Archive for the 'Human Resources' Category

New DOL overtime rules: One good outcome and seven bad ones

Do you have employees who are on salary? Do those employees ever work more than 40 hours in a week, for whatever reason? If the answer is yes to these questions, your world is about to get more complicated and probably more expensive.

Please stay with me. I need to get into the weeds, but just for a minute.

The current Department of Labor (DOL) overtime exemption threshold for “white collar” employees is anyone with a salary of at least $23,666 annually, or $455 per week. Exempt means the employer is not required to pay overtime if and when this class of employee works over 40 hours per week. This threshold applies to all businesses, regardless of size or number of employees.

Here’s the news: The DOL has announced that as of December 1, 2016, that overtime exemption threshold will essentially double, to $47,476 annually, or $913 per week. So anyone currently receiving a salary of less than this new amount will soon convert to non-exempt status, and must be paid overtime when they work more than 40 hours a week.

The reason I’m concerned about this change is because of the size of the increase. I feared this new threshold is going to catch and hurt a lot of unaware small businesses in its net. So I took this concern to my small business audience in our online poll recently and asked if they knew about the new overtime exemption changes. Alas, with less than three months before taking effect, my concerns were justified: Almost three-fourths of our respondents said they either didn’t know about the change or how it would impact them, or they knew about it and it was going to be detrimental to them. The rest, just over a fourth, said they either had determined the change would not affect them or they were prepared.

Here’s the good outcome: You might be surprised to hear me say that I think a new threshold is not unfair. In 2016, a weekly salary of $455 is too low to be expected to work overtime without additional compensation, unless it comes with a leveraged compensation factor that allows them to earn more if they work more.

But while an increase in the overtime exemption threshold is not unreasonable, doubling the threshold all at once is. And like so many government creations, the devil’s in the details. And this devil will create more problems for both employees and employers than it will solve. For example:

1. Increased recordkeeping burden: Because the doubling of the overtime exemption threshold will significantly increase the number of salaried non-exempt employees in Main Street jobs, small businesses will be burdened disproportionately with additional time and attendance record-keeping.

2. Increased payroll expense: For small businesses in a lower cost-of-living area, an immediate doubling of the exemption threshold will create an employee re-classification burden that by definition will result in increased payroll expense, perhaps prohibitively.

3. Flexibility becomes expensive: If an employer requests of a non-exempt salaried employee to work over one week and take off those hours the next, or that employee makes the same request of the employer, under the new rules, that goodwill gesture will cost the employer overtime for the week with the extra hours. A good deed should not be punished.

4. Employee hours cut: Businesses in certain industries will respond by splitting a previous 50 hour/week job into two 25 hour/week jobs in order to prevent their payroll from increasing, hurting the original employee.

5. Bad news for managers: I’m already aware of companies that will react to the new threshold by laying off some managers while increasing the responsibility of a smaller number of exempt managers, without increasing their compensation.

6. A morale downer: Being put “on salary” has been considered a professional accomplishment by generations of employees. But HR professionals tell me they’re recommending converting any employees with salaries remaining below the new threshold to hourly status. There are millions of Main Street employees whose weekly income falls between $455 and $913.

7. More lawsuits: Because of the steps some businesses will have to take to prevent these new government-imposed costs from getting out of hand, experts I’ve talked with are predicting an increase in Fair Labor Standards Act lawsuits.

When the federal government does things like doubling the overtime exemption threshold in one fell swoop, it hurts Main Street businesses disproportionately. In this case, it will create a new administrative burden, increase payroll expense without adding a penny of new productivity, and possibly hurt morale.

For four years, polls show small businesses reporting that the mandates of Obamacare disproportionately hurt them. Within a year, small businesses will regard the new DOL overtime exemption threshold increase as the little brother of Obamacare. Another example of the ham-fisted regulatory overreach of the federal government that hurts the job creators and suppresses the economy.

Write this on a rock … Buckle up, small businesses. If you like your current payroll structure, you won’t be able to keep it.

Can you sell your leadership product?

What is a leader? A mentor once told me a leader is someone who can find others who will follow him (or her).

But as we all know, followers can be high-maintenance folks, requiring constant tending to whatever it is that attracts them; most of the time “it” is something intangible. Napoleon is reputed to have said, “A soldier will fight long and hard for a bit of colored ribbon.” Intangible.

Leadership, like beauty, is in the eye of the beholder. So we asked our radio and online audience which of five characteristics is THE most important to being a successful leader. Two of the leadership traits we offered, courage and perseverance, got the lowest ranking, each in single digits.  The highest ranking went to “ability to communicate,” with about 40% choosing this one, followed by “ethical behavior,” chosen by almost one-third of respondents,  and “vision” selected by a little more than one out of four.

At first, I was surprised that courage and perseverance didn’t rank higher, because it’s my belief that both of these are defining traits of a successful leader. But surprise turned to clarity when I realized that our poll had revealed what we all know but don’t always remember: There are two faces of a leader. One is the face leaders see when looking in a mirror, and the other is the one followers see. When seeking the definition of a leader, we have to be clear about which point-of-view is being sought: leadership traits we seek in ourselves or those that attract followers.

The face in the mirror knows courage and perseverance are definitely among the imperatives for leadership success. But to followers, these are merely raw materials used to manufacture the product they demand of leaders - that intangible “bit of colored ribbon” delivered by communicating a vision that is executed based on mutually held values.

Turns out, being a leader is a lot like being a business owner. To be successful in business, it’s not enough to offer quality products you’re proud of - customers drop the gavel on that judgment. Similarly, it’s not enough for leaders just to please the mirror - followers are the customers of your leadership product.

In order to get others to follow you, both faces of leadership must be in evidence. Nurture those traits that success requires of you personally, like courage, perseverance, faith, commitment, etc., while simultaneously delivering what followers expect: ethics, communication, vision and performance.

Write this on a rock … Are you finding followers for your “bit of colored ribbon?”

Can you make teleworking work for you?

Here’s a scenario that every small business owner fears: A key employee resigns because he or she cannot continue to come to your place of business to work for reasons out of their control, such as an illness or a family issue. Is there another answer besides accepting the resignation?

With the exciting recruiting resources available today, you might discover that the best prospect for a job opening you have lives in another state, or even another country. What if they don’t want to move? What’s your next move?

One word answers both questions: Teleworking.

New technology and evolving management paradigms make stories like these have happy and productive endings through teleworking.

A marker of the 21st century workplace, teleworking is where an employee works off-site full or part-time (aka tele-commuting), most often from home. But in order for such an arrangement to be successful, two things must happen:

First the easy part: You must have the necessary technology and tools, which you will have to provide your teleworker.

  • Computer capability and Internet connection are the minimum.
  • Your teleworker will need the right set up, like office furniture, etc., to make their off-site working environment as productive as possible. And it’s not unreasonable to ask to see how the space is organized.

Now the hard part: Can you handle such a management relationship? Consider these four ground rules to execute a teleworking relationship.

  • Find out if, and what work can realistically be done off-site.
  • Determine how to coordinate all work, off or on-site.
  • Establish expectations for scheduled communication, plus production, execution and delivery of work.
  • Talk with other employees about why this employee is being allowed to work remotely, so they can support the new plan. If handled properly, you’ll get major points for being such a cool, 21st century manager.

Execute your teleworking plan with the expectation that adjustments will almost certainly have to be made. So schedule periodic reviews with your teleworker to discuss how things are going.

By the way, if you’re still having trouble imagining having an employee who’s not sitting under your roof, add up how many hours in-house employees work and communicate without actually seeing each other. I’ll bet that number will surprise you.

It might make you feel better knowing that the teleworking model is now being implemented by thousands of small businesses like yours every day.

Write this on a rock … Teleworking can work. Can you make it work for you?

The power of brainstorming with adjectives

How dull would our world be without adjectives? You know, those handy words or terms we use, as Webster says, to “modify a noun.” Indeed, without the descriptive power of an adjective, a noun is nothing more than a bland commodity – like broccoli without hollandaise.

If I offered you a soybean, you would probably be less than intrigued. But what if I said it was a “beautiful soybean”? You’d want to see such a bean, wouldn’t you? A change of attitude, all because of the power of an adjective.

Adjectives can be powerful and useful in your business when they help you take a look at your company, products, services, etc., in an honest, creative, competitive and critical way. One method of pursuing the power of adjectives is through brainstorming.

My friend and Brain Trust member, Floyd Hurt, author of Rousing Creativity, says brainstorming is a great way to get organizational creative juices flowing. And creativity is the mother’s milk of powerful adjectives. Everybody knows that! So get your team together (if you’re a one-person shop, your support group) and conduct a brainstorming session. But first, it’s important to know the Floyd Hurt rules of brainstorming below, followed by my comments.

Free wheeling
There should be virtually no restrictions. Floyd says if you’re pursuing how to pep up the showroom and someone says “Let’s put an elephant in there,” the next comment should be, “Are we talking African or Indian?” And don’t worry that your idea isn’t complete. Even partial ideas can spark the other half from someone else.

No criticism
Some adjectives may not be positive, especially when you’re working on constant improvement. Everyone must feel that what they say will not be criticized, and that all brainstorming contributions will be considered constructive.

Combine and improve
This is where you put some of your brainstorming ideas, including the half-baked ones mentioned above, together to make a better idea. After this kind of synergy clicks the first time with your group, buckle up, because your brainstorming will probably blast off with new energy.

Judgment of ideas
Which one of the ideas will you work on first? This is the culling process. Everything idea is not a keeper – at least not today. But don’t throw anything away. Keep the unused ideas and adjectives for the next session. Ideas are like seeds: sometimes they need time to germinate.

Quantity
This is where the power of adjectives really comes into play. A brainstorming session MUST have LOTS of ideas complete with powerful adjectives. Write them ALL down! EVERY ONE!!

The immortal Adam Smith identified the written word as one of the three greatest human inventions. Besides the brainstorming power you’ll generate, never underestimate the power of having your ideas on paper, looking back at you.

Write this on a rock … Use brainstorming to unleash the power of adjectives.

Face-to-Face: Old School fundamental and New School cool

For 172 years, communication technologies have sought relevance in an increasingly noisy universe.

Now, well into the 21st century, there is actual management pain from an embarrassment of riches of communication innovations. And this discomfort is especially keen when staying connecting with customers: Should you call? Email? Text? How about IM?

And when should you use social media platforms? I’ve had customers who want me to connect with them on Twitter. Others send me notes on LinkedIn.

But in an era where there’s an app for everything, there is one connection method we must never be guilty of minimizing. From Morse to Millennials, in-person connection has retained its relevance as Old School fundamental and New School cool.

Indeed, face-to-face is the original social media.

Today, social media euphoria is being tempered by ROI reality. And as useful as each new communication resource proves to be, they are, after all, merely tools to leverage our physical efforts, not eliminate the basic human need for human interaction. Consider this story:

A sales manager (whose gray hair was not premature) noticed the sales performance of one of his rookies was below budget for the third consecutive month. Of course, he questioned the numbers previously but had allowed his better judgment to be swayed by plausible explanations. Now the newbie’s sales was trending, but in the wrong direction.

Upon more pointed probing, the manager discovered the reason for loss of production: too much electronic and not enough in-person connections. The rookie was relying too heavily on virtual communication at the expense of opportunities to get in front of the customer.

It turns out lack of training, demographic reality and not enough “rubber-meets-the-road” experience left the young pup uncomfortable and unprepared to ask for and conduct meetings, like a proposal presentation. He wasn’t benefiting from how the success rate of growing customer relationships can increase when critical steps are conducted in person. Consequently, this manager immediately developed a training program that established standards for how and when to integrate all customer connection tools, including face-to-face.

If your sales performance isn’t trending the right way, perhaps your salespeople need help getting in front of customers, particularly at critical steps. Like the manager above, you may need to establish specific, measurable and non-negotiable standards for when face-to-face meetings should take place.

From telegraph to Twitter there is one connection option whose relevance has borne witness to every one of the others: in-person contact. Let’s remember John Naisbitt’s prophesy from his 1982 book, Megatrends: “The more high tech we have, the more high touch we will want.”

Write this on a rock … As the original social media, face-to-face will always be relevant.

4 Power Questions That Will Cultivate Your Leadership Tree

Most agree that there are many traits of a true leader, including: highly competent, professional, visionary, trustworthy, instill confidence, good communicator and, of course, courageous.

But great leaders have three other qualities that further set them apart.

  1. In the 21st century marketplace, the prime devotion of leaders is to their people because they know it’s through engaged, high-functioning teams that their “bottom line” goals are achieved. If you can deliver on this trait, you’ll be more likely to accomplish your professional and personal goals.
  2. The most successful and beloved leaders I’ve known had another trait that’s sometimes overlooked: They mentored their people to become leaders. Great NFL coaches like Vince Lombardi, Bill Walsh, Tom Landry and Bill Parcels became legendary through the subsequent performance of the coaches they mentored. It’s called the Coaching Tree. Whose names will be on your Leadership Tree.
  3. This quality has two parts that are as inextricable as the sides of a coin: 1) They’re devoted to asking questions; and 2) they listen.

Number 3 is so important that I want to offer four cardinal questions that will help you become a legendary leader and build your own Leadership Tree. The first two are from my friend and Brain Trust member, Chester Elton, co-author of “What Motivates Me.” The last two are mine.

How’re you doing?
Chester says this isn’t a drive-by question. It’s a look ’em in the eye, “I’ve got time to listen” question. The setting has to be where the leader can be “in the moment” with the other person. And answers are not pre-supposed – might be about their job, their aspirations, or their personal life. Great leaders care about all of that.

How can I help?

Chester says this question creates a safe environment. A mentor once told me, “If you’re in trouble in your job, don’t go down by yourself. Get me involved early and let me help you get out of trouble.”

What do you think?
I call this the Leader’s Power Question and it produces two kinds of fruit: 1) few things cultivate the illusive engagement factor more than when the boss asks the opinion of an employee; 2) valuable information almost always spouts.

What did we learn?
I call this the Leader’s Magic Question, and it may be the four most important words in management. Surely redemption is the most human behavior a leader can demonstrate. And the most powerful mentoring moment happens after a team member makes a mistake taking initiative and the leader says, “Okay, now we know what happened,” then redeems him with: “What did we learn?” Powerful!

Write this on a rock … Become a legendary leader with your own Leadership Tree.




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