Frank requirements are likely to
increase the use of clawbacks.
The author is a New Jersey-based business and
financial writer.

September 2011 HR Magazine 105

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Compensation Agenda
But there is nothing to say that companies cannot go beyond what is required
by law, and many companies already
are. The Compensation Advisory Partners review found that companies with
clawback provisions often seek recovery
of pay and benefits beyond incentives.
For example, IBM has expanded provisions that allow recovery of company
contributions to IBMs Excess 401(k)
Plus Plan for executives. McDonalds
holds the right to recover severance
awards if an executive engages in willful
fraud that causes harm to the company
or is intended to manipulate the performance measures that determine award
payouts. And JPMorgan Chase & Co.
can recover equity awards from its management committee members if they fail

tives who benefited from the incorrect


higher numbers would have to pay back
enough of the payout to bring their compensation in line with what they would
have received under the correct numbers.
The executives in question do not have to
be caught in any wrongdoing for this new
clawback requirement to apply.
Although Dodd-Frank provides a
broad outline of the clawback requirement under the law, the devil, as they
say, is in the details. Without regulations, there is no certainty about how this
will play out, says Charlie Tharp, CEO
of the Center on Executive Compensation in Washington, D.C.
Indeed, many questions remain that
may or may not be answered by the new
regulations. For example, how should
companies deal
with the local, state
and federal income
What Companies Claw Back
tax implications
Types of Compensation
Number of
Percentage of
of taking back
Subject to Clawbacks
companies using companies using
incentive payouts?
Incentive compensation (cash or equity)
40
59%
How far back
Annual incentives only
5
17
will the clawback
Equity incentives only
5
17
provision extend if
Company discretion regarding type of
a restatement does
compensation to recoup
10
15
not involve recent
Future compensation
7
10
results? Will any
Deferred cash
4
6
existing compensaSeverance benefits
1
2
tion arrangements
401(k) plan (company contributions)
1
2
be grandfathered
in?
Percentages total more than 100 due to multiple responses.
If equity
Source: Compensation Advisory Partners.
compensation
is involved in a
to identify, raise or assess, in a timely
clawback, the questions are even more
manner as reasonably expected, risks
difficult. For example, how should comand/or concerns with respect to risks
panies calculate clawback amounts given
material to the firm or its activities.
the fluctuating nature of stock prices? If
an executive has exercised stock options
Changes from Dodd-Frank
for a gain, only to have the company
The Dodd-Frank requirements differ from
make a restatement, can you calculate
the Sarbanes-Oxley and TARP requirewhat this stock would have been worth
ments in that they are much broader and
had [the company financial statements
include all executive officers. Moreover,
been correct] and that restatement not
the clawbacks required under this new
occurred? Probably not, says Daniel
law extend to any executive who benefits
Laddin, a partner with Compensation
from incentive payouts based on erroneAdvisory Partners. There is a lot of
ous performance data, whether or not
uncertainty around that.
the error was deliberate. For example, if
Although questions will remain until
a company finds an accounting error that
the regulations come out, some things
requires a restatement that lowers comare clear. The Dodd-Frank requirepany earnings under generally accepted
ments raise practical questions about
accounting principles (GAAP), the execuplan design, Tharp says.

Many, if not most, executive incentive plans are based on shareholder


value creation, not financial statement
numbers or GAAP financials. If a
company has a material restatement
on net income of 22 percent from the
previous period, how do you take that
22 percent change in income and equate
it to a cash flow measure or a return
measure or some other discretionary
measure in the incentive plan? asks
Steve Cross, managing partner with
Cogent Compensation Partners in
Houston. Long-term incentive plans
may need to have a tail on the payout.
This way, the executive will not have
received the payout while there is any
possibility for a clawback.
Although companies could shift
compensation design toward more discretionary measures that do not impact
company financials and, therefore, may
not be subject to clawback, such a shift
could introduce corporate governance
issues. After all, shareholders want to
know what financial targets executives
are pursuing and expect pay designs
to back that up. In fact, prior to DoddFrank, shareholders themselves pushed
for clawbacks as a sign of stronger corporate governance.
HR executives are going to face a lot
of work and a lot of policy decisions once
the regulations are out, Seelig says.
Organizations have been in a holding
pattern this year, and even those companies that want to implement a clawback
provision are deciding to wait and see
what the regulations say.
Once the regulations are out, companies can focus on how to adapt executive
compensation designs to ensure that
the program meets its goals and that the
company complies with the rules. For
example, will it be necessary, practical
and even make sense to defer some
amount of compensation in case the
company has a restatement? If so, how
much and for how long?
Many of these issues will take time
to work out. Companies, or executives
themselves, might look into whether it
makes sense to purchase some type of
insurance product to indemnify themselves against a future clawback. The
key will be whether the SEC rules permit
such an approach. These are the tech-

106 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

nical issues that need to be addressed,


Seelig says. Once the regulations are out
there, smart lawyers are going to look for
ways to get around these things.
Most experts believe, however, that
executive compensation programs are
likely to need at least some restructuring to
meet the Dodd-Frank requirements. I do
not think past practice is going to be any
indication of what is to come, Seelig says.

Challenges Ahead
A key concern about clawbacks is their
potential impact on the relationship
between public companies and their
executives. Even when clawbacks are
required by law, there is concern that
these provisions will create an adversarial relationship between the two parties. It is going to create a chasm in the
relationship between senior managers
and the board, Cross says. Clawbacks
are looked at by senior managers as a
punitive measure with the possibility
that they could be the big losers even if

I need help.
I am
assuming
compensation
duties and
need some
quick training

Online Resources
For links to more information about clawbacks, see the online version of this article
at www.shrm.org/hrmagazine/
0911CompensationAgenda.

they had nothing to do with or no control over a restatement.


The challenge for HR is to find ways to
adhere to Dodd-Frank requirements while
maintaining a strong relationship with
executives. The first step is to get familiar
with the law by talking to the companys
general counsel or outside attorneys and
reviewing incentive plans in light of those
rules. It is unclear whether the SEC will
grandfather in existing compensation contracts and plans. Therefore, HR and legal
counsel should be looking for any situations that might arise under the incentive
plans that would make these plans difficult to administer under the rules.
Then, HR professionals can begin to
communicate the laws provisions. Once

the regulations are out, employers will


be in a better position to discuss potential
changes with executives.
This communication is particularly
important in situations where employers
need consent to change individual
employment contracts. They may
want to move away from negotiating
incentives into such contracts. Instead,
employers can manage compensation
through broader plans for specific groups
of executives. Otherwise, they will find
themselves negotiating terms individually with 20 or 30 executives.
Whatever the regulations say, HR
executives need to be ready to incorporate the new clawback provisions into
executive pay programs. Even though
clawbacks have the potential to create
challenges, employers still need to
develop executive incentive structures
that drive desired performance and
provide rewards for increasing shareholder value. The clawback cannot
become the tail that wags the dog.

WorldatWork offers compensation education


and resources that provide the necessary
tools to help you meet todays challenges and
tomorrows opportunities.
Basics of Compensation
Administration

Compensation
Fundamentals

With this e-learning


program, you will quickly
and easily discover the
tactical steps needed for
successful administration
of compensation programs.

This skill-building seminar is


designed to familiarize you
with the basic theory and
principles of compensation
design and decision-making.

to increase

my knowledge.

For more information on these


compensation programs or other
educational resources visit:

www.worldatwork.org/compensation

September 2011 HR Magazine 107

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Fusion HCM
In the Cloud and On Premise

Identify and Mentor


Future Leaders
EXIT

Predict Top Talent


at Risk of Leaving

Find and Connect With


Your Hidden Experts

Plus Global HR,


Payroll and Benets

oracle.com/hcm
or call 1.800.ORACLE.1

Copyright 2011, Oracle and/or its affiliates. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates.
Other names may be trademarks of their respective owners.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Technology

Good Vendor Relations


Its never been more important to pay attention to
managing relationships with technology vendors.
HR outsourcing know the importance of
agreements and governance. But the HR
outsourcing model is more static and does
not require the give-and-take of an SAAS
partnership.

Promoting Partnership

By Bill Roberts
elationships with technology vendors have proved to be far more important in
the software-as-a-service (SAAS) model than in the licensed, on-premise model, according to HR professionals. Unfortunately, most HR professionals dont
give their vendor relationships much thought.
Very few HR organizations do vendor relationship management well, says Heidi
Spirgi, co-founder and president of Knowledge Infusion LLC, a Minneapolis-based
HR consulting firm. It is the elephant in the room. Theres not enough discussion
about it in our industry, and it is a key inhibitor to success with SAAS.
SAAS is just one factor drawing attention to vendor relations. The growth of HR
outsourcing and a spate of mergers and acquisitions in the HR software market also
underscore the importance of vendor relations, especially partnership, service-level
agreements (SLAs) and governance.
Many HR professionals manage relationships with vendors of benefits, recruitment,
relocation and other services. Theyre less experienced with technology vendors, in part
because the IT staff owns the traditional HR information system (HRIS) and the servers it runs on. Even the HRIS professional focuses more on technology and business process than on the vendor relationship. HR professionals at large organizations that adopt

ILLUSTRATION BY DOUG ROSS

After an on-premise software implementation, the vendor often disappears until


theres a new version to sell. In SAAS, the
implementation is just the beginning of a
long-term relationship. The vendor hosts,
maintains and upgrades the software, adding features with input from users who
pay a monthly subscription fee. Like any
relationship, this one needs nurturing.
HR professionals have little experience
managing relationships with technology
vendors. When the HRIS is part of a
licensed, on-premise enterprise resource
planning (ERP) system, the IT department maintains the software, which also
includes financial and other enterprise
applications.
The ERP space is dominated by IT,
which owns the vendor relationship. No
one buys the ERP system just because HR
thought it was a good idea, says Peter
LeBlanc, vice president of HR service
delivery for CareFusion Corp., a San
Diego-based medical technology company
with 14,000 employees worldwide. LeBlanc has spent most of his career dealing
with the HRIS-ERP model, but CareFusion uses SAAS for human resource
management. SAAS vendors target the
business users, not the chief information
officer who supervises information technology, he says.
HR may need the chief information
officers blessing, but the responsibility for
The author is technology contributing editor for HR
Magazine and is based in Silicon Valley.

September 2011 HR Magazine 109

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Technology
the decision and the subsequent vendor
relationship falls on HR. Because a SAAS
vendor upgrades the software three or
four times a year, if enough customers
communicate to the vendor the desire
for a particular feature, it gets onto their
product road map, says Jeanne Bonzon,
director of learning and development for
BJC HealthCare, a hospital system with
27,000 employees based in St. Louis.
Bonzon has used a SAAS learning
management system from Cornerstone
OnDemand Inc. in Santa Monica, Calif.,
for three years. In the past, she used
licensed software on-premise and licensed
software operated by a hosting company.
There is much more interaction with a
SAAS vendor, she says.
Bonzon and three of her staff have
regular contact with Cornerstone, whom
they view as a partner. Weve had direct
input in what has come out of Cornerstone, and that is kind of cool, she says.
To get the most from software-as-aservice, the customer must be involved.
One of CareFusions vendors is Workday Inc. of Pleasanton, Calif., which
offers payroll and HR applications. My
staff is typically talking with Workday
about the product road map, LeBlanc says. There are multiple releases
throughout the year. The community of
users and the vendor talk about features
users would like to see as the road map
evolves. CareFusion has a comparable
relationship with Taleo Corp. of Dublin,
Calif., which it uses for recruiting and
other applications, he adds.

successful is we know what we want


and we are good about telling them,
she says.
Spirgi says successful relationships
have several common traits: Customers
invest time in the relationship. They get

The IT role diminishes under SAAS


but does not disappear. We have 130
integrations in and out of Workday, and
only about a dozen are HR systems,
LeBlanc says. The others are ERP,
role-based system security, et cetera.

Basic to any vendor partnership


is a negotiated agreement between
customer and provider that spells out
service goals.

to know the assigned team at the vendor.


They go to user conferences and attend
webinars. And they designate people on
their team as advocates for the relationship. Like any relationship, when you
give, you get.
At Louisville, Ky.-based Texas Roadhouse Inc., a national chain of about 350
restaurants with 32,000 employees, HR
now manages the relationship with its
provider of payroll and talent management applications, says Mark Simpson,
senior director of legendary people, the
companys top HR position. The vendor
is Ultimate Software of Weston, Fla.,
which once offered licensed, on-premise
software and later transitioned to SAAS.
Five years ago, Roadhouse licensed
and operated Ultimate on-premise,
then left for another vendor, and now
has returned to Ultimate under SAAS.
Too Few Engaged
Whether using SAAS or on-premise
Taleo, Workday, Cornerstone and other
software, you still need a partner you
SAAS vendors encourage tight relationcan rely on, Simpson says. SAAS does
ships with their customers. The need
change some of the dynamics because of
to partner is much
the upgrades. We
stronger, says
have a manager
Online Resources
James Harvey, vice
of HRIS systems
president and genwho manages
For more information about managing
eral manager for the
the relationship
vendor relationships, see the online verperformance and
now. Our senior
sion of this article at www.shrm.org
compensation divimanager of payroll
/hrmagazine/0911Roberts.
sion at Taleo. How
is connected as
many customers do
well. Because
this? Less than one-third is that highly
Ultimate interfaces with the on-premise
engaged with us, he says.
HRIS database, there is still a need for IT
This does not surprise Bonzon. I
support. The dedicated IT person is also
dont think everyone gets this, not even
a key member of the team that partners
in our user groups. One reason we are
with Ultimate, Simpson notes.

LeBlanc says the team spent months


negotiating our roles with the SAAS
vendor, and between IT and HR.

Reaching Agreement
Basic to any vendor partnership is the
SLA, a negotiated agreement between
customer and provider that spells out
the common understanding of services,
priorities, responsibilities, definitions,
guarantees and warranties. It also sets
forth how service goals will be measured
and consequences for not meeting them,
usually service credits.
Agreements are imperative to HR
outsourcing but are appropriate for all
technology delivery models, says Robert
Lupp, SPHR. Lupp recently retired as
vice president of HR/Direct, the shared
services center for Pittsburgh-based
Bayer Corp., U.S. subsidiary of Bayer
AG in Germany. The SLA helps control the partnership, Lupp says. One of
the biggest mistakes people make is not
getting all the parties involved upfront
legal, internal IT, the vendorto agree
on the content of the SLA. Problems
with the vendor relationship can start
right there.
Ultimate offers every customer a
basic agreement for system uptime and
is willing to negotiate more-substantial
ones, says Jon Harris, senior vice president and general manager for Ultimates
enterprise division. But we dont have
more-detailed SLAs with every customer. Not everyone asks for one that
ties into service credits for downtime.
This surprises him. With SAAS being

110 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

THE WORLDS NEWSSTAND

so new, they tend to look at [the SLA]


like something from the old days that is
irrelevant. Lupp says software-as-a-service has different contract requirements.
For example, the SLA needs to spell
out that the vendor is liable for updating
the software and service to comply with
regulations. Data recovery and security
will also be different.
An SLA is one component of a
broader governance process, according to Michael Martin, a principal in the human capital
business at Mercer LLC
in New York. Governance is the who,
what, when, where
and why of decisionmaking and responsibility in corporate
functions. Many HR
professionals have experience in broader corporate
governance.
Martin says much of what HR professionals know about governance generally
can apply to HR technology governance.
Accountability is a necessary concern.
Governance policies should spell out
philosophy and operating principles,
the structure and roles, core processes,
performance and accountability (where
SLAs come into play), and effective governance councils to oversee this, Martin
says. HR technology governance cannot be set independently of the corporate
governance model or the broader HR
governance model.
Now, with SAAS, HR needs to concern itself with technology governance,

LEAD WITH
AUTHORITY
SHRM Executive Education

something the IT department was


responsible for when the HRIS was part
of the ERP system, Martin adds.

Shaken by Shakeouts
No matter how effective the vendor relationship, theres always a chance that
another company will come along and
gobble up the provider with whom your
organization has developed a relationship.
Experts and HR professionals who
have lived through this agree
theres not much you can
do before, during or after
an acquisition to protect
yourself.
Most acquiring
companies will honor
the basic terms of a contract. But once the contract runs its course, the
acquirer is likely to move
you to its own platform and
change the terms of engagement.
The staff you worked with is likely to disappear, and theres no guarantee that the
customer service will be comparable.
Beyond including a couple of basic
things in your contract to protect yourself, after that it is a crap shoot, says
Freddye Silverman, vice president for the
Eastern Region at Jeitosa Group International LLC, a San Francisco-based
consulting firm for HR information
technology. The HR software market
has seen many mergers and acquisitions in the past year: ADP acquired
Workscape; Authoria and Peopleclick
merged; Kenexa acquired Salary.com;
Lawson acquired Enwisen; SuccessFac-

SHRM partners with leading institutions to offer in-depth programs that


illustrate how to apply your experience and enhance your aptitude to be a
more-effective and productive leader.

tors acquired Inform Business Impact;


SumTotal acquired Softscape; and Taleo
acquired Learn.com, just to name a few.
Market shakeouts happen, but Silverman says this environment is different:
The market is shaking out, and established groups have been acquired, but
for every one that gets acquired theres a
new one on the block. This is especially
true in talent management.
The acquiring companys promises
of continued support for your product,
retaining the merged staff and improved
customer support are fairy tales that
often dont come true, Silverman advises.
Bonzon, who has firsthand experience, concurs. She had been using a
licensed learning management system
hosted off-site for six years, and had
just renewed for another three, when
she found out her vendor was being
acquired. The new company said,
Well support you for three years but
then phase it out. Then we would have
had to pay the differences in licensing
fees and pay new implementation fees
for their software. There was no benefit
for us. They never said, Here is why it is
advantageous for you to make this leap.
The customer service was so poor. The
help desk was a revolving door.
When the contract ended, Bonzon
switched to Cornerstone. Since SAAS is
subscription-based, there is little problem
in walking away from the relationship
and starting with someone else, Bonzon
says. And even though an organization
still must implement the software, you
are not tied with all the sunken costs with
the licensed piece.

MBA

HUMAN RESOURCE MANAGEMENT

ADVANCED PROGRAM IN HUMAN


RESOURCE MANAGEMENT:
DRIVING BUSINESS RESULTS
THROUGH GLOBAL HR STRATEGIES

LEARN FROM THE EXPERTS!

Recertication Hours: 37 | Sept. 1923, 2011

COACHING FOR HUMAN


RESOURCE PROFESSIONALS

Bloomberg Businessweek 2010 Rankings

Recertication Hours: 21 | Sept. 2123, 2011


For more
information and
to register, visit
www.shrm.org
/educationseries
______
/executive.
____

M
q
M
q

M
q

MqM
q

BUSINESS AND HUMAN RESOURCES:


LEADING HR AND YOUR
ORGANIZATION INTO THE FUTURE

#2 Best ROI U.S. Schools #5 Teamwork #20 Best B-Schools

MBA.MSU.EDU
____________

Recertication Hours: 37.5 | Sept. 2630, 2011

LEADERSHIP DEVELOPMENT FOR


HR PROFESSIONALS
Recertication Hours: 28.5 | Oct. 2427, 2011
11-0452

September 2011 HR Magazine 111

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Court Report
New cases are posted online each week. Visit www.shrm.org/law.

Employers Investigation Untainted by Discriminatory Bias


Simmons v. Sykes Enterprises Inc., 10th Cir., 09-1558 (June 2, 2011).
n age discrimination claim was properly dismissed where the employee
failed to establish that her employers
reason for terminating her employment
was pretextual and also failed to establish
that her supervisors alleged discriminatory animus toward her influenced the
decision to terminate her, the 10th U.S.
Circuit Court of Appeals ruled.
Patricia Simmons worked for Sykes
Enterprises as a technician/assistant
within the human resource department
at Sykes Sterling, Colo., office. Simmons alleged that her work environment
grew hostile in June 2007 upon the return of Persephone James as the Sterling
offices site director. Shortly after her
return, James allegedly told Simmons
in an almost vicious manner that she
thought Simmons had already retired.
Simmons also alleged that Amanda
Owen, Sykes Sterling HR supervisor,
made hostile remarks about her to other
co-workers, such as commenting how
Simmons repeated herself now that she
was getting older. Simmons never
complained to management about either
James or Owen.
In August 2007, an employee complained to Owen that somebody within
the company had improperly disclosed
the employees confidential medical
information. Owen notified Jeff Bieker,
Sykes regional HR manager, who
instructed Owen to begin interviewing those mentioned in the complaint.
James and Bieker twice met with Simmons, who denied any wrongdoing.
James, Owen and Bieker all participated
in the investigation, and all determined
that Simmons had disclosed the confidential information to another HR
associate, Sharon Gaddis, who in turn
disclosed it to other employees.
Janice DiRose, Sykes senior director of HR compliance, reviewed the
collected statements and personally

interviewed Gaddis and Simmons. AlNevertheless, the 10th Circuit continthough Simmons again denied disclosued its inquiry to address the theory of
ing the confidential information, DiRose subordinate bias, whereby an employbelieved that she gave inconsistent aner can be held liable through the discrimswers. During a conference call between
inatory conduct of its subordinate if the
James, Owen, Bieker and DiRose,
subordinates animus was a but-for
James and Owen recommended Simcause of the adverse employment action.
mons termination. DiRose then recomThis is similar to cats paw liability,
mended to Sykes senior vice president
which was recently discussed by the
of HR that Simmons be terminated. The
U.S. Supreme Court in the context of a
senior vice president of HR authorized
case arising under the Uniformed Serthe termination.
vices Employment
Sykes fired
and Reemployment
Professional Pointer
both Simmons,
Rights Act (USERDecision-makers for a workplace
who was 62, and
RA), the court
investigation should be
Gaddis, who
noted, but, unlike
encouraged to seek additional
was 23. Subseunder USERRA or
opinions and conduct further
quently, SimTitle VII, an ADEA
inquiries where necessary to
mons claimed
plaintiff must prove
ensure a confident decision.
discrimination in
that age was a butviolation of the
for cause of her
Age Discriminatermination, not just
tion in Employment Act (ADEA). The
a motivating factor.
district court granted summary judgThe 10th Circuit emphasized that
ment in favor of Sykes, concluding that
Bieker and DiRose, and not James or
Simmons did not establish any dispute
Owen, initiated the investigation in reof material fact that Sykes stated reasponse to a complaint by an aggrieved,
sons for her termination were pretext for
unbiased employee. Furthermore, the
age discrimination.
10th Circuit observed that DiRose reThe relevant inquiry for determinceived input from individuals other than
ing pretext is whether the employers
James and Owen and personally interstated reasons were held in good faith
viewed Simmons and Gaddis before recat the time of the discharge even if they
ommending termination. Finally, Sykes
later prove to be untrue, or whether
also terminated Gaddis employment
plaintiff can show that the employers
for similar violations of company policy
explanation was so weak, implausible,
despite an absence of discriminatory
inconsistent or incoherent that a reaanimus. Accordingly, the 10th Circuit
sonable fact-finder could conclude that
determined that, absent the alleged disit was not an honestly held belief but
criminatory bias, Sykes would still have
rather was subterfuge for discriminafired Simmons because, from Sykes pertion, explained the 10th Circuit. Given
spective, she violated company policy
the information DiRose had before her,
and could not be trusted with confidenthe 10th Circuit found that she had distial information.
cretion to err on the side of caution and
conclude that Simmons could not be
By Roger S. Achille, an attorney and associate
trusted to protect the confidentiality of
professor at Johnson & Wales University, Graduate
School of Business, in Providence, R.I.
employee and company information.

112 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Donning and Doffing Protective Gear Was Work Under FLSA


Perez v. Mountaire Farms, 4th Cir., No. 09-1917 (June 7, 2011).
ime spent by employees donning and
doffing protective gear at the beginning and end of the workday is compensable work that must be paid at the
regular hourly rate, the 4th U.S. Circuit
Court of Appeals held. Further, if those
activities cause the workweek to exceed
40 hours, they count toward overtime,
the court ruled in a Fair Labor Standards
Act (FLSA) case.
Mountaire Farms engages in the
slaughtering, processing and distribution
of chickens. Employees who work on the
production line butchering and processing
chickens are required to wear a number of
items of protective gear. These employees
spend approximately 10 minutes putting
on the protective gear at the beginning of
the workday and taking it off at the end
donning and doffing.
Mountaire pays its employees based on
line time, which begins when the first
chicken arrives at the first workstation on

the production line of each department,


employees unpaid meal break.
and ends when the last chicken leaves
On appeal, the 4th Circuit held that
the workstation on each production line.
time spent by employees donning and
Mountaire provides an unpaid meal
doffing protective gear at the beginning
break. Almost all employees sanitize their
and end of the workday is compensable
aprons, boots and gloves before leaving
work that must be paid at the regular
the production area for
hourly rate. It
Professional Pointer
their meal break.
also held that if
Employers in any industry that
Hundreds of emthose activities
requires employees to wear
ployees sued Mouncause the workspecial protective gear will likely
taire, claiming that the
week to exceed
be required to compensate
FLSA requires it to pay
40 hours, time
those employees for time spent
for time spent donning,
spent on them
donning and doffing the gear.
doffing and sanitizing
counts toward
their protective gear
overtime. Howduring the workday.
ever, acts of
The district court held that time spent
donning and doffing occurring before and
by employees donning and doffing their
after employees eat their meals are not
protective gear at the beginning and end
compensable because those acts are part of
of a work shift is compensable as work
the meal period, the court ruled.
under the FLSA. The district court also
held that these activities are compensable
By Amy Onder, general counsel of iXP Corp. in
as work when they occur midshift at the
Cranbury, N.J.

Multiphase Firefighter Application Process Nondiscriminatory


Torgerson v. City of Rochester, 8th Cir., No. 09-1131 (June 1, 2011).
eversing a three-judge panel, the full 8th U.S. Circuit
nine ranked candidates and the three protected-group appliCourt of Appeals found that a multiphase firefighter apcants who made the eligibility list (including the plaintiffs) to
plication process by the City of Rochester (Minn.) was not
proceed to the final stage of the hiring process. The city coundiscriminatory on the basis of gender or national origin.
cil did not appoint any of the protected-group candidates to
Under the citys multiphase application process, applicants the vacant firefighter positions.
took a written firefighter entryThe plaintiffs argued that the following
level examination, underwent
statements were evidence of discrimination
Professional Pointer
a physical agility test and interagainst them:
While the result in this case was
A commissioners statement that had he
viewed with a three-person panel.
good for the city, employers are
known
the grant funding three of the available
The plaintiffs combined scores
reminded to use objective criteria
firefighter positions required hiring protectedranked them 40th and 45th out of
to evaluate subjective screening
group candidates, he would not have recom48 qualified applicants.
processes such as interviews.
mended taking the grant.
When a vacancy occurs, the
Another commissioners statement that
Fire Civil Service Commission
one applicant (not one of the plaintiffs) had been recommendcertifies to the city council the names of people eligible for
ed despite having a criminal history because he was a big guy
appointment. The city council makes the final hiring decision
and that hed make a good firefighter.
but generally follows the commissions recommendation.
The six-judge majority held that these statements did not
A state statute requires the commission to certify the three
raise an inference of discrimination because the statement
most qualified applicants (i.e., those highest on the eligibiliabout the grant did not demonstrate discriminatory animus,
ty list) for each vacancy, but the commission may also include
and the big guy statement was not related to the female
in the final stage process protected-group candidates who are
plaintiffs abilities.
ranked on the eligibility list.
The city sought to fill seven firefighter positions, and three
of those were funded by a grant that promoted appointing
By Nicole H. Bermel, an attorney with Kiesewetter Wise Kaplan Prather
PLC, the Worklaw Network member firm in Memphis, Tenn.
protected-group applicants. The commission selected the top

September 2011 HR Magazine 113

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Aerotek delivered every stafng


service I needed.
And a few I didnt even know I needed.

Whether youre looking for one key person or an entire staff, Aerotek
has the experience, expertise and plenty of solutions to meet all your
ever-changing needs. We can nd, hire and oversee your workforce.
And that can save time, money and your sanity. Maybe thats why Aerotek
is a favorite of Fortune 1000 companies everywhere.

To nd out how you can save time and money with Aeroteks
Stafng Solutions, call 888-AEROTEK or visit aerotek.com.

Aerotek is an equal opportunity employer. An Allegis Group Company. 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Legal Trends

Sticks and Stones


A federal definition of workplace violence may not match yours.
Later, at a morning crew meeting,
Big John related the junior employees
opinions and, slapping the wall for
emphasis, asked, Any of you dumb
enough to agree with this jackass?
Because if you are, you might as well
wear a stupid label on your forehead.
At this, the workgroup employees nervously laughed and avoided contact with
the junior employee.
Your company has long had a strong
program against workplace violence.
Weapons are banned from the premises.
Access is limited by electronic key card.
Parking lots are well-lit. Large amounts
of cash are not kept on hand. Anyone
threatening violence is quickly escorted
from the building. And all alleged incidents of workplace violence are investigated under the standing workplace
violence policy.

What Is Workplace Violence?


By Arthur G. Sapper
ome guidance documents from the U.S. Occupational Safety and Health
Administration (OSHA) define workplace violence as including verbal abuse.
This can lead to workers invoking the general duty clause of the Occupational Safety and Health Act, even for nothing more than obscene language. Dont
be surprised if some workers push the envelope with you on this, but employers
have some room to push back. The following hypothetical situation illustrates the
problem.

S
ILLUSTRATION BY STEVE DININNO

Spouting Off
You are the HR manager for a large corporation. An employee comes to you, visibly
upset about an encounter he just had with Big John, a more senior and much larger
fellow employee. He demands that you fire or discipline Big John under OSHAs
general duty clause because Big John presents a hazard of workplace violence to
me, and I demand your protection.
After you calm the employee down, he explains that he and Big John got into an
argument about possible unionization of the workplace, and that the more senior
employee loudly called me a jackass to my face.

Investigating this complaint under the


workplace violence policy strikes you as
inappropriate. No physical violence is
threatened or even implied, and the situation seems to present only emotional
upset. You have known Big John personally for 30 years as a harmless blowhard, so there seems to be no significant
risk that the situation will escalate to
physical violence. Your experience tells
you that, in the vast majority of cases,
nothing happens and tensions drain
away by themselves.
Investigating the matter under the
workplace violence policy will humiliate
Big John and probably make the matter
worse. The companys normal employee
The author is an attorney at McDermott Will &
Emery in Washington, D.C. He can be reached at
asapper@mwe.com.
_________

September 2011 HR Magazine 115

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Legal Trends
relations policy, which calls for low-key
Violence PreventionHealth Care and
counseling and a quiet attempt at reconSocial Service Workers. This says that
ciliation, better applies here and, you are
workplace violence includes verbal
sure, will yield better results.
abuse, psychological traumas, being
Nonetheless, the junior employee,
clearly upset, says, I am seriously
annoyed by this abusive behavior and
what appears to be obscene language.
The man is creating an atmosphere of
anxiety in the workgroup. I demand that
you enforce the general duty clause and
shut him up.
You know that the general duty clause
requires employers to take action against
serious, recognized hazards causing or
likely to cause death or serious physical
harm to employees. The case does not
sworn or shouted at,
seem to meet the physical harm element,
offensive language,
so you ask the junior employee, What
discourteous conmakes you think that the general duty
duct, false or
clause applies here?
unfounded statements
He mentions OSHAs revised booklet,
which tend to damRecommendations for Workplace Violence
age reputations,
Prevention Programs in Late-Night Retail
and inappropriate
Establishments, and says that its definition
remarks. You are
of a covered incident of workplace vioamazed at the breadth of
lence includes using abusive or obscene
these definitions. Your conlanguage or conduct which sericern increases when you learn
ously annoys another person.
that the above materials are used to train
You find this difficult to believe, but
OSHA compliance officers in workplace
you check the document and, indeed,
violence.
those words are there. Moreover, you
General Duty Clauses Limits
visit OSHAs web page on workplace
Even though these materials loosely
violence and see a paper by OSHA and
describe offensive language, discourseveral unions titled, Workplace Violence
teous conduct, inappropriate remarks
Awareness & Prevention. It quotes the
and the like as workplace violence, it
National Institute for Occupational
would be wrong
Safety and Health as
to infer that such
defining workplace
Online Resources
actions violate
violence to include
the Occupaverbal abuse,
For more about workplace violence and
tional Safety and
being shouted
OSHA, see the online version of this
Health Acts genat, intentionally
article at www.shrm.org/hrmagazine
eral duty clause.
causing annoy/0911Sapper. For other resources on
The genance or making
employment law, visit www.shrm.org
eral duty clause
unreasonable noise,
/LegalIssues.
applies only to
misbehaving,
conditions caus[or] disturbing
ing or likely to
persons by an act
cause death or serious physical harm. It
which serves no legitimate purpose, and
does not apply to psychic or emotional
abusive or obscene language or conharm or to emotional upsets or anxiety.
duct which seriously annoys another
None of the facts in the hypothetical situperson.
ation above indicate that the conditions
OSHAs web page leads you to the
pose a significant risk of physical harm,
administrations Training and Refernor that such a risk is likely. Big John
ence Materials Library, where there is
is causing or threatening only psychic
an OSHA slide show titled Workplace

harm to the junior employee, so no matter what the above materials suggest, an
OSHA inspector could not issue a citation on these facts.

The Occupational Safety and Health Acts


general duty clause . . . does not apply to
psychic or emotional harm or emotional
upsets or anxiety.
But HR managers have to
be concerned about more
than law. Although the
behavior is not unlawful
or does not amount to
workplace violence, it
may still pose an HR
problem: Big Johns
actions are demoralizing
a productive worker, isolating that worker from fellow
employees and possibly impairing
the junior employees productivity. The
wise HR manager may well take action,
but he or she should not feel compelled to
label the problem as one of violence.

The Federal View


If OSHA inspectors cant issue a general
duty clause citation for the conditions
mentioned in the above OSHA materialsverbal abuse, being sworn
or shouted at, offensive language,
discourteous conduct, inappropriate remarks, conduct that seriously
annoyswhat are these phrases doing
in OSHAs materials on workplace violence? The answer is that OSHA, like
every organization, is made up of fallible human beings who can err and get
carried away by cultural fashions. Such
trends often have momentum of their
own.
Unfortunately, the presence of these
overbroad statements in OSHAs training materials means that some OSHA
inspectors will actually try to apply
them. Employees or union officials also
may try to use these materials to justify
filing complaints against supervisors
they wish to silence.

116 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Empire BlueCross.
Plans with 100% preventive care
for your employees.
Offering your employees a plan with 100% preventive care coverage means
they can give 100% too. From annual checkups to u shots and other preventive
care services like well-child visits and immunizations. All at no extra cost to your
employees. So they stay healthy. And your business does too.

Learn more about what Empire BlueCross


has to offer at empireblue.com/connects2

Services provided by Empire HealthChoice HMO, Inc. and/or Empire HealthChoice Assurance, Inc., licensees of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue
Shield plans.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Empire BlueCross BlueShield.


Plans with 100% preventive care
for your employees.
Offering your employees a plan with 100% preventive care coverage means
they can give 100% too. From annual checkups to u shots and other preventive
care services like well-child visits and immunizations. All at no extra cost to your
employees. So they stay healthy. And your business does too.

Learn more about what Empire BlueCross BlueShield


has to offer at empireblue.com/connects2

Services provided by Empire HealthChoice HMO, Inc. and/or Empire HealthChoice Assurance, Inc., licensees of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue
Shield plans.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Blue Cross and Blue Shield of Georgia.


Plans with 100% preventive care
for your employees.
Offering your employees a plan with 100% preventive care coverage means
they can give 100% too. From annual checkups to u shots and other preventive
care services like well-child visits and immunizations. All at no extra cost to your
employees. So they stay healthy. And your business does too.

Learn more about what Blue Cross and Blue Shield of Georgia
has to offer at bcbsga.com/connects2

Blue Cross and Blue Shield Association. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Anthem Blue Cross and Blue Shield.


Plans with 100% preventive care
for your employees.
Offering your employees a plan with 100% preventive care coverage means
they can give 100% too. From annual checkups to u shots and other preventive
care services like well-child visits and immunizations. All at no extra cost to your
employees. So they stay healthy. And your business does too.

Learn more about what Anthem Blue Cross and Blue Shield
has to offer at anthem.com/connects2

Life and Disability products underwritten by Anthem Life Insurance Company. Anthem Blue Cross and Blue Shield is the trade name of: In Colorado: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado,
Inc. In Connecticut: Anthem Health Plans, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area):
RightCHOICE Managed Care, Inc. (RIT), Healthy Alliance Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain afliates administer non-HMO benets underwritten by HALIC and HMO benets underwritten by HMO Missouri, Inc. RIT
and certain afliates only provide administrative services for self-funded plans and do not underwrite benets. In Nevada: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc., dba HMO Nevada. In New
Hampshire: Anthem Health Plans of New Hampshire, Inc. In Ohio: Community Insurance Company. In Virginia: Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for
the City of Fairfax, the Town of Vienna, and the area east of State Route 123. In Wisconsin: Blue Cross Blue Shield of Wisconsin (BCBSWi), which underwrites or administers the PPO and indemnity policies; Compcare Health Services Insurance Corporation
(Compcare), which underwrites or administers the HMO policies; and Compcare and BCBSWi collectively, which underwrite or administer the POS policies. Independent licensees of the Blue Cross and Blue Shield Association. ANTHEM is a registered
trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

What if...
A health plan rewarded people for owning their health?
A health plan rewarded doctors for better health,
not just units of service?
Better outcomes meant a better bottom line and happier,
more productive employees?

Healthy Blue ChoicesSM total health engagement


At Blue Cross Blue Shield of Michigan, we believe a healthier future for our state
depends on lower health care costs and the improved health of everyone who
lives here. To achieve that goal, weve adopted a new approach that is leading
the nation as a revolutionary way to deliver health care. Its called Healthy Blue
Choices, a total health engagement model that provides higher quality care,
lowers costs and addresses employers most challenging issues.
Innovative plan design A full suite of innovative plans designed to motivate
people to live healthier with lower deductibles and premiums
Dedicated health support State-of-the-art wellness and care management
programs improve health and minimize risk factors
Enhanced care delivery Driving provider accountability for health with
incentives that change the focus from managing illness to maintaining health
In the end, its all about better health better health for your employees,
better health for your business and a healthier future for Michigan.
Use your cell phone with a
tag-reader application to
download more information,
call your Blues sales consultant
or visit bcbsm.com/innovate.
Blue Cross Blue Shield of Michigan and Blue Care Network are nonprot corporations and independent licensees of the Blue Cross and Blue Shield Association.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

I was involved in just such a case. A


union involved in an organizing campaign
filed complaints of workplace violence
with the police department and with
OSHA against a no-nonsense supervisor with whom a union organizer had
argued. The police quickly dismissed the
complaint, but an OSHA inspector tried to
apply the definitions in the above materials
and urged that the companys workplace
violence policy be expanded to incorporate them. The company, through this
attorney, protested vigorously that the defi-

nitions exceeded the bounds


of the general duty clause
and declined to make the
change. No citation was
issued.
So what should an
HR manager do when
he or she receives a
telephone call from an
OSHA inspector who says
a junior employee has complained that he is being subjected
by Big John to workplace violence?

UNITED STATES DISTRICT COURT


DISTRICT OF MASSACHUSETTS
If You Are a Local Government Entity that Paid for Certain
Brand-Name Prescription Drugs,
a Class Action May Affect Your Legal Rights
This notice concerns a class action lawsuit about how brand name
prescription drugs are priced. For detailed information and a list of drugs
involved, see the contact information below.
What is the Lawsuit About?
If you provide a prescription drug benefit, payment for many of the drugs
may be based on a common pricing benchmark called the Average
Wholesale Price (AWP).
This lawsuit claims that McKesson
Corporation (McKesson) and another company called First DataBank
(FDB) wrongfully inflated the markup factor used to determine the AWP
of certain drugs. As a result, some payors allegedly overpaid for drugs.
McKesson and FDB deny wrongdoing. Trial against McKesson is now
set for March 2012.
Am I Included in the Class?
You are a member of the Governmental Entity Payor Class if you are a
non-federal and non-state governmental entity in the United States and
its Territories, which reimbursed or paid the costs of brand-name
prescription drugs based on AWP published by FDBor Medi-Span data
derived from FDB databetween August 1, 2001 and October 6, 2006.
What Are My Legal Rights?
If you wish to remain a member of the Class, you do not have to do
anything. You will be bound by all the Courts orders. This means you
cannot sue or continue to sue McKesson based on the claims in this
lawsuit.
If you do not wish to be a member of the Class, you must exclude
yourself in writing or by email no later than October 31, 2011. If you
exclude yourself, you maintain your right to sue McKesson on your own.

To request a notice or obtain additional information: Call tollfree: 1-877-257-8346 (hearing impaired call 1-877-266-2939) or
visit www.mckessongovernmentawpclassactionlawsuit.com or
write or email: McKesson Governmental Entity Payor Litigation
Administrator at PO Box 808061, Petaluma, CA 94975-8061;
McKessonGovtclassaction@classactmail.com
____________________________________

The HR manager should


first consult counsel experienced in OSHA matters. The attorney will
understand the legal
constraints that OSHA
operates under and can
judge what kind of presentation should be made
to OSHA.
If the HR manager decides
to handle the matter without counsel, the manager should, above all, remain
calm and treat the OSHA inspector
with courtesy and respect. The manager
should:
Emphasize that the company has
a workplace violence policy. If the
companys policy covers only violence,
threats of violence and conditions that
pose a significant risk of violenceand
thus does not sweep as broadly as the
above loosely written OSHA materialsthe manager should respectfully
tell the OSHA inspector that, given the
language of the general duty clause, the
policy has the proper legal scope.
Emphasize that the company is handling the matter, but under management
policies that are more appropriate to
employee relations problems than the
workplace violence policy. Detail what is
being done under that other policy.
Emphasize to the OSHA inspector
that the company takes uncivil words
seriously, but that sometimes they dont
amount to violence, threats of violence
or conditions that pose a significant risk
of violence.
Explain that applying the employers
workplace violence policy to such cases
would trivialize the real problems of
workplace violence, subject employees
and especially supervisors to harassment by overly sensitive or ill-meaning
persons, increase tension in labor-management relations, and undermine the
policys credibility.
Finally, the HR manager should offer
to inform the OSHA inspector of the outcome of the measures that the company
takes. If necessary, he or she should offer
to explain the situation directly to OSHAs
area director or assistant area director. A
calm and mature explanation should do
much to resolve the situation with ones
employees and with OSHA.
118 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

THINK
DIFFERENT

SHRM 2011
STRATEGY
CONFERENCE
October 5-7, 2011 | Chicago, IL
Fairmont Chicago Millennium Park

Learn creative, effective and scalable


strategies that deliver results.

Keynote Speakers

The SHRM Strategy Conference is an exclusive event for HR


professionals and business leaders who are responsible for
strategic initiatives and programs.

The 2011 lineup of keynote speakers includes an


HR legend, one of the most inuential people in
nance and an internationally renowned authority
on business and technology.

As we continue to experience market shifts and changes


in workforce demographics, you must learn to think beyond
traditional business processes. This is a must-attend event for
HR professionals and business leaders.
The speakers, presenters and sessions will inspire you to
THINK DIFFERENT.

Bill Conaty,
Former Sr. Vice President of HR, GE

Bridget van Kralingen,


General Manager of IBM North America

The SHRM Strategy Conference Delivers:


Creative ideas, strategies and tactics
Valuable networking opportunities
8.75 strategic business management recertication credits
to apply toward your SPHR
Join your colleagues for this eye-opening experience and walk
away with strategies that can be implemented immediately.

This event sells out quickly. Register today.

Don Tapscott,
thought leader on the strategic value and
impact of information technology

www.shrm.org/conferences/strategy

11-0426

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

___________________________________________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Management Tools

Prod the Turtle


In times of change, leaders who have a tendency to hide
in their shells can create uncertainty and mistrust.

By Karen Foster and Jeff Freedman


hange initiatives can be challenging at best, and nearly 70 percent of them
fail to deliver intended outcomes.
Lack of communication and effective change management contribute to
this dilemma. People who are targets of the change must first hear and understand
before they act. Confidence in their leadership represents a significant underlying
motivation for their actions.
Hesitant leaders impede organizational change, while leaders who demonstrate
conviction, authenticity and managerial courage get superior results.
The recession has impacted more than incomes, productivity and employment
figures. It has fostered excessive risk aversion. Rather than acting as effective
change leaders, far too many executives are acting like turtles in defensive mode.
Their hesitance slows them down, and they emotionally disengage. The unintended consequences are manycredibility, reputation and political capital are
affected. Employees can become cynical, disengaged and unproductive.
With so much at stake in todays competitive landscape, it pays to notice and
quickly address the early warning signs of turtling in yourself or others and to
minimize this unproductive behavior as you embark on change initiatives.

Turtles and turtling behavior exist


at the highest levels. Executives may
reach a point of overwhelming reluctance to bear the conviction of leadership. This can occur when there is a
significant change in the environment
or when leadership demands higher
performance, leading to intense visibility.
Turtling signs include the following
behaviors:
Having subconscious reactions to
stress and anxiety.
Trying to avoid rocking the boat or
jeopardizing political capital.
Using a mechanism to prevent taking
the fall for poor performance.
Attempting to dodge risk and difficult
encounters with others.
Having a tendency to micromanage
your team.
Using tightly controlled communications.
Having difficulty following through
on commitments.
Avoiding conflict, or refusing to deliver bad news and give direct feedback.
Conveniently not hearing or dismissing challenging feedback.
As a leader charged with leading
change, you often have choices. You
can be courageous or complacent,
take personal responsibility or avoid
conflict, speak up and communicate
a compelling vision or tolerate groupthink. Change leadership is all about
increasing employee commitment to
Karen Foster is president of Portara Consulting and
Jeff Freedman is president of ClearPath Alliance,
executive coaching and organizational effectiveness
firms specializing in partnering with executive teams
to navigate change. They can be reached at www.por_____
taraconsulting.com and www.clearpathalliance.com.
_________

ILLUSTRATION BY CHADJSHAFFER.COM

Turtle Signs

122 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

M
q
M
q

M
q

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

MqM
q
THE WORLDS NEWSSTAND

the new vision while decreasing commitment to the status quo.


Leading change requires conviction,
authenticity and managerial courage.
Being complacent, avoiding conflict,
and rewarding the same behaviors in
others all lead to an erosion of trust
among team members.
Under these circumstances, a leader
will get stalled and miss milestones,
thereby costing the organization
money. You will create an environment of fear, uncertainty and cynicism.
Soon, top performers will head toward
the exit door.

Coming Out of the Shell


Effective change leaders mobilize energy and create action plans for themselves and the change effort. To inspire
acceptance of changes, leaders should:
Be challenged in their thinking, especially about engaging in conflict.
Take a broader view of their values,
goals and personal responsibility.

Strategically evaluate opportunities


to influence top leaders.
Create alignment around their intentions within the organization.

growth and stay ahead of the competition. Leaders will need to simultaneously lead people to perform, drive
execution and sustain optimism while

Leading change requires conviction,


authenticity and managerial courage.
Visibly fight for the values they

think will foster change.


Engage their team and give employees stretch goals.
Develop a clear and compelling
change story.
Acknowledge employee concerns
and future impact.
Give frequent recognition as well as
direct feedback when necessary.

Continuity Counts
The current economic landscape requires courageous leaders to drive

SHRM Global Learning System

living their organizations core values.


Otherwise, the costs to the business
may be significant.
People make change happen, not
organizational charts, redesigned processes or metrics. Leaders must build
trust, show that they care and demonstrate that they have the guts to take
the heat when the going gets tough.
Prodding your own inner turtle when
you slip into unproductive workplace
behavior is not an overnight process.
But it is possible through effort, honesty and consistency.

The #1 GPHR Certication Prep Tool

Succeed Beyond Boundaries


As communication and transportation continue to advance and the world
becomes smaller, more and more companies are realizing the benets of going
global. Businesses continue to expand abroad, creating a greater demand
for HR professionals who have knowledge and experience in managing an
international workforce.
Meet this demand by earning your GPHR credential. Prepare for the exam by
using the SHRM Global Learning Systemthe #1 GPHR Certication Prep Tool.
Choose from four easy ways to learn:

10-0802

s!TA DAYCERTIlCATIONPREPCOURSE
s/RGANIZATIONALTRAININGFORMULTIPLEEMPLOYEES
s/NYOUROWNSCHEDULE WITHTHESELF STUDYPROGRAM
s!TACOLLEGEUNIVERSITY/NLINE ON SITEORAHYBRIDOFTHETWO

Try the free demo today at www.shrm.org/learning/global

September 2011 HR Magazine 123

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Extra tax advantages for employees.

No extra work for you.


Adding New Yorks 529 College Savings Program Direct Plan to
your portfolio of benefits is fast, easy and no cost to you. Plus,
its highly attractive to your employees.
With its generous tax advantages, including a New York State
income tax deduction for New York taxpayers*, New Yorks plan
has already attracted 500,000 account holders in New York State.
Unlike a 401(k), theres no additional reporting required of you.
And we even have dedicated reps ready to conduct free seminars
right in your office.
2&&%"$,' employer@nysaves.org
_________________
2$$$,"'&+!"(& *Pamela Wait directly at 1.585.201.1882

Learn more at

theNY529plan.com

* Up to $10,000 is deductible from New York State taxable income for married couples
es ling jointly; single residents can deduct up to
$5,000 annually. May be subject to recapture in certain circumstances rollovers to another states plan or nonqualied withdrawals
withdrawals.

Before you invest, consider whether your or the designated beneficiarys home state offers any state tax or other benefits that are only
available for investments in such states qualified tuition program.
The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the
Direct Plan. Upromise Investments, Inc. and Upromise Investment Advisors, LLC serve as Program Manager and Recordkeeping and Servicing Agent, respectively, and are responsible for day-to-day
operations, including effecting transactions. The Vanguard Group, Inc. serves as the Investment Manager. Vanguard Marketing Corporation markets, distributes and underwrites the Direct Plan.
No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Upromise Investments, Inc., nor any of their applicable
afliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.
New Yorks 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor Plan, which is sold
exclusively through nancial advisors and has different investment options and higher fees and expenses as well as nancial advisor compensation.

For more information about New Yorks 529 College Savings Program Direct Plan, obtain a Program Brochure and Tuition Savings
Agreement at www.theNY529plan.com or by calling 1-800-211-7809. This includes investment objectives, risks, charges, expenses,
and other information. You should read and consider them carefully before investing.
2011 State of New York

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Inside SHRM
www.shrm.org/hrnews/insideshrm

Fair Labor Standards Act Showing Its Age?


estifying on behalf of the Society
for Human Resource Management (SHRM), Nobumichi Hara,
senior vice president of human capital for
Goodwill Industries of Central Arizona,
told a U.S. House of Representatives
subcommittee that the Fair Labor Standards Act (FLSA) is long overdue for an
update.
The law, enacted toward the end
of the Great Depression, reflects the
industrial workplace of the 1930snot
the workplace of 2011and hinders
the ability of employers to provide
flexible work options, Hara told the
House Subcommittee on Workforce
Protections.
He cited the example of a group of

Goodwill employees who wanted to


work a biweekly compressed workweek
of five nine-hour days the first week and
three nine-hour days and one eight-hour
day the second week. However, under
the acts rules governing the number of
hours worked per week and overtime
pay, the employees proposed schedule
would require the
employer to pay
overtime for the
first week.
SHRM
believes the FLSA
hinders employers
ability to provide
the flexibility
Nobumichi Hara
that millions of

nonexempt employees want, Hara said


during the July 14 hearing.
Ranking minority member Rep. Lynn
Woolsey, D-Calif., a former HR manager
and consultant, disagreed.
It is true that the modern workplace
has changed from when the law was
enacted, she said. Today for many
workers, the workplace is technologydriven, allowing them to perform their
job from remote locations. Still, the
occupations predicted to experience
the greatest growth over the next
decade include workers for whom the
protections provided by the FLSA are
fundamental.
By Kathy Gurchiek, associate editor for HR News.

Protect Veterans Like Other Groups


The Society for Human Resource Management and the College and University Professional Association for Human Resources have asked the U.S.
Department of Labors Office of Federal Contract Compliance Programs to
reconsider proposed changes to the affirmative action provisions of the Vietnam Era Veterans Readjustment Assistance Act of 1974.
In written comments submitted in July, the organizations said the provisions will increase paperwork for federal contractors without improving
employment for veterans, while creating a separate and distinct series of
affirmative action procedures and processes that are unique to veterans.
Such a distinction would undermine the goal of equal employment opportunity for all, they wrote.
Such proposed regulations could further stigmatize the very individuals
they are designed to help and would pit individuals of one protected class

New communication and training requirements.

against another in the employment selection process, according to the

Special data collection procedures.

submitted comments.

New recordkeeping obligations.

The proposed regulations require, for veterans only:


A different equal employment opportunity clause.

Establishment of benchmarks rather than goals.


Introducing the different standard of benchmarks will, at a minimum,

A separate self-identification process.

result in unnecessary confusion and, most likely, years of extensive litiga-

A singular outreach process and linkage arrangement to employment

tion, the organizations stated.

agencies.

SHRM Online staff


September 2011 HR Magazine 125

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Inside SHRM

New Member Benefit Features Internships


n alliance between the Society for
Human Resource Management
(SHRM) and Internships.com has
created a new benefit for SHRM membersa dedicated microsite of HR internships that employers and SHRM members
can access for free.
SHRM has approximately 16,000
student members, and about half graduate
from college in any given year. Through the
alliance, students can use Internships.com
to search for internships and get tips on

resume-writing and interviewing.


SHRM members can search for
internships by region, by nonprofit and
for-profit organizations, and by paid and
unpaid internships.
An internship is a realistic job preview,
and it gives [interns] the experience they
cant get any other way, said Laurie
McIntosh, SHRMs director of member
engagement. We want to help those
emerging HR professionals to get their first
jobs.

For employers looking to fill entry-level


HR jobs, she added, connecting with HR
intern candidates gives them access to
future employees.

Online Resources
Visit www.internships.com/group/shrm.
Students can create profiles and search
for internships, while employers and educators can post internships and access
the student database.

MEMBER INSIGHT

HR on Stage
Amy Lein
Amy Lein, PHR, has an immovable deadline every day: 6 p.m. Thats
when the curtain rises on the first of two nightly performances at La
Nouba by Cirque du Soleil at Downtown Disney in Orlando, Fla. At
that point, staff-related issues must be settled.
According to its website, La Nouba is where the mundane meets
the marvelousan apt description of Leins job as HR manager.
Lein, 47, handles recruiting, benefits, compensation and more for
the 185-person operation with artists from 14 countries. Its got the
extra challenge of the variety of cultures, language barriers, people
who are here for the first time, Lein says. We help them integrate
not only into their jobs but also into the city and the community.
She coordinates with the performance medicine team to ensure
that a full cohort of artists is healthy and available for each performance
featuring gravity-defying acrobatics and lightning-fast choreography.
We need to know the status of each individual, whether theyre able to
perform and if we need to make accommodations, she says.
HR Association, now as director of diversity. A Society for Human
Resource Management diversity conference in New Orleans inspired
her to foster connections between businesses and organizations that
match adults with intellectual disabilities with employers.
She is collaborating with two large area employers and exploring
the idea of training a candidate to join La Noubas retail operation,
adding another dimension of diversity to the staff.
By Alice Andors, a freelance writer in Arlington, Va.

Amy Lein, PHR (left)

PHOTOGRAPHY COURTESY OF CIRQUE DU SOLEIL

Lein is in her third year on the board of the Central Florida

126 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Pinnacle Program Helps


Rehabilitate Meth Users
elping women in San Juan County,
N.M., become gainfully employed
after spending time behind bars
for methamphetamine use is the aim of
a program by the Four Corners Human
Resource Association, a chapter of the
Society for Human Resource Management (SHRM).
The program was one of nine to win a
2010 Pinnacle Award as part of a national
competition sponsored annually by SHRM
and Automatic Data Processing Inc.
Methamphetamine use has
continued to be a scourge that we as HR
professionals have had to deal with, said
chapter president Julie Rasor, SPHR.
Rasor is HR director for the City of
Bloomfield, N.M.

For example, employers face issues


associated with absenteeism and job
candidates who cant pass a drug screen,
among other things, she said.
The chapters program, begun in
2008, was a response to widespread meth
use in San Juan County. In 2008, 93
percent of illegal drugs seized there were
methamphetamines, and many arrested
offenders were women, according to the
chapter. Those found guilty of possession
are mandated to participate in the
Methamphetamine Pilot Project.
The 60-day, court-appointed treatment
project is considered a potential model
for national use, according to Rasor. Its
strategies include individual and group
therapy, a 12-step program, education,

the Community Reinforcement Approach


and the Job Club.
The chapters program, which is
incorporated into the project, provides
work-readiness training, explains the
hiring process, provides resume and mock
interview critiques, and guides clients in
finding suitable employment once they
have graduated from the project.
This is a full lesson in collaboration
among community groups, Rasor said.
You get together and solve [problems].
Kathy Gurchiek

SHRM Board of Directors


CHAIR
Jose A. Berrios
BTG: The Berrios Talent Group LLC

Upcoming

IMMEDIATE PAST CHAIR


Robb E. Van Cleave, SPHR, IPMA-CP
Columbia Gorge Community College

September
16 Health Benefit Strategy: Leveraging Data, Design and Wellness,
Alexandria, Va.
19-20 Becoming a Strategic Business Partner, Alexandria, Va.
19-23 Advanced Program in HR Management: Driving Business Results
Through Global HR Strategies, Los Angeles
21-23 Coaching for HR Professionals, Colorado Springs, Colo.
21-23 PHR/SPHR Certification Preparation, Alexandria, Va.
26-27 Human Capital Analytics: Using HR Metrics to Drive Business Results,
Alexandria, Va.
26-30 Business and Human Resources: Leading HR and Your Organization into the
Future, Chapel Hill, N.C.

October
4 Health Benefit Strategy: Leveraging Data, Design and Wellness, Chicago
5-6 HR Generalist, Alexandria, Va.
5-6 Strategic Human Resources: Delivering Business Results, Chicago
5-7 SHRM Strategy Conference, Chicago
5-7 PHR/SPHR Certification Preparation, Chicago
6-7 SHRM Diversity & Inclusion Strategic Leadership Program, Chicago
6-7 SHRM Essentials of HR Management, Chicago
To register for these programs, visit www.shrm.org/education.

PRESIDENT AND CEO


Henry G. Hank Jackson
Society for Human Resource Management
DIRECTORS
Melvin L. Asbury, SPHR
Asbury Consulting LLC
Jeffery M. Cava
Starwood Hotels & Resorts Worldwide Inc.
Calvin W. Finch, CPA
CPP Inc.
Bette J. Francis, SPHR
Wilmington Trust
Carolyn Gould, SPHR, GPHR, CCP
PricewaterhouseCoopers LLC
James A. Kaitz
Association for Financial Professionals
Gary P. Latham, Ph.D.
University of Toronto, Rotman School of Management
Virda M. Rhem, SPHR
Texas Property and Casualty Insurance Guaranty Association
Gabrielle Toledano
Electronic Arts Inc.
September 2011 HR Magazine 127

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

___________________________________

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Whats New

Compensation and Benefits


Emerge Workplace Solutions has developed a low-interest emergency loan product
and financial coaching service for workers. With this new financial product and service, employers can offer employees loan options that help build credit scores, savings
and financial literacy. The loans interest annual percentage rates are guaranteed to
never exceed 20 percent. Emerge loans use an innovative credit assessment system that
rewards long-term employees with lower interest rates.
(800) 791-1725 | www.emergeworkplacesolutions.com | info@emergeloan.com
_____________

Employee Recognition
O.C. Tanner Inc. has launched iappreciate,
an employee appreciation application that
provides managers with mobile recognition tools. The application is for smart
phones and iPad and is designed to help
managers create meaningful recognition
presentations. From a simple platform,
business leaders can set a date for recognition events, invite people to speak, draft
talking points and create ready-to-print
certificates. Managers can also send quick
e-notes to team members for jobs well
done and flag important dates, such as
birthdays and anniversaries. The new website and application soon will be available
in 14 languages with the content updated
quarterly.
(800) 814-1786
www.octanner.com/iappreciate
info@octanner.com
___________

Staffing
Taleo Corp. has launched a talent management platform designed to help employers
find the right people to meet business objectives and develop employee incentives

www.taleo.com

to 18 categories. When employees see the


boards, they are encouraged to learn as
many skills as they can. Built for daily use,
these durable, magnetic, dry-erase boards
are available in four sizes and can accommodate up to 68 employees on a board.
(800) 624-4154
www.magnatag.com/crosstraining
info@magnatag.com
___________

Workplace Management
that align with organizational strategic
goals. The capabilities of the web-based
platform could change how employers
find and use talent to tackle tough organizational challenges. With this platform,
employers also can create development
paths for their employees and have the
capability to gain deeper insight into their
organizations talent pools.
(877) 818-2536
www.taleo.com | info@taleo.com
_________

ADP has launched a free mobile application for smart phones that allows workers
to access their human resource and payroll
information. Employees of ADP clients
can now use an iPhone, iPad, Android or
BlackBerry to view current and past payroll
statements (up to five previous pay periods).
In addition, this new application allows

Peoplefluent Inc. has launched Fluency on the Move, a mobile product


line of talent management tools that
include Workforce Explorer, Manager Compensation Assistant, Manager Guidebook and Candidate
Explorer. These mobile applications
deliver information and data that
www.adp.com/mobilesolutions/mobileshowcase.aspx
can help users make informed decisions about their organizations talusers to check their 401(k) and retirement
ent management strategies. For example,
saving allocations, balances and rates of
the Manager Guidebook application
return. The application also features a time
focuses on what managers need to know
and attendance function that employees
about their HR responsibilities and roles
can use to clock in, clock out, indicate late
within the organization. The other three
arrivals and generate timesheets.
applications deliver similar in-depth
(800) 225-5237
information and analyses on manwww.adp.com/mobilesolutions
aging an organizations talent pool.
/mobileshowcase.aspx
(877) 820-4400
_____________
info@adp.com
www.peoplefluent.com/mobile
________
info@peoplefluent.com
_____________
Product manufacturers and developers provide
Training and
information for Whats New. Inclusion in this
Development
sample of products does not necessarily imply
Magnatags new magnetic crossendorsement by SHRM or HR Magazine.
training whiteboard system organizFor an online directory of new products and
es and displays employee training,
services by category, please visit www.shrm.org
qualification and skill levels for up
/publications/hrmagazine/whatsnew.
_____________________
September 2011 HR Magazine 129

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Rutgers Master of
Human Resource Management Program

Your Source for


Top HR Talent
Rutgers Master of Human Resource Management graduates
can bring a number of strengths to your organization, including:

A Solid Business Foundation


A Strategic Approach to
HR Management
Diverse Backgrounds and
Global Perspectives
Training from the Most
Published and Cited HR Faculty

October 7th

JOB FAIR

Tap into this world-class


resource for your organization by
signing up to recruit candidates
at our upcoming job fair.

Tracy S.
Rutgers MHRM student

To register contact: Dave Ferio, Graduate Director

732-445-0862
ferio@smlr.rutgers.edu

_____________________________

or register online at:

www.rutgershrm.com

mhrm.rutgers.edu
____________________________________

Rutgers, The State University of New Jersey

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Education & Training Buyers Guide


AWARDS & INCENTIVES

BENEFITS

Purchasing Power

Purchasing Power

1375 Peachtree Street,


Suite 500
Atlanta, GA 30309
sales@purchasingpower.com
_____________
www.PurchasingPower.com
Purchasing Power is one of the
fastest-growing voluntary benefit
companies. It offers the premier
purchase program that helps
employees purchase name-brand
computers, electronics and
home appliances through payroll
deduction. The program works
for them and works for you
Purchasing Power supports HR
objectives like retention, work-life
balance and wellness programs.

1375 Peachtree Street,


Suite 500
Atlanta, GA 30309
sales@purchasingpower.com
______________
www.PurchasingPower.com
Purchasing Power is one of the
fastest-growing voluntary benefit
companies. It offers the premier
purchase program that helps
employees purchase name-brand
computers, electronics and
home appliances through payroll
deduction. The program works
for them and works for you
Purchasing Power supports HR
objectives like retention, work-life
balance and wellness programs.

COMPENSATION

EDUCATION

COACHING

COMPENSATION

International Coach
Federation (IFC)

ERI Economic Research


Institute

2365 Harrodsburg Rd, Suite A325


Lexington, KY 40504
888-423-3131 or 859-219-3580
Fax: 888-329-2423 or
859-226-4411
www.coachfederation.org
icfheadquarters@coachfederation.org
_________________
The ICF, formed in 1995, is a global
nonprofit organization formed
by individual professionals who
practice coaching. In service to
humanity flourishing, we choose
to lead global advancement of
the coaching profession. ICF is
dedicated to advancing coaching by
setting high professional standards,
providing independent certification,
and providing coaching research.

HR TECHNOLOGY

www.erieri.com
info.eri@erieri.com
_________
1-800-627-3697
ERI Economic Research Institute
provides current market data
for more than 1000 industry
groups. Thousands of corporate
subscribers rely on ERIs salary
survey, executive compensation,
geographic pay, and cost-of-living
data to give them Boardroom, court,
and employee level credibility.
Nothing beats real data and
reproducible results, with reported
rates of error.

HR TECHNOLOGY

WorldatWork

Capella

Epicor

Ultimate Software

For more than 55 years,


WorldatWork has provided
education for HR professionals
focused on compensation, benefits,
work-life and integrated total
rewards. To learn more about how
WorldatWork can help you attract,
motivate and retain a talented
workforce, visit www.worldatwork.
org/education.

Capella is an accredited, online


university providing education
for working adults who want to
make a difference in their lives,
careers, and communities. We offer
degrees in the fields of business,
health care, education, human
resources, information technology,
mental health, public safety, public
administration, social work, and
public service leadership.

707 Seventeenth Street,


Suite 3800
Denver, CO 80202
800-477-3287
Fax: 303-595-9970
epicor.com/hcm
Epicor, a leading provider of global
ERP solutions, and SPECTRUM, a
Web-based human resource and
talent management company,
decided to combine their respective
expertise and resources. Now, as
Epicor HCM, they offer the most
integrated HRISall built upon a
solid foundation of global reach and
leading-edge HR innovation. Visit
epicor.com/hcm.

2000 Ultimate Way


Weston, FL 33326
800-432-1729
Fax: 954-331-7300
ultiproinfo@ultimatesoftware.com
________________
www.ultimatesoftware.com
Ultimate Software is a leading
provider of unified human capital
management SaaS solutions
for global businesses, offering
award-winning UltiPro as SaaS
to manage a worldwide workforce.
Web-based features include
recruitment, onboarding, benefits,
payroll, performance management,
business intelligence, compensation
planning, time and attendance, and
self-service.

Company listings do not imply recommendation or referral by SHRM.

September 2011 HR Magazine 131

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Education & Training Buyers Guide


HUMAN CAPITAL MGMT

BACKGROUND
SCREENING/INVESTIGATION
ONLINE TRAINING
SOFTWARE

Ultimate Software

Citrix

2000 Ultimate Way


Weston, FL 33326
800-432-1729
Fax: 954-331-7300
ultiproinfo@ultimatesoftware.com
________________
www.ultimatesoftware.com
Ultimate Software is a leading
provider of unified human capital
management SaaS solutions
for global businesses, offering
award-winning UltiPro as SaaS
to manage a worldwide workforce.
Web-based features include
recruitment, onboarding, benefits,
payroll, performance management,
business intelligence, compensation
planning, time and attendance, and
self-service.

www.gototraining.com
1-866-962-6491
GoToTraining online training
software lets you hold interactive
training sessions with up to 200
people right from your desk. It
takes minutes to learn and costs a
fraction of what your travel budget
would be. So relax and focus on
what's important: your session.
Get a free 30-day trial at www.
___
gototraining.com.

TRAINING & DEVELOPMENT

TRAINING & DEVELOPMENT

TRAINING & DEVELOPMENT

TRAINING & DEVELOPMENT

Development Dimensions
International

Keller Center for Corporate


Learning at DeVry University

1225 Washington Pike


Bridgeville, PA 15017
800-933-4463
info@ddiworld.com
_________
www.ddiworld.com
Interaction Management:
Exceptional Performers series (IM:
ExPSM)
IM: ExP is designed to transform
individual contributors into
exceptional performers. It is a
competency-based learning solution,
designed to boost interpersonal
skills that will enhance individual
and group effectiveness and build
customer loyalty. Features:
8 contemporary course topics,
including networking, feedback and
embracing change
Flexible delivery options, including
DDI-delivered or train-the-trainer

One Tower Lane


Oakbrook Terrace, IL 60181-4624
888-KELLER-0
www.keller.edu
Remain competitive in the
challenging field of human
resources with an advanced degree
from DeVry Universitys Keller
Graduate School of Management.
Keller delivers the credibility
and flexibility you need with
three options: Master of Human
Resources Management, an MBA
with a concentration in HR or a
Graduate Certificate. Visit ____
keller.edu.

TRAINING & DEVELOPMENT

TRAINING & DEVELOPMENT

MindLeaders

Palace Resorts

Right Management

Villanova University Online

5500 Glendon Court, Suite 200


Dublin, OH 43016
800-223-3732
events@mindleaders.com
____________
MindLeaders-ThirdForce provides
business-solutions software and
services that enable learning-andcontent-driven talent development.
More than 2,500 organizations trust
MindLeaders-ThirdForce solutions
to help them develop their learners
and align their organization's goals
through performance-focused talent
management and award-winning
learning and coaching resources,
more than 4,000 online courses,
and comprehensive compliance and
e-assessment solutions.

8725 NW 18th Terrace, Suite 301


Miami, FL 33172
877-403-1547 (U.S. and Canada)
+52-998-193-2185 (all other
countries)
palaceresorts.com/groups
Whether its at the Five Diamond
Le Blanc Spa Resort in Cancun, the
all-new Hard Rock Hotel & Casino
in Punta Cana or one of eleven
Palace Resorts branded properties
throughout Mexico, we offer an
all-inclusive approach that delivers
success while maintaining cost
control for meetings and events.

1818 Market Street, 33rd Floor


Philadelphia, PA 19103
1-800-237-4448
Fax: 215-988-0150
www.right.com/work
Right Management is the talent and
career management expert within
Manpower, the global leader in
employment services. Our expertise
spans Talent Assessment, Leader
Development, Organizational
Effectiveness, Employee
Engagement, and Workforce
Transition and Outplacement.
We work with more than 80% of
Fortune 500 companies to help
them grow their talent, reduce costs
and accelerate performance.

9417 Princess Palm Avenue


Tampa, FL 33619
813-571-4938
Fax: 813-497-3421
sales@villanovaU.com
__________
www.VillanovaU.com
A well-educated workforce is the
first step to corporate success.
Villanova University can enhance
employee productivity with training
in some of todays most in-demand
disciplines. Empower your staff!
Put them on the road to success
with knowledge and skills they
can attain from Villanova University
corporate training. Corporate rates
available. Learn more at www.
___
VillanovaU.com/empower

132 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

An ounce of
prevention
In real life theres no redo button.

Last year,

However, there is an alternative to expensive legal trouble. All

the Equal

too often, employer liability can be traced directly to managers

Employment

who lack proper training. Because prevention remains the most


effective and affordable way to reduce liability, SHRM now offers

Opportunity

Legal Aspects of Supervision. Designed specically for groups

Commission broke

of 15 or more non-HR supervisors, this on-site workshop provides

all previous records

a basic understanding of key employment law concepts that can

by pursuing nearly

be readily put into practice. Core areas covered include:

100,000 charges
s %QUALEMPLOYMENTOPPORTUNITY

and recovering

s ,EAVE

$319 million

s 7AGEANDHOURISSUES
s !VOIDINGDISPUTESANDLAWSUITS

from private
employers.

Learn how you can bring this training


directly to your workplace:
OrgTraining@SHRM.org
____________________
703-535-6496 | shrm.org/orgtraining/legal
11-0464

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

TM

How to Contact Us
CHIEF PUBLISHING & E-MEDIA OFFICER, SHRM / PUBLISHER, HR MAGAZINE
Gary Rubin / __________
gary.rubin@shrm.org
EXECUTIVE EDITOR / Leon Rubis
EDITOR / Nancy M. Davis
MANAGING EDITOR / Desda Moss
ASSOCIATE EDITOR / John Scorza
SENIOR WRITERS / Bill Leonard / Dori Meinert
MANAGER, WORKPLACE LAW CONTENT / Allen Smith, J.D.
SENIOR LEGAL EDITOR / Joanne Deschenaux, J.D.
HR NEWS STAFF
Manager, Online Editorial Content, Steve Bates / Senior Editor, Beth Mirza / Associate Editor, Kathy Gurchiek
CONTRIBUTING EDITORS / Adrienne Fox / Robert J. Grossman / Susan J. Wells / Bill Roberts, Technology
Jonathan A. Segal, Employment Law
COPY DESK MANAGER / Gretchen Kraft
COPY EDITORS / Erin Binney / Roy Maurer
DIRECTOR, MARKETING, DESIGN & PRODUCTION / Caroline Foster
ART DIRECTOR / John R. Anderson Jr.
SENIOR GRAPHIC DESIGNERS / Maria-Eugenia Adams / Shirley E. Raybuck
PRODUCTION MANAGER / Kathy Jackson
ADVERTISING MANAGER / Courtney Diffley

DIRECTOR, ADVERTISING
Tim Canny
tim.canny@shrm.org
__________
MANAGER, MEDIA MARKETING AND CIRCULATION
Michael Johnson
michael.johnson@shrm.org
_____________
PUBLICATIONS ASSOCIATE
Brittne Burns
brittne.burns@shrm.org
___________

ADVERTISING SALES REPRESENTATIVES


NORTHEAST
Kenneth Luker
Phone (866) 809-7479 Fax (703) 535-6468
ken.luker@shrm.org
__________
SOUTH
Roger Kelton / The Kelton Group
Phone (770) 888-7801 Fax (770) 888-7802
rkelton@keltongroup.com
____________
WEST
Kimberly Lambert
Phone (866) 648-9670 Fax (703) 535-6468
kim.lambert@shrm.org
___________
MIDWEST
Nick LaRich, Tom Lasch & Steve Wafalosky
LaRich and Associates
Phone (440) 247-1060 Fax (440) 247-1068
(Nick) ___________
nlarich@larichadv.com
(Tom) tlasch@larichadv.com
__________
(Steve) stevew@larichadv.com
___________

Society for Human Resource Management


1800 Duke Street, Alexandria, VA 22314, USA
Phone (703) 548-3440; Fax (703) 836-0367;
TTY (703) 548-6999; E-mail: shrm@shrm.org
_______
Web: www.shrm.org
The Society for Human Resource Management (SHRM)
is the worlds largest association devoted to human
resource management. Representing more than
250,000 members in over 140 countries, the Society
serves the needs of HR professionals and advances
the interests of the HR profession. Founded in 1948,
SHRM has more than 575 affiliated chapters within the
United States and subsidiary offices in China and India.
Visit SHRM Online at www.shrm.org.
Toll-free 800 Numbers
(800) 283-SHRM for:
SHRM Membership (dues status, general
information, address changes)
Conference & Seminar Registration
HR Knowledge Center Advisors
HR Certification Institute
(800) 444-5006, option 1 or (770) 280-4188 for:
SHRM Catalog Orders, Books and Product
Information
Other Telephone Numbers
Mailing List Rentals: (203) 532-6644,
shrm@directmedia.com
__________
SHRM Foundation: (703) 548-3440
HR Magazine
Editorial, Advertising and Circulation offices are at
SHRM headquarters.
Contact HR Magazine
To submit a letter to the editor, suggest an idea
for an article, notify our editors of a new product
or service or obtain information on writing for
HR Magazine, please visit our web site at www.shrm
.org/hrmagazine/contact.
Permissions and Reprints
Authorization to photocopy articles for internal or
personal use, or the internal or personal use of
specific clients, is granted for libraries and
organizations registered with the Copyright
Clearance Center, 222 Rosewood Dr., Danvers, MA
01923, USA, (800) 772-3350 or (978) 750-8400, fax:
(978) 750-4470, www.copyright.com
(ISSN: 1047-3149). To order reprints or e-prints of any
article, contact the YGS Group at (800) 501-9571.
Subscription Information
SHRM members receive the magazine as a
complimentary benefit. Nonmember or additional
subscriptions can be ordered at www.shrm.org/
subscribe
____ or by calling (800) 283-7476, option 3 (U.S.
only) or +1 (703) 548-3440, option 3 (International)
Prices are based on mailing location: $70 per year for
the United States and its territories; $90 per year for
Canada; $125 per year for International (via airmail).
Back issues are $10 for mailing in the U.S. or $15
elsewhere, payable in advance.
Join or Renew Online!
Save time and postage. Join SHRM or renew your
membership at www.shrm.org. For more information
about other member benefits, please visit www.shrm.
org/infokitrequest. Out of work? SHRM offers a onetime transitioning membership. Find out more information at www.shrm.org/members/transitioning.

134 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Jobs
www.shrm.org/jobs

To place an ad contact the SHRM HRJobs team at 1.800.283.7476 x 5499, fax 703.535.6468, www.shrm.org/jobs
Positions Available

Texas

Wisconsin

Indiana

Richardson
Assistant Vice President for Business
Affairs - Human Resources Management

Frank E. Allen & Associates Inc.


Madison/Nationwide

Terre Haute
HR Director

For more job listings, visit

www.shrm.org/jobs

Where HR professionals
find HR professionals

Terre Haute Regional Hospital


Job Description:
Regional Hospital is a 278-bed community-based medical center that is
accredited by the Joint Commission and
has been serving the community for over
126 years.
The HR Director will be responsible for
planning, coordinating and implementing
a variety of HR programs to support the
goals and objectives of the organization.
Job Requirements:
Requires a bachelors degree and at
least five years of experience in HR;
masters degree in business or related
field preferred.
Apply online: www.regionalhospital.com

THE CASE OF: The Lost Employer

University of Texas at Dallas


Job Description:
The University of Texas at Dallas seeks
an experienced and visionary human
resource executive to serve as the chief
human resources officer. The successful candidate will be responsible for the
oversight and administration of all human resources services associated with
our progressive and growing campus.
Proficiency in PeopleSoft HCM and experience in ERP implementation is strongly
preferred.
To view the position details and to apply,
please visit www.utdallasjobs.com.

Human Resources Business Partner


position(s) Madison, WI, area (Manager & Director) for Manufacturing
Companies, requires 5-plus years of HR
experience and bachelors degree. Also a
position located near Duluth, MN.
Please see our website for full position listings or request full job specs by
replying to ad with resume and salary
information and relocation preferences
and requirements. Many positions in the
NYC tri-state area also.
Job Requirements:
HR generalist experience and bachelors
degree.
Apply online: www.frankallen.com

Shrmlock Holmes on the job trail


Ive just rescued an employer lost in the job
board forest. I need an HR star! she said.
One with HRCI certication and specialized
experience.
I sniffed out just what she needed. At SHRMs
HR Jobs she can post jobs or use the new
resume database devoted exclusively to HR
professionals. No other job board delivers so
many highly qualied candidates. For best
results, unleash the power of HR Jobs.

SHRMs

HR Jobs

Where HR Professionals Find HR Professionals


10-0721-B

www.shrm.org/jobs
September 2011 HR Magazine 135

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Future Focus
www.shrm.org/trends

By Jennifer Schramm
ith workforces still lean, organizations continue to expect higher employee productivity. Employers are aware that productivity gains depend
on a well-educated workforce with up-to-date skills. Many organizations
say they want to invest more in training and development. Yet fewer are providing
educational assistance. Whether this trend intensifies or is reversed depends on
factors such as the cost of higher education, the rising demand for graduates and
competing strains on benefits budgets.
In 2007, 68 percent of the HR professionals surveyed in the Society for Human Resource Managements (SHRM) annual benefits survey said their organizations offered
educational assistance for undergraduate education, while 65 percent offered graduate education assistance. In 2011, these rates declined to 58 percent and 54 percent, respectively.
The declines are being driven mainly by small and medium-sized organizations.
Cost is no doubt a factor. According to the most recent data from the SHRM Human
Capital Database, the average maximum reimbursement for tuition/education expenses is
$4,563 per year.
Further erosion of educational assistance benefits could add to what some education
experts say is already a serious shortage of college graduates in the United States. A June
study, The Undereducated American, by the Georgetown University Center on Education and
the Workforce, posits that over the past 30 years, the demand for college-educated workers
has outpaced supply. The authors, Anthony Carnevale and Stephen Rose, say the recession

and slow recovery have obscured this undersupply as many young graduates struggle to
find jobs. Nevertheless, they estimate that
an additional 20 million workers with postsecondary education will be needed in the
United States by 2025.
Eventually, more organizations may
conclude that providing education assistance is a cost-effective solution to the
shortage.
But uncertainties could influence such
a decision. For example, will education
costs continue to rise faster than the rate
of inflation? If so, will these high costs discourage employers from offering assistance
or lead them to reduce reimbursements?
Even those organizations that continue to
offer education benefits may find lower employee participation. Another factor will be
the degree to which overall benefits budgets
are strained by other competing costs, including rising health care costs. Yet another
uncertainty is whether Congress will eliminate tax credits offered to employers with
educational assistance programs.
With the importance of having
employees with higher education and
more-advanced skills growing, a complete
elimination of employer-sponsored educational assistance programs is unlikely.
Instead, organizations may alter their approach. They could encourage employees
to obtain college degrees in ways that keep
costs downby limiting reimbursements
or supporting less expensive forms of
higher education, for example. Organizations may get more involved in their local
community colleges to ensure that courses
have direct business applications. And
some employers are giving more support
to online degrees and seeking more flexible
education options that enable employees to
optimize their time both on the job and in
school.
The author is manager of the Workplace Trends
and Forecasting program at SHRM.

ILLUSTRATION BY ALICIA BUELOW

Undereducated

136 HR Magazine September 2011

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Introducing Text2Quit

C H A N G I N
B E H A V I O
C H A N G E
EVERYTHIN

1 Million
People Weve Helped

3.2 Million
Years of Life Weve Added

G
R
S
G

Alere Wellbeing. Leaders in healthy behavior


change for more than 25 years.

Text2Quit is an evidence-based series of text messages


designed to integrate seamlessly with the Quit For Life
Program, the nations leading tobacco cessation program.

At Alere Wellbeing (formerly Free & Clear), we know that


real behavior change happens differently for everyone.
The Quit For Life Program provides a combination of
phone-based coaching, text messaging, web-based
learning, progress tracking, social networking, and
medication support, making it the most effective solution
available for helping your employees quit tobacco.

To learn more YLVLWXV at www.alerewellbeing.com


2011 Alere, Inc. All rights reserved. Quit For Life and Free & Clear are registered trademarks of the Alere group of companies. The American Cancer Society name and logo are trademarks of the American Cancer Society, Inc.

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

HR Magazine

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND

Ceridian InView Workforce Management.


Plan, schedule, measure, smile, repeat.
Nothing makes an employee smile faster than a paycheck. And nothing makes you
smile faster than knowing you can rely on a payroll partner who will ensure timely and
accurate paychecks. Thats why Ceridian designed InView Workforce Management, an
affordable, streamlined, and proven system that is fully integrated with payroll. It ensures
there is no need to come up with quick fixes or work-arounds to make your employees
happy and that makes you happy. InView is one more way Ceridian provides the
insights, KnowHow and solutions you need to successfully transform your business.
For a closer look, call 877-552-5669 or go to www.ceridian.com/smile.

Ceridian Corporation. All rights reserved.

HR Magazine

www.ceridian.com/smile

Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page

M
q
M
q

M
q

MqM
q
THE WORLDS NEWSSTAND