Great Workplaces – Insights from the Great Place to Work Conference

Posted on March 31, 2011, 8:58 pm, by admin and received No Comments ».

A Great Place to Work“95% of my assets drive out the front gate every evening. It’s my job to bring them back.”

Jim Goodnight, CEO and Founder of SAS

We’ve all heard the well-worn adage ‘People are our greatest Assets’. I went to the Great Place to Work Conference today to gain more insights into this from industry leaders in Ireland -

Jim Barry, CEO, Barry Group

Fergus Murphy, CEO, EBS Building Society

Paul Rehill, MD, Microsoft Ireland

Michael Burchell, Great Place to Work Institute

Ferghal Quinn, formerly CEO, Superquinn

A great workplace was described in a nutshell by Ferghal Quinn as a place where people look forward to going to work and the day goes by so quickly that when you look at your watch, it’s already 6pm!

Paul Rehill was very clear that its a place where you Measure Results and not Activity, and allow people and trust people to get on with their work and deliver the results agreed.

All speakers were very clear that its a place where people work hard and it is about everyone having a focus on delivering results, while building a trusting, empowering and fun environment to enable this.

Jim Barry said that two of the key Qualities of Management in this environment are that they are Prepared to Remove Non-Performers (or Blockers) and are Prepared to Manage Conflict (as even in a great workplace conflict will exist).

Fergus Murphy said that energy is more important than intelligence. Not surprisingly he, among other speakers, stressed the need for managers to develop more stress tolerance and resilience, as the climate for the past two years has been extremely challenging.

Many of the speakers stressed the importance of the hiring process. It was clear that all great workplaces are crystal clear about the type of people they want in their organisation, and its not all about technical skill, experience or ability.

Jim Barry said they look for 3 key qualities in every candidate:

Ability

Team Fit

Progress

He said that a good interview process is essential to creating a good team environment, and all interviewers should be trained to find people with the key qualities that will ensure they are a good long-term fit.

He mentioned that people must have a focus on team fit and that superstars didn’t help an organisation. He mentioned that this was one of his key takeaways from reading Brian Cody’s book (Kilkenny hurling manager). Brian apparently doesn’t have much time for superstars and egos either and feels they ultimately do damage to a team.

Paul Rellis stressed that managers need to continually invest in themselves as things are always changing and there are huge challenges all the time.

He described, for example, how Microsoft has come from nowhere 7 years ago to be the No. 1 Gaming buisness in the world presently.

Not surprisingly, a phrase in vogue in Microsoft currently is ‘obsess on success’.

Michael Burchell describe how Larry Page and Segei Brin, the founders of Google, set about creating a great culture by firstly studying great workplaces.

He said

“Culture trumps strategy, every time”

However, the key questions, in creating a great workplace, are:

1.  What is our strategy for winning in the marketplace?

2. What kind of culture do we need to create to win?

3. Who do we need to have/hire in the organisation to have a great culture fit?

4. What are the practices we need to put in place to create the culture?

He spoke about how managers with high scores on the Trust Index always outperform others on business results, showing that delivering results is truly about getting results thorugh other people.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Pay, employee engagement, productivity and performance management are the top people issues facing Irish companies this year

Posted on March 21, 2011, 11:05 am, by admin and received No Comments ».

Is Base Pay a Motivator49% of Irish companies said pay was the most important people issue currently facing their organisation this year.

42% believe employee motivation and engagement will be the most significant issue facing their organisation this year.

This is followed by productivity and performance management.

This is according to a recent IRN/Mercer survey.

It appears that issues of pay and pay related costs will be less pressing in two years time and that issues of employee engagement, productivity and performance management will rise to the fore.

Employee Engagement & Motivation

Levels of employee engagement are a key performance indicator for organisations according to Dr Patrick Gilbert, partner with Mercer.

According to previous studies of motivation globally by Rewick and Lawler, the top motivators at work are:

    Job Challenge

    Accomplishing something worthwhile

    Learning new things

    Personal development

    Autonomy

In this recent IRN/Mercer study of Irish companies, there are some similarities. The following are considered the most important for employee motivation and engagement:

   Job satisfaction

   Career development

   Organisational culture/leadership

   Job security

   Base pay

Is Base Pay a Motivator?

Interestingly, the earlier global Rewick and Lawler study, found Pay to be in 12th position.

The traditional motivational theory is that ‘pay’ is not a ‘motivator’ but rather is a ‘hygiene factor’ i.e. something which won’t in itself stimulate motivation, but if incorrect, will cause de-motivation.

However, according to Dr Gilbert, the Mercer research consistently demonstrates that this is not the case and that base pay is in fact a driver of motivation and engagement.

What about bonuses as a motivational tool?

Dr Gilbert stated that bonuses are considered to be less of a motivator than base pay, and this is repeated in Mercers international research.

He said that this was related to how organisations implement bonuses as most do a very poor job at it. For example, a super performer may get a 1.5% bonus and an ok performer might get 1%.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Do employees on sick leave accrue annual leave – Part 2?

Posted on March 14, 2011, 2:23 pm, by admin and received No Comments ».

sick absenceThe earlier blog on this topic (do employees on sick leave accrue annual leave?) illustrates that the Organisation of Working Time Act 1997 states that the employee’s entitlement to annual leave is based on hours actually worked. Until this legislation is amended the ECJ ruling that an employee can accrue annual leave while on sick leave is not enforceable by employees in the private sector.

What about employees in the public sector?

However under the principle of ‘direct effect’ it does apply to the public sector and therefore workers in the public sector can accrue annual leave when they are off work on sick leave.

What about employees in the not-for-profit sector?

In a recent Labour Court case involving the Brothers of Charity (LRC19562) the employer claimed that annual leave does not accrue while an employee is on long-term sick leave and annual leave is given when the employee meets the criteria of the hours worked as per the Organisation of Working Time Act, 1997.

However, the unions involved, SIPTU and INO, claimed that annual leave should accrue during long term sick leave.

The Labour Court found in favour of the employees on the basis that similar workers in the HSE were allowed to accrue annual leave while on sick leave and, thus, as parity already existed between the HSE workers and Brothers of Charity workers on other matters, parity should exist in relation to this matter also.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Do employees accrue annual leave while on sick leave?

Posted on March 14, 2011, 1:52 pm, by admin and received No Comments ».

sicknessIn 2009, the European Court of Justice (ECJ) ruled in case C-350/06 and Stringer v HRMC that a worker who is on long-term sick leave during the leave year does not lose the right to annual leave.

ECJ says employees on sick leave are entitled to their statutory annual leave

The ECJ ruling states that employees who have not worked during the leave year because they are on sick leave, are entitled to their statutory annual leave for that year.

According to this ruling workers are entitled to accumulate annual leave while on sick leave.

Annual Leave In Ireland is based on Hours Worked

However, in Ireland, the Organisation of Working Time Act 1997 states that the employee’s entitlement to annual leave is based on hours actually worked.

Illness during the leave year will reduce the total number of hours worked by the employee and may therefore affect his/her entitlement to annual leave under the Organisation of Working Time Act.

The 3 different ways of calculating annual leave entitlement are:

• An employee who has worked at least 1,365 hours in the leave year is entitled to the maximum of 4 weeks’ annual leave
• By allowing 1/3 of a working week for each calendar month in which the employee has worked at least 117 hours
• 8% of the hours worked in the leave year, subject to a maximum of 4 weeks

Employee cannot accrue annual leave while out sick

Until this legislation (the OWT Act) is amended, the above ECJ ruling that an employee can accrue annual leave while on sick leave is not enforceable in Ireland (in the private sector).

Thus, for example, if you have an employee who gets 20 days holidays per year and is out sick for 6 months, should they only get 10 days holidays for that year? Broadly, yes. To be precise, you would calculate the number of hours worked in the 6 months and use the formula above to calculate the exact number of holidays.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

€30k award for dismissal during 6 month probationary period – How to dismiss during probation

Posted on March 8, 2011, 6:09 pm, by admin and received 2 Comments ».

employeesThe former General Secretary of the Irish Postmasters Union was recently awarded €30,000 by a Rights Commissioner for unfair dismissal during his 6 months probationary period.

This begs the question as to how best to manage a performance issue, a conduct issue, or a question of ‘fit’, during probation and how best to dismiss during or at the end of the probationary period if deemed necessary?

Background

The employee in this case commenced employment in August 2009, had his first performance review in October 2009 and a second performance review in January 2010.

He was informed towards the end of January 2010 that the company had reservations about his performance and his probationary period was to be extended by a further 3 months.

When the employee expressed concerns in a letter to his employer about the extension of his probationary period,  his contract was terminated and he was paid 3 month’s salary in lieu of notice.

Rights Commissioner Decision

The Rights Commissioner stated that it was the employer’s error in appointing the employee in the first place.

He found that the employer’s decision not to use its own disciplinary procedure or follow the Code of Practice on Grievance and Disciplinary, because the employee was on probation, was misconceived.

The employee was awarded €30,000 on top of the 3 month’s salary in lieu of notice already paid. 

Dismissal During Probation

It is advisable to have a Probation Policy, separate to the Disciplinary Policy, which outlines clearly how issues of performance, conduct or ‘fit’ will be handled during the probationary period.

While it is not necessary to apply the full rigours of the Disciplinary Policy during probation, nevertheless, the Probationary Policy should broadly follow the principles outlined in the Code of Practice on Grievance and Disciplinary Procedures and the rules of Natural Justice.

Normally, the employment contract will specify a probationary period, which can be extended up to one year.

However, the probationary clause in the contract of employment should also state specifically, that during probation, the employee is subject to a different procedure i.e. is subject to the Probationary Policy of the company and not the Disciplinary Policy.

In the absence of a Probationary Policy, the employer is advised to follow the Disciplinary Policy.

The Probation Policy should also be provided in the Employee Handbook and the new employee should be briefed/trained on the contents of the Employee Handbook and sign an attendance sheet for such a briefing/training session, as well as sign the Acknowledgement Form in the Employee Handbook to acknowledge receipt and agree to be bound by the company’s policies.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

What happens if an employee refuses to transfer in a TUPE situation?

Posted on February 28, 2011, 11:24 pm, by admin and received No Comments ».

Employees in a TUPEThe European Communities (Protection of Employees’ Rights on Transfer of Undertakings) Regulations 2003 (TUPE) provide that the employees of a business which is being transferred from one employer to another must transfer with the business to the new employer.

Not only must the employees be transferred but they must be transferred with their accrued years of service, their existing terms and conditions of employment (with the exception of pensions), and also with the benefit of any collective agreement to which they may already be subject.

The application of the TUPE Regulations has been fraught with difficulties and has often given rise to more questions than answers.

What happens when an employee refuses to transfer?

One of the questions which has remained unanswered is what happens when an employee refuses to transfer.

Some were of the view that the original employer is obliged to find alternative employment, and, if unable to do so, the employee’s position is redundant and he/she is entitled to redundancy pay.

Others were of the view that an employee who refuses to transfer in a situation where his/her terms and conditions of employment are honoured by the new employer, is effectively resigning and no redundancy situation exists.

High Court decides a refusal to transfer is a resignation

At last we have the answer. The High Court in a recent decision (overturning the decision of the Employment Appeals Tribunal) held that a refusal to transfer is, in fact, a resignation.

Symantec TUPE case

In November 2006, Symantec transferred part of its business to Corporate Occupier Solutions (COS) following a decision by Symantec to outsource its EMEA facilities.

Two employees, employed by Symantec at the time of the transfer, objected to the transfer and chose not to transfer to COS.

Although they had been told by Symantec that their failure to transfer would be treated as a resignation of their respective positions, both contended that they had been dismissed by reason of redundancy and claimed to be entitled to lump sum redundancy payments under the Redundancy Payments Acts. They also claimed to be entitled to ex-gratia redundancy payments.

Symantec rejected their claims and contended that by reason of the TUPE Regulations, no redundancy situation applied as the two employees were entitled to their same jobs with COS on the same terms and conditions of employment in accordance with the TUPE Regulations.

The employees brought their claims to the Employment Appeals Tribunal (EAT) which decided that they were entitled to redundancy payments. Symantec appealed the decision to the High Court.

Mr. Justice Edwards stated that “…it does not follow that if an employee decides not to transfer a situation of redundancy automatically arises vis-a-vis the transferor. It cannot do so because the fact that an employee objects to the transfer does not of itself have the effect of negativing the transfer. It is just that an employee is not obliged to continue his employment relationship with the transferee…“.

Mr. Justice Edwards went on to state that “This court is completely satisfied that by virtue of regulation 4(1) it is not possible for the Defendants/Respondents in this case to make a redundancy claim against the Plaintiff/Appellant.”

Objecting to a transfer – the answer

This judgment is of huge significance to any companies who are involved in a transfer to which the TUPE Regulations apply as it finally clarifies how employees who object to a transfer should be treated by the transferor (i.e.the original employer).

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Aer Lingus to pay Revenue €32m over controversial ‘Leave and Return’ scheme

Posted on February 24, 2011, 7:03 pm, by admin and received No Comments ».

Aer Lingus LogoBeware ‘Leave and Return’ Schemes

Under a plan, drawn up in 2008 and implemented in 2009 at Aer Lingus, 715 staff of 913 who departed the company with attractive redundancy deals, were taken back within weeks. The ‘leave and return’ workers secured similar jobs on new lower paid terms and conditions.

In Autumn 2010, news broke that the Aer Lingus workers may have to refund money to the Revenue Commissioners over the controversial ‘leave and return’ scheme.

The Revenue Commissioners stated their intention to seek to recover PAYE and PRSI which they considered should have been deducted from termination payments to employees in 2009.

Today, Aer Lingus said it will have to make provisions to pay the Revenue commissioners an extra €32.5m for PAYE, PRSI, interest, penalties and related costs arising from its redundancy scheme.

The charge comes from payments to 715 staff under a restructuring programme negotiated at the Labour Relations Commission. As part of the agreement 913 staff exited the company under a voluntary severance scheme. Subsequently, 715 staff were re-employed into new roles under significantly different terms and conditions of employment, most seeing their wages reduced by up to 20pc.

Back in 2008, Aer Lingus proposed to outsource the majority of its Dublin based ground operations as these operations were uneconomic. Discussions with SIPTU, facilitated by the National Implementation Body and later the Labour Relations Commission, led to a collective agreement in November 2008 on a significant restructuring of ground operations.

In 2009, 913 staff were made redundant and 715 of those employees successfully applied for new roles within Aer Lingus, with changed duties and lower salaries.

By late 2010, it had become clear that both Revenue and the Department of Enterprise Trade and Innovation were seriously questioning whether the members of staff who left and subsequently applied for new roles and returned to Aer Lingus should be considered to be redundant under the relevant legislation.

Aer Lingus stated that it gave assurances to staff at the time that any termination of employment should qualify as legitimate redundancies and that staff members made their decision on the basis that any tax liability in relation to the programme would be limited.

Aer Lingus said it was “deeply disappointed and frustrated” that it must now provide for and settle this liability. It said it will not be seeking refunds of any of the redundancy payments made to staff and it will make provisions to pay the Revenue commissioners an extra €32.5m for PAYE, PRSI, interest, penalties and related costs arising from its redundancy scheme.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Is Pay-For-Performance Effective?

Posted on January 30, 2011, 8:42 pm, by admin and received No Comments ».

Evaluation form for performance payA recent lecture at the ESRI by Canice Prendergast, who is now one of the world’s foremost researchers on workplace incentives and their impact on productivity, addressed this question.

In light of recent bonus issues in Irish banks and public services, I thought it would be useful to summarise some of the main ideas from the lecture.

What is Pay-for-Performance?

Pay-for-performance would include wage raises, the likelihood of getting promoted, the likelihood of a better job, subjective bonuses, profit shares, stocks, commissions, and so on.

Does pay-for-performance work?

There are a series of academic studies over the last decade showing large effectsof pay-for-performance on productivity and profitability.

It is not unusual to see productivity increases of 25-35%, with increased compensation accounting for perhaps half of this.

Sales workers, sports players, teachers, and many other occupations all show gains when commission, piece rates, bonuses, etc. are used rather than salaries.

A key study was in a windscreen replacement firm, Safelite, where productivity rose 35%, of which a third was due to selection of better employees.

On the other hand, there have also been a number of studies suggesting that aligning pay to performance are likely to backfire so badly that it should not be used at all.

Examples include the case of police officers in Los Angeles some years ago. The police were seen as slow to respond to complaints about public policy matters. So a performance measure regarding ‘complaints’ was instituted. However, it backfired, as the police stopped arresting criminal suspects (who when arrested made spurious complaints) and so arrests went down and the police response to complaints improved!

Another problematice situation was in the US under the ‘No Child Left Behind’ scheme whereby teachers were paid for the number of children in schools they brought over the line i.e. above the 40% pass mark. The result was that teachers concentrated their efforts on children they could bring ‘over the line’ and ignored the rest (those who would pass anyway and those who had no hope of making it).

Another bonus that backfired in the US involved paying police 20% of the proceeds from drugs raids. The result was the police stopped arresting people with drugs, and only arrested those with money and drugs, as that is what they were paid for.

These studies identify two issues 1) measurement issues, and 2) psychological responses to performance pay.

The central questions become whether the assumed increase in productivity is (i) worth the increased compensation costs, or (ii) beneficial to the organisation, even ignoring compensation costs.

Pay Crowding Out Intrinsic Motivation

Studies have shown that Extrinsic Motivation (pay-for-performance) crowds out Intrinsic Motivation where employees do work that they inherently enjoy. If you pay one group to do that task for some period of time, but do not pay the other to do it, and then see what happens after the payment period finishes.

Who continues to do the activity? Typically, it is the group that is not paid.

Why pay-for-performance should not be used?

A: Performance pay may indeed change behavior, but not in the way that the employer would like.

B: Performance may not improve enough to warrant the additional compensation costs.

Can we trust performance evaluations done by supervisors?

Another problem with bonuses is that supervisors can end up giving everyone the same bonus in order to keep them all happy, even though performance can vary greatly from one team member to another.

Alternatives to pay-for-performance

Performance measures sometimes only cover a subset of the activities of the employee.

Do you know what the employee should be doing?

Can you monitor inputs rather than outputs?

Can you observe the employees’s actions?

Pay-for-performance incentives have to be evaluated in the context of answers to the questions above.

For example, one of the main reasons sales staff are paid on a performance basis is because they are away from the office and it is used as a way of ensuring they will perform.

McDonalds, for example, pays its franchisees several times more than in the outlets it runs directly as the latter are easy to monitor.

What else can be used when pay for performance fails?

Some things you can do include, job design and better hiring.

So, overall there are pros and cons for pay-for-performance systems.

Be careful about what you measure as ‘what gets measured gets done’, but is it what you intended?

And remember that employees are intrinsically motivated as well as by external factors such as performance related pay.

Helena BroderickAbout the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage.

Is an employee on Health & Safety Leave entitled to accrue annual holidays and public holidays?

Posted on January 23, 2011, 6:34 pm, by admin and received No Comments ».

Pregnant Woman - Health & Safety LeaveA woman is granted health and safety leave from employment if her employer cannot remove a risk to her health and safety while she is pregnant, or breastfeeding, or assign her alternative “risk-free” duties.

Health and Safety Risk Assessment

An employer should carry out risk assessments in relation to pregnant or breastfeeding employees.

If there are particular risks to an employee’s pregnancy, these should be either removed or the employee moved away from them.

Under Section 18 of the Maternity Protection Act 1994 if neither of these options is possible, the employee should be given health and safety leave from work, which may continue up the beginning of maternity leave.

If a doctor certifies that night work would be unsuitable for a pregnant employee, the employee must be given alternative work or health and safety leave.

Following an employee’s return to work after maternity leave, if there is any risk to the employee because she has recently given birth or is breastfeeding, it should be removed.

If this is not possible, the employee should be moved to alternative work.

If it is not possible for the employee to be assigned alternative work, she should be given health and safety leave.

If night work is certified by a doctor as being unsuitable after the birth, alternative work should be provided. If alternative work cannot be provided, the employee should be given health and safety leave.

Health and Safety Leave – Employee Rights

Time spent on health and safety leave is treated as though the employee has been in employment, and this time can be used to accumulate annual leave entitlement.

However, the employee is not entitled to leave for any public holidays that occur during health and safety leave.

To qualify for Health and Safety Benefit, the employee must meet certain criteria and social insurance (PRSI) contribution conditions. The employer pays the first 21 days (3 weeks) of health and safety leave, and the Department of Social Protection may pay the remainder.

Minimum wage to be reduced by €1 from Feb 1st

Posted on January 21, 2011, 9:03 pm, by admin and received No Comments ».

National Minimum Wage The National Minimum Wage will be reduced by €1 to €7.65 per hour from February 1st.

Existing employees on minimum wages are protected from cuts to their wages if they are already working under a contract that sets wages at or above the national minimum wage. Some workers on the minimum wage may be working on contracts stipulating they are paid at the prevailing national minimum wage hourly rate. An employer and employee must both agree to a change to the existing rate of pay.

The latest data from the Central Statistics Office shows that about 47,000 workers, or 3.1% of the employed labour force, are paid at or below the current adult experienced worker rate of €8.65.

The new minimum wage rate of €7.65 is in the top tier of minimum wage rates in the EU and 12% higher than the British rate.

The new rate will apply to new hires on the national minimum wage from Feb 1st 2011.

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