When it comes to operating at peak performance, today\u2019s entrepreneurs face a variety of obstacles that can prevent them from meeting their business goals. In addition to federal and state employment-law compliance, there are other systemic pitfalls than can expose a burgeoning company to risk and distract entrepreneurs, managers, and employees from what should be their primary focus: growing their\u00a0company.<\/p>\n
There are many consequences of ignoring foundational risks. Obviously, company exposure to financial losses due to fines for non-compliance is top of mind to most entrepreneurs. However additional outcomes such as negative publicity and reduced customer confidence can also have a detrimental impact.<\/p>\n
Here’s a list of 10 potential pitfalls, with tips to help you avoid them:<\/p>\n
Managers represent the company to employees. As such, they can create \u201cstrict\u00a0liability\u201d if they take action that is inconsistent with company policy or is in violation\u00a0of laws or regulations. They can also have a profound impact on employee success\u00a0and retention.<\/p>\n
Recommendation<\/strong>: Train your managers on the basics. For example, train managers\u00a0on recruitment and selection, coaching and managing performance, addressing\u00a0discipline in a consistent and productive manner, delivering difficult messages,\u00a0and ending the employment relationship properly.<\/p>\n Inconsistency breeds risk in the workplace. An inconsistent selection process can\u00a0lead to applicant complaints and possibly EEOC actions, not to mention lawsuits. It\u00a0can also result in poor hiring decisions.<\/p>\n Recommendation<\/strong>: Establish a consistent hiring practice. Follow uniform\u00a0processes, conduct proper background checks, use trained interviewers, and\u00a0create offer letters that provide mutual understanding.<\/p>\n Inconsistent or incomplete onboarding opens the door to claims of discriminatory\u00a0practices and can lead to unhappy and\/or unsuccessful employees, as well as\u00a0retention problems.<\/p>\n Recommendation<\/strong>: Create a standard employee onboarding checklist. Implement a\u00a0process that includes a sign-off at the conclusion of each phase, supplemented with\u00a0departmental or role-specific training requirements.<\/p>\n Wage claims are on the rise and the Department of Labor has increased staffing\u00a0under the current administration. Additionally, the Equal Pay Act requires equitable\u00a0pay practices for positions that require similar skills, have similar responsibilities, and\u00a0are of similar importance to the organization.<\/p>\n Recommendation<\/strong>: Tie compensation to competitive market rates. Doing so will\u00a0bring consistency and objectivity to decisions around pay. Variability in pay should\u00a0be based on education, tenure, merit, and skill set.<\/p>\n The Fair Labor Standards Act (FLSA) and some state laws mandate, among other\u00a0things, that certain employees receive overtime pay for overtime worked. Incorrectly\u00a0classifying employees as exempt from these protections, when they should be\u00a0non-exempt, can result in awards of back wages, fines, and penalties against the\u00a0company. Additionally, incorrectly classifying a worker as an independent contractor\u00a0can result in similar risks and penalties.<\/p>\n Recommendation<\/strong>: \u00a0Seek legal counsel with experience in employment law for\u00a0guidance on FLSA and independent contractor classifications. Federal and state\u00a0laws regarding classification of employees are tricky, and employee classification\u00a0issues should therefore be referred to experienced outside counsel. The IRS and\u00a0many other state and federal agencies use very specific tests for determining what\u00a0constitutes an independent contractor, so contractor\/employee issues should also\u00a0be referred to experienced outside counsel.<\/p>\n Documenting performance issues is a key step in addressing misconduct or poor\u00a0performance and protecting the company. Failing to properly document incidents\u00a0leaves employees unaware of the need for improvement, creates problems for\u00a0managers, and may lead to liability for the company.<\/p>\n Recommendation<\/strong>: Use a \u201cRecord of Counseling\u201d or \u201cCorrective Action Notice\u201d\u00a0to document performance issues as they arise. It is important to seek objective,\u00a0experienced human resource guidance before taking disciplinary action to help\u00a0avoid emotional or knee jerk decisions.<\/p>\n Risk #7: Lack of a performance management system<\/p>\n A performance management system improves communication and ensures each\u00a0employee\u2019s activities and focus are aligned with the company\u2019s objectives. It\u00a0also documents accomplishments or misses, and provides objective, observable\u00a0guidance for merit increases, and incentive compensation.<\/p>\n Recommendation<\/strong>: Reward and pay employees based on deliverables. Provide\u00a0performance input to the executive team regularly through a documented\u00a0performance management system; develop shared expectations around\u00a0performance ratings to ensure consistency in evaluation of performance; use goalsetting templates and performance review forms in developing a performance\u00a0management system. A well documented performance management system can\u00a0be a key vehicle in executing a company\u2019s business strategy.<\/p>\n Clear, easy-to-understand job descriptions encourage the accomplishment of\u00a0business objectives and protect the organization from charges of discrimination and\u00a0unfairness.<\/p>\n Recommendation<\/strong>: Use a job description questionnaire to assist in gathering\u00a0information. It\u2019s important that your job descriptions cover essential work\u00a0functions, including the physical ones along with any other requirements\u00a0each position requires. This is imperative in order to be compliant with the\u00a0American\u2019s with Disabilities Act (ADA).<\/p>\n Note: Don\u2019t underestimate the value of\u00a0leveraging experienced incumbents in each position to outline the realistic day-to-day Consistent policies and procedures help set expectations and are essential for\u00a0smooth operations. Evaluate and implement policies specific to your company\u2019s\u00a0situation, and then follow them.<\/p>\n Recommendation<\/strong>: Ensure appropriate policies are documented and accessible\u00a0to employees. Implement only the policies that will be applied consistently\u00a0throughout the entire organization.<\/p>\n Harassment prevention training sometimes limits the company\u2019s liability and\u00a0partially fulfills an employer\u2019s obligation to take reasonable steps to prevent\u00a0harassment in the workplace under various laws.<\/p>\n Recommendation: Conduct harassment prevention training every two years and\u00a0in the on-boarding process for new hires. Training can be delivered online or in-person. Either way, make sure to document participant names, and the date and\u00a0location of the training.<\/p>\n Companies have options to protect themselves from significant risk, but they can\u00a0sometimes feel overwhelming at first. Here are some guidelines:<\/p>\n Editors note: This was a guest post from Trinet. TriNet serves as a trusted HR partner to growing businesses, helping them to contain costs, minimize employer-related risks, relieve administrative burden, and keep focused on their core business functions.<\/p>\n","protected":false},"excerpt":{"rendered":" When it comes to operating at peak performance, today\u2019s entrepreneurs face a variety of obstacles that can prevent them from meeting their business goals. In addition to federal and state employment-law compliance, there are other systemic pitfalls than can expose a burgeoning company to risk and distract entrepreneurs, managers, and employees from what should be […]<\/p>\n","protected":false},"author":884,"featured_media":2286,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"template-single-archived.blade.php","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-5460","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nRisk #2: Poor or inconsistent selection process<\/h3>\n
Risk #3: Poor or inconsistent onboarding of new hires<\/h3>\n
Risk #4: Inconsistent compensation practices<\/h3>\n
Risk #5: Employee misclassification<\/h3>\n
Risk #6: Insufficient documentation of performance or\u00a0behavioral issues<\/h3>\n
Risk #8: Nonexistent or incomplete job descriptions<\/h3>\n
\nresponsibilities and requirements for each role.<\/p>\nRisk #9: Failure to follow published policies<\/h3>\n
Risk #10: Failure to train on harassment prevention<\/h3>\n
Conclusion<\/h3>\n
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