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Monthly Archives

March 2011


By Your Employee Matters | No Comments

Although it’s not binding on employers, a recent informal discussion letter from the EEOC about the use of criminal records as an employment-screening tool reminds us that employers must be careful when making certain inquiries during the pre-employment phase. Here are 10 tips from the letter:

  1. Ask questions related to the applicant’s qualifications The purpose of an interview is to obtain sufficient job-related information to make an informed employment decision. Questions that aren’t job-related will be viewed as suspect, particularly if they appear to have an impact on a protected class.
  2. Be careful about questions regarding outside activities Questions about an applicant’s membership in clubs, organizations, or about hobbies, if not job related, can be problematic if they reveal information about protected characteristics.
  3. Don’t ask about familial status or intentions The EEOC will assume that the purpose of such inquiries is to screen out individuals who answer “incorrectly” and that the questions will have a discriminatory impact on women.
  4. Avoid asking about child care arrangements This is an area of questioning that might screen out female applicants. However, it’s entirely proper to present the specific job schedule and ask all applicants whether they can regularly comply with this schedule.
  5. Stay away from physical and mental health inquiries It is illegal to ask an applicant questions that relate to health or medical conditions, with one exception: If an applicant’s apparent disability legitimately calls into question his ability to perform a job, the person may be asked how he would perform the job, with or without a reasonable accommodation.
  6. Age is not a permissible inquiry The Age Discrimination in Employment Act makes it illegal to discriminate based on an applicant’s age. It’s best to avoid all inquiries, such as when an applicant attended or graduated from school, because such an inquiry might reveal her age.
  7. Don’t ask about discrimination charges or lawsuits It’s illegal to retaliate against a potential employee for complaining about discrimination. Failing to hire someone because of his answer to this question might imply that your company engages in unlawful retaliation.
  8. Avoid asking about prior Workers’ Compensation claims It’s illegal for an employer to discriminate against someone because of Workers Compensation claims that they have filed.
  9. Arrest record inquiries are improper The EEOC and courts have held that questions about arrest records can have an intimidating effect on members of certain minority groups and can’t be justified by business reasons. Although questions about an applicant’s criminal convictions are legal, take convictions into account in the hiring decision only if they’re related to the job in question.
  10. Be careful with post-offer requests for information Wait to obtain certain types of information until after you have made an offer of employment. For example, you may require pre-employment medical examinations post-offer, so long as you make this requirement of everyone in the same job classification. Ask for information for insurance and benefits purposes, which may include personal characteristics and familial status, only after hiring.

Note: HR That Works members can use our post-offer fit-for-duty tools and watch Don’s webinar on Getting Pre-Hire Physicals Right.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.


By Your Employee Matters | No Comments

One of the ways we can get great ideas in HR is to read outside the field and ask how that learning applies to managing people. Here are a few articles from a recent Scientific American Mind that provide insight:

  1. “Any Excuse for Busyness.” According to this article, people who find reasons to occupy their time with activity rate themselves as happier. I’m always amazed at how people waste time when they’re waiting in the airport, flying, sitting on a bus, or driving. I find that this time provides a wonderful opportunity to learn, making the hours fly by while I become that much smarter.
  2. “Beware Your Beverage.” This study concludes that people judge alcohol drinkers as less intelligent, even if they themselves are drinking at the time! A word to the wise: If you’re trying to get a job, advance up the corporate ladder, or close a deal, a sparkling water with lime will do fine.
  3. “When Mom Has Favorites.” This article argues that children who receive unfair treatment versus their siblings are more likely to grow into depressed adults. Now those adults are working for you and have become highly sensitive to unequal treatment. Because they’re adults, they can actually do something about it, such as filing a discrimination claim. In addition, the favored children (insert employee) can experience guilt about their preferred status, extra demands from parents (insert boss), and resentment from siblings (other employees). Bottom line: Watch out for the unintended consequences of playing favorites.
  4. “The ‘Me’ Effect.” One of my Top 10 favorite business books, Leadership and Self-Deception, reminds us how we can deceive ourselves into believing that we make more positive deposits than we do negative ones. According to recent research, most people do not know what their own “trait-affected” presence is. “It’s not very easy to detect, because you don’t actually get to see what the world is like when you’re not around,” says Noah Eisenkraft. The article reminds us that each person gives out a vibe – what the researchers call a trait-affected presence – that affects everyone they come in to contact with in the same way. So much so that “certain emotions (such as discouragement, frustration, and stress) — are affected as much by who you are interacting with as by who you are.” So not only can we deceive ourselves about being discouraging, our very essence can have this affect on people.
  5. The article, “Their Pain, Our Gain,” points out that we actually enjoy each other’s misery. The Germans use the word schadenfreude to describe that small, private rush of glee in response to somebody else’s misfortune (i.e., it’s blasting snow where I grew up – and I’m so glad to be in the sunshine). When measured in the brain, this feeling is similar to the satisfaction from eating a good meal. The researchers posit that humans probably developed the instinct to notice, and profit from, the weakness of their competitors. When groups feel schadenfreude it can become more potent and invidious, driving deep-seated prejudices that can lead to harmful, even violent behavior. That’s why Alfred Cohen reminded us to beware of schadenfreude in his book, The Case Against Competition. Competition, whether focused on an external or internal adversary, can have negative effects if not managed properly.
  6. “What Makes a Good Parent?” As with the previous article on parenting, this one also applies to management. Here’s the Top 10 list, beginning with the most important:
    1. Love and affection
    2. Stress management
    3. Relationship skills
    4. Autonomy and independence
    5. Education and learning
    6. Life skills
    7. Behavior management
    8. Health
    9. Religion
    10. Safety
      For example, although we might not use the word “love” nor be openly affectionate at work, we certainly can have a deep, healthy respect for the other person. We can realize too that they have their weaknesses, as we have ours. As another example, owners have the right to share their religious conviction, but not in a way that’s disruptive or discriminatory. Each of these other factors relates directly to managing performance, motivation, and teamwork.
  7. “Dunbar’s Number.” Revolutionary biologist Robert Dunbar argues that our brain has limits on how many people we can truly keep within our social group. The maximum is about 150 people. Of course, this takes different types of relationships into account. At one end of the spectrum, we have a core group of people we talk to once a week. At the other end, we have acquaintances with whom we speak about once a year. This makes me question someone who brags that they have 5,000 people on their Facebook page.
  8. Perhaps the most interesting article in the magazine had to do with a meeting of the minds between top-end psychologists and magicians – including some from Las Vegas that we all know. Here’s a summary of the conclusions:
    • Humans have a hard-wired process of attention and awareness that’s “hackable.”
    • When people focus on one thing, their brains automatically suppress everything that happens around them. Magicians have devised a number of techniques that exploit this “tunnel vision.”
    • People can pay attention in various ways. Magicians exploit “top down” or deliberate attention by, say, asking a person to scan a book. They capture “bottom up” attention with distracting displays, such as doves fluttering out of a hat. Magicians will have you focus on one big thing while they go about doing a number of smaller things underneath your radar.
    • Interestingly, if an action seems to have an obvious purpose, such as adjusting your hat, an audience generally won’t notice that the magician has moved to put something under that hat. The best con of course, is the most natural one.
    • When magicians do their verbal patterning, they aim to generate an internal dialogue in your mind – a conversation with yourself about what’s taking place. This results in a great deal of confusion. It slows your reaction time and leads you to second-guess yourself.
    • Many magicians introduce delays in the method behind a trick and its effect to prevent you from linking the two. They call this “time misdirection.” The bottom line: Beware of tricksters using these techniques!

If there were ever a magazine that will stretch your thinking, this one is well worth a subscription. Go to www.scientificamerican.com/mind.


By Your Employee Matters | No Comments

Although I certainly disagree with some of the EEOC’s agenda, it’s important to point out what they have done right. One of those things is using their website to provide information. Of course, the primary purpose of the commission is, and must be, protecting workers. However, they – and the DOL, OSHA, NIOSH, JAN, and others – have also done a better job of getting info out there for employers. You’ll find this directory at the bottom of the site’s home page (www.eeoc.gov). The fact that more EEO claims were filed in 2010 than ever, and the apparent EEOC agenda of generating even more claims, should put all employers on notice. We’ll continue to share great government-related content and provide our Members with strategies, tools, and support to avoid destructive and expensive employee claims.

EOCC directory graphic


By Your Employee Matters | No Comments

According to the U.S. Bureau of Labor Statistics, the workforce is getting older, more ethnic, more temporary, less unionized, and more sophisticated. The BLS expects the highest growth in the areas of private educational services (2.4%), health care and social systems (2.3%), professional and business services (2.1%), and construction (1.7%). All other sectors had less than 1% growth expected during the next nine years.

What really matters is the workforce trends that relate to your business. For example, if you’re in the utility industry, which is expecting a negative growth rate, how will you be able to attract talent? If, on the other hand, you’re in health services, how will you retain your highly valuable employees?

Prudent business owners and HR executives should consider how these trends will impact them during the next five years. I believe that the single most important trend you will face is the continued fading of control as a management model in today’s workplace. It’s difficult to control bright people when they can easily work for themselves should they choose to do so.


By Your Employee Matters | No Comments

An interesting SHRM post-recession workplace report showed that the recession had a highly negative impact on employee morale and financial concerns but actually had a positive effect on competitiveness, retention, efficiency, and creativity. Big surprise. My two cents: We should be worrying about morale, finances, competitiveness, retention, efficiency, and creativity in any economic environment. By the way, HR That Works offers a variety of tools to help with each of these concerns.


By Your Employee Matters | No Comments

The December HR Magazine shared these statistics from a SHRM survey:

  • Companies doing criminal background checks? 73% all, 19% selectively, 7% no
  • Companies doing credit background checks? 13% all, 47% selectively, 40% no
  • Companies conducting pre-employment drug testing? 55% all, 17% selected, 21% no

As with most SHRM surveys, most of the companies surveyed are very large. Usually less than 15% are the size of our Member base. Nevertheless, where does your company fit in this? We’d advise you to do criminal background checks and drug tests on everybody, and credit background check on everybody you’re allowed to by law. This will eliminate exposing yourself to unnecessary risks.

(Note: The EEOC is severely restricting credit background checks on a disparate impact basis. Work with our partner, www.globalhrresearch.com to get it right!)


By Your Employee Matters | No Comments

The bottom line goal of most business is to make money. Well-run businesses make their money more efficiently and last longer than their competitors (Southwest Airlines offers a perfect example). Michael Gerber taught us in The eMyth that we should build our business as if we’re going to franchise it. Dr. Deming taught us about systems, systems, systems. Theoretically, we want to rid our organizations of any unnecessary or wasteful dramas. Ideally, we’d cut out all the nonsense and become increasingly productive. Workers would support each other as team members and continually educate themselves because that’s the smart and logical thing to do. That makes sense, doesn’t it.

As Mr. Spock on Star Trek never fully grasped, much of what goes on in organizations today is nonsense! As I state in my workshops, “If it doesn’t make sense, don’t try to make sense out of it!” Every day we bring to work an emotional self that needs drama and connection in order to express itself. Shrewd executives and managers realize the power of tapping into this need, rather than trying to control or dampen it. They know that while systems are important, people are not robots and their emotions need, demand, and deserve attention.

We should address this emotional need by creating great employee experiences – and do so with as little energy, effort, or dollars as possible. At first, this thought might seem Scrooge-like. However, it’s far from that. Any marketer will tell you the importance of trying to get the highest return on marketing dollars by creating great client or customer experience as efficiently as possible. There’s absolutely no reason not to apply this principle toward motivating your workforce too!

There’s a two-step approach to getting this right. The first is to identify the basic needs of each group of employees. The easiest way to do so is through understanding Maslow’s Hierarchy of Needs (click here to watch my quick video on it). After identifying these needs – in a sense, understanding your marketplace – analyze your efforts, using the formula of cost, ease, and impact, just as a marketer would. For example, a marketing firm might determine if they want to use a direct mail approach or telemarketers. They can identify the cost of each approach, evaluate the ease or difficulty of implementation, run test studies to identify the impact, and then roll out the more efficient program, while continually testing to improve it. A perceptive employer will take the same approach when marketing to its employees. What’s the cost of the program? How difficult will it be to implement it? What will its impact be? You can easily identify the first two and survey for the third, eliminating any guesswork.

Consider two examples. In the first, I recommended that one of my clients, who was going through difficult times, assemble a “fun committee” to balance out the negative dramas with some positive ones. I suggested that the company contribute $10 per employee per week toward this committee. The employees could implement any program they wanted, as long as they followed the “formula.” They decided that they were either going to provide healthy lunches every Friday or wash people’s cars at the end of every other Friday. The cost was the same for both programs, as was the ease of implementation. The carwashes won out over the lunches 2 to 1. Now that’s a 100% and enormous distinction when it comes to the ROI of those dollars!

In the second example, the owner of a temporary construction firm told me one of his employees wanted a full-blown Health insurance program, understanding that he would have to pay a portion of it. Up to that point, the owner had provided employees with a medical services discount card that cost him $50 per month. Of course, he was shocked when he saw Health insurance would cost him and his employees roughly $300 per month each! When confronted by the high expense of these plans, he decided to give me a call before he made any decision. I began by asking him how many employees had made this request. He told me it was only one. Based on a hunch from the first example, I suggested that he ask his employees (almost every one being someone who drove his truck to work every day), if they’d rather have a co-pay medical plan that would cost them $300 a month or have their trucks washed for free every Friday. As you can probably guess, these employees preferred having their trucks washed (there’s a reason that most of them were temporary workers). This solution saved the business owner thousands of dollars, and created some very happy employees, driving home with a clean truck every Friday.

The bottom line: Bring good strategic thinking to your soft stuff, as well as the hard stuff. Building great employment relationships is essential if you want to have a great company.


By Life and Health | No Comments

There are three particular actions that we can undertake to ward off serious illness or disease. They are: Quitting smoking, getting regular exercise, and watching what we eat. On smoking, Americans are getting a little better, but we tend to be poor at regular exercise and consuming a healthy diet. Too many years of burgers, fries and milkshakes loaded with fat and sugar have turned us into super-size versions of ourselves.

The sad truth is that Americans are fat and getting fatter. The CDC defines obesity as a body mass index (BMI) of 30 or greater. BMI is determined from a person’s height and weight and provides a reasonable indicator of body fat and weight categories that can cause serious health problems. The CDC further states that during the past 20 years there has been a dramatic increase in obesity in the United States. As of 2009, only the District of Columbia and Colorado had a prevalence of obesity less than 20%.

So what’s the big problem? According to the National Center for Chronic Disease Prevention and Health Promotion, obese and overweight Americans are at increased risk of a range of diseases from high blood pressure and hypertension, to Type 2 diabetes, gallstones to gout, several forms of cancer including breast, prostate, and colon cancer, and of course heart disease and stroke.

According to the American Heart Association (AHA), one in three adult Americans suffer some form of heart disease and 70 million Americans suffer from high blood pressure, the leading contributor to heart disease. Since 1900 cardiovascular disease (CVD) has been the number one killer in the world and almost half of the deaths every year in the United States are from some form of CVD.

But if you reduce your weight by controlling your diet and regular exercise, you actually decrease those risks and establish assets that will help prevent disease.

Healthy food habits can help you reduce three of the major risk factors for heart attack — high blood cholesterol, high blood pressure, and excess body weight. They’ll also help reduce your risk of stroke, because heart disease and high blood pressure are major risk factors for stroke. The AHA recommends eating a variety of fruits, vegetables, and grain products, including whole grains. They also suggest fat-free and low-fat milk products, fish, legumes (beans), skinless poultry and lean meats and to limit fats and oils to liquid and tub margarines, canola oil and olive oil.

Remember prevention is the key. Stop smoking, get some exercise and eat healthier foods. We really are what we eat. Our lives, literally, might depend on it.


By Life and Health | No Comments

How much life insurance you purchase depends on how much you actually need and what you need the life insurance to accomplish. Although it would take a dissertation rivaling the Patient Protection and Affordable Care Act to detail every individual situation, circumstance, and appropriate calculation, there are some general guidelines to help those purchasing life insurance get a good gauge on how much life insurance they should purchase.

Dependents can be used as a good rule of thumb for purchasing life insurance. Typically, the more dependents one has, the more life insurance is needed. Of course, life expectancy of the dependents should also be considered and even those without dependents should carry some life insurance. Here are four common situations:

1. Minor Dependents. The younger the child, the longer he/she will be dependent upon the parents’ income. Insurance should account for how long the child will need to be cared for should you die. There also should be enough insurance coverage to provide for new childcare or housekeeping services if a currently unemployed parent will need to find employment upon the death of their spouse. Ideally, when both parents currently work, they should each have insurance coverage that will sufficiently cover whatever amount they contribute to the household. At the very least, the higher-earning parent should be covered.

2. Dependents Other Than Minor Children. Examples of other dependents would include aging parents or a disabled family member that relies upon your income. The coverage amount should be based on how long the dependent is expected to live and how much income would be needed to maintain the same quality of life for that amount of time.

3. Couples without Dependents. If both spouses could live comfortably in the event one dies, then substantial amounts of life insurance is usually unnecessary. Life insurance should ideally cover medical expenses, owed debts, burial expenses, and any charitable donation desired. In the event that one spouse is a substantially higher earner than the other or the spouse would be left in financial hardship should a death occur, then the life insurance might need to be adjusted accordingly.

4. Singles without Dependents. Again, substantial amounts of coverage are generally unnecessary in this case. The life insurance should be enough to cover debts and burial expenses. Premiums are generally much cheaper for younger individuals. So, it’s actually fairly affordable if more insurance is desired to leave a charitable contribution or lock in a lower premium rate for the future. Experts once recommended for individuals to purchase life insurance five to six times their annual salary. However, a more reliable estimation is from using actual living expenses and the ensuing deficit that would occur from an absent salary. This can be accomplished as follows:

Figure the amount of income existing family members would need to maintain a comfortable lifestyle, which includes property taxes, mortgage or rent, property and vehicle insurance, property maintenance and repair, appliances, utilities, car payments, food and essentials, health insurance, child care, travel and recreation, and so forth.

Next, subtract the annual costs from above from other income sources, such as social security, spousal employment, or retirement that would remain in the event of your death. If unsure about Social Security survivor’s benefits, the Social Security Administration can provide an accurate estimate. Of course, the actual amount will depend on the age of the surviving children, your earnings, and the age at which you die. For children under sixteen-years-old, a good estimate is usually $4,000 annually for one child and $5,000 annually for two or more children.

Subtract the annual expenses from the other income sources to determine the deficit you’ll be working with.

The insurance coverage benefit should ideally be large enough that post-tax annual investment proceeds will cover the annual deficit, without your survivors dipping into the principle. The amount needed can be determined by dividing the deficit by 4% to 6%. Four or five percent leaves room to account for interest rate variations and inflation. You will also want to include any expenses that will be incurred upon death, such as funeral costs, medical bills, estate administration fees or taxes, children that will be going to college, and an uneducated or undereducated spouse that might need to return to school.

As mentioned above, it simply isn’t possible to cover each individual situation, circumstance, and calculation, but the above is a sturdy guideline that will be applicable in many cases. If any doubt remains about how much coverage you need, a professional life insurance agent can help you fine tune the above information to account for your circumstances.


By Life and Health | No Comments

Trying to figure out how to pay for a child’s college education is a mentally exhausting task for most parents. Few people probably think of their variable, whole, or universal cash value life insurance policy as a way to pay for a college education, but it can be a viable cash source.

Of course, the primary reason to buy any life insurance policy should always be to cover and protect the future requirements, needs, and lifestyle obligations of a family. However, once purchased for this need, there are many additional policy features that could allow you to use a permanent life insurance policy for current living needs.

Potential Features of Cash-Building Permanent Life Insurance. You can amass a significant amount of money without having to pay current taxes on the money. Just how substantial the amount of amassed money will be largely depends on what type of policy you opt to purchase. Additional premiums, for example, would only add to the amount of money that is accumulated.

If you ever need to take advantage of the “borrowing” feature on the policy, you can remove a sum of money and not face current taxation as long as the policy is not subsequently lapsed whether intentionally or unintentionally. After you utilize the borrowing feature, you will be repaying yourself instead of a lending agency. If the policy is sufficiently funded, then there might not be a need to repay the borrowed money.

Things to Keep in Mind about Borrowing from Life Insurance. Of course, since it is essentially your money, you can borrow funds from the cash value of your permanent life insurance policy for basically any reason. However, you should make sure that you pay a sufficient amount of premiums to keep the policy “in force.” Borrowing money could mean that you will need to pay greater premiums to keep the cash value of the policy at the suggested level. As long as you do this, a great portion of your child’s college education can be funded with your life insurance policy; yet, you will still have life insurance.

As mentioned above, you might never need to repay the borrowed money if you have a high cash value and pay the necessary premiums. However, you should always consult with an insurance or tax adviser before relying on this approach to pay for your child’s college education.

The Risk versus Benefit. Remember that nothing in life is without risk. Your policy could lapse because there is not enough cash value in the policy for the insurance company to provide the set life insurance benefit amount. The lapse is generally the result of not sustaining a sufficient cash value and/ or failing to make the necessary premium payments. The last thing you want to do is lose your life insurance. A lapsed policy usually means that you will be faced with paying taxes on any cash value above the amount you paid in premiums. If you feel that your policy is at risk of lapsing, you might try to reduce the face value of your policy (the amount paid upon death) to ensure there is enough money.

With all of the above in mind, a life insurance policy is a very feasible method of paying for college and other expenses. You can always consult with an insurance or tax adviser to ensure that it’s the right route for you and your family.