Pre-Eligibility Protection Under FMLA: A Talent Management Issue

Friday, February 24, 2012

Many employees are protected under the Family Medical Leave Act of 1993 (FMLA). The Act allows for employees who meet certain eligibility requirements to take unpaid leave for a variety of medical reasons for themselves and certain family members. Central to an employee’s edibility is at least 12 months of employment encompassing a minimum of 1,250 paid work hours within a 12-month period previous to the leave’s application. It would therefore seem that employment less than 12 months of employment and fewer than 1,250 hours prior to the leave application would render the employee ineligible for FMLA. Not so say the United States Court of Appeals for the Eleventh Circuit

In a January 10, 2012 ruling, a three judge panel of the United States Court of Appeals, Eleventh Circuit stated that Kathryn Pereda had proved that her former employer, Brookdale Senior Living Communities, Inc had both illegally inferred with and retailed against her by terminating her employment after she informed Brookdale of her pregnancy and her intention to request FMLA. Pereda’s former employer augured that since she had not been employed 12 months prior to the FMLA request and had not worked at least 1,250 hours, she was not eligible for FMLA and thus not eligible for protection under the law.

On the issue of interference, the Court cited “the employee shall provide the employer with not less than 30 days' notice, before the date the leave is to begin, [and] of the employee's intention to take leave." 29 U.S.C. § 2612(e)(1). The Court concluded that this provision was actually “meant as protection for employers to provide them with sufficient notice of extended absences.” Reviewing the employee’s claim of retaliation, the panel stated that “FMLA should be executed ‘in a manner that accommodates the legitimate interest of employers,’ 29 U.S.C. 2601(b)(3), without abusing the interests of employees.” Finally, the Court reversed the decision and sent the case back to the district court for further proceedings.

How is this a talent management issue?

One, you can bet that Pereda’s fellow employees at Brookdale are watching for the outcome of her situation and their perception of their employer will be colored by its final disposition. In an industry heavily populated by females and low rates of retention, many current and future employees will see “There but for the grace of G-d, go I.”

Two, the local and corporate management of Brookdale have been distracted from the core activities of running their business; which includes managing hundreds of employees. Spanning a period from June 2009 until January 2012; and possibility beyond; Brookdale’s community goodwill may well suffer as may its employee productivity.

Lastly, Brookdale will have spent and may spend even more thousands of dollars and hundreds of hours in what could have been an avoidable situation had it been handled differently. This includes pulling local managers and even employees away from their duties to testify, provide depositions, and possible attend pre-trial hearings and meetings.

Hiring Great Employees

Friday, February 17, 2012

According to the U.S. Bureau of Labor Statistics, the national unemployment rate was 8.3% as of January 2012, which translates into 12,758,000 workers unemployed and actively seeking work. And yet many employers continue to complain they are unable to find workers with the right mix of job skills. Other employers are concerned that hiring a long-term unemployed worker may bring unneeded problems to their door step. Furthermore, there are numinous hiring guides that promise great employees in 3, 5, 7 or 10 steps. Others guarantee results with their software application and still others suggest stop hiring employees and hire entrepreneurs, partners or associates.

Unless your organization does not require trained, talented, knowledgeable, skilled, and engaged employees; recruiting, interviewing, selecting, and bringing the right person into the flock is an expensive time-consuming gut-wrenching chore. And it is not much different for the job seeker. A poor hiring decision by an organization can be equally devastating for both parties. Since it could take upwards of several months to a year to unwind a bad hiring choice; the selector and the selectee could waste a significant amount of time, money, and angst.

Employers must know the job and what it takes to be successful in that role, employees must know roles, responsibilities, and expectations. In some circles, job descriptions appear to have gone the way of typewriters. However, correctly written and maintained, job descriptions are to employers and employees as are blue-prints to architects and builders.

Sourcing or locating ideal candidates may be as simple as looking within your own organization or not. Relying on your current workers to refer job candidates could be a mixed blessing for both you and your employees. There is something to be said about candidates who bring a diversity of experiences and backgrounds that may not be found in someone who has focused solely on your industry.

The process of vetting candidates is full of potential dangers for unwary organizations. For a number of years most employers have provided only the minimum information to confirm employment dates and maybe position held. What candidates would give a knowingly negative reference? On the other hand, interviewing can provide some insight into the “real” person, especially when multiple interviewers are involved in the process. However, panel style interviews always seem to be dominated by one or two persons. Including superiors, peers, and even subordinates as interviewers allows for a full range of perspectives. It might tell you something about a candidate’s interpersonal skills if they snub the receptionist.

Cooperative selection and decision making methods allow superiors, peers, and subordinates to have some “skin” in the hiring process and decision, thus they feel vested in the success or failure of a new employee. After several years of staff reductions, current employees are elated to have some extra help for a change. While candidate selection may be complete, the integration of that new hire into the organization has just begun.

How any new employee is on-boarded into an organization will influence their initial and ongoing perception of that employer and may even determine the likelihood of their retention. Whether or not your organization has a formal probationary period or not the first few days and weeks of employment should be used to evaluate and re-evaluate the selection decision.

With competitive forces being what they are, every hiring decision carries the potential to add to or take away from an organization’s edge.

Incentive Management or How to Lose Your Best Employees

Friday, February 10, 2012

Organizations design, build, and maintain incentive plans for a number of reasons; primarily they desire higher employee production. Not just any production will do, it has to be within the constraints of quality, cost, customer expectations, credit worthiness, timeliness, safety, and resource availability. Often the case is that organizations throw money, prizes, gifts, trips, and rewards at a workforce and stand back expecting the orders to come, error rates to fall, collections to increase, and costs to decrease. And when nothing happens, business leaderships are puzzled as to why.

The issue may be due to the way in which an incentive compensation plan was designed and/or administered. It may or may not be obvious that everyone should NOT have the same incentive. Plans have to differentiate between management, administrative, production, maintenance, and sales workforces. In addition, plans must distinguish between individual achievement and effort levels? Yes, Jones bills and collects on accounts payables very effectively, however, after analysis it is determined that he does so on accounts that always pay on time, always pay in full, and are among the organization’s best customers. So why does Jones get a 10% incentive on accounts that require little to no effort, while Smith gets the same 10% incentive for billing and attempting to collect on the worst customers?

While it is clear that not all assignments require the same knowledge, skills, abilities, and experience to complete successfully and should be rewarded differently; so must we make a distinction between employees who are new to their role vs. those who have mastered the job. The incentive structure should not reward the inexperienced worker in the same manner and at the same rate as the veteran. Doing so increases the retention risk of the veteran while building an unreasonable future expectation for the newcomer. It follows that more experienced employees should receive the more difficult assignments, accounts or customers, and thus have the potential to earn higher rewards. That does not mean that a less experienced employee who is a high achiever could not move along the incentive curve at an accelerated pace. An incentive structure should be tuned to the individual’s performance.

Some organizations place caps on incentives; such caps have the potential to have a negative impact on the highest achievers. Provided that increased performance economically benefits the employer, incentive ceilings may be perceived as both unscrupulous and increasing the retention risk of top performers. Focusing on the top achievers, allow organizations to reward performers and build an incentive for others to aspire to the top.

It is relatively a simple task to build an incentive plan. It is a far more difficult process to build an incentive plan which actually delivers the desired outcomes. The process of designing, maintaining, and even adapting a workable incentive plan involves input from all of the stakeholders. Leaving out key players in the targeted workforce, organizational management, legal, finance, HR, payroll, and IT can result in a plan that impracticable, illegal, unsupportable, and fails to deliver the desired economic outcomes.

Tiered Health Insurance Plans

Friday, February 3, 2012

Several carriers in Massachusetts have begun to issue health care policies for “Tiered Health Insurance Plans”. Tiered plans are designed to have lower premiums and out-of-pocket expenses than traditional health insurance plans. Co-pays, deductibles, and other out-of-pocket member paid expenses for tiered plans vary by the cost tier of the facility or provider. The higher the cost tier of the facility or provider relative to its peers, the greater the out-of-pocket expenses associated with that specific provider. This variation on Consumer Driven Health Care plans is designed to motivate the member to make economic value based decisions as to where to obtain care.

Blue Cross Blue Shield of Massachusetts, Tufts Health Plan, and Harvard Pilgrim Health Care are among the carriers which have recently begun to provide Tiered Health Insurance Plans to private policy holders. Currently, Blue Cross Blue Shield is using a two-tier system, Lower vs. Higher, to separate hospitals in the state. While the member is free to use any hospital which is a member of the Blue Cross Blue Shield network, members will pay more out-of-pocket at “Higher” cost facilities.

For example: the Blue Cross Blue Shield “Hospital Choice Cost Sharing” plans typically cover “inpatient care, outpatient day surgery, outpatient high-tech radiology, outpatient diagnostic lab tests, outpatient diagnostic X-rays and other imaging tests, and outpatient short-term rehabilitation therapy.” If the member elects to use a High cost facility, generally there will be a deductible and a co-pay; however, for the same service at a Low cost provider, the co-payment is generally waived. This could result is a savings to the member of several hundreds of dollars. Combined with additional savings from lowered monthly premiums of approximately $170 for a family size of three (3) and it is easy to see why such plans may be attractive to individuals, and potentially to employers.

The primary issues in Tiered Health Insurance Plans is the ability of subscribers to have access to cost, reliable provider quality, and their knowledge of own health risks. Carriers and self-funded employer sponsored plans have a substantial knowledge of provider and facility cost; in addition, they have the ability to derive the quality of procedures via analysis of outcomes based on their access to diagnostic and treatment histories. Unfortunately, there is currently not a universal system of provider and facility evaluation. Although Massachusetts is planning to require carriers to use standard quality criteria in the near future; provider and facility ratings may still vary since carriers often weigh the criteria differently. Medicare currently provides provider and facility comparison information about Medicare-enrolled providers, facilities, and health care professionals. However, these evaluations may not be appropriate for non-Medicare populations. Furthermore, non-chronic individuals may have an especially difficult time judging their future health needs and risks.

Employer sponsored plans may find some provider and facility quality data in the form of national, state or local based business health care coalitions formed by employer associations or groups. The National Business Coalition on Health (NBCH) is a national organization of employer-led health care coalitions. At the state and local levels, organization such as the HealthCare 21 Business Coalition and the Savannah Business Group on Health work to provide employers with community impact programs, address patient safety and quality processes, value-based purchasing of health benefits, data warehousing, and research and dissemination of ‘best practices’ in health care and health care plans.

Whether or not employers will embrace Tiered Health Insurance Plans in significant numbers is predicated on their ability to obtain valid and reliable data on cost and quality of care delivery and resulting outcomes. In parallel, employees will need to gain the knowledge and access to tools with which to analyze their current and near-term health care needs. Lastly, short of total abandonment of non-Consumer Driven Health Care plans, employers will need to continue to offer more traditional plans for those members with chronic medical conditions.