Trends in Performance Management 2015/2016

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We’re only two months away from a new year, and while you’re getting ready for holiday parties and turkey feasts, you’re also wondering what you can do better to improve your performance management in 2016. You weren’t? Well, now you are. Did 2015 live up to your standards? Did your employees lack the skills you hoped they would gain? Before running out the office door for your New Years Eve party, take a look back at 2015’s top performance management trends and see what you can offer once January hits.

1. Give your employees some control

According to 7geese.com, putting your employees in the driver’s seat is the best way to demonstrate what kind ofmindset you want to see in the workplace. Being the boss can be exhausting, so why not show your employees how to run the workplace themselves? Placing your employee into a new role or job will both leverage their skills, but also their strengthsin the workplace.

2. Relationship building with the boss

7geese.com has reported that many businesses have recently adopted the ‘holacracy’ structure, in which authority is distributed to teams and groups rather than individuals. This strategy can create strong alliances between employees and the company, as well as giving employees the opportunity to advance their career, therefore helping the company.

3. The Rating Scale

According to CEBglobal.com, only 4% of businesses have followed this advice: eliminate performance ratings and forced rankings. While this is small number, 5% of organizations are planning or considering eliminating their rating scale. Companies like Gap Inc. and Adobe Systems Inc. have eliminated the system, stating their employees were more anxious about their roles in the workplace. What do you think of that?

4. Not only the scale – get rid of the whole model!

Performance management is changing, and companies all over the world are getting rid of the traditional biannual or annual reviews, which are all about setting long-term goals for employees. According to Cognology.com, 89% of companies surveyed in the Global Human Capital Trends 2015 report have changed their performance management strategy. New models in 2015 include increases in employee feedback, setting team goals, and monthly review meetings. Companies such as Adobe Systems Inc. and Deloitte have adopted these strategies and both reported a spike in productivity in the workplace.

5. What’s next?

The Society for Human Resource Management claims 2016 will be the year more employees will be introduced to consumer-driven health plans. Not only that, but employers will use health care analytics to demonstrate costs associated with their employee’s health care plans, enabling them to make better decisions with their plan costs. Financial wellness benefits will also be trailing into the New Year;employers will be evolving their voluntary benefits to reflect the struggles their employees face with the post-recession economics realties, meaning more student-loan assistance and retirement preparation planning. Lastly, business will be adopting strategies to defend their employees against pharmacy costs and bills by shifting to high-deductible health plans (HDHPs), therefore helping their employees pay their expenses by funding health savings accounts or health reimbursement arrangements.

 

Are you thinking about offering benefits to your employees?

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Are you thinking about providing benefits to your employees…?
If you are, you know it can be an overwhelming process. There are a myriad number of options out there and it can be confusing. The first thing you might think about is why you would do that. There are several advantages to providing benefits to employees:

  •  Will aid in recruiting new employees
  •  Excellent for retention – Benefits provide employee security, and often are more highly valued than their worth
  • They can support managerial strategy and allows the employer to be empathetic towards their employees
  • Less expensive than a raise because there are no additional increases in CPP, EI or WCP payments, and premiums can be tax-deductible. A tax effective form of compensation!
  • Can increase productivity, morale and the quality of employee’s work.
  • Healthier employees reduce turnover and absenteeism.

That being said, there are areas of caution that you would want to think about, so as not to create disadvantages for yourself:

  •  Costs can be substantial and sometimes difficult to control, however the premiums are tax deductible.
  •  Funders do not always reimburse employers for these costs
  • It can be difficult to develop an efficient and effective benefits package (but are many options to design a program)

In this post, we’re going to look at just what it means for a small or medium sized business to provide employee benefits. First of all, providing employee benefits (over and above that those which are legislated) is part of a total compensation strategy (more about this in a future post). This is what commonly is referred to as “indirect pay”, as opposed to base pay or performance pay.
So let’s look at what makes up indirect pay:

  • Benefits mandated by law
  • Pension plans
  • Medical, dental, vision care and/or life and disability insurance
  • Pay for time not worked
  • Employee Assistance Programs
  • Food services (such as discounted cafeteria options)
  • Discounts on purchases (such as computers)

Benefits mandated by law are:

  • CPP/QPP
  • Employment Insurance
  • Workers Compensation
  • Provincial Health Insurance plans
  • Vacation Time and Vacation Pay
  • Statutory Holidays
  • Paid Rest Periods
  • Termination or Severance Pay (pay in lieu of notice)
  • Leaves – Pregnancy/Parental/Personal Emergency/Family Medical (these are mandatory, but not paid by the employer)

Now let’s look at the most common types of benefits employers might provide:

  • Pension Plans – Defined Benefit, Defined Contribution, Hybrid, RRSPsHealth Care Benefits – Medical, Dental, Vision Care
  • Income Security – Life and Accident Insurance, Short and Long Term Disabili· Paid Sick Leave
  • Educational Assistance and/or Tuition Reimbursement
  • Employee Services – Employee Assistance Programs, Child or Eldercare Services

This is not to suggest that any small or medium sized business jump in and start a program offering all of these benefits. An employer needs to consider the size of their employee population, the demographic, and the cost. As well, some benefit payouts are taxable for employees, so you would want the support of the employees in the implementation (e.g. Registered Pension Plans, Group RRSPs). But, there are tax advantages in some areas to employers in providing these benefits. So here’s what you need to consider in the choice of a benefits package:

  • The relationship to the total compensation costs – are the benefits worth their cost or would it be better to put the money to another area of compensation?
  • Costs relative to benefits – will the level of benefit expense be acceptable now and in the future?
  • Your competition – is your benefit selection externally competitive?
  • What role do you want your benefits program to play – Attraction, retention, motivation?

And finally, your program must be compliant with legislation.
When you are ready to start down the benefits path, you have issues you need to consider for implementation:

  • The benefits are a factor in achieving the company’s compensation objectives
  • Decide on a process for designing the program
  • Decide on a benefit program and which specific benefits to include
  • Optimize each type of benefit for coverage
  • Funding the program, eligibility and flexibility
  • And developing your administrative process

Cost containment will be a big factor in the success of your program, and one way to do this is by cost sharing with your employees – it’s a simple alternative to some of the more complicated ways of containing costs. Another way is through the type of plan or program you choose – Flex or “Cafeteria” style plans. These plans offer lists of benefit options in exchange for a fixed amount to spend. These Flex Plans allow a company to identify the preferences of their employees and to show them which benefits are of the most importance. Flexible or semi-flexible benefit plans seem to be the best options for a diverse employee needs, and are well suited to the financial needs of the small or medium sized business.
Offering employees benefits will provide employers with many paybacks, staff retention and recognition. A solid well managed benefits plan will help recruit good employees. In developing your employee benefits plan, solicit the input of your employees – the best benefits are the ones your workforce wants.
Finally, going down this path alone is not encouraged; you need an Employee Benefits Specialist with you. I would recommend contacting Melanie Rousseau, melanie@alliancegroupbenefits.com for a chat and to see the process that the Alliance Benefits Team uses to facilitate benefit program implementation and ensure you meet your company’s objectives.
Stay tuned for our next post –“What is Total Compensation?” It will land here in a couple weeks.
Warm regards
Frances Mote
frances@niagarastreetconsulting.com

What is conflict in the workplace really costing you? Part 2

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In my last post, I left you with the formula for a quick and dirty formula for calculating a cost of managing workplace conflict.  This month, I would like to examine the different styles that people use to address conflict and how to deal with conflict in the workplace.  First let’s look again at the three top causes of conflict in the workplace:

  • Personality clashes – 49%
  • Stress – 34%
  • Heavy workloads – 33%
And one or more of the following factors may be present in a situation of conflict:
  • Poor leadership (considered to be the #1 factor in Canada and the UK)
  • Organizational deficiencies
  • Personality styles
  • Scarce resources
  • Conflicting values and interests
  • Lack of information
  • Lack of skills
  • and just plain old bad behavior
We can categorize workplace conflicts three ways, and we can see where the above factors might be seen:
  • Identity or relationship conflicts – personality differences, annoying behaviors etc.
  • Task conflicts – differing viewpoints on what a task or activity entails
  • Process conflicts – disagreement on how the task will be completed
Unresolved conflict is bound to escalate, and there are three critical phases that the problem will move through if not addressed.  In the first phase of a conflict, the parties involved are pretty much open to co-operating, if the conflict is recognized and discussed with an end to resolution.  When this doesn’t happen, we can watch the parties move towards behaviors we really don’t want present in the workplace.  And, let go long enough, the conflict can escalate to phase three, full blown confrontation.  While there are two broad reactions to conflict – the conflict averse person, and the person who enjoys combat and sees conflict as energizing, The Thomas-Kilmann Conflict model identifies five common styles for dealing with conflict:
  • Competitive – end result is achieving one’s own goal, regardless of the other parties position
  • Collaborative – this style requires and employs teamwork to resolve the conflict
  • Accommodating – one party capitulates, your win-lose scenario
  • Compromising – both parties make accommodations
  • Avoiding – this is just not doing anything at all, and it’s irritating and there is potential to escalate the conflict
Where we really want land is on collaborative resolution, through negotiation/mediation.  In the long run, it’s going to be the lowest cost solution, involving fewer people and fewer costs.  Where you never want to go, is to higher authority resolution, particularly litigation, which is going to involve the most people and the most costs, and there will definitely be a loser.
Dealing with conflict in the workplace is everybody’s accountability and there are strategies that organizations can employ, depending upon their needs:
  • Manager should receive training on conflict – how to recognize it, and what to do
  • Clarification on roles and responsibilities
  • Give employees a place to go for advice on managing conflict
  • Integrate a conflict competency into recruiting and embed it in job descriptions and role profiles (particularly for managers)
  • Hold managers and employees accountable for adhering to standards and values – be an organization that builds relationships among employees, and ensure the focus is on the problem and not the individual
Finally, I am reminded of the song from 1975 – War “Why can’t we be friends” http://youtu.be/5DmYLrxR0
Unfortunately life at work just isn’t that simple.
Good luck,
Frances

 

What is conflict in the workplace really costing you?

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Googling the cost of conflict in the workplace will net you about 24,000,000 results, and just as many opinions.  We all know workplace conflict exists, and many of us do not deal with it in a proactive way, and I believe that the average business knows there is a cost, but not how much.  Conflict in the workplace is different than conflict in other areas.  Generally, people who work together rarely have any say in who they will work with (unlike the ability to choose one’s friends and partners), and will have to continue working together after a conflict.

Are you aware of the cost of conflict in your workplace and how it affects your organization’s effectiveness and productivity?  Before we look at the costs, let’s examine the various sources of workplace conflict:

  • Personality clashes
  • Poor leadership (ranked the #1 source in Canada and the UK)
  • Unreasonable or heavy workloads
  • Lack of role clarity
  • Poor or no performance management strategies or systems

As well, in very, very diverse organizations there can be cultural,and linguistic causes.  The CPP Global Human Capital Report – Workplace Conflict And How Businesses Can Harness It To Thrive (if you love statistics, check the report out here https://www.cpp.com/pdfs/CPP_Global_Human_Capital_Report_Workplace_Conflict.pdf) cites the primary causes of Workplace Conflict as:

  • Personality clashes – 49%
  • Stress – 34%
  • Heavy workloads – 33%
So what happens when workplace conflict remains unresolved?  The experience of poorly managed or ignored conflict will leave employees feeling alienated and powerless.  Organizations will see an increase in absenteeism, particularly stress related absences.  Employee disengagement will be obvious – employees who appear to be “retired in place”, don’t complete their work, or miss deadlines.  But workplace conflict that is not addressed, or is badly managed can have some pretty nasty less obvious consequences:
  • Sabotage against the organization, petty theft as one example.  When employees feel disconnected for the organization, their moral compass can become skewed.
  • Damage to the employer’s brand – big social media impact here.
  • No longer able to attract talent (see above).
  • Employee turnover.
  • Missed opportunities and lost business.
In the CPP Global Human Capital Report, the estimate is that the average employee can spend 2.1 hours a week on conflict issues, and other studies suggest that manager time spent on conflict can be 30-40% of their time (Thomas and Schmit, 1976; Watson and Hoffman, 1996).  If you’d like a quick and dirty look at what conflict might be costing you, try the following exercise:
  1. How much time/week, on average, do you spend dealing with workplace conflict (interpersonal, your own, organizational, etc.)? ____________ hours/week
  2. What is your hourly rate of pay? $__________
  3. Multiply #1_______ x #2___________ = $__________/week
  4. Multiply #3__________ x the number of weeks you work each year_____ = $________ total dollars spent by you, alone, in conflict management.
You alone.  This calculation only skims the surface of the cost of conflict in the workplace.  It doesn’t even begin to address the hidden costs (some of which we have discussed above):
  • Wasted time.
  • Reduced quality of decisions.
  • Loss of skilled employees (cost of turnover).
  • Lower employee motivation.
In my next post, we are going to examine the different styles that people use to address conflict, mediation in the workplace and how to deal with conflict in the workplace.  In the meantime, here is a very good article, written by Jennifer Lawler http://www.entrepreneur.com/article/207196

Frances