10/12/2014

Is holiday pay sending you into a panic this Christmas?

A ruling last month by the Employment Appeals Tribunal (EAT) has sent employers, who take on staff on non-guaranteed overtime, into a bit of a panic.  The EAT ruled that any non-guaranteed overtime should be included when calculating holiday pay.  So what does this mean?

The problem lies with employers where staff are working on a low basic salary (say 40%) with the rest of their pay made up in commission (60%) and those where employers pay staff essential overtime.

The UK government has always stated that employers should use basic pay when calculating how much a worker should get paid while they are on holiday. This was outlined in the Working Time Regulations Act of 1998. It means that overtime and commission, which normally helps to increase average pay levels, is not included when calculating basic holiday pay. This puts the UK at odds with the European Working Time Directive, which doesn’t specify how holiday pay should be calculated, and suggests that overall remuneration should be taken into account.

The discrepancy between British and EU law came to a head earlier in the year when several cases were brought to the European Court of Justice by UK workers whose holiday pay was calculated using only basic pay.  Last month the EAT ruled in the workers’ favour, setting a precedent for how workers’ holiday pay will now be calculated. However, this only applies to the minimum four weeks’ holiday required by EU law and not the additional 1.6 weeks provided by UK regulations or any discretionary holiday on top of that.

In the meantime Vince Cable is setting up a task force under the Department for Business, Innovation and Skills (BIS) to look into the implications and some employment law practices are advising employers to assess their risk by assessing their potential claims under the ruling.

Some employers are sitting tight in the hope there will be a further appeal, while others are using this time, as per the advice from some employment law practices, to do some analysis in their own organsations to see how many of their employees are on non-guaranteed overtime.  However, it is unclear in some instances how employees will prove that the overtime they do is essential to their job.

So, if you are winding down to the Christmas break, maybe there is an opportunity for you to have a look at who might be eligible for recalculated holiday if this applies?

Wishing you all a very Happy Christmas from Hafton Consultancy.

22/01/2017

What’s ahead for 2015 in our labour market?

There has been much talk this last week of improved unemployment figures, some small rises in salaries and continued low inflation.  So what’s ahead in 2015 and should employers be upbeat about the economy this year?  Well, there seem to be hopeful signs – but there are also some “known unknowns” according to a recent CIPD report on the labour market.

We have a general election looming which brings its own uncertainty.  The Office of Budget Responsibility forecasts that growth in salaries is set to stay around 1% to 2% and even with our current low inflation it means that wages in real terms will only increase slightly.

Interest rates which have been low since 2008 are likely to rise in 2015.  Some mortgage or other borrowers who have taken loans on the assumption that interest rates will remain low may find it hard if interest rates start to rise. Yet any rise in interest rates is unlikely to be enough to please those with savings!

The economic situation across Europe, despite the European Union’s optimistic outlook, looks uncertain.  High unemployment rates in Italy, Spain and Greece, particularly amongst the youth (under 25 year olds) which are running at between 44% and 54%.are holding their economies back.  Here in the UK, while overall unemployment is running at 6%, our youth unemployment is 17% compared with other European countries like Germany, Netherlands and some Scandinavian countries where youth unemployment is between 4% and 8%.

And then there are the currency uncertainties; the Norwegian Kroner has taken a 30% tumble because of falling oil prices and conversely the Swiss Franc has risen sharply now that it has delinked from the euro.

Yet chief executives in the UK are more upbeat than they were three years’ ago about expanding their business than their counterparts in other European countries according to a Price Waterhouse Coopers report.  They are, however,  more concerned than before about the skills gap with 84% of them reporting concerns about finding the right skills and talent for their business.    Chief Executives reported that they wanted the government to prioritise its commitment to developing a “skilled and adaptable” workforce.

So what does this mean for you as a leader, manager or employer in 2015?  How will you ensure you retain your key talented staff and ensure that any expansion with new positions are filled by people who have the right values, attitudes and skills to contribute effectively to your business?

16/03/2015

As a leader are you creating a sense of purpose?

Making sure your staff understand the purpose of your organisation is crucial to getting them to stay, according to a Gallup poll at the end of last year.

So, how do you create a sense of purpose in your organisation? Here are five things you can do to create that sense of purpose in your organisations and teams.

  1. Keep it simple

Having a straight-forward goal and purpose is important.   Jim Collin’s idea of a Big Hairy Audacious Goal (BHAG) is well-known and helps focus on what is important.  Just to give you an idea of a BHAG here are two practical examples.   Here is Amazon’s BHAG “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online”.  Everything they do from making the on-line experience one simple “click” through to their policy on returns keeps you coming back as a customer.   Google also has a straight-forward mission statement too – “To organise the world’s information and make it universally accessible and useful’.   Both mission statements and goals s are succinct.

  1. Create a great working environment

It sounds obvious,  but if your staff are in a suffocating workplace environment, rather than a comfortable work place with ambient temperatures and good desk space, then it can leave them feeling lethargic and not giving their best.   Their focus, and their conversations with colleagues, is likely to be about their uncomfortable conditions rather than what they want to and can achieve for the organisation.

  1. Engage and be accountable

Getting your staff excited about purpose is one thing but delivering it is quite another.  Organisations with good opportunities for staff to contribute their ideas and share their views constructively are more accountable and means that any radical change you need to adopt to achieve your mission is more likely to be accepted. It is also important that the leaders are visible and communicating regularly with their staff.

  1. Be confident . . . but humble

According to the London Business School, the best performing companies all have an air of confidence, but this is something easier said than done.  Staff will follow leaders who are confident, or even have an air of confidence, but not those who are arrogant.

Jim Collins who wrote “Good to Great” tells the story of Darwin F Smith who took over Kimberly Clark, which back in the 1970’s was a “stodgy old paper company”.  Smith was a mild-mannered in-house lawyer and was made Chief Executive which some thought was an odd choice.  He remained Chief Executive for 20 years and in that period he transformed the company into a leading paper-based products company beating rivals such as Procter and Gamble.  Smith was described as a man who carried no airs of self-importance.

  1. Be prepared for an endurance test

There has been much written about “resilience” whether on an individual or organisational level.

When things are going well and your mission and strategy is working then all is well with the world.   Yes, it important to take advice where the strategy and plans need to change, but also be prepared to be purposeful about pushing through things that are key to the success of the organisation.

20/04/2015

Are you giving feedback clearly to staff from different cultures?

As anyone who has worked abroad or in an international setting will tell you, ways of communicating in one country may not necessarily work in another.  There are some surprising and fundamental differences even within Western and Asian cultures that need to be taken into account.

For instance, while the direct negative feedback given by a German boss might seem unnecessarily harsh in America, while an American worker’s enthusiasm might come off as excessive and insincere in Germany.

In Erin Meyer’s recent book “The Culture Map” she looks at eight dimensions which highlight the main differences between cultures.  They are

Communicating – low context vs high context

Evaluating – direct negative feedback vs indirect negative feedback

Persuading – principles vs applications

Leading – egalitarian vs hierarchical

Deciding – consensual vs top-down

Trusting – task-based vs relationship-based

Disagreeing – confrontational vs avoids confrontation

Scheduling – linear-time vs flexible-time

The two dimensions which impact particularly on feedback, namely evaluation and communicating, can leave both managers and individuals bemused as to “what is really being said”.

She quotes the story of a French Finance Director going to work in the USA for an American boss.  Her team, mainly Americans complained to her boss that in the first rounds of interviews she was unduly harsh focussing on the negative rather than any of the positives.   She was taken aback.   Her style of evaluating her team had worked perfectly with her French team.  In her mind she knew the Americans to be “to the point” and direct, but what she didn’t know was that Americans, when it comes to feedback, tend to be over the top with their praise using words like “great”, “fantastic” and, of course,  “awesome”.  On the other hand, when it comes to negative feedback they will dress it up with some positives and even then might put it in writing rather than in a face-to-face meeting.

The same Finance Director had a similar experience when it came to her own performance review.   Her American boss lavished her with praise about the aspects that were going well, but she missed the more nuanced issues about her performance that her boss was trying to tell her.   Fortunately the author, who was the Finance Director’s coach was able to step in and help them work through the communication blocks.

Have you had or are you currently experiencing some communication or performance review challenges?  Perhaps understanding the prevailing culture of the individuals or group you are working with would help you understand their context better.  Please get in touch if you want to talk confidentially about any situation you face.

12/06/2015

Under Pressure?

It is estimated that right now, one in six workers is dealing with a mental health problem.   The Chartered Institute of Personnel and Development (CIPD) report, in their latest absence management survey, that two out of five employers say they’d seen an increase in reported mental health problems in the past year.  So how comfortable is your organisation speaking about these issues when you see that colleagues and staff members are struggling?

Ideally employers need to take a proactive approach to stress management which focuses on prevention and early intervention, not just responding when a problem becomes significant or when someone goes on sick leave.

A number of organisations are looking at the main causes of stress in their organisation so they can try to reduce those stressors and also increase staff members’ resilience to deal with pressures they may face.

What can you do to reduce workplace stress?

  • Do a stress audit and subsequently direct resources to reduce or eliminate the sources of stress.
  • Ensure people feel adequately trained and supported to do their jobs well.
  • Increase support for staff during periods of change and uncertainty.

Which interventions should you introduce to help build staff resilience?

  • stress management and relaxation techniques training
  • training aimed at building personal resilience (such as coping techniques, cognitive behaviour therapy, positive psychology courses)
  • promoting healthy behaviour and exercise
  • flexible working options and improved work-life balance
  • personal counselling schemes.

 Making an early invention by spotting and addressing early signs of a stress-related issue is important to prevent it from escalating.  Staff members need to feel able to flag a problem with their line managers and feel confident they are capable of taking action.   So it is important that your organisation invests in:

  • developing the people management skills and confidence of managers at all levels so they feel able to have the appropriate conversations with staff
  • line managers knowing the teams and people’s usual working styles to be able to spot behaviour which is out of sorts and may be an early warning sign of a potential issue
  • developing a supportive work culture to encourage staff to discuss and seek support when experiencing stress
  • provision of, and signposting to, support mechanisms, for example a counselling service

The CIPD has come up with a clear set of management competencies for preventing and reducing stress at work.  This is a useful framework and checklist for ensuring your line managers are equipped to deal with stress at work.   If you’d like a copy please get in touch.

19/02/2016

The end of the Annual Appraisal?

It is surprising to see how many organisations are abandoning their annual appraisal schemes – or is it?   People love to complain about the annual appraisal meeting – I have done it myself. Line managers struggle to think through what they should say, individuals being appraised don’t enjoy the process and the HR team get frustrated with line managers and individuals not completing the appraisal meetings and write- ups on time.

There have been too many stories of individuals, who thought they were doing a good job, and their line manager telling them they are doing a good job and then they get a low rating at the end of the year.

Corporations such as Google, Facebook and Netflix have bypassed annual appraisal altogether. In their thinking the young generation entering the workforce want to have immediate feedback. By pointing out excellent performance and problems as they arise, employees have an opportunity to change behaviour that makes an immediate difference. Why wait until the end of the year?

One of the problems is defining the purpose of appraisal because people need three types of feedback; they need

  • appreciation – knowing they are making a valid contribution
  • coaching – support in doing an even better job and
  • evaluation – a critical and objective review of their work

Appraisal tends to muddle these together according to Sheila Heen and Doug Stone in their book “Thanks for the Feedback “. They also discovered from their research that organisations tend to focus on helping managers to give better feedback – a “push” model of learning that is helping line managers have a set of different tools to help deliver the key feedback messages to staff.   However, they soon realised that it is the “receiver” that chooses “what they let in” so as well as helping line managers it is equally important to support staff receiving feedback to make to most of learning from the feedback – even if delivered in a poor way!

So should your organisation abandon the annual appraisal process? Probably not! However, it would be worth making sure line managers and staff are equipped to give and receive regularly feedback, have opportunities to meet regularly (every four to eight weeks) and that line managers and staff are encouraged to have the conversation in the moment rather than waiting for any formal process so that the organisation has a more trusting environment.

02/03/2016

How do you manage ‘Millennials”?

McKinsey recently carried out qualitative research in the USA, conducting 200 in-depth interviews with young professionals across 120 companies.  The purpose was to look for ways to engage younger employees effectively.

Each generation seems to see stark differences in the upcoming generation. McKinsey came across the following quote:

Because all the peoples of the world are part of one electronically based, intercommunicating network, young people everywhere share a kind of experience that none of the elders ever had. . . .” The quote was written in 1970!

Commentators have branded today’s youth as “millennials”—workers who are said to be difficult to manage and likely to quit at a moment’s notice. But can you define everyone born between 1980 and 2000 by a handful of general characteristics? The reality is more complex.

The research highlighted what shapes this ‘millennial’ generation: the harsh economic realities they’ve seen, the burden of student-loan debt and coming into a workforce amid the global financial crisis. This has understandably influenced their decisions to join or leave companies and sharpened their desire to find meaning and purpose in the chaos of the world in which they’ve grown up. Millennials also speak of themselves as hyper-connected globally—“always on”—and this natural affinity for technology provides them with unique skills and insights that managers can use.

So how are organisations adapting? Here are some examples of actions some companies are adopting.

Put communication on steroids: Yes, all employees are eager to hear from top management, but millennials expect this to happen at hyper speed, in real-time, with two-way communication that accepts input from everyone, followed by fairly immediate action.  One company in the research conducts surveys of its mostly millennial employee base every 90 days and reports the raw findings and analysis, to all employees. This approach provides unprecedented visibility into issues and solutions—and encourages a rhythm of continuous improvement.

Develop a culture of mentorship: Many young people thrive on collaborative work and support from colleagues, but few companies have figured out how to build a culture that helps existing employees to mentor new ones. One company is testing the idea of mentoring circles whereby three more experience employees support the a young person when they join. .

Get creative about professional growth: This young generation has grown up watching entrepreneurs reach the height of success before the age of 30.   They are frustrated by the lack of advancement opportunity in today’s flat structures.  Short-term, temporary projects over and above the day job are nothing new, but for millennials, who thrive on challenges, they are crucial and young workers say they are energised by job rotation programmes, a practice which has fallen by the wayside in many companies.

Make flexibility more than polite talk: Young employees value the genuine blending of their work and personal lives. Approaches whereby core hours mean that staff are responsible for their results, regardless of their work hours, creates trust. 
Flexibility is also important to millennials who are starting families and many cite their families as a top priority and they want more family-friendly policies at work.

 Make young employees part of the solution: Allowing millennials to pose questions that foster solutions, and to pause and engage with their elders before moving on to action means they can identify with the role of the manager. It’s crucial to encourage this two-way dialogue between the generations. Given the right attitudes, senior and junior leaders can bridge the cultural gap that divides them.

Young people can help show the way, not because they are so different, but because they have a fresh perspective and can raise relevant questions about why more progress hasn’t been made already. Leaders who listen, and have the courage to break new ground, can improve their odds of building a lasting legacy that serves generations to come.

16/08/2016

Time to get up to date with changes in employment law!

Yes, each year the UK Government makes amendments to employment law which can be easy to miss. Hafton is committed to keeping you compliant with current employment law, so please get in touch if you have any questions. Here are some of the highlights of changes in 2016:-

Spring 2016

The new National Living Wage of £7.20 per hour applies to workers age 25 and over – from 1 April.
The National Minimum Wage amendment regulations also double the financial penalties if employers are found to have paid less than the minimum – from 1 April.
Statutory rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory sick pay (SPP) are usually increased in April each year, but remain unchanged this year.

The limit on a week’s pay (for calculating redundancy and unfair dismissal awards) increases to £479 – from 6 April.

Autumn 2016

Mandatory gender pay gap reporting is expected to be introduced in October affecting private and third sector employers with 250 or more staff in Great Britain. The first reports must be published by end of April 2018 and then annually after that date. Public sector organisations will be included at some time yet to be decided.

National Minimum Wage rates – will increase on 1 October: the standard adult rate for workers aged 21 and over to £6.95, the development rate for those aged 18-20 to £5.55, the young workers rate for those aged 16-17 to £4.00, and the apprentice rate to £3.40.

The link below will take you to a useful factsheet from the Chartered Institute of Personnel and Development.  It gives a summary of the full changes and in which month you can expect these to happen.   Happy reading.

http://www.cipd.co.uk/hr-resources/factsheets/employment-law-developments.aspx?utm_medium=email&utm_source=cipd&utm_campaign=cipdupdate&utm_term=674551&utm_content=060416-5484-8304–20160409130246-popular%20factsheet#link

15/09/2016

Making the case for organisational culture

What makes an organisation a great place to work? Culture is one of 
the hardest attributes of an organisation to articulate and measure, but also one of the
most important and valuable.  Positive and aligned organisational cultures can

  • motivate staff to perform and engage with
their work
  • align behaviours to common values and purpose
  • share knowledge and insights
  • be more productive and responsive
  • build trust.

On the reverse side, when toxic, culture can cause significant issues for the business and its staff, leading to

  • low performance and morale
  • high levels of staff turnover
  • significant harm to the organisation and
to the well-being of employees.

In times of challenge and opportunity, a healthy organisational culture can make or break the success of a business and of the people working for it. It follows then that leaders should be leading the way on the people aspects of corporate culture. Yet in the many organisations I am acquainted with, I hear staff saying that the senior team or, indeed the board of trustees, are not modeling the behaviours that should underpin the organisation’s values. So why this dissonance?

The Financial Reporting
Council (FRC) has come up with a UK Corporate Governance Code aimed at positioning the board as a central element for establishing the culture of the organisation and maintaining the ethics and values thus setting
the ‘tone from the top’.

The FRC also identified that in order to be effective any board required dialogue that is both constructive and challenging. The problems arising from “groupthink” have been exposed in particular as a result of the financial crisis. One of the ways in which constructive debate can be encouraged is through having sufficient diversity on the board. This includes, but is not limited to, gender and race. Diverse board composition in these respects is not on its own a guarantee. Diversity is as much about differences of approach and experience, and it is very important in ensuring effective engagement with key stakeholders and in order to deliver the business strategy.

A joint culture project between the Chartered Institute of Personnel and Development (CIPD) has been leading on
the people issues theme of work, exploring exactly how boards should consider the culture of
their organisations, and crucially the steps which they can take to understand and develop positive working environments. Through their research they have gathered insights into four key themes which are set out in the action points below.

So what are the key action points for your board?

As well as ensuring that the composition of the board is diverse, it should :-

  1. Champion change from the top: Lead cultural change from the top, and evidence its impact on the business. Ensure that the board is diverse and representative of the organisation and community in which the business operates, while ensuring that all appointments are based on merit.
  1. Address the reward question: Align measures of performance, reward and culture to address issues of pay and ensure that reward decisions take cultural alignment into account.
  1. Empower the board’s committees: Empower the remuneration committee to challenge, and act with integrity and independence. Ensure that the board responds to the remuneration committee transparently and with full commitment. Maintain a focus on corporate culture to challenge the board to remain accountable for cultural issues, and highlight potential issues before they arise. Establish a culture committee to oversee cultural risks and opportunities, and hold the board to account on issues regarding culture.
  1. Protect whistleblowers and those speaking up: Create employee voice and whistleblowing processes that protect employees who speak out about cultural and behavioural issues, and ensure that the board takes effective action to rectify concerns.
17/10/2016

How positive should I be in the workplace?

So how can you get the best out of your team?   Should you offer positive feedback to let people know when they’re doing well, or should you offer constructive comments to help them when they’re off track?

Research from Harvard suggests that this is a trick question. The answer, as one might intuitively expect, is that both are important. But the real question is — in what proportion?

The researchers examined the effectiveness of 60 strategic-business-unit leadership teams at a large information-processing company. “Effectiveness” was measured according to financial performance, customer satisfaction ratings, and 360-degree feedback ratings of the team members.

The factor that made the greatest difference between the most and least successful teams, was the ratio of positive comments (“I agree with that,” for instance, or “That’s a terrific idea”) to negative comments (“I don’t agree with you” “We shouldn’t even consider doing that”) that the participants made to one another. (Negative comments could go as far as sarcastic or disparaging remarks.)

The average ratio for the highest-performing teams was 5.6 (that is, nearly six positive comments for every negative one). The medium-performance teams averaged 1.9 (almost twice as many positive comments than negative ones.) But the average for the low-performing teams, at 0.36 to 1, was almost three negative comments for every positive one.

Negative feedback is important when we’re heading over a cliff to warn us that we’d really better stop doing something horrible or start doing something we’re not doing right away. But even the most well-intentioned criticism can rupture relationships and undermine self-confidence and initiative. It can change behaviour, certainly, but it doesn’t cause people to put in their best efforts.  Only positive feedback can motivate people to continue doing what they’re doing well, and do it with more vigour, determination, and creativity.

This research is echoed in an uncanny way by John Gottman’s analysis of marriage and couples.  The single biggest determinant is the ratio of positive to negative comments the partners make to one another. And the optimal ratio is amazingly similar — five positive comments for every negative one. (For those who ended up divorced, the ratio was 0.77 to 1 — or something like three positive comments for every four negative ones.)

Clearly in work and life, both negative and positive feedback have their place and their time. If some inappropriate behaviour needs to be stopped, or if someone is failing to do something they should be doing, that’s a good time for negative feedback. And certainly opposite views are useful in leadership and team discussions, especially when it seems only one side of the argument has been heard. But the key even here is to keep the opposing viewpoint rational, objective, and calm — and above all not to engage in any personal attack – under the disingenuous guise of being “constructive”.

So how can you (and I!) be more aware of the ratio of positive and negative comments we make in the workplace – and how can we keep it as close as possible to the ideal of 5.6 to 1?