FreshView
a publication of Cascade Employers Association
DECEMBER 2010
Dollars & Sense Poll |
In This Issue:
- Survey Suggests Improved Business Outlook in Oregon
- A Review of the 360
- Reconciling Federal FMLA and Employee Bonuses or Other Incentive Payments
- Did You Know?
Survey Suggests Improved Business Outlook in Oregon
By Jerry Bumgarner, CCP, Director of Research and Compensation Services
Cascade Employers Association
jbumgarner@cascadeemployers.com
More Oregon area employers are planning wage and salary increases in 2011, suggesting an improved business outlook in the area. According to the 2011 Salary Budget Survey recently released by Cascade Employers Association, 70% of respondents are planning increases for non-executive employees in 2011... up 19% from 2010. At the executive level, 53% of the employers are projecting increases, up 16% from 2010.
While the number of employers planning increases is expected to be greater, pay increase amounts are expected to average around 3.2% in 2011...slightly greater than in 2010 when increases averaged about 3.0%. When freezes and pay decreases are factored in, overall increases still average approximately 2.0%.
For greater detail regarding 2011 salary increase budget trends in Oregon, Southwest Washington and throughout the nation, contact Tina at thamel@cascadeemployers.com.
Survey results are free to participants. The cost to those who did not participate is $100 for Cascade Employers Association members and $150 for all others.
A Review of the 360
By Michelle Toney, Social Communications Manager
Opinions contributed by Jerry Bumgarner and Glen Fahs
Cascade Employers Association
mtoney@cascadeemployers.com
I recently sat down with two of our professional staff team to learn more about the subject of 360 Reviews. Most organizations want to do these reviews to tap into the rich and valuable information that they can provide. To do these reviews correctly seems like a daunting task, but hopefully the recap of my learning interviews gives insight to even the most apprehensive.
What exactly is a 360 review?
This type of review is used to reveal the perceptions of vendors, co-workers, supervisors, and others with whom an employee comes into contact on a day-to-day basis. It is often anonymous, and generally is used to find out strengths of an employee and how they work and communicate with others around them. While a typical performance plan maps out the goals for an employee each year, the 360 review is reflective of how well an employee accomplished the goals in respect to the relationships and contacts they have daily. Typically a 360 review requests feedback from all direct reports, plus some peers, vendors, and select customers. To the employee who is being reviewed, the more sources that have provided feedback, the more credible the results.
Is a 360 review something our organization should use?
This question is timely and relevant. Employers more than ever are motivated to examine workplace relationships, and to reward and recognize those who have a pattern of excellence as observed by their team. Top talent generally score high on their annual performance reviews by meeting the goals that are set out for them, but what about reviewing how these goals are met? Alternately, there are employees — "quiet workers" — who rarely offer feedback on their own jobs. So if something isn't going as well as expected, a 360 review might give new perspective on work patterns and relationships not uncovered by a single conversation with an employee.
What should we know about how employees will react to having 360 reviews?
Employees usually express concern with any review process. The 360 review process can be particularly intimidating as it is generally more in depth than a typical performance review. It is important that the 360 not replace the regular program of performance reviews since the employee may feel that the results of the 360 are new, and are therefore less credible. Both review styles used together can create a fuller picture of the performance, both within the workplace and with others outside the workplace that are directly involved with the person being reviewed. Generally if a supervisor and an employee decide together who will be asked to provide feedback for the 360 review, the feedback is more welcomed and the process seems to the employee to be more balanced.
How should we prepare for 360 reviews?
Training and preparation is an essential part of the 360 review process as some employees may be hesitant to speak up honestly and others may not realize that the process can include both positive and improvement communication opportunities.
Also, supervisors may be hesitant to do any type of review process because of the strain on their busy schedules. Consideration must be given to the scope of the review and the time commitment expected from "reviewers."
How should we conduct a 360 review?
As mentioned before, the ability to give anonymous feedback with plenty of response time seems to be two key points to higher feedback rates. Email responses or delivery of results should be highly discouraged, as should having someone take part in a 360 where the respondent number is too low. Often a third party that administers the survey can offer security regarding anonymity and reliable data. A third party who includes analysis and feedback on the data received may have an independent and valuable view on the data collected, and may offer suggestions on best practices or when to put new tools into place when the results show that they are needed.
What should we do with the results of the 360 reviews?
Careful consideration of the results is imperative, and should be analyzed with a broad-picture view of what the causes of any anomalies may be. How often or how consistent are negative reviews? How serious are the negative responses? Could it be a small, long-time irritation, or a symptom of a larger problem? Was there one negative response with a large number of positive responses? Innovative people may tend to stand out from the crowd and make more mistakes. Are the top performers meeting their goals and in need of training and encouragement to work with others to further their skills? Could a new problem be from a "quiet worker" who hasn't ever been willing to step forward and be honest about what is holding them back? Additionally, is it possible to get a self-appraisal from the employee who is being reviewed to hear about their strengths, developmental goals, how their supervisor has helped or could help more, obstacles they are facing and what they will need to address them? The scores will tell a story, but it will take a wise and broad perspective to find the true theme that becomes evident from the 360 review data.
If you have any questions regarding a 360 review process, many of the perspectives and suggestions in this article were given by Jerry Bumgarner, CCP & Director of Research & Compensation Services and Glen Fahs, PH.D & Training & Organization Development Consultant. Please contact Cascade if you have further comments or questions.
Reconciling Federal FMLA and Employee Bonuses
or Other Incentive Payments
Adapted by Lynn Morris, Compensation and HR Consultant
Cascade Employers Association
lmorris@cascadeemployers.com
You've worked diligently to put the perfect incentive plan in place. It is designed just for your culture and employees, and everyone is on board and excited. Congratulations! Now it is time to make your specialized plan fit with FMLA compliance laws that are not customized and non-negotiable. To ease the burden, below is a starter list compiled to save you from tedious research. Examples on this list include employee bonuses for attendance, compliance with safety rules and meeting or exceeding productivity/performance targets. Employers covered by FMLA must be careful with these types of incentive plans to ensure compliance with FMLA regulations.
Basic FMLA Regulations
The regulations distinguish between attendance or safety bonuses which are based upon rule compliance, and production bonuses which require workplace effort from employees. In short, FMLA regulations address this issue as follows:
Many employers pay bonuses in different forms to employees for job-related performance such as for perfect attendance, safety (absence of injuries or accidents on the job) and exceeding production goals. Bonuses for perfect attendance and safety do not require performance by the employee but rather contemplate the absence of occurrences. To the extent an employee who takes FMLA leave had met all the requirements for either or both of these bonuses before FMLA leave began, the employee is entitled to continue this entitlement upon return from FMLA leave; that is, the employee may not be disqualified for the bonus(es) for the taking of FMLA leave. … A monthly production bonus, on the other hand, does require performance by the employee. If the employee is on FMLA leave during any part of the period for which the bonus is computed, the employee is entitled to the same consideration for the bonus as other employees on paid or unpaid leave (as appropriate).
Clearly, an employee who misses work while on leave cannot be denied an attendance bonus "because of" exercising rights under the FMLA. However, the same employee may not be eligible for a production bonus, which would also seem to require an element of good attendance. So, how does this work?
How do you distinguish different bonus plans?
A critical element for an effective bonus plan (which, if properly administered, will not be considered discriminatory under the FMLA) is maintaining the proper focus. The focus must be that the employee is required to engage in a specific action, such as the production of widgets. Benefits need not accrue when widgets are not being produced — even when the lack of production is attributable to an employee's absence while on FMLA leave.
On the other hand, a bonus plan which focuses solely on compliance with rules requiring regular attendance, without a defined exception for FMLA absences, may cause problems for the employer. If all absences count against an employee for purposes of award eligibility, such a policy may violate FMLA because it discourages or penalizes the use of FMLA leave.
How do you treat attendance awards or safety awards?
Assume your policy reads as follows: "Employees who have perfect attendance throughout the course of the bonus period will receive a $100.00 bonus award."
An employee with perfect attendance prior to taking FMLA leave cannot be "disqualified" for the attendance bonus award. The absence cannot count against the employee, and the benefit cannot be lost because of taking FMLA leave.
Employers can maintain these types of incentive award programs by stating in the policy that the employees' bonus eligibility will not be affected by utilization of FMLA leave.
How are production bonuses to be used?
Production bonus programs, which by their nature require employees to be at their work stations performing their jobs, are distinguishable from safety and attendance bonuses under the FMLA. Employees performing no work during periods of FMLA absence would not qualify for the bonus. Generally, employees do not accrue benefits when not in attendance, and FMLA does not require accrual of benefits during the leave. Incentive plans, which require employees to take steps to meet specified goals, may be allowed under FMLA — as long as the bonus is not denied or reduced solely because an employee is absent from the workplace. In this case, the employee has not yet met the goal and earned any bonus, so there is nothing forfeited or lost.
How are prorated adjustments in production awards to be made?
If production bonuses are adjusted on a prorated basis, an FMLA absence must be treated the same way other leaves are treated. If, for example, an employee on unpaid leave for a non-FMLA-related reason would be entitled to a bonus, the same benefit must be given to an employee on unpaid FMLA leave. If an employee taking paid leave, such as vacation, during a workweek is entitled to a prorated share of the bonus, then an employee using paid leave while on FMLA leave must also receive a prorated share of the bonus.
Employers with incentive programs should ensure policies clearly state that FMLA leave does not disqualify an employee from receiving benefits already earned prior to taking leave.
Summary of FMLA Rules for Benefits
Employees returning from FMLA leave are entitled to be restored to employment benefits equivalent to those in place prior to the leave. Benefits are broadly defined and include bonuses.
The use of FMLA leave cannot result in the loss of any benefit accrued prior to taking leave.
If the bonus system is discretionary, FMLA leave utilization cannot be used to deny the bonus.
Employees are not entitled to accrue benefits during periods of FMLA leave.
Practical advice to employers in balancing rights and obligations under the FMLA with incentive bonus plans:
Clearly define and communicate your bonus system. Outline what actions must be performed to qualify for the bonus.
Ask yourself whether the employee is losing a benefit already earned or not gaining an additional or new benefit.
Be consistent in how employees are treated when on a leave of absence. If employees are taking paid leave for an FMLA qualifying reason, then they must be treated the same as other employees on paid leave, such as vacation. Employees using unpaid leave should also be treated the same as others on unpaid leave, unless the FMLA regulations require otherwise.
Many FMLA regulations are difficult to understand and apply. If you have questions or concerns about FMLA issues, please contact us. We'll be glad to provide assistance.
Did You Know?
On average, how many paid days off (excluding holidays) are given to employees upon hire (no waiting period)?
The average non-union organization with 1-500 employees gives 10 paid days off upon hire.
Look here each month for a specific policy or benefit practice and see how your practices compare to other employers just like you.
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