Tuesday, February 23, 2016

Value People

I have talked about this before in my short diatribe against the term "human capital." But that has been a while, so after hearing John Maxwell speak last week, it is once again top of mind.

I try to read and listen as much as I can to anything about leadership. Last week The Sewell Family of Companies hosted a leadership event in Wichita Falls, featuring John C. Maxwell. I have read many of Maxwell's books, but have never heard him speak, so reserved a seat at this event. Although there were many excellent takeaways, there was one that I wanted to address today. Mr. Maxwell listed 5 things that he feels if a person does every day, will allow them to live a life of significance. Those 5 things?

  • Value people
  • Think of ways to add value to people
  • Look for ways to add value to people
  • Do things that add value to people
  • Encourage others to add value to people
I want to talk about the first one, "Value People." If we cannot do that, then it follows that the remaining four won't happen. If people are not valuable, why would we do any of the other steps?

We all say we value people. Our companies say we value our people. We say it because we are expected to. But do we? Really? Because our actions tell a different story.

When we value something, we consider it to be important or beneficial. We have a high opinion of that person or thing. We believe people are important to our company, at least in a philosophical sense, but do we believe they are beneficial or do we have a high opinion of them? If we do, we don't act like it. I cannot tell you how often owners (and even HR people) talk employees down.  We talk about them being lazy, disloyal, without work ethic, dishonest, etc. No doubt, some are. I would argue that most are not. Instead I think we get what we expect. People live up to our expectations. If we constantly tell people in words and actions they are not valuable to us, they will tend to give us exactly what we tell them we expect. A few will excel in spite of us.

Some of us are smart enough not to voice comments about how we feel about our employees, but our actions speak strongly--in fact, even if we are telling people how important they are and how much we value them, if our actions tell a different story, our employees will believe what we do, not what we say. If we don't "have time to train" people, that says we don't value them enough to increase their value. If our handbook reads like a police state, that tells employees we believe they are dishonest and lazy. If an employee comes to talk to us about a problem and we continue to read our email while they are trying to explain the issue, that says they and their problem are not important enough for you to listen. If an employee has a suggestion to make a process work better, but are told "If it ain't broke, don't fix it," that tells them their creative and problem solving skills are neither valued nor wanted. Employees are not going to continue to try to push the rope up hill.

If you want gold from people, treat them like they are gold. There will be a few that in spite of your efforts will not live up to your expectations. Fine. Help them move on to other opportunities. The rest will reward you for your efforts.

Monday, February 15, 2016

Penny's Top 7 Best Practices

In the last blog post, I talked about the Top 10 employment law mistakes. That blog was focused on compliance. Compliance is not my favorite thing about HR. You do compliance because you have to. It is a cost avoidance/risk management strategy. But compliance doesn't make you money. In fact, it costs you money--you just hope it is less than you would have lost without it.

Today, I want to talk about what types of HR practices can make you money. HR isn't thought of as a revenue-generating activity. It is seen as a cost. And it is true, that by itself, HR doesn't produce any products or services your customers buy. But I can tell you for certain, that your HR practices have a huge impact upon whether your company is successful because people matter.

So here are my Top 7 HR best practices that can make a real difference in your organization's profitability (and make it a better place to work.) My personal opinion is, "Grow Your People, Grow Your Business." Hence the graphic for this blog post.

1. Pay close attention to culture. Culture is what tells people what is really important, regardless of what your policies might say. It is really more of a leadership responsibility, but have no doubt that your HR policies can support the culture you want or they can undermine it. Consider a culture audit--if you are serious about building and sustaining a culture of a certain type, you have got to pay attention all the time. The foundation of a growth culture is trust.

2. Have the right kind of HR. Most HR departments tend to be one of two types. They are either all compliance all the time or they are what I think of as "tea and sympathy" HR--we want to make the employees happy. Most of the time, I don't fault the HR person--they respond with what they think leadership wants. Many companies have additional duty HR. These people were never trained in HR and have other responsibilities. HR is just an extra piled on to an already busy workload. In my opinion, you need people with superior interpersonal skills (especially in the coaching area), strong professional knowledge, and a business mindset. They should be thinking all the time, how can I help this workcenter be more productive? How can I help the employees be better at their jobs? What would have the most impact on revenue?

3. Hire right. If we hired right in the first place, we could prevent the majority of our people problems. I am not talking just about hiring right off the street--I am including internal promotions/transfers in this. None of us have a crystal ball. We are not going to choose the right person every time. But we can improve our odds by using a solid process. The topic for another post.

4. Not all employees are created equal--they are not interchangeable. We tend to treat employees as if they are interchangeable cogs. We treat employees as disposable. Somehow we have developed the notion that we can pick up a spare part any time we need one.  That's pure B.S. There are very real differences in knowledge, skills and motivation. If you pay attention, some employees make fewer mistakes, sell more, and are valued by your customers. This is worth something. Don't be afraid to pay for that.

5. Invest in your employees--especially your supervisors. Employees should be an investment, not an expense. I hear it all the time, "I'm not going to pay for that training because Joe could go to the training and then quit. I would be flushing my money down the toilet. Why should I pay for him to find a better job?" First, I pay for it because he will be better at his job while he is working for me. Next, I plan to be the best job whenever possible, so he doesn't leave. If you have limited dollars to spend, the single place where you can have the most impact is at the first level supervisor. If you invest nowhere else, invest there.

6. Listen. We don't always have all the answers. We don't even have the best answers. The people who know the most about what our customers want are those who interact with them every day. The people who know how messed up our processes are do the job every day. Get over yourself. Listen and learn.

7. Be fair (that doesn't mean exactly the same.) Employees value fairness. Management often thinks being fair means treating everyone exactly the same. It doesn't. Treating people exactly the same can be very unfair. If Sally makes you 25% more money than the average worker, why should she make the same amount of money as the loser who makes you 10% less than the average? Fairness does mean I need to lay out my expectations and hold people accountable. I need to tell people how they are judged and what I use as my yardstick to determine how I decide what to pay, but that doesn't mean we all have to be paid the same. I find employees to be okay with different treatment for different people as long as they can make the connection between that treatment and the standard. hey don't trust smoke and mirrors.

So there are my Top 7. Obviously there are a lot of other things you can do. But if you can focus on these, the rest will be easy.

Monday, February 8, 2016

Penny's Top 10 Employment Law Mistakes

First off, Penny is not a lawyer. So why am I talking about employment law mistakes? It doesn't take a lawyer to see what types of things repeatedly get companies into trouble. All you have to do it watch the news.

The law is intended to constrain our actions. It is the box that companies have to operate within. Stay within the lines and all is well. Stray outside, and the potential for expensive problems rises the further outside of that box you go. In other words, this post is about compliance and managing risk. (Don't worry, the next post is about actually doing things that can help your company make money.)

So what do I see as the Top 10 mistakes?

1.  Assume common sense and the law are the same. Business owners tell me all the time that they are just using common sense. Stop. There is no relationship whatsoever between the two.

2. Wage and hour. Paying people is tricky. The law was passed in 1938. The workplace was nothing like it is now. Wage and hour lawsuits are the single biggest liability a company has. Make sure your supervisors and payroll people are trained. You may think that your outsourced payroll vendor will keep you from making a mistake, but that is not the case. You need to know how to pay properly and do it, even though you don't think the rule makes sense (see Mistake #1.)

3. Employee misclassification. Yes, this is related to Mistake #2, but an mistake here may not only cause you a wage and hour problem, but carry over into ERISA and tax compliance. There isn't room here to get into details, but I am talking about exempt vs. nonexempt on one hand and independent contractor vs, employee on the other. The key thing to remember is that the going is assumption is that all of your workers are nonexempt employees. If you think they should be classified differently, be prepared to prove it. The consequences for being wrong can be onerous.

4. Interfere with employee concerted activity. Employers tend to think that if they do not have a union, employees have no rights. Not true. If you have 2 or more employees who want to talk about a work issue (pay, benefits, and conditions of work) then that action is protected activity. I had a CEO once who wanted to fire an employee because she asked a question about a wage freeze in a town hall meeting. Don't go there. Be sure your handbook doesn't have policies you cannot enforce (like prohibiting employees from discussing their pay.) The National Labor Relations Board has been busy the last few years, so if you haven't looked at your handbook lately, the likelihood is you have several policies that are not OK.

5. Poor selection, training and support of supervisors. This is a soapbox issue for me, so I will try to restrain myself. Don't just pick the best worker or the most senior employee as the supervisor. Some people are just not suited to the role. The needed skill sets are different. Choose wisely. Since your company is liable for what your supervisor says and does, provide training on all of the things that tend to get your supervisors (and company) into trouble. Then give them some ongoing support--continuing education, mentoring, and coaching are critical.

6. Don't take employee complaints seriously. This was the topic of my previous post, so I am not going into detail here. Listen.

7. Don't worry about compliance. Small business owners tell me they don't have to worry about compliance because the government only worries about the big companies. There is some validity to that. However, I have had several clients in the 3 - 50 employee range who have had audits or other interactions with government agencies. Often, because of employee complaints (See Mistake #6). Some, just because they were in a target industry. A few, just because....

8. Don't know what laws apply to your business. The bigger you are, the more laws you have to worry about. If you are a federal contractor, things are even more complicated. You need to know what laws apply to you and just as importantly, which do not. If you are small, you may be trying to follow statutes that just don't apply to you. I had a company with just 3 employees contact me to look at their handbook. They had taken a sample from the internet some years before and filled in the blanks and used it. One of the policies in the handbook was Family Medical Leave, which they thought they had to provide. This is just too much money for a small organization. Nonprofits sometimes think they don't have to comply with employment laws because they are charities. You have an exemption from certain tax liabilities--everything else you have to comply with, the same as your for profit brethren.

9. Don't do/don't document safety training. No matter what services or products you provide, training is required--before the employee starts to work. Even if that employee is a temp. This doesn't have to be complicated. For many organizations, the requirements are relatively few, but you have to document the training. First, because we don't want anyone to get hurt. Then, because we really don't want to have to pay the fines (which have gone up dramatically in recent months.)

10. Poor selection/oversight of outsourcing partners. Many companies outsource parts of their HR function. That's fine. The field is complicated and getting more so every day. Most business people just don't have time to keep up. Your outsourcing partners should. That's why you are paying them. However, in the end, if things aren't done correctly, you, not them, are on the hook. Pick your partners carefully and check up on them. If they put up any resistance to your oversight or make it difficult, find someone else.

Bonus: Yes, this is a top 10, but there is one more I'll give you as a bonus.  Tolerate jerks. If you tolerate people at any level of the organization that are just jerks, you are asking for trouble. This seems so simple, but it happens in almost every organization. If they can't be coached out of their behavior, the sooner you jettison them from the organization, the better.

That's my Top 10. Someone else may have a different set, but if you start with these, you'll avoid most of the big dollar traps.