Category: Human Capital Management

BenefitsPro asked readers who is in control of the state of employer/employee relations?

By Paul Wilson | September 21, 2023 at 08:17 AM

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A balancing act

With all the media reporting, you would think employee relations are at an all time low. Yet, over half of employees say they’re extremely satisfied with their job, 62% are satisfied with their manager and 78% say they’re treated with respect.

According to The Conference Board, “once workers are paid competitively, a strong workplace culture is the most important factor… Leaders gain the most by offering flexible, hybrid work arrangements, and emphasizing work experience and culture factors.” Advisors must balance health and welfare offerings with a thorough review of compensation, engagement and ancillary products supporting holistic wellbeing.

Bobbi Kloss, VP Human Capital Management Consulting Services, Benefit Advisors Network

ICYMI: Watch Bobbi’s latest Human Capital Management Trends Update

Company culture is the environment that is entwined throughout the organization. It is the sum of the company policies, communication methods, and the organization’s values and practices. Company culture sets the rules of engagement from management down and across the workplace.

Without going into an economic history lesson of how wages were and continue to be driven by supply and demand, let’s look at how workers value themselves compared to how employer values their assets. Traditionally, this is how compensation has been set. A bargaining strategy in an employer market leaves employees feeling undervalued. In an employee market, the opposite occurs as employees feel empowered to turn the tables. Both sometimes start the relationship with the company from a position of inequity.

We can see throughout the generations how the economy has influenced the behavior of the workforce and the employer. The Industrial Revolution saw the Traditionalist generation as the greatest in the workforce.

With the Traditionalist generation, company culture was set by a “heads down” and work hard mentality, leading to a 60-80 hour work week. There was little to zero negotiation for a pay increase. Engagement was generally a personal outcome and not in a company’s culture.   In return, if pay increases recognized individual success, the message documented in the handbook was “do not discuss salary.” The outside world knew by the new vehicle purchases, the bigger house, or the new clothes. Keeping up with and surpassing the Joneses was the driver behind keeping “the secret.”

This theory was then passed down to the Baby Boomer or Post-War generation. Negotiations started taking place as this generation became more driven by materialism.  Keeping up with the Joneses was no more a silent way of living. Salary negotiations became an everyday occurrence, turning the table of the traditionalists at the other side of the desk.

This tactic pitted hiring managers against employees right from the start. Managers were not trained on setting compensation from equality and equity points. They were given a single budget figure, and their role was to pay less, so they had dollars left to spend elsewhere. Employees were not trained in determining their value in the marketplace. They were not always negotiating from a place of equality.  Women and those of varied ethnic or racial backgrounds continued to be undervalued, and they came to the table without negotiating power.

The employment relationship begins with a lack of trust, fairness, and equity.

“Public news of pay inequality at companies with more secretive pay communication practices can seriously damage their reputation, as was the case at BBC and Google. Finally, studies indicate that, at least in the short term, pay transparency may have some important benefits for employees and their employers. For example, pay transparency has positive impacts on employees’ perceptions of trust, fairness, and job satisfaction and has been found to boost individual task performance” https://hbr.org/2022/08/research-the-unintended-consequences-of-pay-transparency

From the millennials on, we continue to see a power shift as workforce imbalance thrives.

Today, companies frequently point out that employees are the greatest asset to a business. Company culture dictates the how value of the employee as an asset are set.  As pay transparency becomes regulated and the distribution of equity (which has been regulated but, in some companies, ignored),  an employer’s culture has to take on an openness that might make them feel unprepared.

The conversation shift should be now placed into the hands of a Human Capital Management Strategy. Employees are no longer thought of as an asset which is commoditized (i.e., bought and sold or easily replaced) but a capital investment (resources invested for long-term sustainability). Does your organization and department strategy support that theory? Consider the following questions:

• Do you have a strategy?
• Has ownership bought in?
• Does it address your client’s most pressing and potential long-term needs?
• Cost of the program?
• Resources needed to implement and administer the program?
• How success will be tracked, measured, and reported
• How long are you willing to support the program to see results?
• How or if the solution competes with, supports or integrates with other employer-sponsored benefits/programs
• Will it need individual promotion and/or education?

These tactics are about transparency and measuring the Return on Investment (ROI) against engagement. Employees are to be a part of the company’s mission and goals and not as a hidden dollar value while maintaining the required compliance.

Human Resources is a prime position to be elevated and become a strategic force for compliance and instituting leadership development, setting strategic compensation and hiring practices, and equalizing the playing field between employer and employee.

ICYMI: Watch Bobbi’s latest Human Capital Management Trends Update

Psychological safety is a term we are hearing more and more of in our world and the work environment. Coincidentally, as we look at this topic, May was Mental Health Awareness Month. June is National Safety Month, among the other initiatives we celebrate. It is befitting we review this topic of psychological safety in the workplace in the context of both initiatives.

Psychological Safety
Employers should know that workplace safety – as governed by the Department of Labor, Occupational Safety and Health Administration (OSHA) – is outlined in the OSHA general duty clause that all employers are to “furnish to each of his employees’ employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.” 29 U.S.C. § 654, 5(a)2

As a nation, survey results from the American Psychology Association  (AMA) reveal there is much we are stressed out about. No surprise that it ranges from personal finances, health, and family matters to social injustices, politics, and the personal safety of ourselves and family members.  Believe it or not, most stressors come from world and national events, not from high-impact life events we experience. To go along with these events creating stress, everyone has their unique way of maintaining composure during these events and a unique opinion on the circumstances surrounding them. More and more people are not afraid to speak their minds, some politely, others loudly, impolitely, and violently.

The American Institute of Stress estimates that job stress costs the U.S. industry $300 billion annually in absenteeism, turnover, lower productivity, and medical, legal, and insurance costs. However, a sense of powerlessness arises when a person cannot control life’s situations, which, according to the American Psychological Association, is a “universal cause of job stress.”   

Anger and fear are no longer being bottled up, and these emotions go everywhere with people, throughout the neighborhoods, stores, restaurants, our schools, and into the workplace. Are we physically and mentally safe with so much violence around us?  In previous articles, we have addressed establishing policies and practices to respond to physical violence in the workplace. In this article, we are addressing the aspects of psychological safety in the workplace.

Psychological Safety is a condition where you “feel included, safety to learn, safety to contribute and safety to challenge the status quo.” In the workplace, a cultural environment must exist where employees are free to perform and express themselves without “fear of embarrassment, being marginalized, or punished.”

As with all human capital initiatives, the strategic thread of psychological safety runs across all human resource programs. A major connection is within the Diversity, Equity, and Inclusion practices. The workplace is changing, and it’s not just about hiring the right people to check that box that the organization has achieved an equal employment hiring practice.

Having an EEO policy is not enough. Diversity and inclusion cultures additionally welcome and promote the uniqueness in each of us and provide the mechanism for a workplace where “all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.” Such a commitment would be like the following:

Commitment to Diversity & Inclusion

The Company is committed to creating and maintaining a workplace where all employees have an opportunity to participate and contribute to the business’s success and are valued for their skills, experience, and unique perspectives. This commitment is embodied in company policy and how we do business and is an important principle of sound business management.

While an organization, through its management practices, appears to treat all employees equally, unconscious biases can provide a real or perceived sense of exclusion in our ability to treat each other non-discriminately. A policy alone cannot eliminate the unconscious biases working against a culture that embodies a workplace where people want to work. How does a company promote and support diversity and inclusion in the workplace? Performance management is the equalizer.

Studies have shown that stress can lead to aggressive behavior. Employers see stress displayed by their employees in many behaviors: good performance deteriorates, increased absenteeism occurs, cooperation with team members erodes, and a once-focused employee becomes distracted, potentially creating safety hazards. Supervisors and HR traditionally have dealt with these issues through performance improvement plans up to and including termination of employment. It is important today for employers to know their employees so that they can recognize or unearth the reason(s) behind poor performance if they want to have the ability to retain employees.

Employers—regardless of size or industry—should be aware of warning signs and how to coordinate with HR to take appropriate action with the employee and safeguard the workplace. Some of the more obvious signs of unhealthy stress levels include:

• Intimidating, belligerent, harassing, bullying, or other inappropriate and aggressive behavior;
• Numerous conflicts with supervisors and other employees;
• Statements indicating desperation (over family, financial, and other personal problems to the point of contemplating suicide);
• Drug/alcohol abuse;
• Extreme changes in behaviors.

Supervisor communication should occur daily with employees, not just when poor performance challenges arise. Employees management should include positive responses to the below questions:

Is communication professional?

Professional doesn’t mean that good-natured conversation cannot occur, but is the communication promoting an atmosphere of respect, or is it demeaning and/or discriminatory?

Is workplace bullying occurring?

• 19% of Americans are bullied, and another 19% witness it;
• 63% of Americans are aware of abusive conduct in the workplace;
• 60.3 million Americans are affected by it;
• 70% of perpetrators are men; 60% of targets are women;
• 61% of bullies are bosses.

Is there bilateral communication where top management and employees share information, ideas, and feedback?

Is there a conflict resolution process in place that promotes employees having authority to resolve matters with each other and/or their supervisor and bring them to the attention of HR when needed?

Does the company have a comprehensive employee assistance program (EAP)? Is the EAP used in the performance management process?

While employees may be going through stressful situations, and employers should have compassion, there is also the reality that quality performance is still required. A supervisor referral to an EAP can include a discussion with the EAP on the performance standards that need to be brought up to par. While the supervisor is not a party to the EAP/employee discussions, the supervisor can have check-ins to identify if workplace performance goals are being achieved.

Most important for an organization today, are supervisors, managers, and those in leadership positions, trained to manage the organizational team proactively? Employers cannot only rely on the tactical skills of the leaders to maintain positive employee engagement. Management needs to be trained on effective team leadership and how to manage that leadership within the particular company’s culture, focusing on attracting and retaining the right people in the right seats to drive forward the organization’s mission.