Posts from — September 2010

Looking for ways to increase morale, productivity and retention? Spot awards could  be the way to go.

They’re the most well-liked recognition incentives among workers, a recent published study  shows.  The best part –  the incentives normally amount to less than 1 percent of base pay. That also can makes this choice attractive to C-levels.  And the awards don’t even have to be given in cash.

Spontaneity grabs ‘em

Traditional end-of-year or quarterly bonuses cost employers an average of 10% of base pay yet often have a lower payoff in morale and retention.

Reason – Workers appreciate them less because they expect to receive them for reaching certain goals. By their nature spot awards are spontaneous and paid out immediately. Honorees are pleasantly surprised and see the business values their work.

Here are four keys to successful spot bonus programs, according to benefits consultant Ken Stahlmann –

1. Creativity is crucial

The most effective programs generally give out awards weekly or monthly.  To avoid over-stretching the budget – and avoid a ho-hum attitude setting in – creativity is a must.

One way that never gets old –  combining time off with a second, non-cash award.

Example –  One firm gives a half-day off in combo with movie passes once a month. Another, at weekly staff meetings, holds a random drawing for a dinner gift certificate, plus permission to leave work early once.

2. Make it personal

Rewards have more lasting impact when they’re geared to people ’s personal needs or interests. Two examples –

• one firm with many foreign-born, low-wage workforce awards a $20 pre-paid phone card after 90 days of service, and a $100 card for outstanding work, and

• Another firm with a lot of sports nuts took a few top-performers to a ball game. Managers said it was the best $200 they’ve ever spent as for creating ongoing enthusiasm.

3. Add structure

The awards may seem spur of the moment, but the most effective programs have a fixed budget and structure set before anything is handed out.

Example –  One retail firm awards “points” for good work. Folks can then trade in their points for store merchandise. By letting people  bank points for additional valuable rewards, the company saw a solid jump in retention.

Other organizations prefer to let staff members reward each other. for  instance, a small health care provider keeps a “goodies box” on-site – paid for in petty cash and stocked by staff members themselves.

When someone spots a coworker going the extra mile, he or she pulls out a prize and awards it.

The program is a huge hit –  It’s immediate and personal, yet structured.

4. Don’t let good intentions backfire

Most spot awards go over well. But keep these issues in mind –

• For most cash or cash-value awards, there are tax implications (just as with traditional bonuses)

• Awards need to be spread around or else resentment can creep in

• Make sure honorees don’t mind being the center of attention (some firms have accidentally alienated individuals  they tried to reward), and

• Make sure the reward is something individuals  actually want. One firm that awarded a VIP parking space next to the Chief Executive Officer (CEO) found no one used it. No one wanted the Chief Executive Officer (CEO) knowing what time he or she came and left.

In the last few years, there’s been a lot of publicity about the fast-growing crime of identity theft. Greater than half happen in the workplace. Benefits and compensation files are the most vulnerable targets.

The scariest part –  Victims of benefits-related ID theft often make out worse than those who fall prey to the more common variety.  The bad guys are ahead of investigators after such thefts occur, and are often very good at covering their tracks.

Likewise, because benefits ID-theft is a relatively new type of crime, there’s no well-established system for victims, plan sponsors and providers to set things straight after the fact.

401(k) accounts a prime target

Not surprisingly, employees’ 401(k) accounts have become the primary target for benefits thieves.  An alarming MSNBC news report showed just how easy it could be for thieves to tap into an employee’s 401(k) accounts – When an internet based account gets hacked into or account paperwork falls into the wrong hands, it takes only a few mouse clicks to wipe out the victim’s retirement savings.

With average credit-card or bank account fraud, victims need only call their card issuer or bank, report the crime and refuse to pay for an item. But 401(k) theft is much, much harder to resolve.

Three gigantic obstacles –

1. Money in 401(k) accounts isn’t federally insured, like a bank account.

2. 401(k) accounts rarely – if ever – come with automatic identity theft protection from the provider, like credit cards.

3. Even if the theft is successfully resolved, the situation becomes an ERISA nightmare for plan sponsors, because your corporation also has to account for the way the theft affected the growth of the employee’s account before the money was restored.

A lot of EAPS fall into a common – and dangerous – category –  Management thinks the program is great, but workers think it’s a waste. But it doesn’t have to be that way if you have an employee assistance program or are considering one.

Seventy-three percent of all firms (59 percent of small corporations) have an EAP. But how well does the typical employee assistance program work? Not in addition to we’d hope. A Mid America Coalition on Healthcare study found –

• just 50% of 6,400 workforce surveyed said they’d use the employee assistance program (EAP) if they felt overwhelmed by personal issues, and

• one-third said they didn’t even know how to access its resources.

The good news –  Firms like yours have seen dramatic improvements in three relatively simple steps

1. Employee attitude surveys

The best beginning place –  Take the pulse of your workforce with a short, confidential attitude survey.

Objectives –  Ask employees when they know how to use the EAP’s resources. Then test workers’ knowledge and opinions of depression and other personal issues that might affect their worksite performance and/or safety. In the final section, find out how employees would handle a serious personal issue.

In other words, figure out where your individuals  would likely turn for help. Would staff members seek out the EAP? Would they prefer to discuss the issue with their family physician? A mental health expert?

The Mid America Coalition’s survey remains an excellent design model from which to craft a recent survey for your own workers.

2. Promote employee assistance program through education

Your survey data ought to help you pinpoint areas where staff members need more education about your EAP. Some awareness-improveing techniques that have gotten results –

• Lunch-and-learn sessions. Possible topics include dealing with personal-finance stress, caring for elderly parents, understanding depression or dealing with a dependent who’s potential psychological health issues.

• Employee newsletter. If you’ve a benefits newsletter, spotlight the EAP from time to time. Some corporations without newsletters have done e-mail campaigns or targeted mailings instead.

• Workplace posters spotlighting EAP.  The ones that work best are often posters designed around a specific theme (e.g., anxiety about personal debt) rather than a general “need help?” message. In addition to posters, you could want to distribute wallet cards with EAP contact info.

Need help finding educational material? There’s lots of free EAP-related handouts and FAQs here. Do not forget –  When doing employee assistance program education, constantly remind staff members that the program is strictly confidential.

3. Make certain to work with supervisors

For legal reasons, supervisors need to tread carefully when they suspect an employee has a mental health issue.

What you don’t want –  supervisors taking disciplinary actions without consulting HR or playing amateur psychologist and “diagnosing” the employee’s problems. Here’s a PDF of some proven tips and talking points for doing supervisor-specific employee assistance program (EAP) education.

HIPAA compliance –  Beware non-discrimination issues

HIPAA’s non-discrimination rules impact both mental health benefits and general health plans. Under current interpretations, medical programs can no longer have benefits exclusions that deny benefits for injuries resulting directly or indirectly from pre-existing mental health issues.

That’s true even if the psychological condition wasn’t diagnosed until after the injury and even if the injury was self-inflicted. Example –  Suppose an employee gets hurt in a workplace accident he or she caused. After the fact, the employee is diagnosed with a mood disorder that previously escaped detection by the employee’s physician.

Under current regs, HIPAA-covered plans can’t deny benefits. This puts companys in a bind. Mental health issues like depression, anxiety or bipolar disorder are among the health conditions that’re most likely to go undiagnosed or underdiagnosed.

That’s why, in most corporations, having a strong employee assistance program (EAP) is one of your best compliance tools.

For a lot of personnel, telecommuting and flex-time are highly desired work-life benefits. But a growing number of organizations are reluctant to offer these programs.

Demand for these benefits remains high.  One study found that 87% of job applicants are familiar with the idea behind telecommuting and flex-time, and the majority express a desire to have at least periodic access to such programs.

Environmental interest groups have pushed the feds for years to develop incentives for businesss to encourage telecommuting.  The pressure has risen as gas prices have continued to soar.

Nonetheless, flex-time programs have leveled off in some sectors, and there’s been a decrease in telecommuting.

Today, about half of all companies where telecommuting is feasible permit staff members to work from home on a case-by-case basis. But the percentage of employers offering full-time telecommuting has dropped in recent years.  Nowadays, only about 20 percent to 25 percent of employers offer the benefit year-round.

Even some national companys that are well-known for their telecommuting programs have scaled back. AT&T, for instance, lately asked several thousand home-based personnel to come back into the office.

Hewlett-Packard and Intel have done the same thing.  and the federal government recently noted a 7.3% drop in telecommuting employees. Why the cutbacks?

Worker Assistance Program – Pros and cons

Offering workers telecommuting or flex-time may be a good recruiting and morale-boosting tool, in addition to a way to retain workers who need to relocate, would otherwise have a need to quit or take leave or commute long distances to work.

But the programs are not without their drawbacks. Some of the primary reasons companys give for scaling back or eliminating them –

• Business culture – It’s easier to build a sense of organizational stability and an individual connection between employees, coworkers and supervisors when people  interact face-to-face on a daily basis.

• Security – One of the hidden costs of allowing workforce to telecommute (or else come in early or stay late) is keeping sensistive information safe. Some the cutbacks are being driven by companies’ IT departments.

In particular, managers have raised concerns about stolen laptops, identity theft or other crimes driven by hackers gaining access to information via workers’ home Internet connections.

• Productivity – Many supervisors find it easier to ensure high productivity when everybody is working under one roof at the same time.  There’s also a widespread view that most workforce get things done faster and more accurately when they’re not distracted by things at home.

The bottom line on the bottom line

Work-life programs like flex-time and telecommuting remain a useful benefit to offer workforce, and a lot of companies still provide these benefits for economic reasons.

But once the potential hidden costs are weighed, it’s often better for the bottom line to limit the scope of these programs.

Organizations that are thinking about beginning a telecommuting program should look closely at job descriptions and telecommuting candidates. Some positions are poorly suited for remote work, and some staff members are more up to the challenge than others.

But unless the business creates objective criteria for authorizing or denying flex/telecommuting requests, such programs can actually damage morale.

The last thing any business wants is to open supervisors(and the company) up to accustations of favoritism or discrimination because of seemingly random decisions on which personnel in their department can and can’t flex their schedules or work from home.

In the near future, the federal government might offer help to employers looking to begin a health promotion program.  The help would take the form of tax breaks to offset health promotion program costs.

A current United States  Senate bill would give employers a substantial tax break for beginning wellness programs. Dubbed the Healthy Workforce Act, it calls for an employer tax credit of up to $200 per staff member enrolled in a newly created wellness program.

For bigger firms, there is the $200 credit for the first 200 workforce and up to $100 per employee thereafter.  To qualify for the full credit, your health promotion program would have to feature –

• health risk appraisals

• employee education drives (e.g., targeted mailings, online tools)

• behavior modification programs (e.g., use of tobacco cessation, weight management, health Coaches), and

• “meaningful” participation incentives (e.g., lower co-pays).

Licensed companys would be able to claim the tax credit for up to 10 years after starting a wellness program.

The bill has enjoyed bipartisan support, but like many things in Washington, the parties disagree over how to fund the cost of the tax credit.  As a result, it has been bogged down in committee.

When and when the bill is ratified, corporations could claim the federal tax credit the following year.

In the meantime, whether or not your corporation already has a formal wellness program, there are proven ways to make wellness part of the corporation culture. Best of all, they don’t have to cost an additional cent.

Health Promotion town meetings

It’s often said that successful wellness programs start at the top of the company. Reason – Employees choose up fast on whether executive management practices what it preaches when it comes to wellness.

If the individuals  in upper-level management are smokers, obese or simply reluctant to talk about health issues, it’s a tough sell to get workforce engaged in taking control of their health.

That’s the idea behind the wellness town meeting.

Once a week (or once a month), everybody in the corporation attends a short meeting to discuss their own recent efforts to get healthier.

Managers generally go first, to break the ice about discussing some potentially sensitive issues like dieting or quitting tobacco use.

In most businesses, the meetings are arranged to encourage casual, free-flowing conversation.

One key – Individuals  speak from where they’re seated, rather than standing up front, with all eyes staring at them.

Some businesses take a more formal approach, which could also work.  For example, at Old National Bank in Indiana, folks file into an auditorium to face their worst enemy, the scale.

Each week, everyone at the firm – from seasoned managers to the newest hires – comes in to get weighed.  The only one who sees the number on the scale is the individuals getting weighed. Even so, the wellness program has inspired a lot of folks to lose weight.

Free tests and screenings

While there’s no substitute for having staff members undergo comprehensive health risk appraisals, it’s also wise to home in on screening for common conditions that aren’t necessarily lifestyle related.

Example –  skin cancer. It’s not just sun worshippers who are at risk of the most common (and in its early stages, treatable) form of cancer. Heredity plays a part. So does luck.

Fortunately, corporations can get their personnel screened for free. Through the American Academy of Dermatology’s National Melanoma and Skin Cancer Screening program, volunteer doctors perform skin cancer screenings at no cost.

Likewise, other medical associations and public health agencies offer free or nominal-cost screenings for a variety of other common conditions.

Truly, it varies.  In some cases, an HSA-eligible plan may cost the same as a non-HSA high-deductible plan. In others, the premiums can actually be more expensive, a recent NHPI report finds.

As a matter of fact, a non-HSA plan offering similar coverage can carry a monthly per-employee premium that’s about $15 to $25 lower and a deductible that’s $500 to $1,000 lower than the HSA option.

Sometimes the difference is because of price-jacking –  the HSA plans are the ones that’ve been hyped in radio commercials and mentioned in newspapers in recent years.

Nowadays, fewer people  exploring high-deductible plans ask first about the non-HSA, so insurance businesses sometimes slash prices to drum up interest in those choices, too. Another factor –  Not all deductibles work the same.

Deductible cuts both ways

Two deductibles can look similar but work differently, and the cost scales can tilt for either an HSA or a non-HSA plan. Example –  HSAs by law can no longer allow first-dollar coverage of prescription drugs. But a non-HSA plan can.

On the flip side, HSAs often feature better preventive-care coverage. In some non-HSA plans, a person who’s yet to meet the deductible must pay out of pocket for standard tests (example –  cholesterol testing) that’re part of the routine physical. Only the office visit itself is covered.

In addition, HSA-eligible plans have to follow rules that limit total out-of-pocket costs. But this can push up the premiums paid on the front end.

Best bet –  Double-check with your broker to be certain you’re comparing apples to apples when analyzing  the costs of HSA and non-HSA plans.

If your company has this common – and increasingly well-liked – fringe benefit you may be at legal risk without even knowing it.

Some organizations have an onsite employee fitness room as part of a formal health promotion program. Others simply do it as a way for folks to get their juices flowing before work or blow off steam afterwards.

No matter the reason, companies with fitness rooms need to be aware that the benefit isn’t risk-free.

Over the last few years, a few privately owned fitness clubs have been sued – and agreed to expensive settlements – after exercisers suffered sudden cardiac arrest (SCA) and died before help arrived. In each case, the facility either didn’t have lifesaving equipment on the premises or didn’t have personnel properly trained to use it.

Some legal professionals have expressed concern that businesss could also be at risk when the unthinkable happened on corporation premises while an employee worked out.

SCA is of particular concern. Reason –  Even seemingly healthy, active adults are at risk of sudden cardiac arrest. It can’t be prevented. There’s no vaccine.

And few victims survive by the time an ambulance arrives. But there’s a way to save the employee’s life and potentially save your firm from a lawsuit.

Learning about SCA

Sudden cardiac arrest (SCA) is a frequently misunderstood killer. It’s different thing as a heart attack. SCA can affect anybody, anywhere, anytime. It occurs more than 600 times every day in the U.S., killing at least 250,000 individuals  each year.

The only hope –  using a device called an automated external defibrillator (AED) within 10 minutes.

The good news is any individuals at your business can be rapidly trained to use an AED – you don’t need any medical knowledge to use it.  The training can be acquired for free through a local Red Cross or civic group.  The devices themselves cost under $2,000.

Compare that to the financial risk of being sued for not having an AED near a workplace fitness room, and it’s a no-brainer that any company with onsite workout equipment should at least investigate an AED purchase and training.

Employees, supervisors and senior level managers alike will probably need education about SCA and AED use. A great teaching resource is available here.

Key talking points –  Without an AED, 90% of victims die. But when you’ve access to one, there’s a good chance to save an employee’s life.  And it’s easy to teach supervisors and workers how to use the device when it’s ever needed.

The vast majority of facilities with AEDs never need to use them – and that includes medical facilities. But it only takes one tragic event, and subsequent lawsuit, to cause pain for both the business and an employee’s family.

Do not forget – Avoidance and education are always your company’s best tools for avoiding liability. In this case, where human life is involved, the choice seems rather obvious.

For most firms, voluntary benefits are a win-win arrangement. But there can be hidden risks.

On the positive side, voluntary benefits cost businesss next to nothing, yet improve employees’ morale and benefits satisfaction.  An Aon survey found 77 percent of corporations offer at least one voluntary benefit.

But what happens when there’s a legal dispute between one or more of your personnel and the provider?

In many cases, businesss unwittingly get dragged into court.  The provider may argue that the plan is covered by ERISA, and the employee’s lawsuit should instead be filed against his or her business.

When the court agrees, the legal burden shifts.  Some courts have ruled that a voluntary benefits could  be covered under ERISA, even when it wasn’t an employer’s intention to formally “sponsor” the plan.

When push comes to shove, the vendors will protect themselves. In truth, some attorneys warn that a voluntary plan insurer’s first move when sued by one of your employees are going to be to try to get the legal burden shifted from itself to you.

Two seemingly innocent things that could be turned against you in court –

• The written announcement to tell workforce about the new voluntary benefit, and

• getting involved when there’s a dispute between an staff member and the plan provider.

Be careful with announcements When you offer a new voluntary benefit, the natural tendency is to attempt to get workers pumped up to participate. But you are able to get in trouble if individuals  get the impression the firm endorses the plan. Helpful practices –

• Don’t put the announcement on organizational letterhead

• Put a disclaimer on the description

•  either exclude your voluntary offerings from employees’ benefits manuals or list them separately, and

• hold open enrollment at a different time than for ERISA plans (401(k), main health plan, etc.).

Moreover, if the vendor offering the voluntary plan has competitors, you may want to remind staff members the vendor of the voluntary plan isn’t the only game in town. Some firms pass along lists of competing vendors.

Avoid involvement in disputes as with your ERISA plans, chances are employees will come to you when they have a problem with a voluntary plan. Your first inclination is to help.

But many specialists warn it’s better to stay out. Reason –  Courts see this as the action of a plan sponsor. But you can steer someone in the right direction (e.g., giving a contact name to call) while remaining neutral in the dispute.

Good intentions gone bad

From an ERISA standpoint, the most hazardous voluntary plan design is one that is partially compensated by the organization, even when staff members pay the bulk of the cost.

In a major ruling a few years ago (Burgess v. Cigna Life Insurance), a United States  district court ruled against an company with a voluntary supplemental disability plan in which the firm paid a portion of premiums on behalf of its lower-paid staff members.

While most employees paid the entire premium – and firm made clear to individuals  the plan was a voluntary benefit -the court said it didn’t matter.  The act of contributing to some employees’ premiums made it an ERISA plan.

In the last few years, “presenteeism” has become an even bigger concern for many businesss than absenteeism. Even though many HR/benefits managers hate the admittedly overused term, presenteeism is however a real issue in almost every worksite.

Most widely,  presenteeism takes the form of employees coming to work sick. They’re  unproductive and endanger colleagues. Meanwhile, the staff member isn’t forced to use a sick day. A bad deal for companys all the way around.

A recent survey by LifeCare revealed that 93% of employees (polled from 1,500 organizations) admit that they at least ocassionally come to work when they’re sick enough to stay home. More important, the published study  looked at the reasons why folks do it.

Troubling rationales

The No. 1 reason staff cited for coming to work sick was a belief that they’d be “letting other individuals  down” when they call out. Almost 30% of respondents cited this as their primary reason. Beyond that, the top responses were –

• It’s too risky, due to office politics or culture, to take time off (26%)

• The worker is too busy at work to be able to stay home a day (15%)

• The worker saves up sick days for childcare/eldercare emergencies (12%), and

• The employee saves up sick days to use as extra vacation time (8%).

Many of these rationales are troubling to HR/benefits managers.

In the first place, supervisors who hassle staff members about taking legitimate sick leave are, at best, being pennywise and poundfoolish.  Presenteeism costs more than absenteeism, once you figure in the uncharged sick days, lack of productivity and risk of other staff members getting sick.

You have more power than you think to change your company culture when the “tough it out” mentality still applies to individuals  who come in sick. When upper-level management is confronted with the real dollars and cents of presenteeism, lowering the problem generally becomes a priority.  At the very least, firms shouldn’t invite it.

In terms of supervisor- and employee-education, repetition of the “stay home when you’re sick” message is the key. Eventually, it’ll sink in.

Of course, there’s still the problem – as evidenced by the survey – of staff members who misuse their sick days by attempting to hoard them for other purposes.  

Adopting PTO, no-fault absence policies or use-it-lose-it sick time are the three most common ways of reducing the risk, but be aware that each of these policies have risks of their own.

At the end of the day, the more open the lines of communication are between executive management and employees, the less prevalent the presenteeism problem becomes.

In many segments of society, we  hear about ethnic and racial profiling in negative ways. But what about when it comes to health promotion programs?  

When used for the specific purpose of starting – or assessing  - a wellness or disease management program, profiling isn’t just legal. It’s also encouraged.

Affects health risks

Different ethnic and racial groups tend to be more at risk – for genetic and/or cultural reasons – of certain health problems. Examples –

• African-American, Latino, Native American and Pacific Islanders are  at higher risk of diabetes than Caucasian employees

• Chinese women are statistically twice as likely to get cervical cancer

• Caucasians have disproportionately high rates of obesity and high blood pressure, and

• Latinos have higher rates of asthma and chronic obstructive pulmonary illness than other groups.  The HIV/AIDS population is also disproportionately Hispanic.

Bottom line –  By investigating  the ethnic breakdown of your employee population, you can set disease management program priorities with greater confidence and accuracy.

Healthcare quality an issue

A few studies also show there’s an unfortunate relationship between ethnicity and quality of healthcare. A lot of times, minority staff receive inferior treatment and health education at the same facilities where others receive top-notch care.

This generally happens for innocent reasons. A common scenario –  a lack  of Spanish-speaking doctors in the network for your Latino staff members. But the result is generally higher healthcare costs for you and, often,  greater reluctance among minority staff members to seek needed treatments.

By profiling employees against the physicians in the network, you ultimately help employees get the care they need and the business to better control long-term costs.