HR Service Matters

By: Mike Smith

Having been close to sales and marketing organizations for over 30 years, I have observed the sometimes simple yet more often complex world of sales compensation plans.  And recently we have all been exposed to the difficulties of highly-leveraged bonus plans in the financial services arena.  Clearly all incentive plans have a goal to motivate employees to peak performance.

Recently, I reviewed a very interesting TED video by Daniel Pink. Pink’s talk covers some of the key elements of his newest book titled Drive.  The research highlighted is intriguing and his conclusions about a whole new operating model for business are very fascinating.  Rather than rely on traditional monetary (carrot) incentives which are external, Pink advocates an intrinsic motivational model that offers employees motivation through autonomy, mastery and purpose.  Below is the link to the complete video on TED.

http://www.ted.com/talks/lang/eng/dan_pink_on_motivation.html

In considering this new model, I believe that HR services can help facilitate the autonomy and purpose incentives.  Using even skimpy social networking capabilities, organizations can help promote autonomy by showing how employees are satisfying their urge to direct their own lives in the workplace.  Even team results can be promoted. 

HR services can also make it easier for employees see the bigger picture and bring into focus the essential purpose of the organization.  Everyone wants to know about the results that are bigger than any one individual.  This revelation helps to satisfy that longing we all have to see our work support the service of something greater than ourselves.

Aimee Cernik, a member of the TALX Unemployment Product Management team, is our guest blogger again today with some insight into how the insured unemployment rate is calculated. 

Last week I discussed what is involved with computing the national unemployment rate (NUR), an essential published monthly rate that helps determine the overall health of our economy.  Why is the NUR so important in projecting the health of the economy? Because a low rate of unemployment shows signs of economic prosperity, as well as the potential for inflation, and conversely a high rate of unemployment reveals signs of a recession or a depressed economy. 

Almost of equal importance is another unemployment number used as an economic health gauge is the insured unemployment rate (IUR), or the volume and length in which unemployment claims are filed.

What is insured unemployment? The unemployment insurance program was created to provide temporary financial assistance to those who became unemployed through no fault of their own (as determined by individual State law). This system was designed to hold significant funds during upswings in the economy, and to ultimately pay out in the downswings, and it is typically funded through a tax on employers.  It is important to note that each State has their own separate unemployment insurance programs, and each program may vary slightly, but all are designed within the Federal law guidelines.  

What does IUR mean to you? The IUR is often used as an indicator of labor market conditions across the Nation and within each State.  This rate is solely collected and calculated from the number of unemployment claims filed, across all states’ unemployment insurance programs, and is posted weekly by the Employment and Training Administration. 

There are two rate classifications for the IUR, initial claims and continued claims.  Those that file for unemployment for the very first time are counted as “initial”, which is treated as a notice that a person is starting a period of unemployment.  Since filing for unemployment is a weekly to biweekly process, those that continue to qualify and receive the benefits after the initial week are counted towards the insured unemployment figures as “continued”.

So why two rates?  The initial claims rate gives a snapshot of the emerging employment market.  A rise in the initial claim rate may signal a weakened economy, while the continued claims rate may expose how enduring the current state of the economy may last, as well as an overall lack of available employment.

Why is filed unemployment claims data not included in the national unemployment rate? Both the NUR and the IUR are important sources that help economists’ trend the economy as a whole and within States; however, the IUR exclusively focuses on filed unemployment claims, which results in the exclusion of several key groups to consider in the total unemployment rate such as:  self-employed workers, unpaid family workers, certain not-for-profit organizations, workers that have exhausted their unemployment benefits, and individuals that simply do not file for unemployment benefits.  Because of these limitations, data on IUR cannot be used towards total unemployment in the United States.  Although the IUR is not included in the NUR, it still lends itself quite readily in trending the state of the economy.

To learn more about the insured unemployment rate, please visit the Employment and Training Administration website at http://workforcesecurity.doleta.gov/unemploy/claims.asp.

Aimee Cernik

Aimee Cernik, a member of the TALX Unemployment Product Management team, is our guest blogger today with some insight into how the national unemployment rate is calculated. 

Did you ever wonder how one arrives at a number that is responsible for determining the overall health trajectory of the economy?  In fact, every month a division of the United States Department of Labor called the Bureau of Labor Statistics (BLS) releases the previous month’s information on the position of the national unemployment rate.  Now, one may assume the BLS bases the national unemployment rate on the total number of unemployment claims filed across all the states, but there are many more factors to consider in calculating the rate such as those who are unemployed and have not filed for unemployment, those that are not eligible for benefits, and those whose benefits have already been exhausted.   And, this information is not available by exclusively looking at filed unemployment claims.

So if you cannot get the complete picture from filed unemployment claims- how does the BLS evaluate and determine the national unemployment rate? Since it is nearly impossible to account for the entire employed and unemployed population, the BLS conducts a sample study titled “Current Population Study” (CPS).  This CPS consists of 60,000 households (approx. 110, 000 individuals) that will participate in a structured interview, which is conducted by 2,200 trained interviewers…every month.

60,000 may not seem like a comparative number to the entire national population, but this sample is statistically sound and large enough to result in a representative and reliable estimate of the true unemployed population.  To ensure accuracy and remove any bias and sampling error the BLS has built in measures to keep the information clean, fresh and up to date. According to the BLS, “25% of the households in the sample are changed on a monthly basis for the specific purpose that no household in the sample will be interviewed more than four times consecutively. After a household is rotated out of the survey, it is not interviewed again for 8 months”.  The BLS has stated that the monthly estimate of unemployment from the sample is within 290,000 of the total census, and the any error resulting from sampling is not significant enough to alter the total and true unemployment rate.  

So who is actually included in the survey?  The BLS is selective of who can participate in the CPS, and has set criteria as to who is considered part of the United States labor force, which includes anyone of 16 years or older who is employed, or is actively seeking employment.  Those who are NOT included in the survey population are those under the age of 16, those that choose not to enter the labor market or not actively seeking employment, and those serving in the armed forces.  

Since the CPS is collecting data that is the foundation for the national unemployment rate, the information gathered must be done correctly, administered the same way-every time, to obtain the facts. Participants are never asked directly if they are unemployed, but rather are asked a series of questions to help conclude their status within the labor force. Moreover, the interviewers solely gather the information, and never determine a respondent’s employment classification. Rather the employment classification is determined by inputing the information into a computer program, and in turn, the program classifies the respondents as unemployed, employed, or simply not in the labor force. 

Certain questions are asked of those not in the labor force to obtain additional information as described by the BSL as , “their desire for work, the reasons why they had not looked for work in the last 4 weeks, their prior job search, and their availability for work.” Finally the interviews and the information collected are then compared to the number of people in the labor force, thus resulting in the national unemployment rate percentage.

Who knew there was so much work involved to produce such an important economic benchmark! To learn more about the CPS or the information provided by the BLS, please visit their website at: http://www.bls.gov/cps/cps_htgm.htm#why

Aimee Cernik

To prove at an unemployment hearing that a claimant’s separation is disqualifying, it is not enough to simply tell the hearing officer what happened. In the case of a discharge, the employer must prove misconduct in order for the claimant to be disqualified from benefits. If the claimant quit, he has to prove he quit with good cause to be allowed benefits. In either case, the key to winning at hearing is first-hand evidence.

First–hand evidence includes:

• First-hand witness testimony
• A video or audio recording
• Time sheets or schedules
• Warning notices
• An admission by the claimant
• A written resignation 

First-hand witness testimony is testimony at the hearing, under oath, from someone who saw what happened or who was present at the time of the final incident

If the claimant was discharged, the best witnesses are the people who saw or heard the final incident at the time it happened.

If the claimant quit, the best witnesses are the people who know the most about the reason the claimant gave for quitting. The best first-hand evidence is a written resignation submitted by the claimant.

Tammy Mullin

Part 1 – The Beginning

Between the years of 1916 and 1931 many states played with the idea of creating an unemployment compensation program for their citizens. None were successful, however, until Wisconsin passed the first unemployment law in 1932. At the time, the United States was deeply mired in the Great Depression and other states remained very hesitant to pass unemployment laws for fear of placing their employers at a competitive disadvantage with states that had no such laws. As a result, advocates for an unemployment program turned to the Federal Government for help.

In 1934, the Federal Government created the Committee on Economic Security. This committee was charged with the responsibility of studying the problems associated with the economic security of individual citizens and to make recommendations for both long and short term solutions. After researching old age insurance systems and unemployment programs throughout the world, they were able to present Congress with an outline of both the "Old Age and Survivors Insurance Program," considered the long term fix, and the "Unemployment Insurance Program," the short term fix.

This began a great debate regarding how the unemployment program would be organized. Some wanted complete state control. Others preferred complete Federal control. With complete state control, the same problem of interstate competition existed between states. In addition, some states would be unable to adequately fund an agency to administer the program as well as development of budget problems that could cause a raid on the unemployment fund established for paying benefits. To nationalize the program was considered equally as unacceptable because it would be inflexible to local economies, conditions of employment, rates of tax and benefit payments. For these reasons, a Federal-State unemployment insurance (UI) partnership was considered the best option for administering an unemployment program across all states.

President Franklin D. Roosevelt agreed, and on August 14, 1935, he signed the Social Security Act into law. This Act created the two social programs that exist today: Social Security and Unemployment Compensation. President Roosevelt described the Social Security Act with the following quote:

"This law represents a cornerstone in a structure which is being built but is by no means complete – a structure intended to lessen the force of possible future depressions, to act as a protection to future administrations of the government against the necessity of going deeply into debt to furnish relief to the needy – a law to flatten out the peaks and valleys of deflation and of inflation – in other words, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness."

His words were proven true for 75 years, but change may now be needed.

Rett Hensley
TALX Strategic Consultant

Situation

The unemployment tax increase for Florida employers this year turned out to be much bigger than expected due to the soaring unemployment rate and a law change passed last year. Tax rate notices issued in December 2009 reflected this increase. Florida lawmakers acted quickly this week to pass legislation to rollback that increase for two years. Governor Crist signed the bills immediately.

What Employers Need to Know

The legislation delays the increase of the taxable wage base from $7,000 to $8,500 until 2012 when it will increase to $8,500. It will also change the factors used to calculate employers’ tax rates for 2010 and 2011 resulting in lower rates. The minimum rate for 2010 will decrease but the maximum rate will remain 5.4%.

The law change also contains a special installment payment plan option which allows employers to spread their 2010 and 2011 payments out over a designated period of time. An annual $5.00 administrative fee will be charged employers that want to take advantage of the installment plan. Information on how to take advantage of this option will be on the state electronic filing website and the blank quarterly reports.

The payment of interest on the federal advances will be made through an employer assessment. Barring a federal law change, interest will be due beginning in 2011.

What You Can Expect

The state will be issuing revised tax rate notices on March 22nd to reflect the lower factors.

Tammy Mullin

HR Service Matters

By: Mike Smith

If you were curious about my previous blog concerning employee engagement, I saw a recent article from Knowledge@Wharton that presents some very interesting research results from Wharton management professor Adam Grant.  While the research is focused on what motivates employees, it is hard to imagine a motivated employee who is not engaged with the organization.

The premise in my blog was that recording and then replaying videos of employees relating positive experiences that customers had encountered with a product or service would help engage other employees.  Even a simple video made with a Flip Video camera would surely do the trick.  For details, here is a link to my previous blog:

http://tiny.cc/oe5IA

Adam Grant’s notion was straightforward.  If a person knows that their work has had a meaningful, positive impact on others, that realization can make the employee happier and more productive (and I contend more engaged).  Here is a sample of Adam Grant’s research results:

In his 2007 study, Grant and a team of researchers -- Elizabeth Campbell, Grace Chen, David Lapedis and Keenan Cottone from the University of Michigan -- arranged for one group of call center workers to interact with scholarship students who were the recipients of the school's fundraising largess. It wasn't a long meeting -- just a five-minute session where the workers were able to ask the student about his or her studies. But over the next month, that little chat made a big difference. The call center was able to monitor both the amount of time its employees spent on the phone and the amount of donation dollars they brought in. A month later, callers who had interacted with the scholarship student spent more than two times as many minutes on the phone, and brought in vastly more money: a weekly average of $503.22, up from $185.94.

"Even minimal, brief contact with beneficiaries can enable employees to maintain their motivation," the researchers write in their paper, titled "Impact and the Art of Motivation Maintenance: The Effects of Contact with Beneficiaries on Persistence Behavior," published in the journal Organizational Behavior and Human Decision Processes. 

You can review the complete article at:

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2436

The big takeaway for me is that we need to make sure we are providing opportunities for our employees to interact with customers (or the ultimate end users) on a regular basis.  Hearing the benefits directly from the customer or end user is a powerful way to engage employees in the organization.  If employees can’t meet the end user directly, then make a video and post it on employee portals or replay during periodic employee webcasts.   Even if the customer is internal, take time to capture on a regular basis the benefits the customer experiences so all can see that their work is making a difference.

Situation

Late on March 2, 2010, Congress passed and President Obama quickly signed a one-month extension to expiring unemployment insurance (UI) benefits provisions.

What Employers Need to Know

The legislation does not create any additional or new UI benefits. It simply pushes back the expiration date of current benefit provisions, from February 28, 2010 to April 5, 2010. These UI assistance measures are:

Next Steps

Despite this temporary extension, thousands of individuals are beginning to exhaust the maximum 99 weeks of combined state and federal UI benefits. Therefore, it is expected Congress will work on additional extensions through the end of 2010.

Special Note: The temporary, one-month extension also applies to the COBRA subsidy originally enacted under the 2009 Recovery Act.

Tammy Mullin

Yesterday I posted a blog about Vermont legislative activity related to a possible new payroll tax paid by the employee to help fund unemployment benefits.  Decided to do a bit more digging and found out that a couple other states are already assessing a payroll tax for this purpose.  Those states are:

Alaska - charges 0.5% of wages

New Jersey - charges 0.3825% of wages generally and 0.0825% for workers of governmental reimbursers

Pennsylvania - 0.08% of wages in certain instances.

Just thought I'd pass this along. 

Tammy Mullin