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HRMagazine Jul 2011

Mag july

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0% found this document useful (0 votes)

196 views76 pages

HRMagazine Jul 2011

Mag july

Uploaded by

Rajan Dhandayudhapani

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

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HR MAGAZINE
JULY 2011

JULY 2011

[Link]
_______

$8.95

What you need to know about PTSD

POST-TRAUMATIC STRESS DISORDER

PUBLISHED BY THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT

New rules to clarify

retirement plan fees
Really automate
open enrollment

Contents | Zoom in | Zoom out

For navigation instructions please click here

Search Issue | Next Page

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POWER
TOOLS
FOR
POWER
HR.

ULTIPRO. Beyond Human Capital Management

we deliver Human Capital Intelligence. Thats power.
With UltiPro from Ultimate Software, you get more than just a powerful
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intelligence, so you can instantly see whats going on in all the areas that affect
your workforce recruiting, employee performance, compensation, tenure,
benets, payroll, and more. UltiPro delivers the power, exibility, reporting tools,
and analytics you need to make decisions informed by insight the kind of
decisions that build a better company.

[Link]

1-800-432-1729
Brought to you through the convenience of Software-as-a-Service.

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Humpty Dumpty sat on a wall.

Humpty Dumpty had a great fall...
Well, we wouldnt exactly call it a great fall. Neither would Humpty Dumpty. Thankfully,
human resources acted quickly and his long-term disability benets were administered just as
he expected them to be. While the kingdom launched an inquiry into the height and weight
restrictions associated with the wall, human resources made sure that the legendary wall
incident was reported in compliance with industry regulations and best practices. They also
helped Humptys managers recruit and hire a shiny new egg swiftly and successfully so that
everyone could move forward with the peace of mind that all was well in the kingdom...

Epicor Human Capital Management:

One Software Solution. All the Answers.

Your Business Runs on Human Resources.

[Link]/hcm

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LAB
OR
&

EM
LAW PLOY

ME
NT

HR Magazine

FRO
MA

ANG DIFF
LE ERENT

A unique and dierent perspective can make all the

dierence in handling workplace disputes. Ogletree
Deakins is one of Americas leading labor and employment
law rms with 40 oces from coast to coast.
Let our client service-focused approach bring a winning
new angle to your company.

Employers & Lawyers,

Working Together

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JULY 2011 VOLUME 56, NUMBER 7

Contents
24

24 COVER STORY
Hidden Wounds
While some employers fear the challenges
of hiring employees with post-traumatic
stress disorder, simple accommodations
can improve their performance and
productivity.
By Dori Meinert

FEATURES
30 PROFILE
The Art of Global HR
Marcelo Ballario Yoshida draws on ancient
wisdom for 21st century global HR.
By Bill Roberts

32 FIRST-PERSON ACCOUNT
When Workers Support the
Flight Plan
An aviation and aerospace manufacturer
reports dramatic productivity and revenue
hikes that executives attribute primarily to
improved employee engagement.
By John F. Schierer, SPHR

AGENDAS
43 EMPLOYMENT LAW

Is a Smoker-Free Workplace
Right for You?
Some employers ban smoking by workers
and refuse to hire smokers.
By Joanne Deschenaux, J.D.

47 OUTSOURCING
Focus In to Farm Out
Deciding what HR functions to outsource is
more than a nancial decision.
By Eric Krell

Employers that sponsor 401(k) plans will

need to disclose new details on fees and
investments.
By David Tobenkin

ADVICE AND ANALYSIS

22 SOLUTIONS

COVER ILLUSTRATION BY JOHN R. ANDERSON JR.

RETIREMENT PLANNING
SPECIAL REPORT
37 Clarity on Fees Coming Soon

Dropping dependents, investigating the

boss, salary feedback
By Erin Patton, SPHR, Liz Petersen, GPHR,
SPHR-CA, and John Sweeney, SPHR, GPHR

52 HR TECHNOLOGY
Open Enrollment Tools Evolve
Options to automate open enrollment exist
for HR professionals in companies of all
sizes.
By Bill Roberts

22
July 2011 HR Magazine 3

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Turn your break room into a Company Kitchen at no cost and enjoy
the benets of Daily Nutritional Analysis (DNA), the program that helps
employees track their nutritional intake and encourages healthy food choices.
Additional benets:
Fresh, avorful, nutritious choices available 24/7
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Reward programs and incentive opportunities for your company
Healthy workplace refreshment, hassle free, with a promise of
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There is no cost to turn your break room into a Company Kitchen,

and there are great rewards!

Check out [Link] to see more benefits

or call us at 1-877-524-6925.
Find out why Company Kitchen is the place to

refresh, nourish and energize.

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Contents

58 LEGAL TRENDS
Hiring Days Are Here Again
Recruiters who are hiring again need to
follow best practices in the hiring process.
By Jonathan A. Segal

MANAGEMENT TOOLS
Management Tools is online. See
this months issue at [Link]/
hrmagazine.

Easy as One, Two, Three

Three types of interviews help identify the
right candidate.
By Martin ONeill

NEWS YOU CAN USE

11 HR NEWS
NLRB upholds discharge for sarcastic
tweets; social media postings raise
questions of concerted activity; higher
limits for health savings accounts, highdeductible health plans; more.

20 EXECUTIVE BRIEFING
Primed performance; executive pay.

56 COURT REPORT
Whistle-blower protection in the SarbanesOxley Act does not cover media leaks;
benets plan administrators may have
violated ERISA; more.

66 WHATS NEW
Compensation and benets; compliance;
employee recognition; more.

PERSPECTIVES
8 FROM THE CEO
Leaving Las Vegas in a Winning Mood

BOOKS IN BRIEF

By Henry G. Jackson

Books in Brief is online. See www.

[Link]/publications/hrmagazine/
books for summaries of Managing the
Unmanageable, Seeing Red Cars, The Chief
HR Ofcer and Create Your Own Employee
Handbook.

72 FUTURE FOCUS
Flexibility Still Meeting Resistance
At some companies, HR professionals may
encounter stiff resistance to exible work
arrangements.
By Joseph Coombs

SHRM RESOURCES
63 INSIDE SHRM
SHRMs CEO advocates for veterans;
members speak up; chapter responds to
shootings; more.

HR Magazine (ISSN 1047-3149) is published monthly by the Society for Human Resource Management, 1800 Duke
St., Alexandria, VA 22314, (703) 548-3440, to further the professional aims of the Society and the human resource
management profession. Members of the Society receive HR Magazine as part of their annual dues, $55 of which
is allocated for the subscription to HR Magazine, which is nonrefundable therefrom. Nonmember subscriptions are
available from the Circulation Department at the following rates: Domestic (U.S. and its territories)$70 per year.
Canada$90 per year. International (via airmail)$125 per year. Published articles do not necessarily represent the
views of the magazine or the Society. Society for Human Resource Management 2011. Periodicals postage paid
at Alexandria, VA 22314 and additional mailing offices. POSTMASTER: Send address changes to HR Magazine,
Circulation Department, 1800 Duke St., Alexandria, VA 22314. Publications Mail Agreement No: 40041558. Please
send returns to BleuChip International, P.O. Box 25542, London, ON N6C 6B2.

SPECIAL SECTION
69 YELLOW PAGES

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is published with the
understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is
required, the services of a competent professional person should be sought.

July 2011 HR Magazine 5

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With Advice Access from Bank of America Merrill Lynch, your employees can get more
than just general guidance about their 401(k). They can get specific, action-oriented advice
that they may need. In fact, plan participants who used Advice Access were four times more
likely to be diversified. And your employees can access their individual advice in person,
over the phone or online2. To learn more, and to find out why more and more businesses
are choosing us as their benefits provider, visit [Link]/adviceaccess

As of September 2010, participants enrolled in Advice Access were four times more likely to have a diversified portfolio than those who chose not
to invest through Advice Access. Source: Bank of America Merrill Lynch.
The Advice Access service uses a probabilistic approach to determine the likelihood that participants in the service may be able to achieve their
stated goals and/or to identify a range of potential wealth outcomes that could be realized. Additionally, the recommendations provided by Advice
Access do not consider an individuals comfort level with investment risk, and may include a higher level of investment risk than a participant may
be personally comfortable with. Participants are strongly advised to consider their personal goals, overall risk tolerance and retirement horizon
before accepting any recommendations made by Advice Access. Participants should carefully review the explanation of the methodology used,
including key assumptions and limitations, which is provided in the Advice Access disclosure statement. It can be obtained through Benefits
OnLine or through your Bank of America Merrill Lynch representative.
IMPORTANT: The projections or other information shown in the Advice Access service regarding the likelihood of various investment outcomes are
hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

Investment advice is provided to plan participants solely through Advice Access.

For plan sponsor audience only.
Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation (BAC). Banking and fiduciary activities are
performed by wholly owned banking affiliates of BAC, including Bank of America, N.A., Member FDIC. Brokerage services are performed by wholly owned brokerage affiliates of
BAC, including Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and member SIPC.
Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value 2011 Bank of America Corporation. All rights reserved. ARD534E1

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Click for More

A spotlight on resources available on SHRM Online

Returning Veterans
With wars in Afghanistan and Iraq beginning to draw down, large numbers of soldiers and military
personnel are returning to the United States, armed with leadership and critical-thinking skills, an ability
to perform under pressure, and a goal- and team-oriented sensibility. Here are some SHRM resources on
hiring veterans and leveraging their skills.
A CALL TO DUTY

WHAT HR PROFESSIONALS CAN DO

INJURIES SEEN ...

SHRM participated in a recent hearing before

Congress on Putting Americas Veterans Back
to Work, outlining ways employers and government can help returning veterans find work.
[Link]/hrnews/returningvets

A SHRM survey describes steps employers

have taken to recruit veterans.
[Link]/research/recruitingvets

A poll conducted by SHRM examines how organizations perceive on-the-job performance of

veterans with disabilities.
[Link]/research/disabledvets

CUTTING THROUGH THE

CAMOUFLAGE
VIDEO: RETURNING
VETERANS RIGHTS
Christine Walters, owner of FiveL Co., says
employers often arent aware of some of their
obligations to returning veterans.
[Link]/video/veterans

In a SHRM webcast, Lisa Rosser describes

resources to find hidden veteran talent.
[Link]/webcast/findingtalent

... AND UNSEEN

While veterans suffering from post-traumatic
stress disorder and other conditions associated
with warfare face challenges, employers can
help make the transition easier.
[Link]/employeerelations/ptsd

COORDINATING COMPLIANCE
Employers need to do a better job of coordinating compliance among the Uniformed Services
Employment and Reemployment Rights Act,
the Family and Medical Leave Act, and the
Americans with Disabilities Act.
[Link]/legalissues/userra

July 2011 HR Magazine 7

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From the CEO

Leaving Las Vegas

In a Winning Mood
am still energized by the whole experience
of the Society for Human Resource Management (SHRM) 63rd Annual Conference
& Exposition in Las Vegas. Nothing gives me a
lift like the largest meeting of HR professionals
in the world.
Every concurrent session I visited was
charged with a quest for learning more, a
desire to be able to do
more. And the human
connection was always
there. Time and again,
comments from members were about what
they needed and wanted
and how the conference
exceeded their expectations. How it prepared
them to guide their
employees who make it
all possible.
Thats the kind of
energy you get from
nearly 14,000 HR
professionals who are
doing the right thing at
the right time for their
people and businesses.
They are people who have seized success
in difficult times, who have found opportunity
after surviving the fits and starts of the economy. They have risen above the fray because
most of the issues for the last year have been
their issues.
Their challenges gave them the opportunity
to do what they do best. And yet, there they
were in Las Vegas, eager to share what they
gained, eager to learn even more from colleagues and other experts. My challenge was
just keeping up with them.
Given how strong they were in meeting HR

needs during challenging times, I was relieved

to be able to assure them that their Society
had stayed with them. It had remained strong
enough in 2010 to match their energy.
When more than nine out of 10 associations said theyd have no membership growth
in 2010, we grew to an all-time high, and we
increased our influence and market position.
When nine out of 10 associations said
theyd have no revenue growth, we grew in
both revenue and operating margins. And
when one association after another said their
2010 annual conference would be smaller, we
smashed our registration goal for San Diego,
and then topped it again for Las Vegas.
Like our members did in 2010, SHRM beat
the odds. When almost all other associations
saw contraction, we saw expansion. We saw
growth. This is not accidental.
As I told the attendees in Las Vegas, success
like that is a community effort. It took 260,000
devoted members, 6,000 committed volunteer
leaders and 300 engaged SHRM employees to
meet the challenge and emerge from the storm
with new determination.
This past year has been an exciting journey.
Today, SHRM is strong and poised for ongoing success. We will serve our members needs,
be a thought leader, be global and remain
financially sound. And we will do it because
we are driven to do so by some of the most
dedicated professionals in the world.
They are the people who told us, Help take
us to where we must lead change. Take us to
where our organizations need to betake us to
whats next.
You dont stand in front of 14,000 people
like that and say youll look into it and see
what you can do. You make it happen, fast.
And you live off the energy of that moment for
months.

PHOTOGRAPHY BY CADE MARTIN

By Henry G. Jackson

8 HR Magazine July 2011

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Whats Missing From Your Benets Program?

Allstate Benets. We have the most comprehensive benets portfolio
in the business. Including the #1 critical illness product in America.
Its no wonder were one of the fastest-growing benets providers
in the country. Call an Allstate Benets Representative today and let
the Good Hands go to work for you.

Youre in Good Hands.

1-877-750-0467
or [Link]

Life Disability Critical Illness Accident Medical Gap

Sources: Allstate Benets Internal Data 2010; LIMRA. Allstate Benets is the marketing name used by American Heritage Life Insurance Company (Home Ofce, Jacksonville, FL), a subsidiary of The
Allstate Corporation. 2011 Allstate Insurance Company. [Link] or [Link]

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Our innovative approach to dental wellness

can lead to a healthier bottom line for you.
Research tells us that serious dental problems can increase the risk of other diseases and illnesses
that could skyrocket your medical costs. Thats why you need a company that can motivate your
employees to improve their overall oral health. Along with a growing network of 73,000 dentists at
over 149,000 access points, and 40-plus years of experience, we offer a wide range of educational
materials, along with plan design features that reward employees for maintaining a healthy oral
lifestyle. Call your broker or consultant today and make prevention a part of your plan.

DENTAL
ADV-0054 0611 - This advertisement is not an offer of coverage or proposal of insurance. The Group Policy or Contract and Certificate of Insurance (Plan
Documents) include a complete listing of covered services, limitations, exclusions, cancellation and renewal provisions. In the event of conflict, the Plan
Documents will govern. United Concordia dental products are underwritten by one or more of the following subsidiaries of United Concordia Companies,
Inc. (UCCI): United Concordia Insurance Company, United Concordia Dental Corporation of Alabama; United Concordia Life and Health Insurance
Company, and United Concordia Insurance Company of New York. United Concordia Insurance Company is not licensed in AL, DE, DC,IL, KY, MD, MO, NJ,
NY, NC and PA. All products are not available in all jurisdictions. United Concordia policies cover dental benefits only. For acomplete listing of the products
and services available in your area, the specific UCCI company licensed to provide those products, and exclusions, limitations, renewal, cancellation and
cost information, contact a United Concordia account representative or log on to our website at [Link]. United Concordia Insurance Company,
California certificate of authority number 3739-0, is domiciled in Arizona at its statutory address, 2198 East Camelback Road, Suite 260, Phoenix, AZ
85016. Available Concordia products are underwritten by United Concordia Insurance Company in OK and written on OK policy forms OK9802 (11/07)
and OK9802L (11/07). The administrative office of UCCI and/or its licensed corporate affiliates is located at 4401 Deer Path Road, Harrisburg, PA 17110.

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HR News

For the latest HR-related business and government news, visit [Link]/hrnews

When Are Social Media

Postings Concerted Activity?
n May 18, the National Labor Relations Board announced that it was suing Hispanics United of Buffalo, a nonprofit that provides social services to low-income
clients, for firing five employees after they criticized working conditions.
The case involved an employee who alleged on her Facebook page that employees
did not do enough to help the organizations clients. The post generated responses
from other employees who defended their job performance and criticized working
conditions, including workload and staffing issues. Hispanics United discharged
the five employees who participated, claiming that their comments constituted
harassment of the co-worker.
According to the complaint, the Facebook discussion was protected concerted
activity within the meaning of Section 7 of the National Labor Relations Act
(NLRA) because it involved a conversation among co-workers about their terms and
conditions of employment, including their job performance and staffing levels. A
hearing of the complaint was scheduled for June 22 in Buffalo, N.Y.
The workers were not unionized, noted Scott Faust, an attorney with Proskauer
Rose in Boston, emphasizing that Section 7 rights apply to unionized and
nonunionized workplaces. Many HR managers who do not have unions are not
sensitized to NLRA rights, he remarked.
Employers can and should enforce internal policies that prohibit discrimination
and harassment, said Michael Schmidt, an attorney at Cozen OConnor in New York
City. But he noted that employers cant discourage employees from raising issues
about the terms and conditions of employment with co-workers. He said he would be
concerned about any policy or practice that chills the right to air workplace grievances
with co-workers through social media.

By Allen Smith, J.D., SHRMs manager of workplace law content.

NLRB Upholds
Discharge For
Sarcastic Tweets
The discharge of a newspaper reporter because
of his sarcastic tweets did not violate the National
Labor Relations Act (NLRA), stated an April 21
advice memorandum from the National Labor
Relations Board associate general counsel in the
Division of Advice.
The Arizona Daily Star had encouraged its
reporters to open Twitter accounts to drive readers to the Daily Stars website.
The reporter was terminated based on the
content of the messages he had posted on
Twitterincluding The Arizona Daily Stars copy
editors are the most witty and creative people
in the world. Or at least they think they are and
What?!?!? No overnight homicide? WTF? Youre
slacking Tucson.
Noting that the reporter was terminated for
posting inappropriate and unprofessional tweets
after having been warned not to do so, the associate general counsel determined that the reporters conduct was not protected and concerted. It
did not relate to the terms and conditions of his

Recruiters Jump on Social Media Bandwagon

employment or seek to involve other employees

Despite some initial reluctance, recruiters are turning to LinkedIn, Facebook, Twitter and other forms
of social media as an inexpensive way to find passive candidates with specific skill sets, according
to SHRM research.

in issues related to employment.

The counsel recommended that the reporters charge be dismissed, but he commented
that the employer made statements that arguably
could be interpreted to prohibit activities that
might have been protected by Section 7 of the
NLRA. Specifically, he noted that the managing
editor told the reporter that he was not allowed
to tweet about anything work-related. Counsel
also observed that the termination letter refers to
the fact that the reporter was told to refrain from
using derogatory comments in any social media
forums that may damage the goodwill of the
company. (Lee Enterprises Inc. d/b/a Arizona
Daily Star, Case 28-CA-23267).

Source: SHRM Research Spotlight: Social Networking Websites and Staffing.

Allen Smith
July 2011 HR Magazine 11

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HSAs, HRAs: Same Goal

But Different Structures
espite their similar and sometimes confusing acronyms and their overall
purpose of allowing tax-free reimbursement of various types of medical
expenses, health savings accounts (HSAs) and health reimbursement
arrangements (HRAs) are quite different when you get down to the details.
But both are an important part of the value proposition an employer offers to
its employees.

Giving Employees Skin in the Game

An HSA is one of the cornerstones of consumer-directed health plans and
is designed to give individuals an incentive to be smarter and more conscientious health care consumers. The most compelling attribute of an HSA is its
ability to provide individuals with a stake in managing their own health care
purchasing. An HSA allows employers and employees to contribute to the
account. It also allows employees to keep any unused funds for use in future
years and to roll over those funds when they leave the company.

Benefits Briefs
For full versions of these articles and others, visit
[Link]/hrdisciplines/benefits.

60% of U.S. Corporate Pensions

Now Closed to Entrants
A May survey by SEI of 100 U.S. finance and HR executives
responsible for managing corporate defined benefit pension
plans reveals that:

36 percent of U.S. defined benefit plans are active,

meaning the plan is open to new hires.

31 percent are closed, meaning the plan is closed to

new entrants but participants are still accruing benefits.

The Employers Tool

30 percent are frozen, meaning the plan is closed to

Because HRA funds do not belong to an employee, the employer retains

funds left in an HRA when an employee leaves the company. This is a
particularly attractive feature for employers in industries with traditionally
high turnover, such as retail or fast food.
Because only the employer is putting money in the HRA, the employer
gets to make all the rules for the benefit plan, said Alexander Domaszewicz,
a principal and senior consultant with Mercer HR Consultings Health &
Benefits Services.
For example, if an employer does not want to adopt the minimum
deductible required for an HSA, it can adopt an HRA plan with a lower
deductible. Alternatively, HRAs can be linked to plans with out-of-pocket
maximums that are higher than the limit the government sets for HSAs.
By Joanne Sammer, a New Jersey-based business and financial writer, and Stephen Miller,
CEBS, an online editor/manager for SHRM.

new entrants; participants are no longer accruing benefits,

but the termination process has not started.

3 percent are terminating, meaning the plan is closed,

accruals are frozen and the termination process is under
way.

Full-Time Employee Definition

Under Health Care Reform Sought
The U.S. Treasury Department and the Internal Revenue
Service asked employers affected by the Patient Protection and Affordable Care Act for help in defining full-time
employee for purposes of the act. Under the reform law,
employers with 50 or more full-time employees that do not
offer affordable health coverage to their full-time employees

Higher Limits for Health Savings Accounts,

High-Deductible Health Plans

would be required to pay a penalty, beginning in 2014.

In May, the U.S. Department of the Treasury released the 2012 limits for high-deductible
health plans (HDHPs) and the health savings accounts (HSAs) linked to them. The
amounts are being raised for 2012, whereas the 2011 rates were unchanged from 2010.
The higher rates reflect the cost-of-living adjustment and rounding rules of Internal
Revenue Code section 223.

Employee Recognition Travel:

Not Just for Sales Staff
Creating a nomination-based, all-employee incentive travel
program could help motivate high-achieving employees,

For 2012

For 2011

according to the not-for-profit Incentive Research Founda-

Individual: $1,200
Family: $2,400

with an established recognition travel program for employ-

HDHP maximum out-of-pocket amounts

(deductibles, co-payments and other
amounts, but not premiums)

Individual: $6,050
Family: $12,100

Individual: $5,950
Family: $11,900

HSA statutory contribution amount

Individual: $3,100
Family: $6,250

Individual: $3,050
Family: $6,150

HSA catch-up contributions (age 55 or older)

$1,000

HDHP minimum deductible amounts

tion. The researchers point to a case study of a company

ees who are not salespeople. They found that simply being
nominated for the award was motivating, according to nearly
half of the potential winners.
In addition, higher levels of motivation were tied to the
degree of executive buy-in.

Source: U.S. Department of the Treasury.

12 HR Magazine July 2011

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_________________

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Pakistani Discrimination
Likely Followed bin Laden Raid
nti-immigrant backlash likely
arose in the wake of the location
of Osama bin Laden in Pakistan,
according to Shanti Atkins, president
and chief executive officer of ELT in San
Francisco.
Employees are stressed-out over the
war on terror and are likely to joke about
developments to release that tension.
Unfortunately, that joking may take the
form of teasing people of Muslim faith
or national origins that have a perceived
connection with the war on terror. And
Pakistani employees might have been
subject to more-overt threats.
Comments might be made around the
water cooler or on social media sites, where
Atkins said inhibitions often are lower.
Employees make reactive posts on Twitter
and Facebook and forget co-workers in
their networks, she said. This can result
in a hostile work environment.

Hence, this is the time to conduct

anti-harassment training. It should not
be confined to sexual harassment but
instead should include discussion of
growth areas such as harassment based
on national origin and other topical
issues, Atkins observed.
Probably the biggest mistake I
see employers make is relying just on
policies. No one reads policies. And even
if they did, reading dry text on the page
is not the most effective way to raise
awareness.
Training is the only way to bring
policies to life, she remarked.
Training should instill the responsibility in all employees of reporting
suspected violations of equal
employment opportunity policies,
Atkins said. The most important part of
training is reporting, she stated.
Allen Smith

How to Contact Us
Society for Human Resource Management
1800 Duke Street, Alexandria, VA 22314, USA
Phone (703) 548-3440; Fax (703) 836-0367;
TTY (703) 548-6999; E-mail: shrm@[Link]
_______
Web: [Link]
The Society for Human Resource Management (SHRM)
is the worlds largest association devoted to human
resource management. Representing more than
250,000 members in over 140 countries, the Society
serves the needs of HR professionals and advances
the interests of the HR profession. Founded in 1948,
SHRM has more than 575 affiliated chapters within the
United States and subsidiary offices in China and India.
Visit SHRM Online at [Link].
Join us on SHRM Connect: Interact with the HR Magazine and online editorial staff at the SHRM Publishing
and E-Media Group. Go to [Link]
org/?q=node/1416 and click on Join this group.
________
Toll-free 800 Numbers
(800) 283-SHRM for:
SHRM Membership (dues status, general
information, address changes)
Conference & Seminar Registration
HR Knowledge Center Advisors
HR Certification Institute
(800) 444-5006, option 1 or (770) 280-4188 for:
SHRM Catalog Orders, Books and Product
Information
Other Telephone Numbers
Mailing List Rentals: (203) 532-6644,
shrm@[Link]
___________
SHRM Foundation: (703) 548-3440

Raising Retirement Age

Not Enough, Report Cautions
etirement ages in advanced economies will have to rise more if national leaders
intend to cover the increase in costs caused by aging populations, according to a
new report.
In Pensions at a Glance 2011, the Organisation
Pension Eligibility Ages in
of Economic Co-operation and Development
Highly Developed Countries
(OECD), an international economic organiFrance: 62; 67 for a full pension.
zation of highly developed countries,
Britain: 68, starting in 2044.
recommends several solutions for governments
Germany: 67, starting in 2029.
to maintain retirement income adequacy
United States: 66.
without endangering financial sustainability:
Source: Organisation of Economic Co-Operation and
Development.
Increase pension eligibility ages. Half of
OECD countries are increasing statutory
pension ages, but projected gains in life expectancy will outstrip prospective increases
in pension ages.
Introduce an automatic link between pension levels
and life expectancy. These pension schemes will reduce
benefits automatically as life expectancy increases so
that the lifetime value of pensions from these schemes
will remain broadly constant, the report stated.
Maintain older workers in the labor force.
Encourage private retirement savings to make up
for reductions in public benefits.

By Roy Maurer, a staff writer for SHRM.

HR Magazine
Editorial, Advertising and Circulation offices are at
SHRM headquarters.
Contact HR Magazine
To submit a letter to the editor, suggest an idea
for an article, notify our editors of a new product
or service or obtain information on writing for
HR Magazine, please visit our website at [Link]
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Permissions and Reprints
Authorization to photocopy articles for internal or
personal use, or the internal or personal use of
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Clearance Center, 222 Rosewood Dr., Danvers, MA
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(ISSN: 1047-3149). To order reprints or e-prints of any
article, contact the YGS Group at (800) 501-9571.
Subscription Information
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subscribe or by calling (800) 283-7476, option 3 (U.S.
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about other member benefits, please visit [Link].
org/infokitrequest. Out of work? SHRM offers a onetime transitioning membership. Find out more information at [Link]/members/transitioning.

14 HR Magazine July 2011

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Staying ahead of employee issues requires the right

solutions, the right support and the right resources.
As the worlds largest provider of employee assistance
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EMPLOYEE ASSISTANCE PROGRAMS

HR Magazine

[Link]/hrmag

BEHAVIORAL HEALTH

WORK-LIFE

WELLNESS

FMLA MANAGEMENT

HR SOLUTIONS

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SEC Approves Final Whistle-Blower Rule

n a 3-2 vote, the Securities and
Exchange Commission (SEC) in
May approved a final whistle-blower
rule enforcing the Dodd-Frank Act that
would permit whistle-blowers to go
directly to the commission for a bounty
for their tips
without
first

using a companys internal compliance

program.
Robert Khuzami, the SECs director
of enforcement, noted that the most
vigorously debated issue about the
rule was the effect it would have on
internal processes. Many argued that
without mandatory reporting to internal
compliance programs, whistle-blowers
will be encouraged to bypass internal
systems, he noted.
However, Khuzami said the rule
was revised so that whistle-blowers
would have more incentive
to use internal reporting
where appropriate. For
example, the rule:
Makes a whistleblower eligible for an
award if the whistleblower reports internally

and the company informs the SEC about

the violations.
Treats an employee as a whistleblower under the SEC program as
of the date the employee reports the
information internallyas long as the
employee provides the same information
to the SEC within 120 days. Through
this provision, employees would be able
to report their information internally first
while preserving their place in line for a
possible award from the SEC.
Provides that a whistle-blowers
voluntary participation in an entitys
internal compliance and reporting
systems is a factor that can increase the
amount of an award, and that a whistleblowers interference with internal
compliance and reporting is a factor that
can decrease the amount of an award.
Allen Smith

MSD Reporting Column

Back Again for Review
he public may again comment on the proposed addition of
a column to record musculoskeletal disorders (MSDs) on
the U.S. Occupational Safety and Health Administration
(OSHA) Form 300 log.
OSHA is reopening the rulemaking process to allow the
public to weigh in on feedback received from small businesses
during two teleconferences held in April. OSHA had halted the
review process for the proposed rule in January when the U.S.
Small Business Administration complained that OSHA officials
were not listening when small-business owners said the time
and effort required to record such disorders would be overly
burdensome.
The proposed rule would not change the existing recordkeeping requirements about when and under what circumstances employers must record work-related injuries and
illnesses, OSHA officials stated in a news release. An employer
would mark the MSD column box on the OSHA 300 log if a
case it already has recorded meets the definition of a musculoskeletal disorder.
Representatives of 16 small businesses, whose number of
employees ranged from 10 to 400, participated in the teleconferences. According to a summary of the teleconferences, A
few participants stated that the proposed requirement to check
a new box was not burdensome, but that correctly checking

the box would require a more thorough investigation to

correctly classify MSDs. Some participants were concerned
that the definition of an MSD included many unrelated
injuries and illnesses that would be difficult to learn and apply.
One participant said this process would put a burden on his
two-person human resources department.
By Beth Mirza, senior editor for HR News.

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HR News

FROM THE STATES

State Laws On
Medical Marijuana
Inconsistent, Unclear
he proliferation of state laws legalizing marijuana for
medical use may impact employers in several ways,
Douglas Farmer, an attorney in Ogletree Deakins San
Francisco office, told attendees at the firms 2011 Workplace
Strategies seminar held in Chicago in May. Employees or
applicants use of medical marijuana may raise safety concerns
and may motivate employers to re-examine drug- and alcoholtesting policies, he said. Employers also may be wondering
whether they have an
obligation to accommodate an employees
medical marijuana use
under federal and state
disability laws.
And although no
employee has been
successful to date in
suing an employer
under state laws
legalizing marijuana
for medical use,
that may change in
the future, added
Lori Bowman, an
attorney in Ogletrees
Los Angeles office.
Furthermore,
Arizonas recent enactment is far more problematic than the
other 16 laws, said Richard Hurford, an attorney in Ogletrees
Bloomfield Hills, Mich., office.
Except for the Arizona law, the state enactments are
similar, according to Hurford. They use the same terminology,
authorizing individuals who suffer from a debilitating medical
condition to use medical marijuana upon receipt of a registry
identification card.
And, again, except for the Arizona law, there is no
requirement under state law to accommodate the use of medical
marijuana, Bowman noted. Also, except in Arizona, employers
may still enforce drug-testing policies to exclude employees
who test positive for marijuana.
But because Arizonas law includes a specific employmentbased anti-discrimination section that protects medical
marijuana cardholders, it is critical for anyone with
employees in Arizona to understand that the Arizona law goes
further than the laws in other states, Hurford concluded.

State Workplace Law Briefs

For state workplace law developments, visit [Link]/
____________________
LegalIssues/StateandLocalResources.

VERMONT PASSES SINGLE-PAYER HEALTH LAW

Gov. Peter Shumlin signed into law a bill establishing a single-payer health
care plan for the state, setting Vermont on a path to creating the nations
first publicly financed health care system. The legislation aims for a
single-payer system, with doctors and hospitals billing one entity, the state
government, for their services. All 620,000 state residents are guaranteed
the right to enroll in the state-sponsored insurance plan, Green Mountain
Care. The law is set to become operational in 2014.

RECORDKEEPING LAPSES COSTLY

IN NEW YORK AND CALIFORNIA
In New York and California, failure to give employees wage statements
or failure to keep proper payroll records can cost employers thousands
or even millions of dollars in penalties. New Yorks Wage Theft Prevention Act requires employers to maintain accurate payroll records for each
week worked and to provide statements to employees each pay period and
additional notices at specified intervals. In California, Labor Code Section
226(a) and Section 7(B) of Industrial Welfare Commission wage orders
impose recordkeeping and pay notification requirements.

MASSACHUSETTS HIGH COURT

EXPANDS RETALIATION PROTECTION
The Massachusetts Supreme Judicial Court has ruled that an ex-employee
can bring a retaliation claim against a former employer for actions taken
after the termination of the employer-employee relationship. Under this
ruling, employers may be subject to claims for such activities as instituting
legal action against a former employee who filed a charge with the state
anti-discrimination agency, providing a negative job reference, or reporting
misconduct to a regulatory or licensing agency.

NEVADA PROHIBITS GENDER IDENTITY-BASED

EMPLOYMENT DISCRIMINATION
Nevada became the 14th U.S. state to ban workplace discrimination on
the basis of gender identity after Republican Gov. Brian Sandoval signed
an employment discrimination bill. The law adds gender expression and
identity to state employment laws that already prohibit employers from
discriminating against job candidates based on race, religion, sexual orientation and other attributes. Gender identity or expression, according to the
bill, means gender-related identity, appearance, expression or behavior,
regardless of the persons assigned gender at birth.

By Joanne Deschenaux, J.D., SHRMs senior legal editor.

July 2011 HR Magazine 17

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Census Data Reflect Older,

More Diverse U.S. Workforce
The United States workforce is aging.
Weve heard that before. But theres
nothing like statistics to make us sit up and
pay attentionor prompt company lead-

Highest Education Level of Adults

Age 25 and Older, 2010
Associate
degree

HR professionals need to know where

to find workersnot just now, but in the

15%

future.

Advanced
degree

The demographic data can be used

During the past decade, the number

goals and also align them with succes-

of individuals ages 45 to 64 has increased

sion planning to test the feasibility of the

31.5 percent, from 62 million to 81.5

organizations survival, says Nereida

million, the 2010 census data show.

Perez, vice president of global diversity

Thats one-quarter of the population. In

and inclusion for Ingersoll Rand Co. in

seven states, the median age shot to 40

Davidson, N.C. Perez used 2000 census

or older.

data, along with other research, to

The 2010 census documents long-

of a previous employer to partner with the

tomorrows workforce. Some examples:

federal government and other industries

Hispanic and Asian populations are

to encourage young people, particularly

growing the fastest. The Hispanic popula-

minorities, to obtain college degrees in

tion accounted for more than half the U.S.

math and science.

The non-Hispanic white population

the fast-growing segments of the population is critical for workforce planners in

group, yet it is growing at the slowest rate.

companies that intend to expand.

in a certain location, no matter how much

2010.

city leaders do to attract you, if the average

The main growth in population contin-

age shoots over 50, that location is not

ues to be in the South and West.

going to generate a sustainable popula-

Members of minority groups now make

tion, Perez says.

Changes in population composition

From 2000-10, Texas joined Califor-

will cause more business leaders to look

nia, the District of Columbia, Hawaii and

internally to determine how they can better

New Mexico in having a majority-minority

represent the groups that they serve,

population.

predicts Dan Ryan, principal at Ryan

In 2010, 30 percent of adults age 25

and older had at least a bachelors degree,

15%
Attended some
college, no degree

Spent time in
graduate school
without receiving
advanced degree

17%

Populations with a Bachelors Degree

52%
36%
28%

33%
20%
14%

If youre looking to build a new plant

from 69 percent in 2000 to 64 percent in

up nearly half of the Wests population.

No high school
diploma

Understanding migration patterns of

is still the largest major race and ethnic

Its proportion of the U.S. population shrank

29%

convince the executive leadership team

range trends and provides glimpses of

population growth in the past 10 years.

Asian

Men

NonBlack Hispanic
Hispanic
white

Women

By Gender, 2010
Age 2529

By Race and Ethnicity, 2010

Age 25 and Older

Educational Achievement
2000

84%

2010

87%

Search and Consulting in Nashville, Tenn.

For detailed information for your area,

compared with 26 percent in 2000,

search the Census Bureaus website at

according to a separate U.S. Census

[Link].
26%

Bureau survey of 100,000 households in

the spring of 2010.

11%

High school
diploma

to compare with workplace planning

ers to take action.

Bachelors
degree

By Dori Meinert, a senior writer for HR Magazine.

At least a
high school diploma

30%

At least a
bachelors degree

Source: U.S. Census Bureau, Current Population Surveys Annual

Social and Economic Supplement, 2010.

18 HR Magazine July 2011

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Population Growth by Ethnicity and Race

In Millions
2000

Hispanic

[
[
[
[

2010

31.5%

Percentage Increase

The percentage growth in the

population of 45- to 64-year-olds
from 2000 to 2010. This group
now makes up 81.5 million,
or 26.4 percent, of the
total U.S. population.
The 65-and-older
population also
grew faster than
most younger
population
groups, at a
rate of 15.1
percent, to
40.3 million,
or 13 percent,
of the total
population.

35.3
50.5
43.0%
10.2
14.7

Asian

43.0%
34.7
38.9

Black

12.3%
194.6
196.8

Non-Hispanic
white

1.2%

Median Age by State, 2010

U.S. median age: 37.2 years
40.0 or more

37.5 to 39.9

35.0 to 37.4

Less than 35.0

Change in U.S. Child Population

by Race and Ethnicity, 2000-10
In Millions
Hispanic

+4.78
D.C.

Other
White

Black

Asian

+0.05 +0.75

-0.24
AK

9.7%

The percentage growth

from 2000 to 2010 in the
U.S. population, which
is now at 308.7 million.
Hispanics and Asians
accounted for most
of that growth.

Population by Selected Age Groups

In Millions
2000

Under 18

18 to 44

45 to 64

65-plus

[
[
[
[

2010

-4.31
Source: Brookings Institution analysis of U.S. Census Bureau data.

Percentage Increase
72.3
74.2

10 Fastest-Growing Metropolitan
Statistical Areas, 2000-10

2.6%
112.2
112.8
0.6%
62.0
81.5
31.5%
35.0
40.3
15.1%

Palm Coast, Fla.

St. George, Utah
Las Vegas-Paradise, Nev.
Raleigh-Cary, N.C.
Cape Coral-Fort Myers, Fla.
Provo-Orem, Utah
Greeley, Colo.
Austin-Round Rock-San Marcos, Texas
Myrtle Beach-North Myrtle Beach-Conway, S.C.
Bend, Ore.

Percentage
Increase
92%
52.9
41.8
41.8
40.3
39.8
39.7
37.3
37.0
36.7

Source: All figures from U.S. Census Bureau, 2010 census, except where noted.

July 2011 HR Magazine 19

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Executive Brieng
By Dori Meinert

Performance Art
orporate leaders have known for a
long time that setting specific goals
helps focus employees attention and
boost job performance.
However, the brains ability to remember
multiple goals is limited.
Theres only so much that one can pay
attention to, says Gary Latham, a pro-

fessor at the University of Toronto and a

Society for Human Resource Management
board member.
Thats why Latham and his research
partner, Amanda Shantz, have been exploring ways to encourage positive behaviors in
the workplace by subconscious means.
Latham says he was fascinated by earlier
studies, including one in which a group of
participants was left to browse dieting and
exercise magazines. Later, when offered fruit
or chocolate as a snack, participants in that
group were more likely than other participants to choose fruit. I found that impossible to believe since Im a chocolate freak,
he says.
With that skeptical mind-set, Latham
and Shantz conducted three experiments
in call centers. In each case, the employees

were given written instructions on how to

urge donors to contribute to a university.
But only half of the employees received the
instructions printed over a color background
photograph of a woman winning a race.
In each case, the employees exposed to the
photo outperformed the others.
We were totally surprised to find out
that those who saw
the picturebut
had the same
instructions as
those who didnt
see the picture
actually raised way
more money, says
Latham, whose
findings were
published in the
March/April issue
of Human Resource
Management.
The findings
could prompt
a bout of office
redecorating, and
HR professionals
will want to be
involved. The
moral is: The pictures you look at do, in
fact, affect your behavior on and off the
job, he says. And dont forget about those
laptop screens.
Latham says more research is needed
to determine how long the positive effect
on job performance will last and whether
such tactics would work in other settings.
He warns that the wrong choice in artwork
could have a negative effect on job performance.
He acknowledges that the practice of
priming employees subconscious brains to
achieve greater job performance raises ethical questions.
Before employers delve too far into the
subconscious realm, he says, they need to
discuss: How can we best use this information in ethical ways?

CEOs Pay
Search
Attempting to draw attention to the gap
between executive compensation and
average workers pay, the AFL-CIO is promoting its Executive PayWatch website,
a searchable database containing the
most recent compensation data for about
3,000 companies, including most of
those listed in the Russell 3000 Index.
The chief executive officers of the
largest companies received, on average,
$11.4 million in total compensation last
year, according to the labor organizations analysis of 299 companies in the
Standard & Poors 500 Index. Thats a
23 percent jump from 2009 and 343
times the average workers median pay of
$33,190, the union claims.
The CEO compensation figures
include stock options, equity awards and
perks such as country club memberships
and personal use of company cars and
airplanes.
At [Link], users can
search by company name, industry and
state.
Representatives of the labor organization are encouraging shareholders to
exercise their new rights under the DoddFrank Act. The legislation gives them a
nonbinding vote on executive pay, an area
that has traditionally been left up to managers and HR leaders.
However, a Towers Watson analysis
in April found that most companies are
receiving strong shareholder support for
their say-on-pay proposals. Only four had
failed to win majority support for their
say-on-pay proposals as of that date.

20 HR Magazine July 2011

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GET CERTIFIED.
GET NOTICED.
Our certied HR professionals have their HR certication stories to share. Kristi West is one of them.
Will you have your certication storyProfessional in Human Resources (PHR), Senior Professional
in Human Resources (SPHR) or Global Professional in Human Resources (GPHR) to share?

To set myself apart, I pursued the SPHR certication as the key

differentiation tool. Combined with my HR experience, the SPHR
certication enabled me to think like a strategic partner of my
organization. Since then, I have also added the California and
GPHR credentials to my title. Kristi West, SPHR-CA, GPHR

APPLY FOR THE 2011 HR CERTIFICATION EXAMS TODAY.

WINTER

Exam dates*:

Dec. 1, 2011Jan. 31, 2012

Applications accepted:

July 11Oct. 7, 2011

Late applications due:

Nov. 11, 2011

Visit [Link]/certied/hrm7
for more information on our HR
certications.

GPHR exams are held December 131, 2011.

A US$75 late fee will be assessed on applications received after the regular deadline.
FOLLOW US ON
and our CERTIFICATION MATTERS BLOG
Web site: [Link] 2011 HRCI
C11-011

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Solutions

Dropping Dependents, Investigating

the Boss, Salary Feedback
dependents from the health insurance plan
during open enrollment, there is no qualifying event that would trigger COBRA
eligibility.
However, special consideration is
required when an employee drops a
spouse during open enrollment in anticipation of divorce or legal separation. Divorce
or legal separation is a qualifying event for
COBRA, but not until the divorce or legal
separation is finalized. The Internal Revenue Service (IRS) has ruled that the spouse
dropped in anticipation of divorce or legal
separation will be entitled to COBRA continuation health coverage upon the finalization of the divorce or legal separation,
even if he or she wasnt covered under the
plan immediately preceding the event.
In practice, employers struggle with
this issue. It is difficult to know what
employees are anticipating when they
make open enrollment changes. It is the
employers responsibility to take reasonable measures to determine if the anticipation of divorce rule applies. Employers
should consider:
When an employee voluntarily drops dependents during open
Asking an employee who drops a
enrollment, do employers have to offer the dependents COBRA
spouse during open enrollment to specify
continuation health coverage? And what is the anticipation of
any COBRA-qualifying event influencing
divorce rule?
the change.
mployers do not necessarily have to offer the dependents COBRA continuation
Adding related questions to coverage
health coverage. COBRA continuation health coverage is triggered when an emchange forms.
ployees dependent loses coverage due to certain qualifying events, according to a
Sending notice to employees spouses
U.S. Department of Labor fact sheet.
advising them of their rights if a divorce
For a spouse of a covered employee, the qualifying events are:
or legal separation is pending.
Voluntary or involuntary termination of the covered
Due to the implicaemployees employment for any reason other than gross
tions of this rule and the
Online Resources
misconduct.
possible difficulty with
Reduction in hours worked by the covered employee.
insurance carrier compliFor additional questions and answers and
The covered employee becoming entitled to Medicare.
ance, employers should
more information about topics in this
Divorce or legal separation of the covered employee.
consult with legal counsel
column, please go to [Link]
Death of the covered employee.
for specific guidance. For
/templatestools. For answers to your own
For children, the qualifying events are the above five plus
more information, see IRS
questions, visit [Link]/hrinfo or
loss of dependent child status under the plan rules.
Revenue Ruling 2002-88.
call (800) 283-7476, option 5.
When an employee makes a voluntary choice to drop
Erin Patton

ILLUSTRATION BY RICHARD BORGE

22 HR Magazine July 2011

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What should you do if your

boss or the chief executive
officer is accused of harassment
or discrimination?
R professionals should never
overlook a complaint because they
feel the boss is untouchable. Even
a complaint against a CEO should be
investigated thoroughly, promptly and
impartially.
An employee coming forward with a
complaint against a top-level executive
may hesitate to disclose details because
such disclosure could single him out as
the accuser and affect his job security.
Employees should be protected from
retaliation, but it is not possible to keep all
information gathered in the initial complaint completely confidential and still
conduct an effective investigation. Do not
overpromise confidentiality.
A harassment claim may place HR
professionals in an uncomfortable and
perilous position as well. The initial challenge for an HR professional receiving
a complaint about his or her boss or the
CEO is finding the right individual to
approach regarding the complaint. If you
are not familiar with conducting investigations, you may need to first find an

In conducting our salary review

process each year, weve never
asked staff members for their
perceptions of their increases or
bonuses. Should we?
eaders of many organizations view
this communication process as a
one-way street. Indeed, monetary
rewards stemming from performance
reviews are often viewed as an information event, not a communication event.
In reality, this is an opportunity for organizations to hold open discussions with
employees regarding their compensation
and other monetary incentives the organization may provide.
Organizations that use the event as a
communication opportunity can use the
review process to begin discussions on
how the company is doing financially
and what new goals and objectives are
planned for the coming year. This would
include any ventures planned by the

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ally within HR, if possible. This ally may

be your boss, your skip-level manager or
someone from corporate HR. Another
option is to contact the companys
employment law attorney.
The next step usually will include
contacting the alleged harassers manager
to make him or her aware of the allegation. This manager may be able to help in
preparing for an investigation and will be
involved in deciding how to proceed upon
review of the investigation summary. This
person may be a top-level executive, the
CEO or, if the CEO is accused, a board
member.
Time is of the essence. When requesting time with this executive or board
member, make it clear that the matter is
urgent. Be prepared to deliver an unbiased
summary of the allegation and your suggestions for how to proceed in a prompt
and objective way. Those suggestions may
include how to protect the employee during the investigation process, who should
conduct the investigation and who should
be involved in the process. Consider
whether the accused should be sent home
on paid administrative leave until the
investigation is concluded, especially if the
accusing employee and the accused are in
the same office, attend the same meetings

or have any type of reporting relationship.

If an internal HR manager investigates
someone in her direct line of supervision
or someone with influence over staffing
decisions within her department, the
accusing employee may see it as a conflict
of interest.
The alleged harasser should not have
any direct or indirect control over the
investigation, according to the U.S. Equal
Employment Opportunity Commissions
Guidance for Small Employers. If an internal
HR manager conducts the investigation,
he should feel comfortable thatno matter the outcomehe will be supported by
top executives or board members higher in
the food chain than the accused to protect
himself, the accusing employee and any
witnesses from retaliation. In some cases,
a better alternative is to hire an external
HR consultant or an attorney to investigate the complaint.
Involve legal counsel early to advise
the company on how to prepare for the
investigation, conduct the investigation
and respond upon review of the investigation summary. For more information, see
the Society for Human Resource Managements How-to Guide, How to Conduct an
Investigation.
Liz Petersen

organization and how the staff member

may fit into the picture. This is also an
excellent opportunity to talk with staff
members about their jobs, their career
goals and how these aspirations may fit
within the companys future business
plans. Managers and staff should discuss
professional development opportunities
that may be available internally.
These discussions give managers an
opportunity to conduct a pulse check
with employees to gauge satisfaction and
dissatisfaction levels with the organizations existing rewards systems, career
development process and future prospects.
Just as many organizations require
staff to sign off on performance appraisals or reviews, it can be equally beneficial
to have an employee sign off for pay
changes and for bonuses or incentives.
This would provide employees with
opportunities to comment on their salary
changes, just as it is common practice

to receive comments on performance

reviews.
As a compensation best practice,
organizations should solicit some form
of feedback, either at the time of award
or through periodic surveys, on the value
of the rewards systems and how they
are perceived by staff. There should be
a process for correcting compensation
decisions previously made, if the organization chooses to do so. A February
study of 451 employed adults by MarketTools Inc. concluded that about twothirds of organizations have no formal
feedback process for compensation decisions. In addition, those who do have a
feedback process may not utilize it in a
reasonable and timely manner.
John Sweeney

Erin Patton, SPHR, Liz Petersen, GPHR,

SPHR-CA, and John Sweeney, SPHR, GPHR,
are HR knowledge advisors in SHRMs HR
Knowledge Center.

July 2011 HR Magazine 23

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Cover Story

While some employers fear the challenges of hiring employees with

post-traumatic stress disorder, simple accommodations can improve
the chance of success.

uring his combat tour in Iraq, Richard

Martin was nearly killed by a rocket
that exploded 20 feet away. The guy in
front of him wasnt so lucky.
The rocket hit the ground in front of me, and
it blew off both of his legs, Martin recalls.
Its one of many horrifying experiences the
National Guardsman endured in Iraqand one
he cant forget. Martin estimates that he saw at
least one soldier die every week he was stationed
there in 2005.

He wasnt visibly injured like those bleeding all

around him. He didnt seek treatment. He thought
he could handle the stress. Unlike most others in
his unit, he had seen combat before. He had commanded a tank company for the U.S. Army during
the first Gulf War.
I attributed my disorientation, my inability to
clearly think, to exhaustion, Martin recalls. But
as time went on, I knew something was wrong.
It wasnt until he returned to the United States
that a nurse at Fort Lewis in Washington state rec-

The author is a senior writer for HR Magazine.

24 HR Magazine July 2011

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PHOTO ILLUSTRATION BY JOHN ANDERSON JR.

By Dori Meinert

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July 2011 HR Magazine 25

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Cover Story

Richard Martin during his combat tour in Iraq in 2005.

ognized his symptoms as post-traumatic stress disorder (PTSD)

and traumatic brain injury from three concussions he sustained
in a four-month period.
He had flashbacks. His mind replayed scenes of fellow soldiers dying. He had trouble staying focused. He couldnt sleep.
And, there was the constant fear. For some reason, when I
came back, I would drive and I was always worried that a car
bomb was going to get me, Martin says.
Martin is one of an estimated 17 percent of soldiers returning
from Iraq and Afghanistan with PTSD. After 10 months in rehabilitation, Martin is employed as a systems engineer at Northrop
Grumman Corp. in Clearfield, Utah.
However, many returning veterans are unable to find employment. Their average jobless rate in 2010 was 11.5 percent compared with 9.4 percent for nonveterans. The unemployment
figures for young veterans ages 18 to 24 were worse20.9 percent compared with 17.3 percent for nonveterans.
Some veteran advocates blame the high unemployment
numbers on the stigma of PTSD, at least in part. Hollywood
is great at dramatizing the crazy veteranthe veteran who is a
loose cannon, who is perhaps unreliable or a substance abuser.
Thats probably the furthest thing from the truth, says Brock
A. McNabb, a readjustment counseling specialist with the U.S
Department of Veterans Affairs (VA).

Although combat veterans commonly come to mind as

vulnerable to PTSD, they arent the only ones. Others include
victims of rape; survivors of plane crashes, industrial accidents
and natural disasters; and emergency medical personnel and law
enforcement officers who routinely deal with crime and accidents. Among rescue and recovery workers at the World Trade
Center after the Sept. 11, 2001, terrorist attacks, 12.4 percent
have symptoms of PTSD, according to a 2007 study published
in the American Journal of Psychiatry. An estimated 6.8 percent
of Americans will experience PTSD at some point in their lives.
About 3.6 percent of U.S. adults, 5.2 million people, have PTSD
during a given year, according to the U.S. Department of Veterans Affairs National Center for PTSD.
HR professionals can help supervisors understand that these
invisible injuries are just as real as physical wounds and are treatable. Flexibility and compassion can go a long way to retaining a productive and loyal employee, say advocates for people
with PTSD. If thats not enough motivation, employers should
be aware that federal regulations effective in May, which implement the 2008 amendments to the Americans with Disabilities
Act (ADA), make it easier for employees with PTSD and other
mental health disabilities to pursue discrimination claims.

Employers Attitudes
Many employers express uncertainty about hiring someone with
PTSD. They worry that the individual will pose a safety threat to
other workers. They are concerned that employees with PTSD
would require costly accommodations and take too much of their
managers time.
In a June 2010 poll, the Society for Human Resource Management (SHRM) found that 46 percent of the HR professionals
responding said post-traumatic stress and other mental health
issues pose hiring challenges. Just 22 percent said the same about
combat-related physical disabilities.
Another poll indicates that employers are concerned about
the potential for violence but arent sure if that concern is valid,
says Hannah H. Rudstam, a member of the senior extension
faculty at the DBTAC-Northeast ADA Center in the School of
Industrial and Labor Relations at Cornell University in Ithaca,

Perceived Challenges of Hiring Employees with Military Experience

Translating military skills to civilian job experience
Difculty transitioning from the structure and hierarchy in the military culture to the civilian workplace culture
Post-traumatic stress disorder or other mental health issues
Amount of time it takes for these employees to adapt to civilian workplace culture
Combat-related physical disabilities
These employees tend to be underqualied for the positions they apply for

60%
48%
46%
36%
22%
18%

Source: Employing Military Personnel and Recruiting VeteransAttitudes and Practices, SHRM poll, June 2010. Multiple answers were permitted. Between 110 and 148 respondents.

26 HR Magazine July 2011

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N.Y. Cornell and SHRM researchers collaborated on the Janu- National Center for PTSD, wants employers to know two facts:
ary poll to gauge employers views on hiring veterans.
PTSD is easy to recognize and its very treatable.
In that poll, 53 percent of the HR professionals responding
Yet some individuals dont recognize they need help, or they
said they didnt know if workers with PTSD are more likely to dont seek help right away because they believe doing so shows
commit violence in the workplace. Rudstam says she suspects weakness, which their military training and society discourages.
that those expressing uncertainty were
Sometimes, symptoms dont appear until
masking concerns they werent commonths, or even years, after the traumatic
fortable expressing directly, even in an
event when a chance encounter, remark,
Perceptions in the Workplace
anonymous survey. Eight percent said
sound or smell triggers a memory.
Accommodating workers with disabilities such as
employees with PTSD would be more
Before getting treatment, some may
post-traumatic stress disorder or traumatic brain
violent, while 39 percent said they
turn to alcohol or drugs to relieve their
injury requires more effort for the employer.
wouldnt be.
pain.
In addition, 61 percent of the responArmy Staff Sgt. Meg Krause was
Strongly
Disagree
dents said that accommodating workers
a
medic
in Afghanistan and Iraq who
disagree
9%
with PTSD or traumatic brain injury
returned home in 2006 to enroll at Penn
1%
requires more effort for the employer,
State University. Two years later, she
Dont know
while 52 percent reported that they
began having nightmares and flashbacks.
29%
didnt know if accommodations would
She couldnt sleep. She started drinking.
Agree
43%
be costly. Only 6 percent had accommoThe turning point came one night when
Strongly
agree
dated a worker with PTSD.
she was out with friends. We heard a
18%
They were really struggling with
car backfire. I thought insurgents were
understanding What do accommodachasing me, Krause recalls. She called
It is costly to accommodate workers with distions in this area look like? What are
the police, telling them insurgents were
abilities such as post-traumatic stress disorder
the possibilities? What do we do?
waiting for her. Her roommate drove her
or traumatic brain injury.
Rudstam says. They have very, very
to a VA hospital, where she went through
little experience with these types of
detox and counseling and was diagnosed
Strongly
disagree
accommodations.
with PTSD.
4%
With therapy and the help of her
What Is PTSD?
professors,
Krause finished college in
Disagree
Dont
In World War I, they called it shell
December 2008 as scheduled and landed
31%
know
shock. In World War II, it was dubbed
a job. Have a support system in place
52%
combat fatigue.
thats going to help you, she advises. Her
Agree
It wasnt until after the Vietnam War
first employer gave her a flexible work
12%
Strongly
agree
that post-traumatic stress disorder
schedule so that after sleepless nights, she
2%
became an official diagnosis accepted by
could start work later the next morning.
the American Psychiatric Association.
She now works as associate director for
Workers with PTSD are more likely than others to
commit acts of violence in the workplace.
Symptoms include severe anxiety,
military programs at the American Counsleeplessness, nightmares, social isolacil on Education in Washington, D.C.
Strongly
tion, emotional numbness, irritabildisagree
Concerns of Violence
ity and a feeling of being on guard. A
6%
While news coverage involving atrocikey symptom: The individual relives a
ties committed by people with mental illtraumatic event when confronted with
Disagree
Dont
33%
nesses reinforce the public perception that
reminders or thinks about it when trying
know
53%
they are prone to violence, studies have
to do something else.
shown otherwise, researchers say.
While the majority of people exposed
Strongly
Violence is exceedingly rare among
to a traumatic event dont have ongoing
Agree
agree
7%
people with mental illness, and the rare
psychiatric problems that require clini1%
instances that do occur are associated
cal intervention, some do to varying
Source: Recruiting Veterans with Disabilities: Perceptions in the
with other factors, such as active subdegrees.
Workplace, SHRM poll, in collaboration with and commissioned
by the School of Industrial and Labor Relations, Cornell
stance abuse or refusing to take mediMatthew J. Friedman, a psychiaUniversity, January 2011. Between 906 and 921 respondents.
cations, testified Dr. Gary R. Bond, a
trist and executive director of the VAs
July 2011 HR Magazine 27

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Cover Story

Welcome Home
Northrop Grumman has hired 84 veterans with disabilities since

The estimated cost to accommodate individuals with physical

2005, recruiting them from the U.S. Department of Veterans Affairs

disabilities is $500 to $600. But for people with PTSD, its much cheaper

hospitals and training programs. Candidates who come into the program

because, the majority of the time, it involves changing a persons schedule

voluntarily identify themselves as veterans with disabilities.

or allowing the employee to leave early to go to the doctor, says Michael

Our philosophy has been to focus on the candidates ability and not

Reardon, supervisory policy advisor at the U.S. Labor Department's

the disability, says Mary B. Brogan, SPHR, manager of military programs

Office of Disability Employment Policy. Because PTSD ameliorates over

and Operation IMPACT. We dont dismiss their disabilities. But at an

time, the ongoing accommodations may be reduced, he says.

appropriate time, we connect them with a health care professional in our

Flexibility remains key, says Mike Bruni, staffing manager for

organization to have a confidential conversation to discuss what types of

the Intelligence, Surveillance and Reconnaissance Group at Science

workplace accommodations would be helpful.

Applications International Corp. (SAIC) in Reston, Va.

For example, if an individual startles easily, managers can ensure that

For example, medications to treat PTSD can make it difficult to wake

the employee sits with a view of the door or can place a mirror on his

up. In some instances, when folks didnt show up for work, it wasnt

computer monitor so he can see when someone approaches him from

because they didnt want to. They took their medication a little later than

behind. The company also may provide noise-canceling headphones.

they were supposed to and slept through the alarm clock, Bruni says.

The cost is really minimal. But the impact of those couple of

About 18 percent to 30 percent of the defense contractors 43,000

workplace accommodations is really significant in terms of the success

employees are veterans, he says. Many, but not all, are actively

of the employee, she says.

recruited by Bruni, who maintains relationships with veterans support

Employers can get free advice on accommodations for post-traumatic

organizations.

stress disorder (PTSD) and other disabilities at the U.S. Department of

Both Northrop Grumman and SAIC offer affinity groups or mentor

Labors Job Accommodation Network website, [Link], which

programs that make available to veteranswith and without PTSD

has a searchable database.

people they can talk to as they transition to the civilian workforce.

professor of psychiatry at Dartmouth Medical School, before the

U.S. Equal Employment Opportunity Commission (EEOC) at
a March hearing on the employment of people with mental disabilities. Being employed significantly reduces the possibility of
violence even further.
Workers with PTSD, particularly those who have sought
treatment, shouldnt be cause for alarm, Friedman says.
Most people with PTSD are over-controlled. They dont
want to lose their temper. They dont want to be aggressive. They
tend to avoid situations that might evoke such feelings or behavior, Friedman says. Most veterans with PTSD are quite able to
accommodate to the workplace.
Individuals with PTSD have shown significant improvement
from therapy that teaches them to face the memories theyve
been avoiding and find ways to cope. Medication may be prescribed to reduce anxiety, Friedman says.
In one long-term study of female rape victims completed in
2005, 76 of 110 women contacted five to 10 years after treatment had recovered. The research was conducted by Patricia A.

Resick, now director of the womens health sciences division of

the VAs National Center for PTSD.

Legally Speaking
With a greater understanding of what PTSD isand isnt
employers can help ensure that workers with the disorder are
productive, advocates say. And, theres legal risk if they dont
try. Federal regulations implementing the 2008 ADA amendments make it easier for employees to get their discrimination
claims heard in court.
Congress expanded the definition of who is disabled and now
requires the primary focus in ADA cases to be on whether discrimination has occurred, according to Jeanne Goldberg, senior
attorney advisor with the EEOCs Office of Legal Counsel.
Its going to be far less often now that employers are able to
get court cases thrown out on summary judgment on the ground
that the individual is simply not covered under the ADA, Goldberg says. We have stressed to employers that this is a very
important point in time to revisit the training of their front-line

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managers and supervisors to make sure they

The stigma and the discrimination is
Online Resources
know how to recognize a request for accomvery real.
modation when they receive it and what to do
Stark was diagnosed with PTSD
To discuss post-traumatic stress disorder
to make sure they meet their obligations to
years ago after she was raped as a
and to review the surveys cited in this artiprovide accommodations to individuals with
teen. Early on, she had symptoms at
cle, see the online version of this article at
disabilities where it would not be an undue
work. Someone would raise his voice
[Link]/hrmagazine/0711Meinert.
hardship on the business.
in a meeting, and shed feel something
Medical conditions that are episodic or in
building inside of her. Shed excuse
remission, such as PTSD or cancer, are now
herself from the meeting until it subconsidered disabilities if they substantially limit a major life activ- sided. Eventually, she learned to cope.
ity when active.
For privacy reasons, managers and HR professionals cant
It was more difficult to prove PTSD was a covered disabil- ask questions even if they suspect someone has PTSD. But if the
ity when Donna Malone was fired by her employer, Land Air worker volunteers the information, she suggests talking to them
Express of New England, while she was hospitalized for treat- to help them determine what their triggers are.
ment of PTSD. Her condition stemmed from physical and sexual
She had one employee whose work would noticeably suffer
abuse she endured as a child.
each November. The third year, I sat down with the employee
Malones manager said he fired her because of his gut feel- and asked if there was anything I could do to help. It was only
ingbased on news stories about employees going postal then that I learned the employee had PTSD and that November
that she was a danger to other employees. The manager never was the anniversary of something bad that had happened, says
spoke to Malones doctors or took time to understand the illness Stark, who teaches disability awareness workshops.
before firing her, EEOC senior trial attorney Markus Penzel told
As an HR professional, she tells supervisors: Dont call me
the commission in March. The company settled for $360,000 in up and tell me you have an employee who is depressed or who is
2003.
bipolar, because you dont have a medical degree. Tell me what
youre seeing and then we can have a conversation with this
Dont Ask, Dont Tell
employee.
During the hiring process, employers are prohibited by law from
When there is a behavioral problem, HR professionals can
asking any disability-related questions in interviews or on job refer the employee to an employee assistance program (EAP),
applications, Goldberg says. If applicants volunteer information says Richard Kunz, human resources manager with the City of
about disabilities, employers can only ask what accommodations Pasadena.
they will require. If applicants ask for accommodations in preWe cant necessarily require professional treatment. We can
hire testing, employers can ask for reasonable medical informa- require they attend the EAP first session and can require whattion if the disabilities are hidden.
ever sessions that the EAP recommends, Kunz says.
Like Stark, Kunz has PTSD. The former security officer has
seen several fatal accidents, including one where he witnessed
two pedestrians hit by a drunk driver. That scene and others
came flooding back when, during the course of his HR duties, he
investigated e-mail content of some employees, including a video
of a person being struck by a helicopter rotor blade. Immediately upon seeing that, I go through a whole series of flashbacks
of all the things Ive seen on TV, video and real-life experiences,
he explains. When such episodes happen, he shuts his door until
it passes.
He and his staff are aware that a crisis at work can trigger
After a job offer has been made, the employer can ask the PTSD in some employees who may or may not have experienced
individual to submit to a medical exam or provide a medical his- traumatic events in the past. When theres a death in the office,
tory, if the request is made of all entering employees in the same for example, they call in an EAP crisis team to help employees
job category, she says.
deal with their emotions.
There are very valid reasons that a person with a hidden disSupport and encouragement from supervisors and managers
ability, particularly with mental health disabilities, do not tell of the employee go a long way to providing a safe environment for
their employers, says Kathe Stark, SPHR, employment litiga- the person to deal with their PTSD issues instead of hiding from
tion specialist with Carrill Law Firm PC in Las Cruces, N.M. them or treating them with unhealthy means, Kunz says.

For privacy reasons, managers

and HR professionals can't ask
questions even if they suspect
someone has PTSD.

July 2011 HR Magazine 29

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Profile

The Art of Global HR

By Bill Roberts

ong before Marcelo Ballario

Yoshida went to China in 2005 to
build a recruiting organization that
would hire thousands of workers for Siemens AG, he read The Art of War.
It is a book he returns to often. Even
today, the 2,000-year-old treatise on
strategy written by Sun Tzu, a Chinese
warrior-philosopher, offers guiding principles for him.
It was 12 or 13 years ago when I
first read The Art of War, he reflects. I
was not interested in war. I was trying
to understand oriental philosophy. I was
looking into yin and yang, Taoism, those
things.
Asians have a different approach to
the way they solve problems and see life.
Interestingly enough, it was also a couple
of years later when I saw the first books
and articles about the war for talent,
he says.
That first time he read The Art of
War, Ballario Yoshida was a new HR
professional in Siemens Brazilian
hydro-power business. He had moved to
HR in 1999 after originally joining the
company in finance.
As a third generation ItalianJapanese Brazilian, he was drawn to
the book by a desire to understand his
Asian roots. The lessons for HR would
become clear during the next decade
lessons he emphasizes today in conference appearances and professional
articles.

Sun Tzu does not offer absolutes. It is

about fluidity and adaptability, Ballario
Yoshida says.

China-Bound
From 2005 to 2008, Ballario Yoshida
had many opportunities to practice
those two principles in China as head of
Siemens HR center of competence for
recruiting. The China center of the German electronics and electrical engineering
company didnt exist until he built it.
In China, all these companies came in
and took a very Western approach in their
assumptions and expectations about what
people are supposed to do, how they would
behave and the management styles to implement. There was a lot of failure. Some
companies recovered, and others didnt
and closed down, Ballario Yoshida says.
He then joined Alstom Power in
Baden, Switzerland, the largest division of
Alstom Holdings SA, a French company
based outside Paris. Today, he is global
HR director for talent management at
the division with 50,000 employees in 70
nations who build equipment and provide services for oil, gas, wind, solar and
nuclear power generation.
At Alstom, he has experienced a
different cultural environment. With
Germans, direct confrontation about
a problem is fine. They dont take it
personally, he says. With the French,
you never directly confront people. The
French take it personally. On the other

The author is technology contributing editor for HR Magazine and is based in Silicon Valley in California.

hand, there is more room for creativity because the French are more flexible regarding processes, Ballario Yoshida says.
With an analytic mind, he prefers a
combination of strategy and data-based
decision-making. Siemens executives
loved data.
When the Germans complained
about something, I would analyze it and
bring them the data, and then they asked
for more. And then theyd invite me for a
beer, he says. The French are less datadriven; internal networking is more influential, he notes.
Ballario Yoshida manages a team of
six that develops programs to support
business-unit managers and HR partners
in training, performance reviews, succession planning and other talent management. We provide the strategy and tools,
and the HR practitioners in eight business
units do the implementation, he explains.
One internal customer, Angela Osborne, is the Baden-based HR director of
a manufacturing division with 8,000 employees at 14 factories in 10 countries. Ballario Yoshida has a phenomenal scope
of responsibility, Osborne says, but you
never see him having a bad day.
Attitude is key, he says. This is especially true for difficult assignments
abroad, when many expatriate workers
are thinking about where they will be
tomorrow instead of what they are doing
today: People fail overseas because they
think of being somewhere else, he notes.

Respecter of Tradition
When he arrived in Beijing in 2005, Ballario Yoshida began gathering data about
Siemens recruiting, the needs of the
business units and recruiting practices
in China. He built a 15-person team that
largely replaced outside recruiters.
Every company in China was hiring
as quickly as possible. Engineers, factory
workers, research and development staff
with doctoral degrees, managers, and his
own HR teamthe recruiting challenges
never ceased. Siemens workforce in

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Marcelo Ballario Yoshida

PHOTOGRAPHY BY ___________
[Link]

Education: Working on a masters degree in consulting

and coaching for change from HEC in Paris and the
University of Oxford in Oxford, United Kingdom. 2000,
specialist degree in HR, Fundao Getlio Vargas, So
Paulo, Brazil. 1998, bachelors degree in business
administration, Universidade Mackenzie, So Paulo.
Current job: 2009-present, global HR director of talent
management, Alstom Power, Baden, Switzerland, a
division of Alstom Holdings SA, Levallois-Perret Cedex,
France.
Career: 2008-09, global HR director, manufacturing,
Alstom Power Systems, Baden, Switzerland. 2005-08,
head of HR center of competence for recruiting, Siemens
AG, Beijing. 2003-05, international HR manager, Siemens
IT Solutions and Services, Munich, Germany. 2001-03,
HR consultant, corporate recruiting and sourcing, Munich,
Germany; 1999-2001, HR consultant, So Paulo, Brazil;
1998-99, assistant controller, So Paulo; Siemens AG.
Personal: Age 39; born in So Paulo, Brazil; married; two
children.
Diversions: Family, travel, photography, people, music,
dance, modern art, skiing, electronic gadgets, languages,
golf.
Connections: [Link], _______
[Link]@[Link], +41 (0)56 205 77 33.

China grew from 35,000 to 50,000 during

his years there.
When visiting universities, he encountered confusion about Siemens because
each division operated autonomously. He
spent two years developing a brand. By
the time he left, faculty and students knew
that Siemens medical, automotive and
information technology services were the
same company.
He was a very good learner on the
fly, recalls Grace Wu, one of his recruitment managers who now works for a
global pharmaceutical company in Beijing. He used every chance to learn and

understand the Chinese. And he always

respected Chinese traditions.
His Japanese father, an engineer, married a Brazilian, an architect of Italian
descent. Given his background, Ballario
Yoshida understands that cultural differences can impact everything, including
recruiting.
Compared with Americans, he says,
Chinese workers are reluctant to relocate.
If they do, they usually want to return
home at some point to be with their families. When trying to hire people, you
need a much better understanding about
local conditions and how they vary, Bal-

lario Yoshida says. For example, during

his time in China, labor law was local- or
city-specific. This is equivalent to Sun
Tzu teaching that you need to know the
weather and the landscape.
Lessons from Sun Tzu regarding leadership apply to HR. Research has shown
that there is a strong link between success
and morale, as Sun Tzu would say, or
values as we would say. The values are
the basic components of how companies
and managers engage people, how they
motivate their teams. And, in this sense,
you have to ensure that the values are
very clear and easy to communicate and
understand. They have to be aligned with
the way business is conducted in the company.
Morale starts with the generals in Sun
Tzus world, and values start with executives, Ballario Yoshida maintains.
No company can afford to have leaders that do not behave like leaders, that do
not follow the values and do not give the
example, he says. Employees are very
fast on analyzing the disparities between
what is said and whats done.
July 2011 HR Magazine 31

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First-Person Account

Ten books of wise words circulated through the workplace. As an employee heard a peer practicing positive communication techniques, he or she wrote down the
name and behavior and gave the person the book as an award to pass on. The books passed through 600 employees hands.

When Workers Support the Flight Plan

Leaders turn to engagement principlesand engineer a turnaround.
By John F. Schierer, SPHR
n the life cycle of organizations,
employee behaviors need to evolve.
Behaviors that are appropriate in the
growth phase of a company must adapt
to meet current and future needs. Such
was the case in 2007 with Cobham
Defense Systems in San Diego when I
signed on as vice president of human
resources. The company, now called
Cobham Sensor Systems, manufactures
sophisticated radio frequency and microwave devices for defense and homeland
security arenas.
The business had begun as REMEC
Defense and Space 20 years earlier, the

brainchild of four entrepreneurs with no

employees or revenue to face the challenges of growth. By 2005, having grown
to 1,000 employees generating $100 million in revenue annually, the owners sold
REMEC to Cobham plc in England and
remained on board as managers.
From a marketing standpoint, the
match was a good one, as Cobhams
presence in the defense industry provided
great opportunities. But along with growth
came greater challenges to the management team. From 2004 to 2007, employee
turnover ran in excess of 20 percent per
year. The lack of continuity affected man-

ufacturing consistency, as our products

are extremely difficult to build: Assemblers perform complex operations under
a microscopetasks likened to placing
earrings on a Barbie doll. Underlying the
turnover was the core management philosophy. In the small and growing company, longtime managers were directive
and autocratic. Most REMEC supervisors
were homegrown, so they had no reference point and little training for a more
inclusive approach. Yet in four years, these
The author is vice president of human resources at
Cobham Sensor Systems in San Diego.

32 HR Magazine July 2011

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managers and their skilled technology

workers took control of the workplace and
made it their own.

A Common Language
When I first met Cobham Sensor Systems President Dave Schmitz in 2007,
he readily acknowledged that he and his
top executives knew that an important
element of employee engagement was
missing. Productivity and quality metrics were flat and unimpressive. Schmitz
clearly understood that employees
stayed because they found the technology challenging, but that the environment did not
encourage the
broad participation necessary to
foster innovation
and improve productivity. Simply
put, the organization was now
too complex to
be sustained by
John F. Schierer, SPHR
the directive approach. Without
employees taking ownership of their
work processes, the legacy of growth
could not be sustained.
The first step in our transformation was
coming up with a description of desired
behaviors. Cobham executives partnered
with Sandy Asch of the Alliance for Organizational Excellence in San Diego and
established a code of conduct based on
Excellence at Work: The Six Keys to Inspire
Passion in the Workplace (WorldatWork
Press, 2007). These principles stressed:
Communicationuse your words
wisely, meaning that each person has
to understand the impact of his or her
words in content and delivery, speaking
in the language of possibility without
condemnation or placing blame.
Focusthe ability to discern independently the most critical items to
accomplish.
Accountabilitytaking responsibility
for your actions and outcomes.

Mine the goldthe ability to develop

yourself and others.
Balancefinding personal and
work/life balance, and leading a healthy
lifestyle that maintains personal energy.
Have funbringing joy to the workplace every day and keeping perspective.
The principles were defined for our
employees and managers, who received
badges with the code of conduct.
Sharing the code of conduct was a
watershed moment. It gave us common
definitions, language and understanding.
For the first time, leaders defined how
employees should expect to be treated by
supervisors and co-workers.
All employees completed half-day
training. Anyone who managed another
person received a full day of training, followed by quarterly sessions on individual
principles. Leaders asked employees to
expect to come to a respectful, inclusive,
challenging and engaging workplace and
to hold themselves and the company to
this higher standard. Simultaneously, we
equipped managers with the tools and abilities to alter their traditional approaches.
The challenge was acknowledged in all
development sessions, but it was clear that
even in this short time, the expectations
of employees had changed. To be credible, managers must embrace the code of
conduct.
We then set out to discover how
employees understood the principles.
Each quarter, we emphasized a single
principle in light but engaging ways.

Engagement, Coaching
The most powerful of these efforts: the
books of wise words. So-called Employee Excellence Ambassadors created
10 brightly decorated books and circulated them through the workplace. When
an employee saw a person who embraced
positive communication techniques, he
or she noted that persons name in the
book, along with an example of the behavior. That person was given the book
as an award, with the goal of passing
the book to someone else that he or she

observed making the workplace better

through communication. The books
passed through 600 employees hands and
captured more than 800 acts of communication valued by employees. This helped
define the fuzzy concept of good communication and provided examples to
supervisors of what employees value.
Most employees took the changes
to heart. Ezra Clay, a quality assurance
supervisor, says, I felt if I wanted the
workplace to be better, I had to be part of
the effort.
Along the way, performance appraisals
were rewritten to feature the code of conducts language and to match with objectives, behaviors and compensation.
We listened to employees responses
in opinion surveys. They clearly wanted
meaningful and frequent interaction with
supervisors through coaching sessions.
We used the quarterly management
forums to teach and model coaching and
feedback skills. We told employees that
they should expect to spend time each
quarter with their managers, and we set
a no-meeting zone on Friday afternoons
to accommodate coaching. Few find it an
easy task. As Dick Hastings, our quality
assurance manager, says, Coaching is a
personal struggle in that there is no
playbook.
To give us some measure of how the
coaches fare, we give employees blank
feedback cards to use during sessions
with their managers. Employees can
remain anonymous if they wish, but
the goal is for the employee to list the
name of the manager, the date, and what
the employee liked and didnt like. We
gather the cards and track how many are
returned. We study the comments and
provide managers with feedback on what
employees find useful and what can be
improved.
The trend was clearly positive by this
point. Supervisors who had previously
embraced a traditional and autocratic style
began to get praise and reinforcement for
activities such as coaching that once made
them uncomfortable.
July 2011 HR Magazine 33

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First-Person Account

Cobham Sensor Systems

We were on the right track. Our 2008

engagement survey showed that the proportion of employees who were engaged
or somewhat engaged in their work had
increased 9 percentage points from the
previous year.

Personal Commitment
By 2009, we needed to translate the behaviors and improved environment into
results. Customers were placing demands
on the company for the volume and sophistication of our products. It was clear
that if we did not get broad employee
engagement, we could not achieve our
goals and satisfy customer demand. Likewise, if supervisors did not embrace engagement as a permanent way of doing
business, Cobham Sensor Systems could
lose credibility with employees and customers. As expectations mounted, would
we slip back into old ways or embrace
inclusion and teamwork?
First, in keeping with our aviation and aerospace background, each
employee filled out a flight plan, a
description of a skill, job or achievement that he or she would master,
exhibit or extend in the coming year
that represented a new height. For some
employees, it was a rotation assignment,
certification in a process or participation in the redesign of a work area. For
others, it was taking a leadership role
on a committee or analyzing data that
they once had only gathered so that they
could grasp the meaning behind their
work. They developed the flight plans in
conjunction with managers as the basis
of their discussions during the year.
Once they achieved their goals, they
were recognized in weekly ceremonies
attended by their supervisor and the area
vice president. They received wings of
achievement, and their pictures and flight
plans were placed on a Wall of Fame in
the lunchroom.
More than 650 employees achieved
their goals in 2009, and the impact was
impressive:

Orders increased 17 percent from the

previous year.

Revenue increased 25 percent.

Earnings before interest and taxes
increased 28 percent.
Work-in-process inventory for more
than 30 days fell 71 percent.
Defects fell 13 percent.
Overdue customer backlog fell
52 percent.
Annual rates of growth are telling:
Each year since 2007, as the worldwide
economy faltered, orders increased 11 percent, revenue soared 12 percent and profits
were hiked 42 percent. Orders in the pipeline reached a record high.

Turnover Plummets
Anecdotal evidence documents the
changes: Early on, a supervisor came
forward and asked to be returned to the
manufacturing bench. The paradigm of
coaching, inclusion and teamwork was
too difficult. She returned to the bench
and remains a key contributor. We hired
another supervisor, screened to our expectations. How we handled that situation
allowed several more supervisors to step
forward, secure that they would be treated
with respect and without loss of employment. The net result of the changes was
that we had better technicians, better supervisors and a better environment.
When turnover exceeded 20 percent,
about 95 percent of turnover was voluntary. Managers, besieged by losses, were
reluctant to address performance issues
among those who stayed. As turnover fell
to 8.9 percent in 2009, about half of turnover was involuntary as supervisors had a
behavioral paradigm to address problems.
In addition, while half of the turnover
was voluntary, some departing employees
self-selected out because the environment
was not comfortable for them personally.
Furthermore, as our reputation grew as an
employer with an engaged workforce, we
saw more talent in our applicant pool.
Within the HR department, the code of
conduct created a common language. As

Products: Designs and manufactures

microwave components, assemblies and
subsystems, composites, and radomes
for aerospace and defense industries.
Owner: Publicly held Cobham plc (London Stock Exchange: COB).
Top executives: Dave Schmitz, president; Gene Joles, vice president and
general manager; John F. Schierer,
SPHR, vice president of human
resources.
2010 revenue: $3 billion for Cobham
plc; revenue for Cobham Sensor Systems was not disclosed.
Employees: 1,000.
Locations: Headquarters in San Diego
and a design location in Richardson,
Texas.
Connections: [Link] and
[Link]/sandiego.

employees come to HR with issues, they

place their problems in the context of the
six principles. This shorthand allows us
to address issues quickly and up, down or
laterally through the organization.
One of the learning points for me has
been the realization that people want to
do well. We now have more opportunities
to tell people what they are doing right.
When there is common understanding
and reinforcement of what is right, people
tend to repeat those behaviors. When
people spend more time doing the right
things, there is simply less time to do the
wrong things.
Many of the common threads among
great companies are related to the working environment, the culture and the
people and less related to a common set of
world-class business processes, Schmitz
reflects. Many struggling and even good
companies overemphasize the process
and undervalue the impact of an engaged
workforce.
It may sound trite, but engagement and
teamwork are journeys, not destinations.
As with maintaining physical fitness, if
you take a shortcut or a day off, bad habits
can creep in. In the end, employee expectations for positive workplace experiences
become relentless.
Isnt that the best outcome of all?

34 HR Magazine July 2011

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When a serious illness occurs, like a heart attack or stroke, the last thing anyone wants to think about is the
cost associated with recovery. Help your employees focus on what really matters getting better and help pay

Serious illnesses can be devastating. Paying for them shouldnt be.

Introducing Critical Care and Recovery.

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to the insured, unless assigned. There may be indirect administrative or other costs. Aacs Critical Care and Recovery is a specied health event insurance policy.
NAD1157

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Too Many Hands In Your

401(k) Candy Jar?
Your companys 401(k) plan probably isnt worth as much as you think, or
as much as it could be. Thats because of the 17 different fees Trustees
fees, Custodial fees, TPA fees, Investment Advisor fees the list goes on
and on that takes a bite out of savings, leaving you and your employees
burned.
As your companys 401(k) Plan Sponsor, you have specic duciary
responsibilities. Senior Planning Network can examine your plan right
down to the bone, showing how to optimize its value with a side-by-side
appraisal and a cost and legal analysis. Then well customize a 401(k)
strategy specic to your needs and communicate those strategies to your
employees.
Annual Fees have a direct impact on Investment Returns. The more the
Plan pays, the less employees save for their retirement. You have a duciary
duty to ensure fees are reasonable and not excessive.
FREE Side by Side Cost Analysis
Our Free Cost Comparison lists all your current Plan fees and compares
them with two alternatives. This comparison can be used to demonstrate
proper duciary oversight. Obtain your Free Cost Analysis now by
visiting our website at [Link] or by contacting
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FEES HAVE A CLEAR IMPACT

ON INVESTMENT RETURNS
20 YEARS

Am I at Risk?
$190,611

As your companys 401(k) Plan Sponsor, you have specic duciary

responsibilities and liabilities. As the plan duciary, you shoulder the
responsibility for the plan selections you make, increasingly intricate
compliance requirements, and the fees charged against your plans assets
by plan providers.
Soon, new Department of Labor regulations take effect requiring full
disclosure of 401(k) plan fees. Because fees can seriously erode earnings,
this change will prompt questions from employees about the integrity of
your plan. If you dont have the right answers, it could lead to employee
lawsuits.
FREE Liability 401(k) Analysis
Our Free Legal Risk analysis, which will be completed by our own ERISA
attorney, reviews your exposure to duciary liability and informs you of
the corrective action required. Obtain your Free Risk Analysis now by
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us below.

$155,585

JOHN (WITH 1%
ALAN (WITH 2%

EXPENSE)
EXPENSE)

John and Alan are two 401(k) participants. Each has $50,000
invested in the same type of fund delivering the same 8%
return per year. Lets assume that they hold on to these funds
for twenty years until reaching retirement age. The only
difference is that Johns annual participant fees and expenses
total 1%, while Alan pays a total of 2%.
The graph shows that after 20 years, John has $35,026 more
in retirement than Alan. After 30 years John would have
$97,716 more than Alan. Clearly, participant fees impact how
much you can potentially earn over time.

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(877) 990-PLAN
info@[Link]
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HR Magazine

Michael Jankowski is a registered representative of LaSalle St. Securities, LLC, a registered broker/dealer, and
an Investment Advisor Representative of LaSalle St. Investment Advisors, LLC. LaSalle St. Investment Advisors. LLC is afliated with
LaSalle St. Securities, LLC. Senior Planning Network is not afliated with LaSalle St. Securities, LLC.
Securities are offered through LaSalle St. Securities, LLC, member FINRA/SIPC.

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Retirement Planning
SPECIAL REPORT

Clarity on Fees
Coming Soon
New regulations require that workers receive much more detailed information
about 401(k) plan fees and investment options. Are you ready to provide it?

ILLUSTRATION BY EVA VZQUEZ

By David Tobenkin

mployers that sponsor 401(k)

plans soon will be required to
give employees detailed information about plan fees. Will it be enough to
motivate workers to better manage their
investment options?
New regulations from the U.S.
Department of Labor require sponsors
of 401(k) plans and other participant-

directed, defined contribution plans to

disclose fee and investment information
to all eligible employees, plan participants and beneficiaries. The rules take
effect Jan. 1, 2012, for calendar year
plans.
The author is an attorney and freelance writer in
Chevy Chase, Md.

July 2011 HR Magazine 37

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Clear communication about fees and

the fees associated with their retirement
their impact on investment returns is
accounts.
essential because the cumulative effect
Better Information
of fees on retirement savings can be
The final fee disclosure regulations are
substantial. Even a small difference in
meant to present clear, user-friendly inforfees can have a huge impact on retiremation to workers about their retirement
ment savings, resulting in much smaller
plan fees and investment options. They
account balances over time.
require plans covered by the Employee
Take, for example, an employee with
Retirement Income Security Act (ERISA)
35 years until retirement and a current
to provide standard quarterly reports to
401(k) account balance of $25,000. If
plan participants and beneficiaries detailinvestments in her account during the
ing the fees and expenses deducted from
next 35 years grow at an average annual
employees accounts and a description
rate of 7 percent and fees and
of the services for which
expenses reduce her
the deductions were made.
average returns by
Previously, participants and
0.5 percent, her account
beneficiaries received quarbalance would grow to
terly reports, but fee disclo$227,000 at retirement,
Percentage of
sures were not standard and
even with no further
employees who said
were not required in most
contributions to the
account. But if fees
they are aware that fees circumstances.
Another new requireand expenses are
are charged to their
ment
states that investment1.5 percent, her balance
retirement accounts.
related information must
would grow to only
be provided in a uniform
$163,000. The 1 permanner and in a format that
cent difference in fees
allows participants to comand expenses would
pare investment options.
reduce her account balPercentage of
The Labor Department has
ance at retirement by
employers who said
issued a model chart that
$64,000, or 28 percent,
employees have a clear
plan administrators can
according to the Labor
understanding of fees
use to satisfy the disclosure
Department.
associated with their
rules.
Yet, there is a perretirement accounts.
The regulations expand
sistent and widespread
the scope of employees who
lack of employee
must receive general inforknowledge of fees. A
mation about the employers retirement
May retirement survey by the Transplans, fees and investment options. All
america Center for Retirement Studies
eligible employeesnot just plan particifound that 48 percent of employees were
pants and beneficiariesmust be notified
not aware that fees were charged to their
on or before the date they can first make
accounts. Thirty percent were aware of
investment elections so they can make
such fees. Twenty-two percent were not
informed decisions about managing their
sure whether they were paying fees or
not. The survey captured the responses of accounts. Plan administrators must provide this information again annually.
4,080 employees at companies that offer
In the past, you gave a summary of
a 401(k) or similar plan.
the plan document to a participant and, in
Employers thought workers were
most cases, you relied upon the provider
much more knowledgeable: The same
of the plan to offer investment facts,
survey found that 78 percent of 743 comsays Paul Escobar, a senior vice president
panies strongly or somewhat agreed that
with the Woburn, Mass.-based retirement
employees had a clear understanding of

30%
78%

Online Resources
For more information on fee disclosure, see the online version
of this article at [Link]/
hrmagazine/0711Tobenkin.

38 HR Magazine July 2011

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Retirement Planning
SPECIAL REPORT

Begin Planning Now:

Your Compliance Checklist
Plan-related information that must be disclosed to participants includes:
The structure and mechanics of the plan, including a list of the plans investment
options and how plan participants and beneficiaries may give investment instructions.
Plan-level administrative fees and expenses that may be charged against participant
accounts, such as fees for legal, accounting and recordkeeping services.
Individual fees and expenses that may be charged against participant accounts based
on actions taken by a participant, such as for plan loans.
Quarterly statements that include the amounts deducted from participant accounts
and a description of the services rendered.
Investment-related information that must be disclosed includes:
Performance data for mutual funds and similar investment options, including investment returns over one-, five- and 10-year periods.
For investment options that do not have a fixed rate of return, the name and investment-result histories of an appropriate, broad-based securities index over one-, five- and
10-year periods.
Fee and expense information, such as fees charged directly against investments and
annual operating expenses.
For mutual funds and other investment options that do not have a fixed rate of return,
the total annual operating expenses expressed as both a percentage of assets and as a
dollar amount per $1,000 invested.
Guidance stating that fees and expenses are only one factor to be considered when
making investment decisions.
A comparative format is required for investment-related information and must be
furnished in a chart or similar format that allows a comparison of each investment option
available under the plan.
The regulations become effective for plan years beginning on or after Nov. 1. For
calendar year plans, compliance will be required on Jan. 1, 2012. A proposed transition rule would allow plan administrators to make required initial disclosures within
120 days of the rules becoming effective, which would be by April 30, 2012, for calendar year plans.

options more carefully? Even employees who receive training on investment

options generally tend to give little attention to such details, says Sharon Smith,
SPHR, HR manager at Castle Hayne,
N.C.-based VisionAIR Inc., an information technology company with roughly

100 employees. We find that people set

up an account, set up their investment
allocations, and leave it.
For their part, HR managers do
appear to be focused on the new rule.
The Transamerica Center for Retirement
Studies survey found that 65 percent of

The participant
fee disclosure
regulations
are part of a
larger effort
to increase fee
transparency.
employers said they were aware of the
Labor Departments final rule, while
35 percent said they were not. Significantly, 58 percent said implementation
of the new regulations would lead them
to evaluate their retirement plans fees
and expenses.

More Leverage
The participant fee disclosure regulations
are part of a larger effort by the Labor
Department to increase fee transparency.
Starting with the 2009 plan year, virtually any fee employer-provided retirement plans pay directly or indirectly to
any service provider must be reported
on Schedule C of Form 5500. ERISAcovered retirement and employee benefits plans must file the form annually
with the department. A separate interim
final rule will require service providers to disclose their fees to fiduciaries of
defined benefit and defined contribution
retirement plans. The rule emphasizes
that plan sponsors have a fiduciary duty
to determine whether plan fees for necessary services are reasonable. While
the rule was initially scheduled to take
effect this July, its effective date has been
pushed back to Jan. 1, 2012, to give service providers more time to comply.
These new disclosure rules are prompting plan sponsors to analyze plan fees
more carefully. There are many issues
regarding fees, such as how the plan pays
them. Is the plan sponsor paying the
fees? Are they charging the participants a
percentage of their account values, or are
July 2011 HR Magazine 39

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Retirement Planning
SPECIAL REPORT

Electronic Disclosures
May Get Easier
The U.S. Labor Department is mulling an expansion of the use of electronic communications to distribute employee benefits plan information, including quarterly account statements required by the Employee Retirement Income Security Act (ERISA).
Some workers and retirees may not be sufficiently computer-literate to receive
information electronically or have reasonable access to the Internet, and others may
simply prefer traditional paper disclosure, Phyllis C. Borzi, assistant secretary of the
departments Employee Benefits Security Administration, said in a statement. But in
some instances, electronic disclosure may be just as effective as paper-based communications and could save employers and service providers money.
In 2002, the department adopted standards for the electronic distribution of plan
disclosures required under ERISA that created a safe harbor for certain types of electronic
disclosures by plan administrators to individual recipients of information. The safe harbor
applies only for two categories of recipients:
Participants who can effectively access documents furnished in electronic form at any
location where the participant is reasonably expected to perform his or her duties as an
employee, and access to the employers or plan sponsors electronic information system
is an integral part of those duties.
Participants, beneficiaries and others who are entitled to documents under ERISA but
who do not fit into the first category. For these individuals, it is assumed that electronic
information systems beyond the control of the plan sponsor are used. Compliance through
the safe harbor is available here only if these individuals affirmatively consent to receive
documents electronically.
The department solicited comments on a broad range of issues related to the electronic delivery of plan information. It stated that reviewers will explore whether, and

with information, and they are more

attuned to what they are paying.
Some HR managers say that the focus
on fees has already led to cost reductions.
Yonkers, N.Y.-based Riverside Health
Care System Inc., with 2,100 employees,
recently conducted a search that led to
the selection of a new 403(b) plan vendor. The process reduced fees by half,
says Pamela LaFrance, vice president of
human resources.
At VisionAIR, company leaders
have been working with their financial

The broad
push for
transparency
should go
a long way
toward helping
plan fiduciaries
ensure that
plan fees are
reasonable.

possibly how, to expand or modify these standards, taking into account current technology, best practices, and the need to protect the rights and interests of participants and
beneficiaries.

they charging a flat dollar fee? The who

and how will become more apparent to
plan sponsors, Escobar says.
Armed with this information, plan
sponsors are in a better position to
negotiate fees and expenses with service providers, says Michael Webb,
New York City-based vice president of
Cammack LaRhette Consultings retirement services practice. They will learn
things about vendor fee disclosure for

the first time and may view that as an

opportunity to account for, and control,
investment fees. They may want to use
a request for proposal process to ensure
that fees are properly benchmarked. Why
not turn this into a positive?
Adds Escobar: It is definitely true
that transparency improves competition. In three years, provider fees have
come down enormously. Plan sponsors
are getting smarter. They are barraged

services provider to negotiate charges to

bring them to a level we believe is fair
and reasonable compared to other providers, Smith says. With an eye on fees,
Boston-based architectural and design
firm Shepley Bulfinch plans to offer its
123 employees an institutional class of
investment funds because that will limit
the compensation paid to advisors, says
Eileen Keaffer, HR manager at the firm.
In the end, the broad push for transparency should go a long way toward helping
plan fiduciaries meet their obligation to
ensure that plan fees are reasonable. As
Webb says, All plan fiduciaries owe it to
their participants to get the best deal.

40 HR Magazine July 2011

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Employment Law Agenda

Is a Smoker-Free Workplace
Right for You?
Employers may refuse to hire smokers, but beware of legal hurdles in many states.
smokers lifestyle discrimination.
At least 29 states and the District of
Columbia have statutes that protect
employees from adverse employment
actions based on their off-duty activities, including smoking, the National
Conference of State Legislatures (NCSL)
reported in October 2010. And federal
laws, such as Title VII of the Civil Rights
Act of 1964 and the Americans with Disabilities Act, may come into play.
So, should your company leaders
consider banning the hiring of smokers?
Any employer contemplating such a step
should first weigh policy considerations
and potential legal pitfalls, experts say.
There is a broad-based spectrum of
legal hurdles you have to jump to be sure
your program isnt going to get you into
trouble, cautions Greg Ash, an attorney
with Spencer Fane Britt & Browne in
Overland Park, Kan.

Where to Focus?
By Joanne Deschenaux, J.D.
he average smoker costs companies more than $12,000 a year in health- and
disability-related costs and takes four 15-minute breaks a day, claims Action on
Smoking and Health, an anti-smoking group in Washington, D.C.
Smoking is the biggest factor in controllable health care costs, says John
Banzhaf, the executive director of the group and a law professor at The George Washington University.
Employers are becoming increasingly aggressive about eliminating smoking in the
workplace and trying to manage its attendant costs, not only by imposing on-the-job
bans but also by adopting policies that address employees off-the-job behavior, says
Susan K. Lessack, an attorney in Pepper Hamiltons Philadelphia office.
Dozens of major companies now have smoker-free policies. Alaska Airlines,
Union Pacific and Turner Broadcasting have refused to hire smokers for more than 20
years. Hospitals in Florida, Georgia, Massachusetts, Missouri, Ohio, Pennsylvania,
Tennessee and Texas, among other states, stopped hiring smokers in the last year.
However, the American Civil Liberties Union calls an employers refusal to hire

ILLUSTRATION BY MIKE AUSTIN

Banzhaf is perhaps the most visible

proponent of hiring bans. Smokers
should accept the fact that there is no
legal or moral right to smoke, and to
force others either to put up with their
secondhand smoke or the huge costs
their smoking imposes, he says. Stop
whining about discrimination when
companies make perfectly logical decisions not to hire people whose personal
choices impose huge, unnecessary costs
on the firm and its nonsmoking employees.
However, Andrew Tarsy, executive director of the Progressive Business

The author is senior legal editor for SHRM.

July 2011 HR Magazine 43

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Employment Law Agenda

Leaders Network in Massachusetts,
strongly disagrees. Most businesses would
be better off trying to improve employee
health and cut costs through other
methods, he says. The proposal to ban
the hiring of smokers is neither practical
nor likely to spread to the mainstream. Its
a distraction from a broader strategy.
There is enormous cost and complexity involved in instituting a ban, he
notes, and the focus of business should
be on hiring the best workers. Fortyseven million Americans smoke, he
observes, and these people have to work
somewhere.
Karen Chadwick, a professor at
the Thomas M. Cooley Law School in
Ann Arbor, Mich., says hiring bans are
impractical, particularly in some types of
businesses. Some employment pools are
high in smokers, such as those that draw
from noneducated applicants, she says.
You are eliminating workers who have
something to bring to the table.
Molly DiBianca, an attorney with
Young Conway Stargatt and Taylor in
Wilmington, Del., stresses the practical difficulties of enforcing a ban on
employing smokers. Even if an applicant
tests negative for nicotine on an initial
screening, what happens once the applicant joins the workforce, she asks. How
do you guarantee that he or she does not
then start or resume smoking? Some
companies do annual nicotine testing,
she says, but that is intrusive and could
lead to morale problems. Such testing
is also expensive, and it consumes
administrative time and resources. But
if you dont test, its likely that some
employees may lie about off-duty
smoking, she adds.
Ultimately, Ash says, Its a matter
of personal opinion about how paternalistic employers should be. Should
an employer be looking at the off-duty
conduct of employees?

Legal Limitations
In addition to weighing these policy considerations, be very aware of whether
your state has legislation prohibiting any
kind of discrimination based on nonwork
activities, Chadwick says. Twenty-nine
states, plus the District of Columbia,
have such laws. According to the NCSL,
these statutes fall into three categories:

18 jurisdictions have enacted statutes prohibiting discrimination against

smokers. They are Connecticut, the
District of Columbia, Indiana, Kentucky, Louisiana, Maine, Mississippi,
New Hampshire, New Jersey, New
Mexico, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota,
Virginia (for public employees
only), West Virginia and
Wyoming.
Eight states protect
the use of lawful products. They are Illinois,
Minnesota, Missouri,
Montana, Nevada,
North Carolina, Tennessee and Wisconsin.

of a conflict of interest with the employees responsibilities.

While there is virtually no case law
on this issue, Mattingly notes, this statutory language could support arguing for
an exception for particular employees
such as health care workers or fitness
instructors.
Some state statutes specifically allow for an increase in
insurance premiums for
smokers, provided certain
conditions are met. Some
of these states already had
the smoker-protection
statutes in place and
amended them so that
employers could discriminate

Eighteen jurisdictions have enacted

statutes prohibiting discrimination
against smokers.
Four states offer statutory protection
for employees who engage in lawful activities. They are California, Colorado,
New York and North Dakota.
These lifestyle statutes prevent an
employer from terminating an employee
or refusing to hire an applicant who
smokes tobaccoa product lawfully
sold in the United States.
These laws all differ. Several do not
apply to all industries, and many contain
numerous exceptions. You actually
have to read the statutes, stresses
Mendy Mattingly, in-house employment
counsel for Solar Turbines in San Diego.
For example, Missouris law explicitly exempts not-for-profit organizations whose principal business is health
care promotion.
Other statutes, including those in Colorado and North Carolina, allow restrictions based on bona fide occupational
requirements. Employers in those states
may restrict off-duty and off-premises
smoking when the restriction:
Relates to a bona fide occupational
qualification.
Is reasonably related to employment
activities.
Is necessary to avoid the appearance

in terms, conditions, and privileges of

employment by charging smokers more
for health insurance, Mattingly explains.
In addition to state law restrictions
imposed by lifestyle statutes, employers
must implement any hiring or retention
policies impacting smokers in a consistent manner to avoid a claim of disparate
treatment in violation of anti-discrimination statutes such as Title VII, Lessack
says. Courts have long recognized that
Title VII applies not only to the more
blatant forms of discrimination, but also
to the subtler forms, such as discriminatory enforcement of work rules, she
explains.
Issues may also arise under the Americans with Disabilities Act, Lessack adds,
noting that a smoker may either claim
that he or she is perceived as having a
disability or that nicotine addiction is a
protected disability under the law.
In addition, making employment decisions based on out-of-work conduct may
implicate state privacy laws, according
to Ash, who notes that this issue was
raised in a recent case litigated in a Massachusetts federal court (Rodrigues v. EG
Systems Inc. d/b/a Scotts LawnService,
2009). The court rejected the invasion of

44 HR Magazine July 2011

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privacy claim of a worker whose job offer

was rescinded when his pre-employment
nicotine test came back positive because
he had made no secret of the fact that he
was a smoker. However, Ash notes, the
result might have been different had the
employee not been so open about his offpremises smoking.
Restricting tobacco use may be a
mandatory subject of bargaining in
unionized workplaces.

Suggestions from Experts

Mattingly advises any employer considering implementing no-smoking or
tobacco- and nicotine-free policies to
consult with counsel to learn whether
it operates in a state that restricts employment policies based on lawful use
of products. The employer should then
determine whether there are any exceptions that might apply to a particular
workplace or set of employees. The employer should also explore the options
available in no-smoking initiatives and
encouragement of healthier lifestyles.
If a decision is made to go smokerfree, it should be done in steps, she says.
If employers already have a smoke-free
worksite, then going to a smoke-free
campus (encompassing anywhere on
the grounds or near the building) is the
next step, followed by a possible no
smokers rule.
But it may not make sense for a bar,
restaurant or casino, for example, to have
a no smokers hired or employed rule
if customers smoke on the premises and
expose employees to smoke. The costs
from secondhand smoke are still there.
So, if the goal is to cut costs, it wont be
met that way.
Rather than instituting a hiring ban,
Tarsy suggests that employers emphasize health and wellness as fundamental
to the workplace. Offer and encourage
smoking-cessation programs. Offer
financial incentives to quit, such as lower
health care premiums for nonsmokers.

Business should take a role in making

people healthier, he says, but, Im
drawing the line at saying to them that
you cant work here because your blood
says that you smoke.
DiBianca suggests that employers
simply prohibit smoking breaks other
than breaks that are legally mandated.
If an employee goes through the
workday with only one opportunity to
smokeat the meal breakyouve gone
a long way to reduce tobacco use. This
approach eases the discomfort from

what is perceived as an employers intrusion into its employees personal lives.

She notes that what makes sense
differs among industries. A ban may work
for hospital employees, she says, because
trying to promote wellness is a part of
their jobs.
Whatever action you elect, do it in
a way thats compassionate. Quitting
smoking is hard, Mattingly stresses.
And take into account the culture of
the workplace. Its not a one-size-fits-all
issue.

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Online Resources
Benefits
For more information about smoking
policies at work, see the online version of
this article at [Link]/hrmagazine/
0711EmploymentLawAgenda.

Risk and Financial Services

Talent and Rewards

[Link]

July 2011 HR Magazine 45

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Outsourcing Agenda

Focus In to Farm Out

Effective HR outsourcing requires strategically selecting tasks
that vendors can do better to allow you to focus on key functions.
vice president of human resources, the
Americas, for Mansfield, Mass.-based
Samsonite [Link] to increase
the value of your function and maintain
costs or to reduce costs and protect
your value.
Cimini says outsourcing HR administrative and data management functions
allowed him to free up my high-value
team members to focus more time and
energy on addressing strategic organizational issues. For example, Cimini
could support the development of new
customer programs and products during
open benefits enrollment seasonformerly a brutal time for HR. HR
previously was not involved in such
innovation.

Zeroing In

By Eric Krell
ost savings drove the human resources outsourcing (HRO) gold rush of the
early 2000s. Today, as many agreements come up for renewal, saving time
trumps saving money for leading practitioners.
Saving money is not necessarily the primary objective at this point, notes Ron
Gier, vice president of human capital planning and employee relations for Sprint in
Overland Park, Kan. Outsourcing is about concentrating where you are going to put
your energy, where you are going to build competency as a company and where you
can use a partner to perform activities that are not core to your business.
Cost remains a key consideration, but it should take a back seat to organizational
strategy, according to Gier and other HR practitioners. These HR professionals,
along with HRO advisors and researchers, describe a maturing market that is
becoming better suited to delivering on buyers desire to focus their decision-making
squarely on value.
You generally decide to outsource for one of two reasons, says Lou Cimini,

ILLUSTRATION BY MICHAEL MORGENSTERN

One of Sprints top strategic objectives is

to provide excellent customer service. A
related HR function objective is to train
and develop top-notch service representatives in the call centers as quickly as
possible, Gier says.
To meet that goal, Gier and his colleagues realized that they needed more
time to focus on training, developing
and retaining call center representatives.
About three years ago, this need led
to the outsourcing of most, but not all,
recruiting, interviewing and onboarding
processes for call center representatives.
Gier and his HR colleagues continue to
conduct some call center recruiting to
understand this part of the onboarding
cycle. By partnering with a recruiting
company, Gier notes, We are now able
The author is a business writer based in Austin,
Texas, who covers human resource and finance
issues.

July 2011 HR Magazine 47

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Outsourcing Agenda
and continuous improvement backed by
measurable commitments.
Buyers want precise yet flexible contracts that support high service levels
and quick responses when their needs
change.
Single-process outsourcing
arrangements tend to be
more easily monitored,
Ackerson notes,
particularly in
their approaches
to customization
and expansion of
services.
Nevill says
vendors define their
offerings and services
better than they did five
years ago, simplifying buyers
decisions and selection activities. If
you are a large organization and youre
looking at outsourcing multiple processes, there are no more than four or
five vendors that youre really going to
look at, he notes. Six to eight
years ago, before a lot of consolidation occurred, there were
Whats the Big Deal?
more than 10 options.
Rajesh Ranjan, New DelhiThe following individual HR processes were most
based research director for outfrequently included in multiprocess outsourcing agreesourcing advisory and research
ments involving three or more HR processes for 3,000
or more employees from 2009 to January 2011.
firm Everest Group in Dallas,
has observed a rise in the comFunction
Frequency
ponentized approach. Buyers
Payroll
95%
first outsource a few highly
transactional processes, such
Benefits
73
as payroll, and then outsource
Recruiting and selection
32
more judgment-intensive
Compensation
27
processes such as recruiting
or training and development.
Training and development
20
This is not to say that large,
Performance management
15
multiprocess contracts are a
Source: HRO Annual Report 2011: The Revival of Multi-process HRO
relic of the 2000s. Globally,
Market, Everest Group.
multiprocess HRO activity
agreements involving three or
more HR processes covering
Ackerson, SPHR, a specialist leader
3,000 or more employeesis projected
in Deloitte Consultings HR service
to increase by 8 percent to 10 percent
delivery practice, points out that large
this year over the 46 new large deals
HRO providers have learned numerous
that were signed in 2010, according to a
lessons from clients and from smaller,
recent Everest Group study.
single-process providers. These insights
More Face Time
include the following:
Service cost, while important, is just Not all agreements in the past decade
the price of admission.
produced mutually beneficial partner Clients want higher-quality service
ships. This helps explain why HR
to focus much more diligently and effectively on how we can take our new hires
and make them productive.
Sprints approach illustrates one facet
of the maturation of HR outsourcing.
We see more companies moving
toward a right-sourcing model, in
which they focus on finding the best
providersnot the best providerfor
each HR domain area they are considering outsourcing and then determining
if they can find a provider who fits their
needs, reports Glenn Nevill, the Dallasbased North American practice leader
for Towers Watsons HR service delivery
practice. HR professionals then want
to make some strategic decisions around
how they source. They are not automatically looking to bundle all of their HR
functions with a vendor who can give
them a good price.
Lessons learned during multiprocess,
multiyear relationships drive the evolution of this market. Most contracts are
five, seven or 10 years in duration. Peter

buyers are becoming more aggressive

in researching their options when its
time to renew their outsourcing agreements, according to Diane Youden,
Dallas-based HR transformation leader
with PricewaterhouseCoopers. Applying greater rigor to decisionmaking and selection, she
adds, helps ensure that
vendors are providing
the value and services
that buyers need.
Youden says
buyers are focusing
on what she
describes as partnership capacitythe
potential for the two
organizations to work
together to achieve mutual
benefits and address problems and
changes. Some buyers run through
scenarios with potential partners in a
workshop setting before making final
selections.
Before Samsonites Cimini decided to
outsource employee self-service to ADP
Inc. in 2010, he took two actions that he
says bolstered his decision-making. First,
Samsonites HR department worked to
improve employee relations and benefits
processes that had been disrupted as
a result of a previous enterprise software implementation. Once we had
our processes under control, I could
map our performance gaps and I could
justify any differences in cost in hiring
an outsourcing provider to handle the
processes.
Second, Cimini visited ADPs
Augusta, Ga., service center. The
purpose of the one-day meeting was to
get to know the people on the team and
who would be answering the phones,
Cimini explains. I also wanted to make
sure that they had a learning environment down there. If one person on their
team asked us a question or escalated an

Online Resources
For more information on current trends
and data about outsourcing, see the online version of this article at www
.[Link]/hrmagazine/0711Outsourcing
Agenda.

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issue to me, I wanted to make sure that

everybody on their team would learn
from it.
The face time helped lay the groundwork for a partnership. You want
to treat your outsourcing group as a
partner, and you cannot run away from
your responsibilities in that partnership,
Cimini says.

Cost and Time Savings

More HR professionals could achieve
HRO happiness by focusing more on
value and less on cost, notes Charlotte
Anderson, SPHR, GPHR, managing director of Amethyst and Iris, a consulting
firm in Hillsborough, N.J.
Within companies that view HR
service delivery as a commodity,
Anderson observes, HR outsourcing
decisions are almost entirely related to
costs.
In the past, Gier agrees, HR out-

Richard Oyen, SPHR, vice president of

human resources for SumTotal Systems
in Mountain View, Calif. If an outsourcing agency does your recruiting,
will they understand the business
needs and manager preferences enough
to continually send good candidates?
When outsourcing HR operations and
information systems data, will a call
center give your employees the touch
your employees need to feel that their
issues and questions are being properly
addressed?
These types of strategic questions are
factors that Youden says HR executives should weigh in decision-making.
Specifically, she suggests that HR
leaders determine whether outsourcing
can help ensure that the HR function is
better positioned to provide the business
with the organizational capabilities it
will need to deliver against its strategic
initiatives.

Buyers want precise yet flexible contracts

that support high service levels and quick
responses when their needs change.
sourcing was really all about finding an
activity that existed within your group
that you could give to somebody else
and get a cost savings. Today, Sprints
HR leaders prefer to decide where we
want to go from a strategy perspective
and then seek out partnerships if they
can help us get there, Gier says. This
is where a lot of companies got caught
upsomebody comes in and portrays a
significant savings that you cant ignore,
but you really have not figured out how
it is going to help you accomplish your
core objectives.
He emphasizes that Sprints agreements are made in conjunction with the
companys supply chain and contract
management functions. Their input helps
ensure that most partnerships generate
a positive financial return, Gier says.
In other words, cost savings mark a
secondary outcome.
Besides the basic dollars and cents,
how will the organization benefit? asks

That approach defines how Sprint

tackled another strategic objective:
improving employee wellness to hike
overall business performance and
reduce employee medical costs. HR
leaders decided that the best use of
resources would not involve running
a wellness facility, but understanding,
identifying and nurturing strong links
between specific wellness programs
and bottom-line measures such as
medical costs, employee engagement
and employee productivity. They
decided to outsource the staffing of a
new on-site health care facility and the
administration of wellness programs.
We did not want to hire doctors,
nurses and pharmacists, Gier explains.
We really wanted to concentrate on
how [wellness programs] improve the
health of our people [and] the performance of our organization, and reduce
time away from work. Thats where we
put our energy.

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11-0369

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HR Technology

Open Enrollment Tools Evolve

Technology is available for even the smallest employers
to automate open enrollment.
Payroll processors and other vendors
now offer open enrollment solutions for
smaller companies, providing some of the
benefits of automation that large employers gain from outsourcing.
This whole vendor segment is emerging, says Jamie Hawkins, president of
Benefit Technology Resources LLC,
a consulting firm in Tampa, Fla., that
helps small and medium-sized employers
choose benefits platforms.
Hawkins advises customers to exercise
due diligence when selecting a vendor:
Do your homework. Pay attention to the
back end, not just the pretty face. See how
it works. Look at the security of it. Ask
for what you need. Get deliverables in
writing.

By Bill Roberts
y automating open enrollment with technology, a restaurant company with
1,850 employees reduced errors in its annual benefits sign-up to less than 1 percent, down from as much as 5 percent in paper-processing days.
The benefits and HR manager of a heavy equipment company with 350 employees
now spends less than half the time she once did on open enrollment after moving from
paper to a technology platform.
And a manufacturer with 2,500 employees saves more than $400,000 per year,
thanks to an open enrollment platform.
Whats not to like?
An open enrollment platform is a technology that can transform human resource
operations from looking like the registry of motor vehicles to looking like Netflix, says
David OConnell, principal analyst at Nucleus Research Inc. in Boston.
Most large employers outsourced benefits administration a long time ago; as technology improved, providers began using software and the Internet to automate open
enrollment and other benefits-related processes. These outsourcing agreements are typically large, multiyear deals that include services such as call center support and that are
feasible mainly for employers with thousands of workers.

Few large employers still use paper for

open enrollment. In a survey of 209 U.S.
employers in December 2010, less than
9 percent used paper, down from 14 percent the previous year, Towers Watson
found in an annual survey. Company size
ranged from 2,000 employees to more
than 100,000, with an average of 14,000,
says Rich Nicholas, a senior consultant in
Towers Watsons outsourcing group.
The survey sample included organizations that outsource and those that use
other solutions. The research shows that if
these employers do not outsource but do
use technology, they no longer buy and
install it on their premises. Most either outsource or use the technology as softwareas-a-service (SAAS), Nicholas says.
Large outsourcing providers such as
Aon Hewitt, Fidelity, Towers Watson
The author is technology contributing editor for
HR Magazine and is based in Silicon Valley in
California.

ILLUSTRATION BY DOUG ROSS

New Trends

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and Mercer built or acquired software

platforms that give clients employees an
automated, self-service experience. The
first versions of these open enrollment
platforms handled basic transactions and
workflow. Modeling tools to assist with
decision-making and health care content
came later. Today, these platforms offer
increasingly more interactive health care
and wellness content. Blogs, videos and
other Web 2.0 tools, plus mobile access,
help HR professionals communicate open
enrollment information to employees.
Large outsourcing providers platforms
are highly integrated and include the
insurance carriers systems and the clients
payroll software. Now, there are similar
options available to mid-size and smaller
employers from a bevy of providers.

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A growing class of vendors offer benefits platforms through insurance carriers

and the broker community. Some now
offer these directly to employers.
Hawkins cautions buyers not to be
wowed by particular features on any

tions, says Tim Padva, chief executive

officer.
After two years of using CheckPointHRs payroll product, Modern Group
adopted its benefits service when paper
administration became too burdensome.

Be hyper-vigilant about security

and data management.
platform until they understand what the
platforms can and cannot do.
Document what you need in a request
for proposal. Then, Use a consultant
or do it yourself, but get the vendor to
respond, she says. Ask about:
Billing reconciliation.
Building spreadsheets.
Processes around evidence of insurability.
Integration with payroll providers.
Be hyper-vigilant about security and
data management. Hawkins says many
vendors may not meet basic security
expectations.

Hawkins works with companies that have

a maximum of 10,000 employees; most
are much smaller than that. She estimates
that 60 percent to 70 percent of employers in this mid-size and smaller market
still use paper for open enrollment.
Based on her study of the market,
Hawkins cautions that benefits techPayroll Extension
nology is a diverse and potentially
If your company already has a satisfacoverwhelming segment to buyers. She
tory relationship with a payroll provider
estimates that 70 to 100 vendors offer various solutionsbut not always exactly the that offers benefits enrollment, explore
that option.
same products and services, making comWith 350 employees, Modern Group
parison difficult. In her opinion, a much
Ltd. in Bristol, Pa., sells, rents and sersmaller number of providers are serious
vices forklifts and other construction
players. HR clients are often bewildered
equipment at 10 dealerships in Pennsylvaby the selection process because they
nia, Delaware and New Jersey. Modern
dont do this every day and it is hard to
Group began using technology from
do, she says.
CheckPointHR LLC in Edison, N.J.,
Among available options:
Some existing human resource infor payroll in 2004, according to Heloise
formation system developersof both
Schieber, benefits and HR manager.
older generation and newer SAAS-based
CheckPointHR provides web-based
modelsoffer, or
HR management
soon will offer, techtools, including
Online Resources
nology for benefits
payroll and benenrollment and adefits administraFor more information about automating
open enrollment, including a case study
ministration.
tion, for small and
of return on investment, see the online
Some existing
medium-sized
version of this article at [Link]
payroll providers
companies. For
/hrmagazine/0711Roberts.
have acquired or
benefits, Checkbuilt open enrollPointHR provides
ment front-ends that
the platform and
work with their payroll software but that
serves as broker. We negotiate health
dont always interface with other payroll
insurance rates, handle all facets of open
software.
enrollment and update payroll deduc-

When we were on paper, it was just

insane, Schieber says. Having employees
do it online is a big time saver for me.
Padva says 80 percent of his payroll
clients use the benefits platform and
service.

Negotiating a Deal
Grill Concepts Inc., headquartered in
Woodland Hills, Calif., owns 29 restaurants, including The Daily Grill and The
Grill in the Alley groups, and employs
1,850 people. The company uses BeneTrac open enrollment technology that
is offered through its insurance carrier,
says Chris Gehrke, vice president of
HR.
BeneTrac, a subsidiary of Paycheck
Benefits Technology Inc. in San Diego,
sells to insurance brokers and carriers,
who then offer the platform as a service
to customers, says Chris Knight, western
region field sales manager. The vendor
has end users ranging in size from 50 to
5,000 employees, but our average-size
end user customer is about 300 employees. He says companies that size usually
work with a broker.
A couple of years ago, when Grill Concepts was seeking a new insurance carrier,
executives looked into a benefits enrollment option from its payroll provider but
passed because of cost, Gehrke says.
Company leaders were aware of
BeneTracs cost model because Grill Concepts previous carrier had used BeneTrac,
although the restaurateur had never
used it, Gehrke says. As negotiations
progressed, the new carrier decided that
adding BeneTrac would clinch a deal with
Grill Concepts and reduce its costs.
Grill Concepts has used BeneTrac for
two open enrollment cycles. In paper days,
errors ranged from 2 percent to 5 percent.
July 2011 HR Magazine 53

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HR Technology

Better Benefits Communication

Employers are slowly adopting new technologies, including social media tools and
videos, to support employee communications for open enrollment. But they still rely
most heavily on e-mail.
In a survey of open enrollment trends conducted in December 2010, Towers Watson
found that more employers than in past years use technology and face-to-face meetings to communicate with employees about open enrollment. The findings are based
on responses from 209 U.S. employers.
Specifically, 84 percent used e-mail, compared with 76 percent the previous year,
and 60 percent used face-to-face meetings, compared with 53 percent. Thirty-three
percent of the respondents used videos, podcasts and online chats, compared with
27 percent the previous year. Only 4 percent used blogs or other social media tools.
Jill Radding, manager of benefits and employment at Rex Healthcare in Raleigh,
N.C., sends daily e-mail reminders to about 5,000 employees during open enrollment
season. We also send out links to information on our home page, she says. Rex
Healthcare uses software from [Link] Inc. as its open enrollment platform.
Jennifer Benz, chief executive officer of Benz Communications, a social media
consultancy in San Francisco, sees growing interest in social media tools for benefits
communication.
Some employers are getting creative in their approaches to benefits communication. Trustnode Inc., a three-year-old startup in San Francisco, develops decision
support tools based on animated stories designed to educate employees on benefits. Research conducted at Stanford University has shown animation to be a useful
educational tool with high viewer recall, according to Kevin Dunn, founder and CEO of
Trustnode.
The 54,000-member New York Public Employees Federation, an association of
technical and engineering employees, is among the early adopters. Beth Wales, marketing executive for voluntary membership benefits, says the association is testing animated features. There is science that explains why people relate to cartoon characters
that exaggerate human behavior, she says.
Some providers of online enrollment technology are adding communication features to their platforms. Benefitfocus offers a messaging center that allows employees
to ask questions privately or publicly. Benefitfocus has produced 300 videos for its
portal that customers can use. It can also develop custom videos for a separate fee,
according to Nancy Sansome, senior vice president of marketing and communications.
Sansome says the company is also developing other features, including access
from mobile devices as well as a rating and ranking feature similar to the one Amazon
uses for books to allow employees to grade benefits providers.
Rex Healthcares Radding says the company doesnt use any Benefitfocus features
yet, but podcasts and webinars, probably developed internally, are on the list for next
year.
Bill Roberts

With BeneTrac, the error rate fell below

1 percent, Gehrke says.
The software does not connect seamlessly to Grill Concepts payroll system

HR staff download spreadsheets from

one system and upload to the otheryet
the companys HR professionals are generally pleased with the technology.

One step and youre done, says

Melinda Shafran, HR generalist for benefits. Lets say you terminate benefits.
You terminate it once and the system
distributes to everyone. You dont need
to go to dental, medical, COBRA, life
insurance. You notify one place, and it
tells all carriers. Thats huge.

Real Money
Testimonials about saving time are persuasive, but nothing beats cold cash. Morganite Industries Inc. in Raleigh, N.C., makes
ceramic electrical supplies and carbon
graphite products. The employer achieved
cost savings when it adopted technology
from [Link] Inc. in Charleston,
S.C., for open enrollment of 2,500 employees who work at 10 locations in the
southeastern United States.
Benefitfocus started like BeneTrac
did, selling to insurance carriers. Two
years ago, it began selling directly to
employers with 1,000 or more workers,
according to Nancy Sansome, senior vice
president of marketing and communications. The companys SAAS offering
covers open enrollment transactions and
connections to payroll and insurance carriers. Benefitfocus has been developing
tools to improve the employee experience. The software also performs call
center functions for customers.
Nucleus Research Inc., an independent organization offering studies
of technologys return on investment
accredited with the National Association
of State Boards of Accountancy, determined that Morganites accrued savings
paid for deployment of the platform in
seven months, and the company now
saves an average of $438,418 annually on
its open enrollment process.
OConnell lists three reasons for the
savings. The first two are obvious: By
moving the process online, Morganite employees and HR administrators
became more productive by saving time,
and a hard dollar savings can be attached
to these productivity gains.
The third reason is less obvious but
produces the largest savings. The application enables an eligibility audit. The
first audit allowed Morganite to identify
100 unqualified peopleex-spouses of
employees, for examplewhom the
company dropped from benefit rolls.

54 HR Magazine July 2011

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COMMERCIAL MARKETS

WHEN YOU CAN MEET MORE OF THEIR NEEDS, YOU CAN EARN MORE
OF THEIR BUSINESS. THE HARTFORD CAN HELP YOU DO BOTH.
Clients depend on you to ensure their companies well-being. And you can depend on The Hartford for
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The Hartford not only services large national accounts, were also a top-ten* provider of small commercial
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The Hartford is The Hartford Financial Services Group, Inc. and its subsidiaries, including its administrative services companies, Hartford-Comprehensive Employee Benet Service Company and Specialty Risk Services and issuing companies Hartford Life Insurance
Company, Hartford Life and Accident Insurance Company and Hartford Fire Insurance Company. All non-property and casualty policies sold in New York are underwritten by Hartford Life Insurance Company. The home ofce of Hartford Life Insurance Company is Simsbury,
4032 NS 11/10
CT. All property and casualty policies are underwritten by Hartford Fire Insurance Company, Inc., and its property and casualty afliates, Hartford, CT. 2011 The Hartford Financial Services Group, Inc., Hartford, CT 06155. All Rights Reserved.

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Court Report
New cases are posted online each week. Visit [Link]/law.

Sarbanes-Oxley Act Whistle-Blower Protection

Does Not Cover Media Leaks
Tides v. Boeing Co., 9th Cir., No. 10-35238 (May 3, 2011).
n employer did not violate the whistle-blower provision of the SarbanesOxley Act (SOX) when it terminated two
employees who disclosed internal company information to the media, according
to the 9th U.S. Circuit Court of Appeals.
Nicholas Tides and Matthew Craig
Neumann worked as auditors in Boeings SOX corporate audit group. SOX
requires companies to annually assess
the effectiveness of their internal controls
for financial reporting. The audit group
ensured that Boeing complied with this
obligation. The group was staffed by 10
Boeing employees and supplemented
with roughly 70 contract auditors from
an accounting firm. An external auditor
was responsible for annually attesting
to Boeings assessments of its internal
controls.
In January 2007, tensions were allegedly high in the internal audit group
because management suspected that the
external auditor was going to declare a
material weakness in Boeings internal
controls. Tides and Neumann claimed
that, as a result, they were pressured by
Boeing management to synthesize positive results by rating Boeings internal
controls and procedures as effective.
In April 2007, a reporter from the
Seattle Post-Intelligencer contacted Tides
and Neumann to speak with them about
an article she was writing on Boeings
SOX compliance. After several inquiries,
both separately divulged to the reporter
their concerns about the apparent pressure in the audit group, as well as their
beliefs that the audit system permitted
unauthorized users to alter the ratings

given to the companys internal controls.

On Feb. 9, 2010, the federal district court
At the time, both were aware that Boeing
granted Boeings motion for summary
had a policy that restricted the release of
judgment.
company information to the media. The
On appeal, the court addressed the
policy required
issue of whether
employees to
Tides and Neumann
Professional Pointer
refer [i]nquiengaged in protected
This case stands as an
ries of any kind
activity under SOX.
important limitation to SOX
from the news
The court outlined
whistle-blower protection but
media to the
that an employee
also serves as a reminder that
communications
in a SOX whistleemployees often have access to
department and
blower lawsuit must
sensitive company information.
prohibited the
provide information
Accordingly, it is crucial to have
release of comto one of three entian employment policy restricting
pany information
ties to be protected:
release of company information
without the dea federal regulatory
to the media.
partments prior
or law enforcement
review.
agency, Congress, or
On July 17,
a supervisor. Tides
2007, the Seattle Post-Intelligencer puband Neumann argued that because the
lished the article, Computer faults put
SOX violations were published in the
Boeing at risk, reporting that Boeing
media, the information may eventufailed to prove it can properly protect
ally reach members of Congress or law
its computer systems against manipulaenforcement, and that they therefore had
tion, theft and fraud. The article detailed engaged in protected activity.
Boeings threatening company culture
The court disagreed, declining to afperceived by the employees in SOX comford such an expansive meaning to the
pliance, a record of poor internal audit re- statutory language. The court reasoned
sults and an internal allegation that audit
that Congress intended to protect discloresults were being manipulated.
sure only to individuals and entities with
Thereafter, Boeing officials conducted the capacity to act effectively on the inan investigation and interviewed Tides
formation provided. The media, the court
and Neumann. Both admitted to commu- stated, is not one of these entities and, by
nicating with the news reporter without
the plain language of the act, reporting
permission. They were subsequently terinformation to the media is not protected
minated for violation of Boeings policy
activity.
prohibiting disclosure of information to
the media without prior company review.
By Zack Learman, an attorney with Pilchak, Cohen
They filed separate SOX whistle-blower
and Tice PC, the Worklaw Network member firm
complaints, which were consolidated.
in Auburn Hills, Mich.

56 HR Magazine July 2011

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Benefits Plan Administrators May Have Violated ERISA

George v. Kraft Foods Global Inc., 7th Cir., No. 10-1469 (April 11, 2011).
he alleged failure of plan fiduciaries
of the Kraft Foods Global Inc. 401(k)
plan to change the plan structure to reduce participants costs may have been a
breach of their fiduciary duties.
The primary funds at issue in this case
were those invested principally in Kraft
and Altria Group Inc. stock, known as
company stock funds. Altria Group is the
parent of Kraft.
The plaintiffs were a class of current
and former Kraft employees who directed their contributions to company stock
funds. The funds are unitized, meaning
that participants purchase units of company stock funds rather than shares of
company stock.
Unitization may result in investment drag, which is caused by cash held
in company stock funds. Because cash
reserves in funds would not appreciate at

the same rate as appreciating company

to eliminate investment drag and transstock, the return on investment for unitactional drag, the fiduciaries did not act
ized funds lags the return on investment
reasonably. The fiduciaries discussed
in the appreciating stock alone.
moving to real-time trading, whereby
Also, although unitization results in
participants would own shares of stock
the avoidance of
rather than units of
many transaction
company stock funds,
Professional Pointer
costssuch as
but made no changes
If you are involved in the
requests to buy and
to the plan structure.
management of an employee
sell unitssome
The 7th U.S. Cirretirement or profit-sharing
costs are inevitable.
cuit Court of Appeals
plan, do not limit the scope of
Those costs are
found that the fiduyour review to performance
taken from the total
ciaries failed to act to
of the funds assets; consider
value of the funds,
address transactional
the fees and costs involved in
meaning that each
drag and investment
managing those assets.
participant pays
drag, and so may have
equally for tradacted unreasonably.
ing, regardless of the
number of transactions they initiate. This
By W. Kevin Smith, an attorney with Smith &
is known as transactional drag.
Smith Attorneys, the Worklaw Network member
The plaintiffs allege that by failing
firm in Louisville, Ky.

Pregnant Employee Did Not Prove Constructive Discharge

Trierweiler v. Wells Fargo Bank, 8th Cir., No. 10-1343 (April 8, 2011).
he 8th U.S. Circuit Court of Appeals affirmed that an
saying, This isnt going to work, you taking time off.
employee was not constructively discharged, in violaTrierweiler understood this message to mean that she no
tion of the Pregnancy Discrimination Act of 1978, when she
longer had a job. Maynard subsequently issued Trierweiler
failed to demonstrate intolera formal warning for her absences, not inable working conditions or to
cluding the recent medical leave, and told
Professional Pointer
provide her employer a reasonher to contact a Wells Fargo program called
By implementing effective
able opportunity to remedy the
WorkAbility to explore possible temporary
internal complaint procedures,
situation.
accommodations.
employers can address employee
During the first three and
On the last day of her medical leave,
concerns at their earliest stages
a half months of 2007, KimTrierweiler drove through the bank drivebefore they become potential
berli Trierweiler, a teller at Wells
through lane, gave a teller her keys and
issues of litigation.
Fargo Bank, used nearly 120
said she was done. She then left Maynard a
hours of her 160-hour annual
phone message saying that she had dropped
paid-time-off (PTO) allowance.
off her keys and asking that a teller retrieve
None of the absences were related to her pregnancy. On
her personal items.
May 11, Trierweiler used another PTO day to stay home
Trierweiler alleged that Wells Fargo constructively diswith a sick child. According to Trierweiler, her supervisor,
charged her in violation of the Pregnancy Discrimination
Mandy Maynard, told her that if she missed one more day
Act. But the 8th Circuit observed that Trierweiler failed to
of work before the end of the year, she would be done
show that Wells Fargo intended to force her to quit or that it
working there.
could have reasonably foreseen that she would do so.
On May 14, Trierweiler obtained a doctors note for a
pregnancy-related medical leave for the entire week. AcBy Roger S. Achille, an attorney and associate professor at Johnson &
Wales University, Graduate School of Business, in Providence, R.I.
cording to Trierweiler, Maynard left her a phone message

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Legal Trends

Hiring Days Are Here Again

By Jonathan A. Segal
s the economy slowly improves, we are finally and gratefully seeing new jobs
being created. Thats the good news. The bad news is that our hiring skills
may be rusty. This article provides best practices in 10 areas of the hiring
process. Such practices maximize the likelihood of hiring the best talent and minimize legal risks.

Finding Qualified Candidates

Recruitment begins with an understanding of the position to be filled so that the
most-qualified applicants can be identified.
Job descriptions. Of course, the first step ideally is to prepare a job description. It
can be a painful step, but it is very helpful.
Most job descriptions appropriately include the minimum required education,
experience, skills and physical demands. Dont forget to include what I refer to as the
stamina requirements, such as the ability to work long hours and to multitask, where
applicable. Stamina requirements are often key with regard to whether an employer
can accommodate mental disabilities, such as stress disorders.
Job descriptions are often silent on factors that correspond to the legal status

given to the position under certain

lawssuch as whether an employee
is exempt under the Fair Labor Standards Act (FLSA) or is protected by the
National Labor Relations Act. Make
sure your job descriptions support
the classifications that go with them.
For example, if you have classified an
employee as exempt under the administrative exemption of the FLSA, the job
description should include examples of
job functions that involve discretion and
independent judgment with regard to
matters of significance.
Recruiting. Post vacant positions
internally so that your employees have
the opportunity to apply for them. However, posting alone may not be adequate;
external recruiting may be necessary.
To increase the diversity of the applicant pool, employers may wish to supplement, not supplant, general recruiting
with targeted recruiting.
Be careful of timing. General and targeted recruiting should occur at the same
time. Deferring targeted recruiting until
after you have determined the diversity of
the applicant pool could carry with it an
inference of discrimination, according to
Rudin v. Lincoln Land Community College
(420 F.3d 712 (7th Cir. 2005)).
Interview selections. Employers
should interview candidates only if they
meet the minimum requirements of the
job as employers have defined them. The
question becomes what to do when you
have too many qualified candidates.
Develop and document a process where
you select among those who are qualified
The author, a partner with Duane Morris in
Philadelphia and managing principal of the Duane
Morris Institute, focuses on counseling, training
and strategic planning to minimize litigation and
unionization.

ILLUSTRATION BY STEVE DININNO

Brush up on hiring skills in 10 areas.

58 HR Magazine July 2011

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the applicants you wish to interview. For

As a technical matter, an organization
example, you could decide to interview
may not be liable if a peer asks an inaponly qualified applicants who applied
propriate question at lunch, such as Who
on day one. Thats a nondiscriminatory
takes care of your kids while you are at
criterion for whittling down the size of the
work? But the inappropriate question may
applicant pool.
push away the talent. Plus, if a manager
If you apply more-subjective criteria
happens to be at the table and says nothing,
related to experience, be careful that
her silence may be seen as condoning the
subconscious bias does not result in
question. At a minimum, her knowledge
the exclusion of
of the answer may
people of color
be seen as the basis
Online Resources
or women. There
for adverse action.
are studies that
Minimize the
For more about hiring, see the online
show that when an
risk by training peer
version of this article at [Link]
/hrmagazine/0711Segal. For other reindividuals name
interviewers on what
sources on employment law, visit www
is presumed to
they can and cannot
.[Link]/LegalIssues.
belong to someone
ask candidates, and
who is not white,
make it clear that
that individual is
recruiting lunches
less likely to be interviewed than someand dinners are part of the interview
one with the same resume but a whiteprocess.
sounding name. How do you protect
Appropriate interview questions.
your organization from subconscious
Managers complain at times that they feel
bias? When circulating cover letters,
as if there is nothing they can say. When it
consider redacting them so names and
comes to interviewing, employers should
addresses are not visible. By taking steps
provide them and peers with sample queslike these, you consciously avoid subcontions to ask.
scious bias.
Of course, appropriate questions
include questions about an applicants
Conducting Interviews
experience, skills and ability to perform
Interviews can help narrow the applicant
the essential job functions. A problem may
pool, but they must be handled correctly.
arise, however, when different applicants
Inappropriate interview questions.
are asked different questions.
Employers know that they generally canIt is OK to ask whether a candidate can
not ask candidates questions that relate
travel as required by a job but problematic
to equal employment opportunity status:
if you ask the young woman and not the
How old are you? What is your religion?
middle-aged man. It is OK to ask if someWhere were you born?
one can work up to 70 hours per week as
Employers also know that they legally
required by the job but problematic if you
cannot and practically should not ask quesask the older and not the younger man.
tions about a candidates family life: Are
Selective questioning may be the result
you married? Do you have kids? Are you
of subconscious bias. But its still bias.
fertile?
It is desirable for each interviewer to
Even if these questions are not unlawful have a list of standard questions that he or
per se under state law, they often correlate
she uses as a starting point when interviewto a protected groupfor example, they
ing candidates for a particular position.
are asked of women and not men or are
Different interviewers can have different
seen as a way to determine some other
standard questions. The key is that each
protected status such as sexual orientation,
interviewer should be consistent with his or
pregnancy or even age.
her candidates.
In many organizations, however, not
Interview cues. John Lennon wrote,
everyone is aware of the rules on prohibLife is what happens to you while youre
ited questions.
busy making other plans. The same can
Increasingly, peers help screen candioften be said of the interview. How an
dates. And employers infrequently train
applicant will perform as an employee
nonmanagerial peers on the dos and donts is often foreshadowed by how he or she
of interviewing.
behaves independent of his or her inter-

view answers. Ignore these cues at your

peril.
If the candidate is late for the interview,
dont be surprised if she is often late to
work. If you take the candidate on a tour
and she makes glowing eye contact with
those in power but ignores the support
staff, dont be surprised if she manages
horribly down even though she manages
wonderfully up.
If the candidate cant decide what to
order for lunch long after everyone else has
made their selection, dont be surprised
when the person suffers from paralysis
analysis at work.
Create opportunities for the person to
show his or her true personality, and consider those demonstrations to the extent
that they are job-related.

Choosing the One

Consider all the information you have
about the candidates, and then extend an
offer to your top choice.
Decision-making. We often talk about
the at-will principle when it comes to terminations. In fact, it applies equally to the
hiring process. Employers can reject someone for a job for any reason, no reason, a
good reason or a bad reason, just not an
illegal reason.
It is increasingly rare that someone is
rejected for a job because of a blatantly
unlawful reason. Yet, claims by applicants
have increased.
One of the more commonand challengedreasons for rejection is bad cultural fit. When it comes to bad cultural fit,
there are two extreme views and both are
extremely wrong.
On one extreme, there are those who
argue that bad cultural fit is almost always
a proxy for some sort of unlawful bias.
On the other extreme, there are those who
argue that cultural fit is everything. If
someone does not fit in, they will fail.
The truth is that cultural fit may be
relevant and legitimate because we want to
maximize our odds of finding an employee
who will do the job well. But we need
to make sure that cultural fit is not really
cultural bias based on differences among
protected groups.
The way to maximize value and
minimize risk is to define what cultural
values employers are looking for and then
determine whether someone has them
July 2011 HR Magazine 59

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based on specific behaviors and answers to

interview questions.
Verifications. Before extending
an offer, certain background information should be verified or obtained. For
example, generally you should verify
the individuals education from the
institutions listed on the application and
check work experience at the organizations where he or she claims to have
been employed. It is frightening how
many candidates are blatantly dishonest in terms of their education and work
experience.
When it comes to prior employers, try
to get substantive information, too.
Background checks. You may want
to consider conducting criminal or credit
checks, depending on the position. Of
course, if you use a third party to help you
with these checks, then you must comply
with the federal Fair Credit Reporting
Actas well as certain state laws, such as
in California and New Yorkwhich may
impose additional requirements.

Be careful of per se bars to employmentall felonies or any credit score

below a certain number. The U.S. Equal
Employment Opportunity Commission is
attacking per se exclusions by way of class
actions.
Offer letters. Ideally, every applicant
should be required to complete an application for employment. Comparing the application with the resume is a good way to
test veracity or, at a minimum, carefulness.
Plus, the application includes key
questions that you want to make sure all
candidates are asked. For example, it is
recommended that the application include
a question asking whether the candidate
is subject to any post-termination agreements with a prior employer. Ignorance is
no defense.
The application also includes appropriate representations, including that employment will be at-will.
Even if every candidate completes an
application, it is still generally desirable
to send each new hire an offer letter. If an

application was not completed, the existence of an offer letter with clear at-will
language is even more important.
The offer letter may state the employees position, responsibilities and reporting relationship. However, the offer letter
should state directly or indirectly that these
facets of the employment relationship are
subject to change at the employers sole
discretion.
When it comes to pay, indicate starting
salary or wage only and indicate that the
employee may be eligible for increases at
the employers sole discretion.
When it comes to benefits, speak in
terms of coverage and make it clear that
the plan documents control.
Then, hold your breath. Because no
matter how much employers may think
otherwise, hiring is more art than science.
We all have hired individuals about whom
we had some doubts but who turned out
to be superstars or candidates who we
thought would be superstars but who
turned out to be super duds.

American Public University

The more your employees know, the more your organization will succeed.
And youre one click away from making it happen.

ntroduce your talented team to a quality

education that will take them to the next
level. American Public University offers
more than 100 degrees and certicates in
a wide variety of specialties, helping you to
develop and retain your employees and grow
your organization. Our affordable tuition helps
you stretch your tuition benet dollars without
breaking the bank.

Learn more at [Link]/hr

Text APU to
44144 for more info.
Message and data
rates may apply.

Transportation and Logistics Management // Business // Information Technology // Management // Security Management

60 HR Magazine July 2011

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What we know.
We know that having six L&E attorneys listed among
Americas Best Lawyers is worthy of celebration.
We know that excellent client service is every bit as worthy
of celebration as being nationally ranked.
We know that, while these six L&E attorneys deserve our hearty
congratulations, our entire L&E team is of the same caliber.
We know that, in the end, were only as good as the last matter we handled.

Thats what we know.

4TH HIGHEST IN THE NATION

[Link]

ALABAMA

DISTRICT OF COLUMBIA

MISSISSIPPI

NORTH CAROLINA

TENNESSEE

No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. Contact: John B. Grenier, Esq., 1819 Fifth Avenue North, Birmingham, Alabama 35203

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Whats your focus?

SHRM 2011 Fall Conferences
SHRM conferences combine learning, collaborating and networking. With
our trusted educational content, world-respected speakers, and range
of comprehensive topics, SHRM conferences offer you an unmatched
professional development experience.
For the complete list of SHRM conferences & expos and to register, visit
[Link]/conferences.

SHRM 2011 Strategy Conference

October 57
Chicago, Ill.
This is a signature event for top-level HR professionals. The conference
delivers senior-level programming and features sessions that focus on
developing and executing strategies that are creative, effective and
scalable. Collaborate and learn from other industry experts on how to
develop strategies that align with organizational goals, mission and brand.

SHRM 2011 Diversity & Inclusion Conference & Exposition

October 2426
Washington, D.C.
Successful organizations need culturally competent workers who can cross
borders and navigate different cultures. There needs to be a greater focus
on connecting diversity and inclusion to strategic business outcomes.
This conference is for diversity and inclusion professionals who want to
increase credibility in their organizations, are willing to be bold and deal
with tough issues.

Work-Life Focus: 2012 and Beyond

November 810
Washington, D.C.
Presented by SHRM and the Families & Work Institute, this exclusive
event will provide innovative solutions for senior-level HR practitioners
and other business leaders who are actively engaged in developing
effective and exible workplace strategies. This conference will provide a
platform for you to share, learn and network with business leaders from
around the globe and will prepare you to engage in meaningful dialogue
about whats next in the world of work. Space is limited. Applications are
now being accepted.

Join the conversation on:

SHRM CONNECT
11-0199

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Inside SHRM
[Link]/hrnews/insideshrm

SHRM CEO Advocates for Veterans

more streamlined set of resources
employers can use to identify and
hire military veterans, an educational campaign, and a single information portal for employers and veterans
were among suggestions Society for
Human Resource Management (SHRM)
Interim President and Chief Executive
Officer Henry G. Hank Jackson shared
during remarks before the U.S. House
Committee on Veterans Affairs.
Jackson was among a panel of experts
providing testimony in Washington,
D.C., at a June 1 hearing on Putting
Americas Veterans Back to Work.
Jackson cited SHRMs efforts in helping
employers recruit and retain veterans
returning to the workforce:
A partnership with the Department

SHRM Interim President and CEO Hank Jackson, far

right, gives testimony at a congressional hearing on
employing veterans.

of Defenses Employer Support of the

Guard and Reserve.
Collaborating with the Department
of Labors Veterans Employment &
Training Service to educate employers
about resources that can connect them
with veterans.
Participating in the White Houses

Joining Forces initiative to support

military families and educate employers
on effective recruitment and retention of
military spouses.
Despite organizations interest in
hiring veterans, knowledge gaps exist
among employers as to how to find and
hire veterans, Jackson said. He cited a
2010 SHRM survey of members that
found 53 percent of respondents were
unsure about how to go about hiring
veterans.
We are developing a toolkit for
veterans and employers, Jackson said,
that we hope to roll out sometime before
the end of the year, in conjunction with
the Department of Labor.
By Kathy Gurchiek, associate editor for HR News.

Members Speak UpLoud and Clear

The senior management team of the Society for Human Resource Management (SHRM) invited four members to the Alexandria, Va., headquarters on
May 9 and 10 to talk about how SHRM can better serve its members.
The Societys chief U.S. membership officer, Pam Green, SPHR, facilitated
the panel of HR professionals with diverse backgrounds and experiences.
Our members had a lot to tell us. And staff were taking notes, Green
said. During breaks, staff lined up to speak with them one on one and to
exchange contact information.
The visiting members were:
Denise Green, director of human resources for the Concord Church in
Dallas.
Phil Jackson, PHR, HR client relationship manager for UBS Fund Services (Cayman) Ltd., headquartered in Grand Cayman, the largest of the
Cayman Islands.
Aseem Juneja, founder of executive search firm Ten Yards Advisors,
who had moved his operation from India to Philadelphia just days before
talking with SHRM officials.
Mike Letizia, PHR-CA, vice president of HR and security for the Community Bank of San Joaquin, based in Stockton, Calif.

From left, SHRM members Mike Letizia, PHR-CA, Denise Green, Phil Jackson,
PHR, and Aseem Juneja visit SHRM headquarters in Alexandria, Va.

The visitors ranged from having 10 years to less than one year of SHRM
membership.
They had some suggestions for SHRM: Make the website easier to
use. Send fewer e-mails, limiting them to those that are most important or
relevant. Focus on California, India and emerging markets.
But their primary message was: Keep doing what you are doing.
By Steve Bates, SHRMs manager of online editorial content.

July 2011 HR Magazine 63

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MEMBER INSIGHT

Clearing the Mind

Andrea J. Corbett, PHR
Each evening, as soon as Andrea Corbett, PHR, gets home from Stanley
Black & Deckers East Coast Distribution Center in Charlotte, N.C., she goes
off the grid. Cell phone and laptop stay in the car for an hour or two. Corbett
takes her cocker spaniels to the park and walks off the intensity of her job
as senior HR representative merging Black & Deckers hardware and home
improvement division with Stanley Hardware.
Corbett, 43, says having a bright line that separates workday and home
life is essential to keep up with the pace of the reorganization that brought
Stanley Hardware into her Black & Decker division. The businesses are
similar, yet Corbett says meshing corporate cultures is the hardest part.
After youve aligned the benefits, after youve rationalized policies and
procedures, you still have to start thinking like one company, she says.
It takes a while for people to stop thinking of themselves as legacy Black
& Decker or legacy Stanley and see themselves as Stanley Black & Decker.
Corbetts previous employer, pharmaceuticals supplier Bergen
Brunswig Corp., had also been acquired by another company, an experience that helped kick her career into high gear. I knew I had to enhance
my HR toolkit to show management I was serious about my craft, she says.
She joined the Society for Human Resource Management and got her
PHOTOGRAPHY BY JON SILLA

PHR certification. Serving on a Society Special Expertise Panel was a great

opportunity to learn from senior HR professionals and offer them a perspective that was close to employees, she says.
By Alice Andors, a freelance writer in Arlington, Va.

Chapter Responds to Fatal Shootings

hen an employees ex-husband
entered her workplace and
fatally shot her, a co-worker and
himself in Salina, Kan., in October 2009,
it stunned the city.
The tragedy occurred despite legal
actions the ex-wife had taken against the
shooter and created fear and vulnerability in many citizens, employees
and employers, noted Natalie Fischer,
PHR, HR director for the City of
Salina and past chapter president of the
Salina Human Resource Management
Association.

Inquiries and phone calls from people

concerned about workplace violence
poured into the police station, said
Fischer, who had regular conversations
with the police chief during that time.
In addition to feeling vulnerable, people
were seeking guidance on warning signs
and prevention techniques.
We knew that something needed to
be done, she said.
In response, the chapter collaborated
with local and state law enforcement
officers to create the 2010 Pinnacle
Award-winning public education

seminar, Coping with Community

TragedyWorkplace Violence. The
two-hour seminar attracted 185 attendees
from 59 organizations and aired
numerous times on local TV. The chapter
later created a DVD of the seminar.
Salina was one of seven U.S. chapters
and two state councils to win the coveted
national competition that the Society
for Human Resource Management and
ADP sponsor annually. Winners were
announced during the SHRM Leadership
Conference in November 2010.
Kathy Gurchiek

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Inside SHRM

Collaboration Brings
Organizational Research
To Members
riving Customer Satisfaction Through HR: Creating and Maintaining a Service
Climate is the first in a series of research papers made available to Society
for Human Resource Management (SHRM) members by the Society for
Industrial and Organizational Psychology (SIOP).
The two groups want to distill evidence-based science into readable,
actionable formats that help HR practitioners solve everyday issues.
This collaboration is important to making this knowledge more accessible to
our members so they have really good, deep HR-related research on industrial
and organizational psychology, said Mark Schmit, SPHR, SHRMs director of
research and a member of SIOP. The aim is to bring SIOP research to SHRM
members on a quarterly basis.
Deb Cohen, SPHR, SHRMs chief
Online Resources
knowledge development and integration
officer, noted in an article that she wrote
Visit [Link]/research for papers
for the SIOP website that the two organimade available through a partnership
zations share a like-minded focus.
between SHRM and the Society for Industrial and Organizational Psychology.
More effectively linking science with
business and HR practice will be helpful in
supporting HRs strategic contribution to
organizational excellence, she added.
The collaboration has extended to the SHRM Foundation reaching out
to SIOP members with offers of content and teaching resources and funding
opportunities, according to Cohen, and to presenting at each others conferences.
SHRM has exhibited at the annual SIOP conference since 2005, and SIOP
members have presented at SHRM conferences.

SHRM Board of Directors

CHAIR
Jose A. Berrios
BTG: The Berrios Talent Group LLC
IMMEDIATE PAST CHAIR
Robb E. Van Cleave, SPHR, IPMA-CP
Columbia Gorge Community College
DIRECTORS
Melvin L. Asbury, SPHR
Asbury Consulting LLC
The HR Group Inc.
Jeffrey M. Cava
Starwood Hotels & Resorts Worldwide Inc.
Calvin W. Finch, CPA
CPP Inc.
Bette J. Francis, SPHR
Wilmington Trust Wealth Advisory Services
Carolyn Gould, SPHR, GPHR, CCP
PricewaterhouseCoopers LLC

Upcoming
July
25-26 SHRM Essentials of HR Management, Atlanta

August
1-5 Leadership Development for HR Professionals, Colorado Springs, Colo.
15 Diversity Practitioner of the 21st Century: What New Practitioners Need
to Know, Alexandria, Va.
18-19 SHRM Essentials of HR Management, Alexandria, Va.

James A. Kaitz
Association for Financial Professionals
Gary P. Latham, Ph.D.
University of Toronto, Rotman School of
Management
Virda M. Rhem, SPHR
Texas Property and Casualty Insurance
Guaranty Association
Gabrielle Toledano
Electronic Arts Inc.

July 2011 HR Magazine 65

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What's New
Compensation and Benefits
AlwaysCare has expanded its national dental provider network for plan participants.
The network now includes more than 144,000 providers nationwide and offers more
choices for participants who want to save on out-of-pocket expenses by using an innetwork provider. AlwaysCare offers easy-to-use online tools for group administrators
and participants, plus group enrollment support for insurance agents and brokers.
(888) 729-5433 | [Link] | quotes@[Link]

Compliance
HireRight Inc. has launched HireRight
Compliance Central, a web-based content
portal designed to help inform employers
of changes to laws and regulations that
affect employment screening and employment eligibility policies and procedures.
HireRight Compliance Central can assist
HR professionals in maintaining compliance and communicating legislative
changes to their organizations. The portal
features federal and state legislative news
alerts, commentary, educational tools,
templates for compliance forms, and
referral and search functions to help find
legal support.

(800) 400-2761
[Link]
customerservice@[Link]

Employee Recognition
Dittman Incentive Marketing has
launched the website DittmanTotalPro.
com. The site features employee engagement tools, rewards fulfillment services
and information that can help businesses
improve performance through improved
employee recognition. The site is designed
to provide prompts, reminders and other
tips to help managers and supervisors
remember and recognize the efforts of
their employees. The recognition modules

and resources offered include sales incentives, recognition programs and referral
programs.
(732) 745-0600
[Link]
info@[Link]

Retirement
Rest-of-Life Communications has
launched an online guide for employers that want to help employees plan for
retirement. The Money for Life Guide
Online is a free, web-based retirement
planning tool.
(805) 985-3526
[Link]
[Link]@[Link]
Product manufacturers and developers provide
information for Whats New. Inclusion in this
sample of products does not necessarily imply
endorsement by SHRM or HR Magazine. For
an online directory of new products and services
by category, please visit [Link]
/publications/hrmagazine/whatsnew.

U.S.-Brazil Executive Business

& HR Exchange Program
Nov. 26 Dec. 4*, 2011

Join executive HR professionals and participate in an educational business and

HR exchange program while visiting the cities of Rio de Janeiro and So Paulo.

Led by Janet Parker, SPHR, GPHR, Chief Global Membership Ofcer of SHRM
and Howard A. Wallack, GPHR, Director, Global Member Programs of SHRM,
this delegation will provide an understanding of the development of HR and its
role in the Brazilian economy and in society, including new approaches that are
unique to Brazil.
Program details and registration form available at
[Link]/SHRM.

*Arrive in the U.S. on December 5.

11-0380

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EVERYBODY WANTS TO

LOWER
HEALTHCARE

PREMIUMS.
HERES A PLAN THAT IS DOING IT.
BLUE OPTIONS TIERED NETWORK
Significant premium savings
Access to full provider network in three benefit tiers
Where employee goes for care determines out-of-pocket costs
Encourages employees to consider cost of services received
Simple for you and simple for your employees
Another innovative product from the brand you trust

Employers now have real choices when it comes to insurance premiums.

The Blue Options Tiered Network Plan sorts hospitals and primary care providers into three groups based on cost and
quality performance data. This can help your employees lower their healthcare premiums, and allow them to control
their out-of-pocket costs based on where they choose to go for care.
Theyre simple to implement, too. And simple for employees to use. No wonder these are some of the fastest
growing plans in our history.
To learn if Blue Options is right for your business, contact your broker, call Blue Cross at 1-800-262-BLUE or visit
[Link]/affordability.

Blue Cross Blue Shield of Massachusetts is an Independent Licensee of the Blue Cross and Blue Shield Association.

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OUR POLICIES
MUST ALIGN
WITH NEW
LAWS.
THE SOLUTION IS SHRM.
I somehow need to balance internal policies with state and federal
statutes, while enforcing complex compliance regulations.
As a leader in my organization, Im the one people turn to for
guidance, but when I need specic solutions to the challenges
I encounter, I turn to SHRM. I regularly use webinars and
weekly email alerts to remain current with HR standards.
With SHRM, I know Ill have access to accurate and reliable
legal and regulatory resources. I consider my membership to be
absolutely indispensable. Find out how SHRM can help you at

[Link]/COMPLIANCE

________________________________________

10-0438

Ann M. Jackson, SPHR

New York, NY
Member since 2005

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Guide to HR Products and Services

BENEFITS

Alere

Allstate Benefits

999 3rd Avenue, Suite 2100

Seattle, WA 98104
866-434-9750
[Link]
Alere Wellbeing drives sustained
health behavior change by providing
individuals with information,
fostering their acquisition of
knowledge, and empowering them
to then improve their own health
and wellbeing. Alere Wellbeings
evidence-based programs
reflect the companys standards
of excellence in measuring
outcomes, service quality, account
management, and transparent
reporting.

1776 American Heritage Life Drive

Jacksonville, FL 32224
904-992-3358
Fax: 904-992-2740
[Link]@[Link]
[Link]
Whats Missing From Your Benefits
Program?
Allstate Benefits. We have the most
comprehensive benefits portfolio
in the business. Including the #1
critical illness product in America.
It's no wonder we're one of the
fastest-growing benefits providers
in the country. Let the Good Hands
go to work for you.

BENEFITS

Bank of America Merrill

Lynch
53 State Street
Boston, MA 02109
617-366-4067
Fax: 617-366-8067
[Link]
One of the worlds most innovative
financial institutions, Bank of
America Merrill Lynch stands
today among the leaders in
retirement and benefit plan
services. We are committed to
providing corporations, institutional
investors, financial institutions and
government entities with retirement
solutions and personal service.

BENEFITS

Dearborn National

Purchasing Power

The Standard

1020 31st Street

Downers Grove, IL 60515
800-331-0512
marketing@[Link]
[Link]
Dearborn National is among
the leading providers of group
insurance benefits in the United
States, offering group life, group
LTD, group STD and group dental
on an employer-paid and voluntary
basis. Our dental network is the
largest in the United States with
more than 160,000 dental access
points.

1375 Peachtree Street,

Suite 500
Atlanta, GA 30309
sales@[Link]
[Link]
Purchasing Power is one of the
fastest-growing voluntary benefit
companies. It offers the premier
purchase program that helps
employees purchase name-brand
computers, electronics and
home appliances through payroll
deduction. The program works
for them and works for you
Purchasing Power supports HR
objectives like retention, work-life
balance and wellness programs.

At The Standard, our highest priority

is helping people feel confident
about the future. Our group
insurance products - disability,
life, dental and vision - as well
as individual disability insurance,
retirement plans and annuities are
backed by financial strength and
experienced professionals. To learn
more, visit us at [Link].
com.
__

Yellow Pages
BENEFITS

ComPsych Corporation
NBC Tower
455 N. Cityfront Plaza Drive
Chicago, IL 60611-5322
800-851-1714
info@[Link]
[Link]
ComPsych is the worlds largest
provider of employee assistance
programs, and the leader in fully
integrated EAP, work-life, behavioral
health, wellness, and FMLA
administration. Providing services
to more than 13,000 organizations
covering 35 million individuals in
more than 100 countries, ComPsych
creates Build-to-Suit programs
which help improve employee
productivity.

COMPENSATION

ERI Economic Research

Institute
[Link]
[Link]@[Link]
1-800-627-3697
ERI Economic Research Institute
provides current market data
for more than 1000 industry
groups. Thousands of corporate
subscribers rely on ERIs salary
survey, executive compensation,
geographic pay, and cost-of-living
data to give them Boardroom, court,
and employee level credibility.
Nothing beats real data and
reproducible results, with reported
rates of error.

Company listings do not imply recommendation or referral by SHRM.

July 2011 HR Magazine 69

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Yellow Pages Guide to HR Products and Services

EMPLOYMENT & STAFFING

GLOBAL HR

HOTEL

Kenexa

NuView Systems, Inc

650 East Swedesford Road,

2nd Floor
Wayne, PA 19087
877-734-0002
contactus@[Link]
[Link]
Kenexa is the only company that
offers a comprehensive suite of
products and services that support
the entire employee lifecycle
from pre-hire to exit. Through the
study of human behavior in the
workplace, we have developed
software solutions, business
processes and expert consulting
that help organizations maximize
success through HR.

200 Brickstone Sq, Suite 303

Andover, MA 01810
978-296-6600
Fax: 978-475-1771
info@[Link]
[Link]/[Link]
NuViewHR is a global HRIS and
U.S. payroll solution that enables
business strategy through our
advanced HR Technology. This
award-winning product suite
addresses all HR functions,
including HR & Benefits
Administration, Compensation,
Recruiting, Training Administration,
Performance, Succession, Employee
& Manager Self-Service, Metrics,
Time Entry, Payroll and Reporting.
License and SaaS/Hosted Options.

Traveling to Las Vegas?

Introduce all your Employees to the
NEW Tropicana Las Vegas
ELITE (Employee Leisure Incentive
Travel Experience) program
BIG SAVINGS
Room Rates up to 30% off
Brand NEW Best-in-Class Deluxe Rooms
Great NEW restaurants, lounges
& casino
Voted Best Pool in Las Vegas
Nikki Beach Club
New Las Vegas Mob Experience
and great entertainment & shows
Book TODAY through 2011!!!
Simply go online to [Link]
and choose your stay dates and
type in the code WESHRM1 & you will
receive your special rate or
Dial 1-800-GO2-TROP (462-8767)
And mention your SPECIAL CODE
[Link]

3311 E Old Shakopee Road

Minneapolis, MN 55425-1640
877-552-5669
[Link]
Put Ceridian KnowHow
to work for you.
From payment solutions to benefits
and health and productivity
services, you can count on Ceridian
KnowHow to take the guesswork
out of choosing proven solutions
that assure your company will
thrive, and take the guesswork out
of making smart decisions for your
bottom line.

HR TECHNOLOGY

Electronic Commerce, Inc./

ECI
2810 Dexter Drive
Elkhart, IN 46514
800-320-9530
info@[Link]
[Link]
ECIs web-based single source
HRIS solution Empower, utilizes real
time integration that automates
workflows and manages all facets
of employee administration from
a single login. Empowers areas
of focus are: Payroll Processing/
HR, Self Service, Benefits
Administration/Enrollment, Time
& Labor Management, Applicant
Tracking/Recruitment, Pointand-Click Reporting, Analytics,
Onboarding, Performance and
Learning Management. ___
www.
[Link]
______

Tropicana

HR TECHNOLOGY

Ceridian

Epicor

Kenexa

Ultimate Software

707 Seventeenth Street,

Suite 3800
Denver, CO 80202
800-477-3287
Fax: 303-595-9970
[Link]/hcm
Epicor, a leading provider of global
ERP solutions, and SPECTRUM, a
Web-based human resource and
talent management company,
decided to combine their respective
expertise and resources. Now, as
Epicor HCM, they offer the most
integrated HRISall built upon a
solid foundation of global reach and
leading-edge HR innovation. Visit
[Link]/hcm.

650 East Swedesford Road,

2000 Ultimate Way

Weston, FL 33326
800-432-1729
Fax: 954-331-7300
ultiproinfo@[Link]
[Link]
Ultimate Software is a leading
provider of unified human capital
management SaaS solutions
for global businesses, offering
award-winning UltiPro as SaaS
to manage a worldwide workforce.
Web-based features include
recruitment, onboarding, benefits,
payroll, performance management,
business intelligence, compensation
planning, time and attendance, and
self-service.

70 HR Magazine July 2011

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Guide to HR Products and Services

LEGAL SERVICES

RELOCATION

Yellow Pages
RETIREMENT

Ogletree Deakins

Allied Van Lines, Inc.

191 Peachtree Street, N.E.,

Suite 4800
Atlanta, GA 30303
404-881-1300
Fax: 404-870-1732
clientservices@[Link]
_________________
Ogletree Deakins is one of the
nation's largest management labor
and employment law firms. The
firm offers representation in every
aspect of labor and employment
law, represents a diverse range of
clients, and has 40 offices across
the country. Employers & Lawyers,
Working Together.

700 Oakmont Lane

Westmont, IL 60559
1-800-234-1085
[Link]
For efficient corporate relocation
services that wont halt your
business productivity, trust in Allied
Van Lines.
Founded in 1928 and is backed
by parent company, SIRVA (worlds
largest global relocation & moving
services company)
Extensive network reach, 40+
countries with 400+ agent locations
throughout North America and 600+
city locations worldwide

TRAINING & DEVELOPMENT

Development Dimensions
International

MindLeaders

Right Management

Villanova

5500 Glendon Court, Suite 200

Dublin, OH 43016
800-223-3732
events@[Link]
MindLeaders-ThirdForce provides
business-solutions software and
services that enable learning-andcontent-driven talent development.
More than 2,500 organizations trust
MindLeaders-ThirdForce solutions
to help them develop their learners
and align their organization's goals
through performance-focused talent
management and award-winning
learning and coaching resources,
more than 4,000 online courses,
and comprehensive compliance and
e-assessment solutions.

1818 Market Street, 33rd Floor

Philadelphia, PA 19103
1-800-237-4448
Fax: 215.988.0150
[Link]/work
Right Management is the talent and
career management expert within
Manpower, the global leader in
employment services. Our expertise
spans Talent Assessment, Leader
Development, Organizational
Effectiveness, Employee
Engagement, and Workforce
Transition and Outplacement.
We work with more than 80% of
Fortune 500 companies to help
them grow their talent, reduce costs
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Villanova University Online

9417 Princess Palm Avenue
Tampa, FL 33619
813-571-4938
Fax: 813-497-3421
sales@[Link]
[Link]
Leverage the expertise of topranked Villanova University to
advance in the growing field of
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1225 Washington Pike

Bridgeville, PA 15017
800-933-4463
info@[Link]
[Link]
Interaction Management:
Exceptional Performers series (IM:
ExPSM)
IM: ExP is designed to transform
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Flexible delivery options, including
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North American Van Lines,

Inc.

Bank of America Merrill

Lynch

5001 U.S. Highway 30 West

Fort Wayne, IN 46818-0988
260-429-1444
[Link]
NorthAmerican Moving Services
offers Personalized Moving
Solutions for your Relocating
Families.
- Financially stable moving services
leader providing quality service for
over 75 years
- Professionally-trained, background
checked crews
- Fully-transparent market driven
pricing
- Priority load & delivery
- Full-value valuation protection
- Additional value added services

53 State Street
Boston, MA 02109
617-366-4067
Fax: 617-366-8067
[Link]
One of the worlds most innovative
financial institutions, Bank of
America Merrill Lynch stands
today among the leaders in
retirement and benefit plan
services. We are committed to
providing corporations, institutional
investors, financial institutions and
government entities with retirement
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TRAINING & DEVELOPMENT

July 2011 HR Magazine 71

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Future Focus
[Link]/trends

By Joseph Coombs
articipation in many forms of flexible work arrangements has not changed
much in the past five years, according to the Society for Human Resource
Managements 2011 Employee Benefits survey report, which captures the responses of 600 HR professionals and was released in June.
In fact, even as technology has improved and the standard 40-hour workweek has become dated at many companies, the percentage of employers offering flextime and ad hoc
telecommuting actually dropped from 2007 to 2011from 58 percent to 53 percent and
from 48 percent to 42 percent, respectively.
The survey results indicate that perhaps cultural changes will be needed in many organizations if flexible work is to become more widespread in the United States. Options
such as telecommuting and compressed workweeks may go a long way toward boosting
workers job satisfaction levels, but executives and supervisors need to buy into the plans.
Employers are experimenting with atypical work arrangements and benefits. Some
respondents to the survey said their organizations offer flexible schedules and compressed
workweeksworking longer but fewer days in exchange for a day off each weekduring
the summer. Others give employees time off to exercise during the day. One company
gives workers an extra day off in December for Christmas shopping.
Some employers give employees all the time off that they want: Employers Resource
Council, a human resource services company based in Mayfield Village, Ohio, has no
schedule and no limit for earned vacation and leave time. The 30 staff members simply

have to make sure that time away from the

office does not interfere with operations
or their performance. And workers are
granted unlimited vacation and sick time
at Robbinsville, N.J.-based TriCore Inc., a
payroll and benefits outsourcing company
with 20 employees.
Overall, however, such policies are not
common. The surveys closest measure to
an unlimited vacation and leave policy is
the results-only work environment, or
ROWE, which allows employees to work
wherever and whenever they wish as long
as they complete projects on time. As with
other flexible work policies, it may take a
while for ROWE to catch on: Only 2 percent of companies offered the benefit in
2011, up from 1 percent in 2010 and down
from 3 percent in 2009.
But with employees job satisfaction
increasingly tied to perks such as flexible workweeks and telecommuting, HR
professionals need to be familiar with
these options. At the very least, they can
research the benefits of these practices
and share them with executives, many of
whom may still believe that workers need
to be at their desks to be productive.
Clearly, flexible arrangements cannot
be applied uniformly. But HR professionals can help establish a culture of
flexibility, even where these practices are
not typical. Assembly line workers cannot telecommute. But shift-sharing at a
manufacturing plant with 24-hour operations could be a viable option, and an HR
leaders expertise would be required to
form the policy.
As technology evolves and work continues to stretch beyond the hours of 9 to
5, the trend toward flexible work arrangements will accelerate. Members of the
HR profession will be central to managing
these changes effectively.
The author is a specialist with the Workplace
Trends and Forecasting program at SHRM.

ILLUSTRATION BY ALICIA BUELOW

Flexibility Still Meeting Resistance

72 HR Magazine July 2011

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C H A N G I N G
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behavioral strategies, and cognitive skills. We should
know Alere Wellbeing (formerly Free & Clear, Inc)
has spent more than 25 years helping people change
their behaviors and add years to their lives.

Learn more about our tobacco cessation and weight

loss programs at [Link]

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Ceridian InView Workforce Management.

Plan, schedule, measure, smile, repeat.
Nothing brings a smile faster than efficiencies that produce cost savings.
So we designed InView Workforce Management to help managers move beyond
time-and-attendance tracking to optimized scheduling. Then user-friendly, proactive
InView automation makes it easy to repeat the process, flexing schedules as needed
to cut labor costs by up to seven percent of payroll. Meanwhile, managers save several
planning hours per week time they can put toward building sales and are assured
of labor law compliance. InView is one more way Ceridian provides the insights,
KnowHow and solutions you need to navigate your business.
For a closer look, call 877-552-5669 or go to [Link]/smile.

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