Leading Through Difficult Times

I had an exchange with a reporter last week. She asked me for advice on how employers can proactively help employees through these times.

Here’s my response:

  1. Don’t panic. It is way too easy to make rash, and then regrettable decisions (for example, immediate layoffs).
  2. Get clarity. Get away from the office, re-visit your business plan, and then decide what makes the most sense for your company – not just now, but in a 2-3 year plan. For example, terminating your highest paid employee would lower immediate expenses, but how expensive will it be to replace that employee in the future, when the economy rebounds?
  3. Determine the amount of disclosure, and err on the side of too much information to employees. Employees are just as nervous as employers – and the uncertainty about their employer (and their careers) exacerbates their fears. Employees want and need to be informed and what the situation is in their company. Employees are normally just as invested in the success of their company as the business owner is.
  4. Conduct team meetings and be honest. Get feedback, solicit ideas for expense reduction, or ways to increase revenue, and make this process a collaborative effort. Business owners are normally surprised by the sophistication of such responses. And they are also surprised at what comforts employees are willing to surrender in order to keep the business viable.
  5. Acknowledge employees’ fear. No one knows what’s going to happen.
  6. Keep an eye open for employees who appear especially troubled, and make sure to engage them. This often can assist in preventing potential violence in the workplace (although almost all statistics show that workplace violence is instigated by a relative of an employee).
  7. Finally, show you’re in charge. Leadership (and resulting confidence by employees) comes from the top. Your employees respond to your emotions and words – and that is magnified to such an extent that employees sense even your subtle mood swings. Showing panic or a dark side is the worst thing an employer can do. Be as positive as possible.

Employee Morale and the Economic Crisis

From the incomparable Tom Peters:

Tough times are in fact golden opportunities to get the drop, and the longterm drop at that, on those who respond to bad news by panicky across-the-board slash and burn tactics and moves that de-motivate and alienate the workforce at exactly the wrong moment.

Tough times indeed require tough and unpleasant decisions—but thriving, not just surviving, is an option for those who mix wisdom and boldness of leadership with transparency and maximized employee involvement and engagement. Without suggesting that there is anything humorous about the pain that bad times cause, one can say that “this is when it gets fun” for truly talented and imaginative leaders at all levels and in businesses of every sort and size!

It’s time to go back to basics. What were the decisions that got you to where you are today – both good and bad? The fundamentals of your success are still the same; it’s the circumstances that are different.

Adjustments are necessary, but not necessarily radical ones. Don’t forget where you came from and what got you there.

The Elephant in the Room

It’s a pleasure to recommend a timely book from my partner, Tony Rose.

The “Elephant in the Room” is that thing – or things – which keep you up at night, which you try so hard to avoid confronting. It could be the current economic situation; a poorly performing but well-liked employee; or something in your personal life.

Tony’s book, “Say Hello to the Elephants” looks to embrace that elephant; to tackle the big issue in a positive and efficient way.

He has a 4-step process for dealing with the elephants:

  1. Discover and get clarity on the situation;
  2. Consider and select a solution;
  3. Implement the solution; and
  4. Manage and sustain the result.

I’ve worked with Tony for many years, and this book is a wonderful summation of his leadership philosophy. I’d highly recommend it (even if he weren’t my partner)…

http://www.holaelefante.com – or buy the book here.

Asking Employees For Proof of Illness

Many employers are frustrated with employees who frequently call in sick. And that frustration can lead to major headaches.

Tresa Baldas of The National Law Journal, writing in law.com, identifies several pending lawsuits filed by the EEOC where employers are apparently asking for too much information when employees use sick time. Of particular note is the ‘intermittent leave’ permitted under the Family and Medical Leave Act.

You’ve got to consult with your employment attorney or HR expert before making such a request.

In the meantime, I am an advocate of consolidating ‘vacation’ and ‘sick’ time into one broader category – paid time off (PTO). If such a program is in place, it doesn’t matter why the employee is taking the time off. And once PTO is exhausted, the employee does not get paid for any additional time off – whether sick or vacation.

California Computer Professional Overtime Requirement Clarified

On September 30, 2008, Governor Schwarzenegger signed into law a bill clarifying that salaried computer software professional employees who earn at least $75,000 a year are exempt from overtime compensation requirements.

Under the new law, hourly employees earning at least $36 an hour and salaried employees earning at least $75,000 a year are exempted from overtime compensation requirements, thus defining clear amounts for both hourly and salaried employees. This new requirement takes immediate effect.

There are important additional criteria for exempting these computer professionals; Baker & Hostetler have them here.

Whoops! They Forgot To Teach Us How To Manage People!

I have several law firms as clients – and if there’s one thing I see they all have in common, it’s friction between young, new lawyers and their support staff.

It’s because law schools forget (or worse, don’t care) about teaching law students how to manage people.

The fundamental problem is communication. All managers need to understand the motivations of their ‘subordinates’ – what makes them come to work and why. A mutual understanding, along with frequent and candid one-on-one communication, goes a long way.

It’s not about ‘do this’ or ‘do that’. It’s about working cohesively together to attain mutual goals.

If there are law schools that include fundamentals of management courses, I’d like to hear about it.

In the meantime, my validation for this argument comes from of New York Law Journal, writing in law.com.

Independent Contractor Properly Classified

It’s our perception that most of the time, employees are improperly classified as Independent Contractors – and the IRS is certainly cognizant of that fact.

But when an Independent Contractor is properly classified, it is a boon to the employer – especially when that person tries to sue their employer for improper termination, discrimination, etc. – because they are not actually an employee

In California’s Varisco v. Gateway Science and Engineering, Inc., the 2nd Appellate Court ruled that an Independent Contractor was properly classified, and thus threw out Varisco’s wrongful termination claim.

Control is the principal factor in determining whether an individual worker is an employee or an independent contractor. “An independent contractor is ‘one who renders service in the course of an independent employment or occupation, following his employer’s desires only in the results of the work, and not the means whereby it is to be accomplished,’” wrote the court, quoting prior cases.

There are numerous secondary factors in determining an Independent Contractor status, very well outlined by Chris Olmstead of Barker Olmsted & Barnier.

What To Include on a Pay Stub

In California (Labor Code 226), failure to provide any one of these items can subject you to fines calculated on each pay period up to a total of $4,000.00 per employee – plus attorneys’ fees and costs.

  • Gross wages earned;
  • Total hours worked by the employee (unless properly exempt from overtime);
  • The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
  • All deductions (all deductions made on written agreement of the employee may be aggregated and shown as one item);
  • Net wages earned;
  • The inclusive dates of the period for which the employee is paid;
  • The name of the employee and the last four digits of the social security number or employee identification number – not the entire social security number;
  • The name and address of the legal entity that is the employer; and
  • All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.

According to our friends at Fisher & Phillips:

California Labor Code 226 is not a recent statute, but employees have begun regularly including claims under this statute in many actions filed against employers…This is true low-hanging fruit on the litigation tree.

Benefits of Being a Kind Manager

Successful managers practice the golden rule.

And when managers treat employees with respect and decency, superior team performance is the result.

The American Management Association came out with a survey that illustrates how a boss’s character affects employee performance and retention rates.

  • 84% of employees who report to ‘kind’ managers plan to work for their company for a long time;
  • Whereas only 47% of employees who report to bullies agreed.

Managing employee turnover – especially in troubled economic times – can be as simply as applying the golden rule.

When Women Work For Women

A new study by the University of Toronto says women who have to answer to a female supervisor feel more stressed than if their superior is male. They suffer from far more depression, insomnia, headaches and heartburn than if their boss is a man.

But for male workers, the sex of their manager makes no difference.

Scott Flander, writing in HR Executive Online, quotes experts as saying it may have to do with the fact that many women — bosses and subordinates alike — feel more vulnerable in their jobs than men do. And they say HR leaders need to work harder to change that.

My advice is generally gender neutral:

And become intimately involved in the relationships all of your managers have with their employees.