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APRIL 2016

 

In This Issue:

Improving Performance Management: Where to Start?

By Erin Mahoney, JD, Director, Training & Organization Development
Cascade Employers Association
emahoney @cascadeemployers.com

Performance Management has been a hot HR topic for the past few years and it’s only getting hotter. According to Deloitte’s 2015 Global Human Capital Trends report, the “importance” of Performance Management has jumped from 68% to 75%1, and based on the interest we’ve seen at Cascade Employers Association, that number will continue to climb. Given that most performance management systems have historically been perceived as ineffective, at best, and demotivating, at worst, an increasing number of employers are left scratching their heads at how to simultaneously alter those perceptions and reshape their PM systems into the effective tool so many want, but so few have.

Many PM experts have begun advocating for the elimination (at least in part) of the most villainized component of PM – the Annual Review/Appraisal – and replacing it with a series of ongoing coaching conversations between employees and their supervisors2. Unfortunately, this presumes that supervisors know how to have coaching conversations in the first place.

It also presupposes that there is a one-size-fits-all approach to PM and that a conversation can cure all employee development concerns. Not surprisingly, organizations that have had legal woes are not convinced that coaching (even with documentation) is sufficient. Other employers want to tie pay to performance and need performance appraisals to do so. While the latter is often dismissed as being demotivating, the jury is actually still out, with some studies showing a correlation between pay-for-performance systems and improved employee performance3. There is a lot of contradictory information coming from academics and IO Psychologists and most research focuses on the measurement aspects of PM and not on how well performance appraisal tools actually affect performance.

And for those who decide to use a performance appraisal tool, there are even more questions to answer. They not only have to sift through all the different approaches (Trait ranking? Behaviorally Anchored Rating Scales? Comparative or Absolute measurement?), but also all the different software available to implement one. And again, this is only to figure out the appraisal tool component. In addition, we need to make further considerations as to how performance management affects other areas like training needs, strategic development, and even what job descriptions look like.

No wonder we’re all looking for the Performance Management magic bullet. No wonder it can be soothing to hear that, “Just have a conversation with your employees” is the answer. While there is no doubt that coaching and ongoing conversations are essential to any PM system, and even where there is no appraisal tool and coaching is the sole PM approach, it should be done with intention and skill.

So given how confusing the landscape is, where does one begin? Though it’s easy to get overwhelmed by a PM overhaul or reboot, here are some things to keep in mind when trying to improve your performance management system that might make life a little easier:

  1. Take a deep breath. You don’t have to do everything at once. View your PM system as a work in progress. Even the most well-designed PM system will only last a few years, not a few decades.4

  2. Invest in training. No matter what your approach – coaching only, appraisal tool, pay-per-performance, or a hybrid – training is essential. If you want to successfully coach your employees, supervisors need to know how to have difficult conversations. They need to know how to recognize positive behavior and invest in employees’ strengths – not magnify their weaknesses. If you want a performance tool to be perceived as fair (or stand up better in court) you need to train your staff on what the performance criteria really mean, how managers should apply rankings consistently, how to draft good goals, and how to avoid the numerous biases (leniency, attribution bias, halo/horn effect, recency, central tendency, etc.) that will inevitably come up in any appraisal system.

  3. Ask questions. Before you change anything, ask why. What are you trying to accomplish through your system? What are your priorities? What are your organization’s goals? Use the answers to guide the changes that make sense for your organization. Better yet, ask people at all levels of your organization what they think. What’s working for them? What’s not working? What do they think will help create a rich performance culture? Not only will you get great information, your employees will become more invested in the system that emerges.

Take it all a step at a time, ask good questions and act with purpose, and you’ll be well on your way to a performance management system that you can be proud of. And, as always, Cascade is here to help.


1 Deloitte, 2015 Global Human Capital Trends: Leading in the New World of Work - Performance Management, The Secret Ingredient.

2 Rock, David; Jones, Beth, “Why More and More Companies Are Ditching Performance Ratings,” Harvard Business Review, September 8, 2015.

3 See Nyberg, Anthony J.; Pieper, Jenna R.; and Trevor, Charlie O., “Pay-for-Performance’s Effect on Future Employee Performance: Integrating Psychological and Economic Principles Toward a Contingency Perspective” (2014). Management Department Faculty Publications, University of Nebraska – Lincoln. Paper 111.

4 Ibid.

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Five Things You May Not Know About OFD Foods –
Featured Member

By Gayle Klampe, President
Cascade Employers Association
gklampe@cascadeemployers.com

This Albany, Oregon-based Company is the pioneer of freeze-dried foods for outdoor recreation. Read on to learn more about this impressive local employer. Did you know...

OGC Logo
  1. OFD Foods was incorporated in 1963, when the Company began drying fruit for breakfast cereals. Soon after, it worked with the Department of Defense to develop and produce military rations that tasted better and weighed less than canned rations.
  2. In 1968, the Company started marketing its own Mountain House® line of freeze-dried foods for outdoor recreational use. And in the 1980’s, the Company grew rapidly as it began to manufacture private label packaged food products and expanding its ingredient line.
  3. Today, OFD Foods is the world’s technological leader in freeze-drying. Their freeze-dried ingredients are key components in the products of some of America’s largest food companies.
  4. The Company’s Mountain House® brand continues to be the favorite of backpackers and campers, as freeze-dried foods weigh less than fresh (more than 98% of their water is removed) but retain virtually all their fresh-food taste and nutritional content when rehydrated.
  5. OFD Foods employs over 400 people and has produced over 400 different foods and beverages.

Cascade is proud to feature OFD Foods, the world leader in freeze-drying technology.

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Hot Compliance Question

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

Question: We require certain employees to hold special licenses. As part of maintaining those licenses, our employees are required to take continuing education courses. Am I required to pay my employees for the time spent in these trainings?

Answer: It depends. Time spent training must be paid unless all of the following are not met:

  1. Attendance is outside of the employee’s regular working hours;
  2. Attendance is in fact voluntary;
  3. The course, lecture, or meeting is not directly related to the employee’s job; and
  4. The employee does not perform any productive work during such attendance.

Continuing education is an interesting subject because – while it seems job-related – the Department of Labor has taken the position that it is not directly related to the employee’s job “when it provides instruction of general applicability that enables an individual to gain or continue employment with any [employer.]”

So to avoid paying training time for these classes, you must ensure that they are taken outside of regular working hours, that the employee voluntarily chooses which classes they want to take, and that the employee does not perform any productive work during such attendance.

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Tips for HR Ninjas: Workers' Compensation - Lower Premiums and Less Time Loss, Is This For Real?

By Bethany Wright, HR Consultant
Cascade Employers Association
bwright@cascadeemployers.com

Did you know that as an employer who maintains Oregon’s workers’ compensation insurance, your company may be eligible for up to $5000.00 to assist with worksite modification EACH time a worker is injured at your place of business?

This money can be used to rent, purchase or modify existing equipment so the worker can return to work earlier (with restrictions), which leads to less time loss and lower premiums.

For more information on eligibility, additional benefits and how the Employee At Injury Program (EAIP) works, contact your business’ workers’ compensation insurance company.

You can also visit the following Workers’ Compensation Division EAIP pages to learn more:

www.cbs.state.or.us/wcd/rdrs/rau/eaip/eaip.html
www.cbs.state.or.us/wcd/rdrs/rau/3525eaip.html

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New FLSA Exemption Rules Might Come This Spring

By Jenna Reed, JD, General Counsel and Director, Compliance Services
Cascade Employers Association
jreed@cascadeemployers.com

You may remember that last summer the Department of Labor announced proposed changes to the FLSA rules that determine when an employee is exempt from wage and hour laws. The most notable change was an increase in the salary threshold from $455 per week ($23,660 per year) to $970 per week ($50,440). Original speculation was that the final rules would not be published until late 2016.

Now, the DOL has announced that it has finished reviewing all of the public comments and has drafted a final rule. The next step, a review of the rule by the Office of Management and Budget, typically takes 1-2 months which means we may see the final rules this April or May. Once the final rules are published, they may take effect in 60 days.

Cascade will notify you once the final rule is published and help educate you about what you will need to do to comply with the changes. Until then, do not hesitate to contact us with any questions you might have.

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Oregon Passes New Paystub Bill

By Ryan Orr, JD, HR and Compliance Consultant
Cascade Employers Association
rorr@cascadeemployers.com

The Oregon Legislature recently passed SB 1587, which changes the requirements for what an employer needs to include on an employee’s paystub. The bill is expected to be signed by the Governor and will go into effect on January 1, 2017. Previously, ORS 652.610 required employers to provide employees “with a statement sufficiently itemized to show the amount and purpose of the deductions made during the respective period of service that the payment covers.”

SB 1587 changes this general requirement, and employers must now provide a paystub in writing and include the following information on each paystub:

  • The date of payment;
  • The dates of work covered by the payment;
  • The name of the employee;
  • The employer’s name and business registry number or business identification number;
  • The address and telephone number of the employer;
  • The rate or rates of pay;
  • Whether the employee is paid by the hour, shift, day or week or on a salary, piece or commission basis;
  • The employee’s gross wages for the pay period;
  • The employee’s net wages for the pay period;
  • The amount and purpose of each deduction made during the respective period of service that the payment covers;
  • Allowances, if any, claimed as part of minimum wage;
  • For non-exempt employees, the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours; and
  • For employees paid on a piece rate, the applicable piece rate or rates of pay, the number of pieces completed at each piece rate and the total pay for each rate.

Additionally, many employers provide paystubs to their employees electronically, and the bill creates some new requirements in order to continue that practice. To provide a paystub in electronic format, the employee must expressly agree to receive the statement in electronic form, and the employee must have the ability to print or store the statement at the time of receipt.

All employers should check their paystubs or check with their payroll company to make sure all the required information is being included. Additionally, if your organization provides paystubs electronically, you will need to ensure that employees have a way to print the paystub, and you will need to have employees sign a form that authorizes the electronic dissemination of the paystub.

For additional questions about this new law, contact Cascade today.

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Consumer Price Index (CPI)

Consumer Price Indexes listed were issued March 16, 2016 for February data.
1982-84 = 100, unless otherwise noted.

  CPI-W
United
States
2015

229.421
2016

230.972
Change

0.7%
Portland/
Salem

Avg. 2nd
half/year
2014

236.280
2015

236.882
 

0.3%
  CPI-U
United
States
2015

234.772
2016

237.111
Change

1.0%
Portland/
Salem

Avg. 2nd
half/year
2014

242.679
2015

245.405


1.1%

Note: CPI-W consists of urban households whose primary source of income is derived from the employment of wage earners and clerical workers. CPI-U includes wage earners and clerical workers, salaried workers, the self-employed, retirees, and the unemployed.

US Department of Labor Historical CPI Data

 


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