Why do good companies stocks suffer even when earnings are great?

This question has always seemed to rattle around in my mind when seeing a solid company show week stock prices. Unfortunately, the answer is not so simple either when talking about financial performance. A company can be performing well on many fronts but have way too much debt/liability. It intrigues me how a financial analysis can tell a lot about how a company operates. A word of advice, if you’re about to go work for a publicly traded company, look at their financials to tell if they’re solid or not…..you’ll thank yourself later.

A companies short term solvency means their ability to pay bills in the short run (6 months or less). This is an indicator how strong they would be if they got into a pinch and if they can keep the doors open. It’s worth understanding the ratios in order to analyze a company because so much depends on it:

Current Ratio= Current Assets/ Current Liabilities. (These are found on the balance sheet)

Let’s say a company has one-million dollars in current assets, eight-hundred thousand dollars in current liabilities and two-hundred thousand in equity. The Balance sheet means balance because each side needs to equal each other. (Assets=Liabilities + Shareholders Equity). Using the Current Ratio equation, this will mean 1M/800K=1.25. This will mean for every dollar of current liabilities, the company  has 1.25 dollars of total assets. So the company would be able to pay off its debts by selling assets if it got into trouble financially. 

Quick Ratio= Current Assets-Inventory / Current Liabilities 

This is a measure of how can pay for its debts without having to sell of inventory (which is a the bloodline of any business). Using the same figures above, let’s say the company has $100K in Inventory. 1M-100K/ 800K = 1.125. This means for every one dollar of current liabilities, the company has 1.13 dollars of current assets. This basically means the company will be able to pay for it’s liabilities without having to sell of its profit making items. In other words, McDonalds would not have to give their hamburgers to the creditors to pay off their debts, they would be able to keep them and continue selling them for revenues.

Cash Ratio=Cash/ Current Liabilities

This is my favorite because it tells just how solvent or liquid a company truly is. Being too liquid/solvent is sometimes not a good thing because it means the company has cash to use which can be invested or used to pay off debts. Let’s say this company has $200K in Cash. $200k/800K= 0.25. This means for every one dollar of current liabilities, the company only has 25 cents of cash. This can spell trouble for the company because they cannot afford their debts with the cash they have on hand. I guess investors look at the law of diminishing returns because too much of one thing can result in negative returns. 
I will only touch on the following ratios here because these are very important when trying to understand a companies long term ability to handle their debts. 

Total Debt Ratio= Total Assets- Total Equity/ Total Assets.

Total Assets minus Total Equity will equal Total Liabilities because (Assets=Liab + SH Eq –> Liab= Assets – SH Eq). Let’s say the company has 4 million in total assets, 3 million in total liabilities and 1 million in total equity. This will result in the following: 4M-1M/4M = 0.75. This means for every one dollar of total assets, the company has 75 cents of liability. Interestingly enough, when looking at the top 4 banks established and headquartered in Louisiana, the best performer was around 0.87 and the worst was at .912. Banks are highly leveraged because they loan out money to make profit off of interest payments from lenders. 

Profit Margin= Net Income/ Sales

This shows a company’s ability to manage its costs and still turn a profit. From an investor standpoint, this one is very pivotal in deciding if the company has the ability to pay dividends to you and other shareholders. Netflix for example over the past 5 years had the following profit margins: 

2011.      2012.     2013.     2014.     2015

7.06%.   0.47%.  2.57%. 4.85%.   1.80%

So we can easily see Netflix has struggled to do well over the past 4 years. In other words, their costs were very high and they did bring back money for the shareholders, just not a lot. I would’ve loved to have compared Netflix to Amazon Prime, but Amazon Prime is not a separate entity from Amazon. Whenever looking at investing in stocks, you should compare a company to its competitors and determine who is performing better as a whole. 

The interesting thing is Netflix had around a 14% drop in share price the other day even though their earnings were better than the market predicted; however, they underperformed on their subscriptions and the market did not like it at all. Even with strong earnings, a company can suffer because market perception shows lack of confidence. 

Hopefully performing your own financial analysis of companies can help you decide where you would like to work or even companies you want to invest in. 

The ADA and Reasonable Accommodation

ada

I’ve been very fortunate to have the opportunity to take over the Leave of Absence process at my company with very little experience besides knowing the ins and outs of the law. Needless to say, I was very nervous about my first few leave cases. I think there are hesitations about saying the wrong thing or even going as far as saying too much. I was fortunate to have the experience I had before because it prepared me for much more than what was to come.

Let’s discuss the Americans with Disabilities Act. In my mind, the law could not have been a better protection for those who need accommodations to become whole at work even though they’re not the same when they return. The law was passed in 1990 by President Bush as a landmark protection for all those who’ve been brushed aside in daily living and even employment opportunities. I enjoy the statement written in the actual law, it says, “Congress recognized physical and mental disabilities in no way diminish a person’s right to fully participate in all aspects of society, but people with physical and mental disabilities are frequently precluded from doing so because of prejudice, antiquated attitudes or the failure to remove societal and institutional barriers.” In short, there was a need for the ADA to address the long-standing issues which burdened those who are disabled.

I had several leave cases which ended up going over the job protected limit of 12 weeks, one was even past 42 weeks. Needless to say, I took over a system which was so overburdened with work they neglected to handle the leave cases. It was now my job to engage in the interactive discussion with the employee on leave and determine what the restrictions were and how much longer they would last. After determining this, it would then be my job to discuss their restrictions with them and determine if they have any other skills which are not restricted and could be utilized in their current position, or perhaps another position.

This process is quite nerve-wracking since you have to discuss a person’s restrictions and sensitive topics. To ensure I protect myself, I document every single conversation I have with all FMLA or excused absence cases from start to finish. When a person comes in to discuss FMLA, I document the time, place and date as well as what was discussed. If it is a telephone call, I write down the number, time of call and the duration of the call. I also document what is being said in the conversation. And lastly, when the interactive discussion begins, I ensure everything is in writing so I have complete clarity as well as transparency with both Legal and Management before moving forward with a decision.

The trick to the interactive discussion is to determine if the restrictions prevent a person from performing the essential  functions of their current role and how long they will last based on physician recommendation. If the person can no longer perform their role permanently, it is then my job to see what job positions we have open and determine what positions the person would be interested in doing contingent on their ability to perform the essential functions. This is a good faith effort to make an accommodation by doing a simple job search. However; I’m not legally obligated to create a position if there is not one available at the site. All of my leave cases have wanted to come back and work; however, their restrictions and the nature of their conditions prevent them from performing the grueling task of manual labor or lifting.

One thing made complete sense to me, it was determining hardship. If I have a leave case which is outside of their 12 weeks and require another 2 weeks of leave, it is usually a pretty simple answer. However; if the request is for another 3-4 months, the answer will be a little different. I don’t determine this without consulting legal, management and my HR manager. Reasonable and Unreasonable is not always a clear answer. It makes me chuckle because many laws are written with large areas of grey which are not easily interpreted by non-lawyers.

After engaging in the interactive discussion and determining there are no accommodations (including additional leave), the position is usually to move forward with separation of employment. It’s not easy to say goodbye to any loyal employee, but a drafted letter should address the conversations had, the position of the company in needing to replace the employees role and how the employee is absolutely eligible for rehire when they’re able to return. Always communicate with the employee in person or by phone and mail the letter afterwards.

The general rule of thumb is to talk with the employee as often as possible and show a level of care and understanding. All of these individuals are having a difficult time, so it is good to have a high level of empathy and understanding. The law scares many of us from being human, but it is okay to let someone know how you’re sorry how difficult this situation must be for the person. A little care goes a long way when discussing someones life situation (but not digging into details or begging for more details).

If you want to read the full text of the ADA, here is a link to the website:

http://www.ada.gov/pubs/adastatute08.htm.

 

Holiday Pay and Overtime

  
It’s a regular issue which comes up during a holiday week. Employees feel if they work three ten hour days (30 hours total) and get two days off (8 hours per day) they would be entitled to 24 hours of overtime pay. Think again, this is not the case. Overtime hours are only computed based on the hours “actually worked.” You have to physically work the hours in order to receive overtime pay. In other words, if you physically worked 40.5 hours Monday through Wednesday, you would be entitled to .50 hours of overtime, and 56 hours of regular pay (this includes 16 hours for Thursday and Friday).

Another factor which comes into play would be if the employee works during the same pay period and if it would count as overtime. Lets say the company’s pay period was Monday through Sunday. For a lone example, lets say an employee worked 24 hours total Monday through Wednesday, received 16 hours of holiday pay and worked 16 hours total Saturday and Sunday. This would mean the employee would receive 56 hours of straight time pay and no overtime pay. 

Some other factors which come into play and also cost an employer more money is if they offer time and a half to work during the holiday or if they pay a premium on top of the hourly base for those working on the holiday. If the employee is receiving two different hourly rates, it most certainly affects the employees overtime calculation. Bill Shaefer submitted a great article to SHRM back in 2008 regarding this type of scenario (however it was for two different jobs), but I like to think this is still a good comparison. Here is a link to the article as I think he provides a great scenario based calculation for weighted average computation. http://www.shrm.org/templatestools/hrqa/pages/cms_023246.aspx.

Let’s provide an example for an employee who receives premium pay on top of their hourly rate if they work the holiday. Let’s say Sally Employee makes $10.00 an hour and is offered to work the Thanksgiving and Black Friday shifts (two-ten hour days) and receive a 20% premium on top of her hourly rate. 

How to calculate her overtime rate:

Monday-Wednesday: $10/hour * 24=$240.00

Thursday-Friday: $10/hour*.20 shift premiums=$12.00/hour*20 hours=$240.00

$240+$240=$480.00/44 hours= $10.91 straight time hourly rate

$10.91*1.5=$16.37 per hour for overtime.

$16.37*4 hours of overtime=$65.48 total compensation for overtime.

Total Wages= $480+ $65.48=$545.48

Just remember, it is not mandatory to pay a shift premium for working weekends and holidays. You just have to pay time and one-half for every hour of overtime worked by the employee. Of course, most companies do something like a bonus, shift premium or time-and-one-half to provide an incentive to employees who want to work the less sought out shifts. 

Let’s look at the other two examples of which an employer can pay an employee to work a shift:

1) I’m going to pay you a nondiscretionary bonus of $500.00 to work Thursday and Friday (20 hours total between the two days). Because you’re going to work this shift, the bonus will be included in your overtime calculation.

Sally Employees hourly rate is $10.00 per hour.

Sally worked 24 hours Monday-Wednesday and 20 hours Thursday-Friday which equals 44 total hours.

Straight time Computation: $10/hour*44 hours=$440.00

Add in the Bonus: $500+$440.00=$940.00

Find the Straight time hourly rate: $940/44 hours=$21.36

Find the overtime hourly rate: $21.36*1.5=$32.04 per hour

Find the overtime compensation: $32.04/hour*4 hours=$128.16 

Total Compensation=$940+$128.16=$1068.16.

2) I’m going to pay you time and one half for the hours you work on Thursday and Friday (20 hours total).

Sally Employees hourly rate is still $10.00 per hour.

Sally worked 24 hours Monday-Wednesday and 20 hours Thursday-Friday which equals 44 total hours.

Straight time computation: $10/hour*24= $240  Plus $15/hour*20=$300 

Total Straight time compensation: $540.00

Straight time hourly rate: $540/44 hours=$12.27/hour

Overtime hourly rate: $12.27/hour*1.5=$18.41/hour

Overtime compensation: $18.41*4 hours of overtime= $73.64

Total Compensation: $540+$73.64=$613.64

So after looking at the three different types of scenarios, it is safe to say Sally Employee benefits the most when a bonus is given to her. She also fares better when the employer says they will pay her time and one half for working Thursday and Friday (common sense tells you 50% on top of the hourly rate for overtime is higher than the 20% offered in the very first scenario). Best of luck to everyone when scheduling your employees for this holiday season.

The Various kinds of Employment Tests

employment test

At one point in time or another, we’ve all had to partake in some form of test in order to get a job. Drug tests, background checks, word tests or even putting parts together are all of the different types of tests which can be given. The truth is, there is no law forbidding any of these tests as long as certain criteria are met.

Drug Tests: These are probably the most common amongst companies today because more and more employers are trying to reduce on the job accidents or even worker’s compensation cases. The Public Policy Institute of New York State Incorporated posted statistics by state back in 2002-2003 and found Louisiana to have an average workers compensation case cost of $14,189. I would say looking at a figure this large for just one case can be compelling enough for employers to want to drug test as a condition of employment. Please keep in mind, a drug test should only be performed after a verbal offer has been extended and accepted by the employee. The written offer letter should be put together and the employee should get it (keep in mind a disclosure should be put at the bottom saying employment is contingent upon successful completion of both a background and drug test). Even though the figure above was from 12-13 years ago, I’m sure it’s just as high due to inflation. Here is a link to the figures by state: http://www.ppinys.org/reports/jtf/workerscomp.html.

Keep in mind drug tests must be administered among everyone and not just a certain group. It has to be a requirement everyone has to follow. I would also recommend drug tests after each worker’s compensation case to rule out intoxication from drugs or alcohol since the employer bears so much risk with injuries and accidents. Be certain to put this in your policy manual and ensure all applicants have read and signed off on it.

Background Checks: A background check may not be initiated without having the employee sign off their authority to have one performed on them. This is generally achieved by having the employee sign off a Fair Credit Report Act disclosure and have a summary of their rights under the act. Background Checks cannot be performed until after a verbal offer has been accepted. Again, the applicant must be advised how employment is contingent on successful completion of a background check. If any adverse results come up on the background check, the employee generally has 3 business days to contest these results and get back with the employer with information. Here is a link to the Fair Credit Reporting Act: https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-credit-reporting-act.

Employment Tests: These are generally the least common as not many employers can prove these tests can prove successful performance on the job. Lifting tests, question and answer tests, putting parts together or even performing the job are the different types of tests. Firefighters are required to lift a certain amount of weight above their head in order to be considered for employment. This particular test can exclude many females and could possibly looked at as adversely impacting them; however, lifting dead weight over your head is required as a bona-fide occupational qualification (which basically means it is essential for the job). I’ve taken many different types of question and answer tests and really don’t see a connection between the test and the job. I’ve been particularly perplexed when I’m asked questions like, “If you were a cash register worker and had more cash than you were supposed to, would you pocket the rest?” I would honestly have to be out of my mind to answer “yes” because I don’t steal.

I do laugh at some of the questions like, “I feel entitled to office supplies because I work hard.” These tests are actually behavioral/situational and can predict past behavior. I can see this being very important for cash handling jobs, but the interview should be a time to ask these types of questions. The one case which sticks out in my mind is the Griggs V. Duke Power; this case consisted of a power company with only 12 African Americans. The company had a policy where African American men were only allowed to work in the labor department (which was also the lowest paid job) and after the passage of Title VI of 1964, the employer required either a high school diploma or certain scores on their IQ tests to move into a high paying job. This test did not prove to be a predictor of successful job performance as white males promoted into higher positions without high school diplomas performed at a satisfactory level. So be certain if you wish to start testing your employees and applicants, you do so in a manner which does not have discriminatory intent. Doing so can have severe implications unless you can prove a bona-fide occupational qualification and how successful completion of the test predicts successful job performance. Here is a link to the case: http://www.naacpldf.org/case/griggs-v-duke-power-co.

 

Discretionary and Nondiscretionary Bonuses

  
Employers are usually on the lookout for superior performance or behavior which is in line with the organizations instilled values, mission and vision. There are some which decide to reward employees by giving a bonus on either a discretionary basis or a nondiscretionary basis. It is great to work for an employer who values employees for their superior behavior or performance. The employee gets the benefit and it is determined by the form of bonus which is received. 

Discretionary bonuses are the types of bonuses which are not tied to a certain level of production. Examples of discretionary bonuses include spot bonuses or a bonus for being a good employee. Discretionary bonuses do not occur on a level of frequency or have a level of production which needs to be achieved to get a bonus. If your boss looks at you and says, “I want to give you a bonus for doing a wonderful job this week.” This type of bonus will be added to the check but not included in the employees wages for purposes of overtime.

Nondiscretionary bonuses are the bonuses which occur for a certain level of production or performance. Say for example, the employer says the employee will get a $200 bonus for achieving 200 units of sales each week. This $200 bonus will be included in the employees wages to determine overtime. So if the employee worked 50 hours and is paid $10.00 an hour, the following should take place: 

The correct way of calculating bonus plus overtime:

Straight time: 50 hours times $10.00= $500.00

Bonus: $200 for this week plus straight time hours=$700.00

Overtime Rate: $700/50= $14.00 times 1/2= $7.00. $21 an hour for each hour of overtime.

Overtime compensation: 10 hours times times $21.00= $210.00

Total Compensation for a week: $910.00

The illegal way of calculating the bonus:

Straight time: 50 hours times $10.00= $500.00

Overtime Rate: $10.00 times 1/2= $5.00 plus $10.00= $15.00 per hour of overtime.

Overtime compensation: $15.00 per hour times 10 hour= $150.00

Bonus= $200

Total compensation: $850.00

As you can see in the example above, it is very important to include your nondiscretionary bonuses in overtime compensation calculation. If you calculate it wrong, you would have shorted the employee $60.00 of compensation. This type of violation is worthy of a call to the Department of Labor. I’m sure the IRS would be happy to hear about this as well because they would have needed to take more tax on the $60.00 of missed wages. Employers have to be very careful about the type of bonus they will assign to their employees since it has grave implications on the employees pay.

If the same employee was going to receive a $200 bonus one week because the manager was pleased with employees customer service, this would be considered a discretionary bonus because there was no set level of production or threshold. Discretionary bonuses are not a, “this-for-that” type of situation since the employee does not have to do something to get the bonus. Just being a good employee is a good enough excuse for some employers to give a bonus. But we all know not all employers have the financial means to do so. Christmas bonuses are a good example unless they occur every single year. If you tie it to the financial environment (for example, the company can only give a bonus if the company has the financial means to do so), this would be considered a discretionary bonus. 

Please keep in mind, exempt level employees do not get overtime; therefore there is no overtime calculation. If the employee gets $1500 every two weeks and gets a $200 bonus, the employee will be compensated $1700 (before taxes of course). 

Reglious Accommodation

  
Many HR professionals come into contact with a religious accommodation at one point in time. Our worst fear is to handle it the wrong way and end up in a lawsuit. A recent court case involving two individuals who were terminated for not delivering alcohol because of religious beliefs was determined in their favor. After taking a close look at this case from just the details given in the following article, it is surely of great concern since the government intervened on the outcome. Here is a link to the article on Fox News: http://insider.foxnews.com/2015/10/26/muslim-truck-drivers-fired-not-delivering-beer-jury-awards-them-240k.

The first question I have is if the job exists only to deliver alcoholic beverages? I would have to say this job sounds a lot like a beer truck driver. This type of job would only exist to deliver alcoholic beverages. I would have to imagine the candidates were informed of what they would be doing and what they would be delivering. I feel there is a responsibility on the candidates behalf because they should ask questions about the type of deliveries being performed and if there was an issue, they could easily decline the position or advise the hiring manager how they could not deliver alcohol. We all as individuals must take responsibility for the jobs we apply to, and do our best to understand what is required of us.

Let’s say for example I applied to a clinc as a nursing assistant. The hiring manager tells me it is an abortion clinic. It is then my responsibility as the candidate to tell the hiring manager I would no longer be interested in the position. Religious accommodations were established to provide accommodations without causing undue hardship on the employer. If the job required the employee to deliver alcohol or assist with abortions, there would be no accommodation for a person who said they could not perform the functions of the job. It is important to distinguish between what is considered reasonable and unreasonable.

A reasonable request would be one which did not require the employer to completely revamp the job or push all the employees duties to others because they could not perform due to restrictions. Myself and many other HR professionals will do all we can to assist those who cannot do the job because of restrictions, but we’re not required to eliminate job functions for one person if all others are required to do the same. The accommodation falls on us when we decide how to handle. If we say these individuals do not have to deliver alcohol, they would not have a job because they work for a alcohol distributor.

Here is a fact sheet provided by the EEOC since Title VI of the Civil Rights Code covers Religious discrimination. http://www.eeoc.gov/eeoc/newsroom/wysk/workplace_religious_accommodation.cfm. Employers should make their decisions very carefully on any accommodation. If the job exisits to perform a certain set of duties, eliminating a part of it may very well cause undue hardship as the person should not be needed since the job requires a person to perform deliveries 100% of the time. 

Whenever an employee asks for a reasonable accommodation for religious purposes, the employer should take precautions to ensure the company will evalute the request and how the employees request will be clearly documented. This case gives me a little bit of anxiety since the government intervened in the case and assisted in getting the case pushed in favor of the two employees. I can understand if the company performed alcohol and soft drink deliveries, because the employees could then do 100% soft drink deliveries. This case is a clear example of how doing what is thought to be right can backfire on you if you’re not certain of the stipulations. 

Remember, if the job exists only for particular job duties, an accommodation should be considered when it does not involve eliminating essential functions. If the person cannot perform those essential functions, they should be put on a leave of absence until they can perform those essential functions (this is always the case for FMLA leaves due to personal restrictions). I can only hope these two individuals won this court case because they had the ability to perform other functions besides delivering alcohol. If not, this can only mean we have to take more precautions before terminating employees for failure to perform essential functions. 

Inclement Weather

  
The time has come for long sleeves and jackets for many across the U.S. Fall has always been my favorite time of the year as the colors always seem to migrate to orange. With the change in season also comes a number of weather challenges. Some areas in the U.S. experience extremely cold and freezing temperatures. Interstates, main roads and bridges freeze over and are dangerous for traveling. The vast majority of employees are commuting on the highway daily (especially to Baton Rouge, LA). 

With these weather challenges comes an opportunity for the company to decide how it wants to handle times when it is unsafe for employees to come to work. There were several times where I was driving 40 plus miles one way only to have my commute stopped by 3-4 hour traffic from closed bridges. My employer had a specific inclement weather policy which offered some support for times like these. The issue is management did not stand behind their policies like they should have. My manager called me at 8:30 and told me not to come in. It was a little too late since I left around 6:30 every morning so I could get to work on time at 8:00. Times like this frustrated me as HR should be more of an advocate for these policies when they need to be used.

Every employer should sit down and decide how often these types of situations occur and if a policy should govern the situation. If your company operates in more than one state and have locations in the North (above Mississippi and Tennessee); the company may want to implement a guideline for situations which are unpreventable. The policy should be made around the premise of protecting employees safety. The second item is to decide how to compensate those employees for the time. The law does not require an employer to compensate an employee for time not worked, therefore, the company can make it a blanket policy for all employees to either use PTO or take the time unpaid. 

A policy should talk about the different situations which make it difficult for employees to get to work; however, the policy should steer clear of words like, “every” or “always.” The policy should tell employees something like this, “The inclement weather policy has been established to protect the safety of our employees. Weather is unpredictable and at times a safety hazard for our employees. If an employee cannot show up for work due to unsafe driving conditions, the employee should contact their manager/supervisor immediately to inform them of the situation. The employee will/will not be compensated for this time of inclement weather.”

It is definitely a courtesy to compensate employees for time not worked. If you have a PTO policy, you may want to incorporate stipulations into the inclement weather policy so employees know they can either take PTO or can be unpaid for the time. The policy at my old job had 24 hours of inclement weather at a time. If a city had multiple occurrences of inclement weather during the course of a year, it could end up costing the employer a lot of money. Budgetary considerations should always be planned ahead of time to decide if PTO should be used or if the employee will be paid out of an inclement weather bucket. I can’t speak for all employees, but I can say I wanted to go to work and would be upset if inclement weather prevented me from doing so. 

If you’re in top management, take some time to prepare for this season by discussing inclement weather and how it affects you and your employees. Coming up with a plan ahead of time can possibly prevent issues into the future and make it easier to interpret those situations as they arise. 

Social Media Issues in Employment

  

2005 was the year I signed up for my Facebook account. It was really cool to me because I could stay in touch with friends from high school and contact them at the click of a button. Years later, LinkedIn and Twitter evolved. Much controversy surrounds the legality of whether employers should be able to use the information against employees for purposes of hiring, employment practices or even requiring employees to provide account login information. Giving employers social media login information constitutes an infringement on privacy for employees, especially if the employer puts the employee in the position by duress or threatening disciplinary action up to including termination. 
Louisiana passed a law in 2014 which forbids employers from requesting social media account information of applicants or employees. Current or former litigation on social media will continue to pave the way for new laws and regulations for employers to follow. Heath Morgan and Felicia Davis wrote a detailed article on Social Media and Employment law advising some courts have found pubic social media are fair game for employee investigations, particularly when the employer obtains the information without asking or pressuring an employee to provide it (Morgan and Davis, 2013). It is comforting to know there is the ability to investigate employees negligent activity through social media without infringing on privacy laws.

An issue was presented to me earlier in the year surrounding how an employee was to handle their name being used in someone elses social media post and how it was offensive and insulting. I advised the employee how social media is in fact protected by the first amendment right of free speech; therefore, there was no protection or action I could offer the employee. I did advise the employee how they would need to speak to offender and advise him/her to please remove the social media post as it was offensive and inappropriate. The employee said the other person would most likely refuse to take it down. At the moment he told me this, I informed him to then tell the person if they refused to take it down, he would seek legal advice to see if it was legally actionable for defamation since the statements were not accurate and were blasted for others to see. 
The employee ended up not following through on my advice and the entire department ended up getting wind of the post. I unfortunately could not intervene and force the employee to take it down as they were exercising their free right of speech. If I forced the person to remove their post, I would have just done what the law calls an “unfair labor practice.” Even though the hospital does not have a union, the employer must not prevent employees from engaging in concerted activity as well as following any freedom. With other employees from the hospital commenting on the post, they were essentially cyber-bullying the employee without the employee being “tagged” in the post. 
I left the facility before I could intervene, but wanted to tell the employees they were putting themselves at risk for bullying this employee on social media. Once a post is put out there, there is a permanent record of it to fall back on even if the post is deleted. Unfortunately, the law prevents employers from involving themselves in social media matters unless the employee is posting something while at work (Like a selfie with a patient or a video of themselves disclosing confidential company information). The article written by Heath Morgan and Felicia Davis also states how employees should have narrow social media policies and keep it to legitimate business interests. The hospital lacked a policy at the time, which prevented me from having any real guidance from the hospital. 
If there is any advice I can give any young professionals, it would be to not put your frustrations about work or any work related matter on Facebook or any other social media platform. If it is something which needs to be discussed with others (like pay, working conditions etc), do so in a manner which will help the situation instead of make it worse. I would also advise young professionals to discontinue taking selfies at work or taking pictures in their offices. The ability to catch information which does not belong on social media or causes a privacy issue can clearly put the person at risk. 

For further information on the topic, here is a link to the article I referenced in my text above: http://www.americanbar.org/content/dam/aba/events/labor_law/2013/04/aba_national_symposiumontechnologyinlaboremploymentlaw/10_socialmedia.authcheckdam.pdf

How having a succession plan now can help in the future.

  
Everyone who is a Saints fan like me knew how traumatizing  it was to discover Drew Brees was sitting out of one of his first games in over 10 years as the Saints Quarterback. I often wonder what it would be like without him as he is such a star on the field for us. When he got injured a few weeks ago, it got me thinking about how the Saints really need to develop someone into a leader with effective passing skills. Every fan in the NFL realizes if their star quarterback goes down it can affect their winning ability almost immediately. It would be like taking Peyton Manning out of the Denver Broncos game and hoping his backup would perform the same.

Succession planning is no joke, whether in the NFL or in the workplace. The results are similar based on how the company or team develop the next best leader for the organization. Having a CEO retire is something a lot of companies have to deal with sometime in the future. Unfortunately, everyone has an exiting date with a place or organization. Usually it takes months or years to find an equal replacement for senior leadership positions. Organizations can suffer on the front and back ends when leadership is not in place to fill the gaps left by the exiting party. 

Succession planning means determining ahead of time what team member or members would be a valuable asset to the company in the long run. Once this/these person(s) are determined, the company should then meet with the individual(s) to see if they feel the same way long term. If the feeling is mutual, the company can then set up development plans to educate and train the individual on how to handle the specific situations they encounter everyday. These development plans should not come from thin air, but should be formulated on the premise of feedback and suggestions of the person who is being succeeded. The successor should also have time to receive mentorship from the person who will leave in the future so they can be prepared for most situations.

I’ve seen many teams in the NFL lose games after a backup was put in the game, and it is shocking to discover how the team did not have a very efficient succession backup plan in place. Then again, we’ve seen those teams who end up winning more when the backup gets put into the game. I don’t know of any company who wants to put the faith of their employees in someone who is not ready to lead or run the operations efficiently and smoothly. The best way to deter this from happening is to ensure someone is developed and ready to take over the soon-to-be vacated position. 

Not all individuals who are thought to be the next-best-leader end up being fit for the role. The best way to discover this is to have multiple people on this development plan track. When going through leadership training and testing, one who will most likely not succeed will most likely show in their results. To be a leader requires special hard and soft skills like communication, people skills, motivational skills, tactfulness as well as ability to understand complex information and issues. The individuals who are unsuccessful should be removed and possibly developed into a different type of role which is not in leadership. The ones who are successful in their training and development track should be moved forward into the process.

In my last position, I recall a senior leader who was going to retire in a about a year. I immediately informed the VP how we needed to start a search for a leader within the organization and get her on a development track so she can move into this vacated postion in the future. The person was eventually chosen and moved into a leadership role to learn and understand the first part of the business she was going to handle. Once she mastered this part, she would then be mentored by the senior leader on the areas which were also required in order to be successful in the role. I just remember the individual was well fit for the role and appeared to have the tactfulness to work as a senior leader.

Whether it is starting quarterback or a senior leader, always have a plan in place to replace someone in the future; especially if you have knowledge of their eventual departure in the distant future. These individuals carry knowledge and skills which can be lost in an instant without a back-up plan. The responsibility of a succession plan falls with senior leadership and management. No company or organization wants to have to suffer a loss whether its losing games, money or employees, so be sure and work on getting your next best leader developed ahead of time. 

Here is a link to a really good article about how to implement a succession plan and the challenges one can face when implementing one. 

http://hrcouncil.ca/hr-toolkit/planning-succession.cfm.

Policies which are downright odd.

  
A friend of mine on Facebook shared this policy sheet a few days ago, and I was baffled to say the least. I believe their are a lot of good individuals out there who do things to benefit both parties. I also believe there are inexperienced individuals running companies without clear guidance or direction. The above sheet can be looked at as either a practical joke or a learning experience for all. I would like to tackle each item one by one:

Sick Days:

Regular attendance is something every job requires. The job would not exist if the person did not need to show up everyday. Everyone has those days where they’re feeling blue and just can’t come into work. This policy makes me chuckle because the owner/HR department says if the person can go to the doctor, they can show up to work. Any person in their right mind would not do this to someone, especially the people responsible for running your company. Sick days are not mandatory or required by law; however, it is more of a courtesy to those who are not feeling well. 

If you ask me, I think it becomes a safety or efficiency issue by letting ill employees come to work in their current state. The employee may work in an assembly line and could get their hand caught in a belt because they can’t react as quick. Or the person could pass out and injure themselves further. Each of these scenarios are far fetched, but are also realistic. If this happens, the employer will be paying the workers compensation support for the employee for quite some time. 

Whether it was the employers or the employees fault does not matter. I would always recommend giving employees an opportunity to seek care if they’re not feeling well. It does cost you money and spreads more work across the group, but you will definitely have much happier employees. The best practice is to require the employee to call you within a certain time period before their shift and engage in a discussion with the employee. The employer should just ask if it is health related or other. If the employee says they’re ill, do not ask what is wrong with them, just ask the employee to bring a doctors note if you suspect the employee is not telling the truth. This is something which is not easy to do because some employees lie very well, but the manager/supervisor should be able to decifer whether a doctors note is needed or not. If the employee has a pattern of illness, the discussion should move into FMLA/Intermittent FMLA.

Personal Days:

Paid time off (PTO) is something the majority of employers offer; however, it is not required by law. Again, accrued benefits are not required but must follow the law if an employer decides to offer it. This employer above has a realistic approach on the matter because all employees should use their weekend to relax. 

Lunch Breaks: 

I wrote a blog a few weeks ago about lunch breaks and how they’re governed by the Fair Labor Standards Act. Some states require lunch breaks and a minimum time for them. Louisiana is not one of them. Bona Fide lunch breaks should be no less than 30 minutes for anyone. The employee should not be engaged in work related activities. If they are, the employee should be paid for the time. This employer is talking about peoples body sizes; truthfully this reminds me of an ADA issue as some people may have a disability which causes them to be a certain size. This employer definitely is exposing themselves to potential litigation if a lawyer finds discrimination in the policy.

Dress Code:

Every employer should have one of these in place and do their best to have wording which describes what is acceptable and unacceptable attire. Whether someone is rich enough or broke should not matter as everyone should be able to dress according to the policy. If the person does not follow the dress code policy, then coaching and disciplinary action should follow. 

Bereavement Leave:

This one strikes a nerve for me; I can’t believe anyone would put something like this in writing. To say a person is dead and they can do nothing for you is just plain harsh. Yes, bereavement leave is not required by state or federal law. Any person on this earth (besides the person writing this policy) would be understanding enough to allow someone to take time off to grieve the loss of their family member or close relative. The person does not need to be paid for the time, but it is definitely a kind gesture to let the person take time to go through the grieving process. Most policies which I have seen give the person 3 days maximum for close relatives (Mom, Dad,  Brothers/Sisters, Step-Mom,Step-Dad, Spouse or Children/Step-Children) and 2 days maximum for secondary relatives (Grandparents, Aunts, Uncles, Cousins, Nieces and Nephews). 

Restroom Use:

The ADA clearly defines how a person is considered disabled if one or more of their major life activities are not functioning properly. Bowel movements are included in their wonderful description. Telling a person they have so long to use the bathroom is something which can be considered discrimination in a sense. Some people need time and some don’t need much time. The other issue is the bathroom is a place where all individuals have a reasonable expectation of privacy. This means a camera installed in the bathroom can infringe on a persons privacy and could potentially lead to a lawsuit. I know many people including myself would not like a picture of ourselves posted on a board for others to see. I sense a lawsuit in the horizon if this employer actually follows through on their policy.

To summarize this sheet, I think this employer is in for a rude awakening. I don’t know who would work here after reading this, I know I would approach them and let them know the laws they violate by putting some of these things in writing. I wonder why some individuals go into business if they do not like people. It definitely shows here. I had to laugh at the persons last statement of, “We are here to provide a positive employment experience,” nothing is as far from the truth. Anyone reading this, use this as a motivation of what not to do if you want to keep employees working for you.