The Advantage

July 2003

Handling Employee Performance Problems

As a manager, you will inevitably face a puzzling situation. One of your employees will not be performing in the way you expect. Discovering why is a critical step in solving this problem. It's essential that you know how to deal effectively with performance issues, for the sake of your entire organization.

Unfortunately, the cause of poor performance is not always obvious. There is a systematic approach, however, that will help you sort out the most likely causes of any performance short falls. This system consists of five questions. Asked one after the other, you will find they will guide you through your analysis of the situation and lead you to a solution.

QUESTION #1
Once you realize your employee is not meeting performance expectations, the first question to ask is: "Does he or she know how to do the job the way it should be done?" For your newer employees, this is a particularly likely cause. Even for more experienced workers, there may be misunderstandings or uncertainty about new equipment, new procedures or how various pieces of the job fit with one another.

Not long ago, a client called to discuss the potential termination of a senior professional. After three years on the job, the boss had concluded that this employee had to go. It turns out there was a serious personality conflict between the employee and boss. Both were professionals, and on a professional level, they each knew how to do their work. Yet, in three years, there had never been a job description prepared, nor a set of performance standards for the employee. Said differently, the employee wasn't meeting the boss’ expectations, and those expectations had never been explained to the employee. If the employee doesn't know what you expect, there can rarely be success. We had to figure out how to deal with that situation without immediately terminating the employee.

If you believe your employee may not know how to do the job correctly, then verify your belief this way: Ask your employee to show you how he/she has been doing the work. Such a simple demonstration will give you the opportunity to correct errors on the spot, make suggestions for improvement, and give the training that may be required. After all, no one can be expected to do a job well if they don’t know how to do it properly.

QUESTION #2
If you believe your employee knows how to do the job, then ask this second question: "Does this person have all the skills necessary to do the job?" If not, arrange for some skill development. Knowing how to type doesn't insure that correspondence and billing statements will be done quickly. It takes practice to develop even standard skill levels for typing speed and accuracy. Your coaching and encouragement of the skill development effort will be important if this is the cause of your employee's performance problem. Skill problems are common when new technologies are introduced to any job. Performance problems can occur from the mere replacement of one software program with another. Production will drop while users build skill in using this new equipment. If you have recently undergone a transition from manual human resource records to a computer system for tracking employee information, expect that it will take some time for your workforce to gain expertise in the new system. Be tolerant of production drop-offs during this period.

QUESTION #3
If you determine that the employee both knows how to do the job and has developed appropriate levels of skill required, ask question number three: "Does the employee have the resources necessary to do the job?"

You can have the greatest automobile in the world, and be the best driver, but never go anywhere if there isn't some gasoline in the tank. Job resources are things like supplies, appropriate information, time to do what is necessary, and properly working equipment. As a manager, one of your roles is to arrange for any needed resources. You have the organizational leverage which your employee doesn’t have. You have authority for expenditures and access to information your employee will need if the job is to be done successfully. Therefore, you must exercise your authority in support of your employee’s efforts. Break up any log-jams and get things rolling again. If you are unable to arrange for the necessary resources, then cancel the assignment. Directing a worker to do something that cannot be done is destined to produce frustration, if not more serious upset. Remember, you can only hold people accountable for those things over which they exercise control. You will find your people react emotionally when you try to hold them accountable for a job assignment and you didn't provide them needed resources.

QUESTION #4
If you discover that all resources needed are available, then move on to question number four: "What other difficulty is blocking this worker’s performance?" Sometimes, the only way to answer that question is to ask the employee directly. You may discover that some personal problem exists that is interfering with work performance. It could be that your employee is getting bored with the job or discouraged about career advancement opportunities. You may discover that your employee has lost interest in doing the work the way it should be done. If that is the case, you should consider building a Performance Improvement Program for that person. Notify your worker that specific improvement is necessary. Talk in terms of job performance standards.

Standards are the minimum acceptable levels of performance in any job. They are measurable in terms of quantity, quality or timeliness. Identify a set period of time the employee will have to achieve the standard level of performance, perhaps 30 days or 90 days. Explain your willingness to support their effort with whatever help you can provide, but that the responsibility for their performance improvement rests with them. And, outline the consequences for both possible outcomes. Successfully meeting performance standards will complete the Performance Improvement Program. Failure to reach job standards will likely result in separation from the payroll.

QUESTION #5
Question number five then is: "Has the problem been solved?" If the answer is yes, congratulations to both you and your employee. If the answer is no, you must follow through with the consequence you outlined to your employee when establishing the Performance Improvement Program. A "No" answer to this question could mean removing that worker from your payroll.

Performance management is easily done if you are specific about your expectations (in measurable terms) and place the ultimate responsibility for success with the employee where it belongs. As the manager, you can help and be supportive, but it is the employee who must actually demonstrate the necessary job performance.

When job performance issues occur in your organization, use this easy five-question process and it will lead you in effectively dealing with the situation.

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William H. Truesdell is SPHR certified and president of The Management Advantage, Inc. He can be reached by email at billt@hrwebstore.com

Drive the Car You Have: Dealing with Ambivalence in a Life Filled with Choices

Our lives today are filled with more choices than ever. Personal and professional development opportunities, continuing education, work, marriage and children - all are options to consider, and each comes with a variety of alternatives and combinations. Yet, after we make our choice, often with great anxiety and concern, we spend a great deal of time wondering about the path not taken, second guessing ourselves, worrying about missed chances and dealing with guilt and regret over the options we didn't choose.

While facilitating a discussion group entitled "Doing Less, Having More" with a group of professionals, the recurring theme was one of ambivalence about the choices made: the working parent regretted not traveling more at work, thinking that it would have put her in line for a promotion faster; a professional who had been promoted to CFO wondered if there would ever be a good time to start a family; the single manager felt that the likelihood of creating a personal life was remote since the company saw him as always available; and a stay-at-home parent wondered if the MBA she had worked so hard for was now just useless paper. It sounded to me like an epidemic of 'buyer’s remorse.'

It called to mind the story of my last car purchase: my son had grown to the age where his legs were long, his friends were tall, his band practiced at a variety of homes requiring the frequent transportation of instruments and equipment and my sweet, sexy little car no longer made sense. I did the research, checked out the choices that fit the needs of my checkbook and our garage. My new car wasn't small or all that sexy. It didn't have a leather interior or a stick shift. It was, however, practical, affordable, had a good sized trunk and an ample back seat for long-legged teens. As I drove around, I found myself looking at all the other cars I hadn't purchased with longing. While I could console myself that I wasn't driving a decidedly parental vehicle like a van or an SUV, the ambivalence of my choice weighed on my mind.

I realized that I needed to just drive the car I bought. Spending my time in regret, wondering if it had been the right decision, was a waste of energy. The choice had been made. I did a pretty good job of weighing the pros and cons. I needed to live with the choice I made and move forward. And so did these folks. How could I help them focus on getting the most out of what they decided to do, rather than spend their time wondering if they should be doing it?

There are things we all can do to focus on enjoying the choices made and enhance the selection process for the future:

Sports Car vs. Van – When the dream competes with the practical, create a list of objectives you are trying to accomplish with this choice. Rank your objectives and figure out how many of the highest ranking ones will be met with each choice.

Resist Back Seat Drivers – Everyone has an opinion but you need to silence the voices of others so you can know your own. Don’t take a referendum. Select one or two people who know you well and can provide objective and truthful advice. Ask them what they think the best choice would be and why, and then weigh that against your own thoughts.

Have a Map – It's important to know where you are going, and more important to make sure that detours don’t take you too far off course. While the most direct route may not always be possible, you don't want to travel too far away from where you hope eventually to end up.

Know When to Trade In – Not all choices last forever. You can buy a different car; leave a job that is no longer challenging or return to school. When the criteria for your choice have changed, it may be time to change the solution.

Keep Your Eyes on the Road - Once you've made the choice, make the commitment to close the book on that particular decision. Enjoy the choice you made, and remember the reasons that made it the right choice now.

It's hard not to have some regrets when you have to make a choice:

• You are eager to start your own company, but are this close to being vested with your firm;
• You want to apply for the Director's position, but the extra travel would create havoc with your family right now;
• Additional education will take time and money away from the annual family vacation;
• The position you are being offered seems like a dream come true but the commute will be lengthy and stressful.

Whatever choice you make, if you think carefully about what is important to you, there will be good reasons for it. Focus on all the reasons it is the right choice for you today. The goal is to take the option that fits best and creates the least amount of regret for as long as you will be living with it.

© Copyright 2003, Daniels & Associates. All Rights Reserved. Used with permission.

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A nationally recognized speaker, trainer and author, Joni Daniels is Principal of Daniels & Associates, providing solutions to training needs and presenting programs on personal and professional development. An instructor in management topics at the Wharton School's Small Business Development Center, she is author of "POWER TOOLS FOR WOMEN®: Plugging into the Essential Skills for Life and Work." (Three Rivers Press) Reach her at www.jonidaniels.com.

Practical Perspectives on Employee Management

Read any newspaper business section today and you will find at least one reference to the state of our weakening economy. The hand-wringers are in full form worrying out loud about the doom we are soon to encounter. Accurate or not, they are getting the attention of many workers around the country. Each day, another business faces employees who are more concerned than the day before.

Employees are better informed today than in times past. Whether or not it’s concern about economic trends which have driven the increase in knowledge and awareness is problematical. There is one certainty: American workers have more finely-tuned sense of what is right and wrong in the workplace than ever. And they know they have more legal protections than in years past.

Much of our American labor law has grown out of old English law. The grand daddy of them all is known as the doctrine of Employment-at-Will. Under its concept, workers and employers are totally free to begin and end an employment relationship at any time they choose. A worker can quit at any time, without notice, and for any reason. Individual freedom to leave a job has always received strong support in our society.

Until the 1970s, employers were equally free to end the employment relationship with their employees. Employment-at-Will meant that an employer could discharge workers for good cause (such as theft or falsifying information), or for no cause. Workers had no job security under its doctrine of legal provisions.

Both federal and state legislatures have been chipping away at this bed-rock of employment law, as have the courts with their interpretations. Employment-at-Will is still practiced today, but in a much restricted form.

Reasons for all the increased restriction on permitted employer actions come from a lack of self-control among the body of employer decision-makers. Where labor unions once offered to protect workers with bargained contracts, now changes in labor law itself are offering protections to management as well as non-management workers. It is no longer possible to expect you will go unchallenged when dismissing a long-term employee who has simply "fallen out of favor." Personality conflicts with the boss are seldom seen as justification for dismissal of an employee.

If you have fifteen or more workers in your business you are subject to many federal labor laws. Some states have lower qualifying headcounts and stricter labor laws. You must know what the rules are where you are located. As they say, ignorance is no excuse. Protections are offered to workers now based on such things as race, color, sex, national origin, religion, disability, veteran status and age.

Federal law now requires all employers to maintain records showing proof of worker eligibility under immigration law. Additional laws protect workers with disabilities, or who wish to take a leave of absence because of a family member's illness. Safety regulations have been getting more strict, and medical records privacy issues are now addressed by federal law.

What can be done to avoid entanglement in these liabilities? How can employers continue to operate their businesses without having to pay fines, lawsuit settlements or worse?

Some practical tips:

• Examine Your Management Style
  Instead of the authoritarian, self-centered boss, companies need a skipper with empathy at the helm. A true team-builder can even execute necessary layoffs without destroying the morale of survivors or endangering the business with wrongful termination and discrimination lawsuits. Successful contemporary managers treat themselves the same way they treat their employees. The trend is toward one benefit plan for all company personnel, and equal compensation treatment at all levels of the organization.

  Soon will be gone the days when senior management receive increases three to ten times the magnitude of worker raises. Gone at least in organizations that care about their future.

  Look at your attitude about being the boss. If you feel you deserve better treatment than your subordinates, watch out. You’re headed toward serious problems. If you believe all company employees should be subject to the same "rules" and interpretations then you are more likely to have smoother times ahead.

• Examine Your Internal Communication Systems
  Straight talk with employees is essential. Company newsletters, bulletin boards, and memos from executives are all good one-way communication tools. You need them. However, if you rely solely on them for all your internal communications, you will find yourself in trouble.

  Today, more than ever, it is essential to get input from employees about any number of issues. It is equally important to give them access to executives who can answer their questions about issues facing the company and its workforce. The Japanese are famous for the work-team concept which involves workers directly in the product quality improvement process. Inter-departmental project teams are used by bellwether firms like 3M to respond quickly to customer needs. What we are re-discovering in our business experiences is that employees often have more knowledge and contribution potential for product issues than to company executives. If employees are not included in the communication process as resources, the company is wasting valuable assets.

  Monitoring employee opinions and attitudes is being undertaken by the more sophisticated (and competitive) businesses these days. Both large and small companies are realizing the importance of guaranteeing a flow of information from their general employee population to the executive offices. Employee surveys can be accomplished with questionnaires, individual interviews or through the use of focus groups. All can be helpful sources of input from your firm’s most knowledgeable resource. These surveys should be done each twelve to twenty-four months to generate comparative data. Identifying trends in employee opinions and attitudes can give you a competitive advantage in your industry. If you base your policy decisions, at least in part, on such input, you can reduce employee turnover, lower absence rates, and save dollars by reducing accident rates. People who are asked for their input, and then are listened to, make for more satisfied employees. Satisfied employees work harder and better…and costs go down.

  We must face the fact that communication has to be a two-way process. If it’s not where you work, take some action right away to change the situation.

• Examine Your Training Programs
  Managers are sorely lacking in skills training at most companies. Training budgets are the first to be cut during a belt-tightening by executives. As a consequence, their companies never seem to be able to change anything. They plod along with the same policies and practices, the same level of management skill, and the same undercurrent of employee discontent from one year to the next. In a worst-case scenario, ill-informed or low-skilled managers can cost your company untold dollars in discrimination complaints, sexual harassment charges and general worker upset. Management people need high levels of skill in leadership, decision making, communication, organizing and planning, and interpersonal relations. All of these skills can be enhanced through proper training programs. Cut your training budget and you could easily be trading its cost for much larger ones – lost production, higher absenteeism, and greater turnover.

  Ask yourself, "How many new managers have been appointed in the organization in the last two years?" Then ask, "How many have been given training in basic management skills?" Would you place an untrained employee on an expensive production machine? Hopefully, the answer is "No" because you wouldn't want that person to be injured or waste company dollars on spoiled machine output. The same is true for managers. We owe it to those folks to provide them with proper basic skills through adequate training programs.

  How many laws and regulations governing employee management have changed where you work in the last five years? Many federal and state regulations change every year. If a line supervisor is to be successful and not place the company in financial jeopardy that supervisor must have enough knowledge and skill to avoid colliding with legal compliance requirements. Training is the only way. Yet, we foolishly cut training of managers from our budget as an easy way to shave expenses from our budgets. What we are really shaving are the insulating properties of properly trained managers who can make proper decisions based on legal requirements. Absent those abilities, managers will make errors that will cost employers many times the cost of proper training. Today it costs an employer approximately $200,000 to fight an employee lawsuit. That is the cost of winning. And, there is no reimbursement forthcoming. Preventing one employee lawsuit through proper training of managers can pay for itself several times over.

  Employee training is also more important than it used to be. Technology has placed greater skill level requirements on almost three-quarters of today's jobs. Any secretary who cannot use a word processor is unable to save the company the dollars such technology offers. Production line workers who do not understand statistical process control (and do the math it requires) will be hard pressed to help their employers keep pace. Employers are finding it necessary to train all workers in new technologies of one kind or another. Cut those training budgets and you will have pulled the plug on corporate life support. Training is the life support of every business' vital organ – its brain.

• Examine Your Policies and Procedures
  Be sure your policies are reviewed each year to be certain they are current. Out-dated policies can cause confusion, failure to meet new legal compliance requirements, or worse, can stimulate lawsuits.

Testing for Disparate Impact

There are only two types of illegal employment discrimination: Disparate Treatment and Disparate Impact. Disparate Treatment is discrimination against individuals based on a protected class membership. For example, failure to promote an employee because there is doubt about women’s capability to perform the job is likely sex-based discrimination. Prohibiting people over 40 from working overtime because of a belief that they tire more readily, is likely an example of age discrimination. Disparate Treatment involves decisions that affect single individuals or groups of individuals.

Disparate Impact is discrimination that affects entire classes of people. And, it is difficult to find a single decision that causes disparate impact. Usually, disparate impact is demonstrated through analysis of workforce statistics. And, often, it is policies or practices that seem to be unbiased that actually cause illegal treatment of protected groups. For example, an employment screening device often used is the requirement that applicants have a high school diploma. While that may appear reasonable, any employer making such a requirement must be able to demonstrate why a high school diploma is a job necessity. That must be done on a job-by-job basis. Demonstrating a requirement for one job does not offer proof that the same requirement should apply to other jobs. Each job must stand on its own with regard to its requirements. If minorities are not able to show they have graduated from high school, they will be eliminated from consideration. If elimination of minorities occurs at a rate greater than the rate for non-minorities (Whites) there could be illegal discrimination happening in the employment process.

How can we test for Disparate Impact? The courts and the government have provided us an answer in the form of statistical analysis. Here's how it works.

The Process of Impact Ratio Analysis
Since 1978, Federal Regulations have required employers with 15 or more employees to demonstrate their selection process is "valid." Called Uniform Guidelines on Employee Selection Procedures (41 CFR 60-3), all employers subject to Title VII of the Civil Rights Act of 1964 are directed to take certain steps to demonstrate they are not illegally discriminating when making decisions about hiring, firing, promotion, compensation, benefits, or any other aspect of employment. Here is what the regulations tell us:

The use of any selection procedure which has an adverse impact on the hiring, promotion or other employment or membership opportunities of members of any race, sex, or ethnic group will be considered to be discriminatory and inconsistent with these guidelines, unless the procedure has been validated in accordance with these guidelines… (41 CFR 60-3.3(A))

Validation can take many forms…some simple and easy, others complex and expensive. The simplest is to prove a direct link between the job requirement and the employment selection criteria. If the job requires basic skill in algebra and basic skill in communication, perhaps describing those skill levels is more appropriate than requiring a high school diploma. The question then becomes how to measure those skills in applicants. One way is by testing.

There are many employment screening tests used. Some of them test for job skills. Others test for emotional compatibility with job requirements. Others test for psychological stability. And on, and on. When any employment selection device like a test is used, the employer is held responsible by the Federal Government for proving that device is a valid tool for the job it is screening for.

So, how do we test for disparate impact in our screening process? The first step is to identify those people who have passed through the screen and those who have failed to get through the screen. Let’s assume we are hiring for an accounting clerk position where working with basic arithmetic is required. Our test contains 100 number problems involving adding, subtracting, multiplying and dividing. Here are the results of that testing process:

Once we have determined the selection rate for each group, we can begin our comparison of those rates. Remember, the standard is 80%. That means if we are selecting minorities or women at 80% or more of the rate we are selecting Whites and males there is no discrimination resulting from our selection process.

So, let's do the comparison of these selection rates.

Looking at the results, we see that Black and Hispanic applicants pass through the arithmetic test above the 80% requirement. Blacks, for example, pass through the test at 88.3% of the rate that Whites pass through the test. Anything at 80% or more is acceptable.

Asians, however, are not as fortunate. They are selected at a rate that is only 64.8% that of the White selection rate. And, Females are selected at only 21.6% the rate of males, well below the 80% requirement.

So, what do we do about it? What does it mean?

It means that we have more investigation to do. Depending on the numbers of people involved, we may be able to apply statistical significance or probability testing to determine if these results could have happened by chance. If they might have happened by chance, we are not going to be held accountable for disparate impact.

If chance is ruled out, we need to look at the test and ask ourselves if there is another way to measure basic arithmetic skills that will not have this detrimental affect on Asians and Females.

Courts have given us the opportunity to apply these extra tests before declaring a problem with disparate impact. But, the place we always start is the 80% test. If we can get past that, there is no need for further examination.

Test your data to determine if you have any potential disparate impact. If you find the possibility of illegal discrimination, dig deeper until you find its cause, then address the cause. If the test is biased, change or eliminate the test. If a manager is biased, coaching or training may be appropriate.

Use your 80% test often to be sure you don't have an expensive legal problem facing you in the future.

If you need help with your disparate impact testing, call us at The Management Advantage, Inc. We are experts in handling such analysis and can relieve you of the burden while providing you with the results you need to maintain your legal compliance and avoid nasty surprises. You can call toll-free at 1-888-671-0404 or send an email message to AAP@hrwebstore.com.

Customer Service: Success With It, Disaster Without It

Most everyone has heard, seen, or read Tom Peters comments about how important customer service is to businesses today. He’s the management expert you recall who co-authored In Search of Excellence, and Thriving on Chaos. If you think customer service is important to you today, wait until tomorrow! That's what Mr. Peters says, and our experience with client companies indicates he is absolutely correct.

According to Peters, there are three ingredients for successful service firms. He identified them as people, customers and quality. Let's examine why.

People. Most of our economy is based upon service businesses today and that trend will strengthen as we move into the coming years. Printing is one such industry. Service levels are often more critical in customer buying decisions than price. Well, professional service businesses are their people. How well we provide for and care for our employees will determine our longevity in a business sense. Employees who are enthusiastic and committed to satisfying the customer’s needs will keep that customer coming back. You get enthusiasm and commitment from employees who feel they are a part of your team. Ask for their ideas and suggestions. Encourage them to be courteous and helpful by giving them an example to follow. Being a leader isn’t always easy, but being a leader in today’s business world is essential.

Customers. You have undoubtedly read of sophisticated programs which espouse "relationship management" or "getting close to the customer." Those things may be fashionable in expensive training programs but what really counts in a successful service business is old fashioned courtesy and responsiveness. Simply said, find out what the customer needs and show how your company can respond to that need better than someone else. If you get a pain every time a customer gives you a job with a short fuse, you are experiencing a non-responsive reaction. You will find that competitors who foster the image of solving their customer’s problems will get more customers. Don’t let them get yours.

Quality. One specialty painter we know did some work for the IRS. The customer requested a certain color which the painter believed they would be unhappy with and he mentioned it. The customer insisted. The job was done as the customer demanded. Next morning the customer was on the phone complaining about the color. It wasn't what it was supposed to be. The painter went back and repainted the entire job in an alternate color selection. Expense for redoing the job was absorbed by the painter. His customer was wrong. His customer made the choice and didn't really have a "right" to object at the outcome. He wanted to keep his customer, however, so he kept his promise of quality. Since then, the painter has had job orders from the IRS that forced him to expand his workforce. Quality means satisfying the customer…regardless.

Finally, remember that what you hear people say about your business is merely the "tip of the iceberg." Most of the comments are made when and where you don't hear them. Those comments are recommendations about you and your ability to serve customers well. News about bad experiences travels much more quickly and is repeated more frequently than tales of good service. Don't allow folks to pass the word that your company is uncaring about its customers. Protect your reputation and your future. Work with your employees to build the sense of team membership that fosters positive customer recollections.

A Gentle Word on Behalf of Our Business

When you need help developing your affirmative action program, give us a call. We specialize in AAP development, implementation training and compliance review support for clients all over the country. Find out more about our AAP development service by looking at our sample agreement and other information. You will find it all at The Management Advantage, Inc.

You wouldn't go to an IRS audit alone. Why think about going into a Department of Labor compliance review without professional support? The stakes are just as high either way.

We are ready to give you the support you need.

And while you're at it, think about ordering a copy of our reference and training book on preparing affirmative action plans and managing compliance reviews. You will find it an invaluable resource at a price that just can't be beat.

Secrets of Affirmative Action Compliance, 5th edition, contains over 480 pages of the latest and current regulation requirements and practical suggestions for your organization. Includes new Federal Regulations. $99.95 plus $8.50 shipping/handling and CA sales tax for CA destinations. Credit Card Orders ... Call Toll Free:

We can help with your other human resource management needs as well. Think of us the next time you need:

• Compliance Posters (All-in-One format)
• Management Training in Compliance Issues
• Affirmative Action Plan Development
• Affirmative Action Statistical Analysis
• Disparate Impact Testing for New Hires, Promotions, Transfers, Terminations
• Expert Witness
• Books, Software or Other Support Materials for HR Professionals

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