Benefits and Compensation

Happy New Year! (Don’t Forget Your Personal 2014 Performance Appraisal)

Happy New Year, readers! Before you celebrate, take a moment to reflect on your accomplishments of 2014.

How close are you to where you thought you’d be on January 1, 2014?

  • How did compensation and incentive programs fare in 2014?
  • How about benefits and especially, Affordable Care Act challenges?
  • How pleased are you (and your hiring managers) with the people you’ve added to the staff?
    How about the employees you’ve lost? Were they the ones you’re glad to be rid of or the ones you most needed to keep?
  • How about your talent management programs?
  • Retention?
  • Engagement?
  • Wage/hour compliance?

That’s certainly a long list of challenges, not the least of which is the performance appraisal process for employees. Here’s some guidance for your 2015 program.

Give the Appraisal the Respect It Warrants

Anyone who does performance appraisals knows that there are 101 ways that they might not function as they should. One of those ways is when the managers and employees don’t take the process seriously.

The review process is there to incentivize, to provide an opportunity for feedback, to help the organization achieve its goals, and to assist in employee development by discussing individual goals and future planning. These are all serious goals and require everyone to give them the attention they deserve. If the managers and supervisors don’t treat the performance appraisal process as a sincere and important aspect of employee development, then the employees will not have the incentive to work toward their stated goals. The whole process falls apart.


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Problems Caused When Performance Appraisals Are Not Treated Seriously

Managers and supervisors may complain that the performance appraisal process is time-consuming and takes them away from their day-to-day tasks. However, they need to understand that employee development is an integral part of being a manager. The performance appraisal process is one key aspect of employee development and is crucial to maintaining engagement among the workforce. When employees understand expectations and know where they stand, they’re much more likely to be satisfied on the job.

Unfortunately, however, when the appraisals are put off and not given adequate time and attention, it can lead to multiple problems, such as:

  • Inaccuracies. When little thought it put into the appraisal, it may be inaccurate.
  • Dissatisfaction. When the manager or supervisor rates everyone the same (which is likely to occur if they do not put time and effort into the task), employees can quickly become dissatisfied by the lack of personal feedback.
  • Missed opportunities to address concerns. A performance appraisal is a great opportunity to have discussions about employee concerns—but only if it’s taken seriously.
  • Letting poor behaviors or performance go unaddressed. When performance appraisals are not reflective of performance, this can mean that problem behaviors do not get addressed nor resolved. Other employees may then get frustrated because these problems are not addressed, which can lead to lowering of employee morale.
  • Good employees get frustrated. Some employees may feel they did not get the ratings they deserved and did not get credit for their hard work. Feeling unappreciated, they may even begin to look for another job. This can lead to losses of good employees and higher turnover rates.
  • Economic harm for employees. If any portion of wages (or bonuses) is tied to employee performance ratings, the employees can suffer economic harm from inaccurate ratings.
  • Missed employee development opportunities. Employees can miss out when they don’t receive input on how they can improve, and this hurts everyone.
  • Legal trouble from lack of documentation. If an employee is having productivity or other problems that are not documented in the review process, and that employee is later fired for cause, the lack of documentation could create legal troubles—it could make the termination appear unwarranted.
  • Loss of incentive. If the review isn’t taken seriously by those conducting it, why should the employee care? Where is the incentive?
  • Lost opportunity to build trust. Inaccurate or uncaring review sessions represent a lost opportunity to build trust and rapport between the supervisor and employee. This is also a lost opportunity to build morale.

Have you encountered this problem in your organization? How does your organization ensure that performance reviews are taken seriously by both managers and employees? What will you do in 2015 to improve performance management in your organization?

2015 is going to be a big year for HR. With all the anticipated change, be sure you don’t forget about your basics, like Wage & Hour compliance. Even the most savvy practitioners get tripped up, and FLSA’s complex requirements can easily land you and your company on the wrong side of a lawsuit or a Department of Labor (DOL) investigation.

Fortunately, there’s help—Wage & Hour Compliance: Practical Solutions for HR provides you with detailed guidance on how to comply with the FLSA, and it takes you through the most complicated wage and hour issues that HR practitioners encounter.
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Why are aggressive attorneys so eager to file claims on behalf of employees? Because there’s so much money to be made! Some examples are:

  • $4.75 million—Hospital in Thousand Oaks, California, settles a wage and hour lawsuit over miscalculated overtime pay and failing to compensate workers for missed meal and rest periods.
  • $1.15 million—Las Vegas construction company to pay back wages to 1,060 current and former employees.
  • $976,327—New Mexico aerospace company settles with 900 employees who were routinely required to work through lunch breaks without compensation.
  • $340,400—New Jersey convenience store agrees to pay back wages and damages for violations of overtime and recordkeeping.
  • $84,541—New York physical therapist agrees to pay 22 employees for minimum wage violations.
  • $30,000—Texas chain of four gas stations agrees to pay their six hourly employees, again, for recordkeeping and overtime violations.

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