Latest / HR Spot / Episode #77 - The HR Mistakes You Don't Know You're Making
Transcript
- 0:05SPEAKER_02: Hello everyone.
- 0:06SPEAKER_02: Welcome to another episode of HR Spot.
- 0:10SPEAKER_02: And Gary and I, we've got a good one for you today, right, Gary?
- 0:15SPEAKER_00: You got it.
- 0:16SPEAKER_00: It's gonna be something owners don't want to talk about.
- 0:22SPEAKER_02: So we're gonna talk about the HR mistakes you don't know you're making.
- 0:29SPEAKER_00: Yeah, this is usually one of the best episodes when it makes them feel uncomfortable.
- 0:33SPEAKER_02: I like it.
- 0:35SPEAKER_00: Yeah.
- 0:35SPEAKER_02: All right.
- 0:36SPEAKER_02: So um the HR mistakes you don't know you're making.
- 0:40SPEAKER_02: Here's the thing: most business owners aren't intentionally doing HR wrong.
- 0:47SPEAKER_02: In fact, a lot of the mistakes we're going to talk about today seem perfectly reasonable at that time.
- 0:55SPEAKER_00: Yeah, and I think that's really important when the business owners aren't sitting around saying, hey, I'm gonna create my own HR problem today.
- 1:05SPEAKER_00: Like that's not their goal when they wake up in the morning.
- 1:07SPEAKER_00: And if it is, then we really need to have a conversation.
- 1:10SPEAKER_00: But, you know, they're running their business, right?
- 1:14SPEAKER_00: They're trying to get their own business to run better, make more money.
- 1:19SPEAKER_00: They're trying to take care of the customers, I hope, make payroll, build it, grow revenue, manage employees.
- 1:27SPEAKER_00: But here's the reality, right?
- 1:29SPEAKER_00: Sometimes they're making people decisions based on what they think is logical.
- 1:36SPEAKER_02: Yes, and what seems logical isn't always what's compliant, consistent, or smart from an HR perspective.
- 1:46SPEAKER_02: So today we're gonna talk about five HR mistakes you may be making without even realizing it.
- 1:53SPEAKER_00: Uh oh, here we go.
- 1:56SPEAKER_02: Okay, so mistake number one.
- 2:00SPEAKER_02: We're at will.
- 2:02SPEAKER_02: I can fire anyone I want.
- 2:06SPEAKER_00: I love that, Linda.
- 2:08SPEAKER_00: I'm let's start with that one, right?
- 2:10SPEAKER_00: We hear it all the time.
- 2:11SPEAKER_00: So true or false.
- 2:13SPEAKER_00: You help me out with this one.
- 2:14SPEAKER_00: I know the answer, so I'm not gonna say anything.
- 2:17SPEAKER_00: We're an at-will employer.
- 2:19SPEAKER_00: I can fire anybody I want.
- 2:21SPEAKER_00: Is that true or false?
- 2:23SPEAKER_02: It's false.
- 2:25SPEAKER_02: Or as the lawyers would say, at least dangerously incomplete.
- 2:31SPEAKER_00: Right?
- 2:32SPEAKER_02: Yeah.
- 2:33SPEAKER_02: So at-will employment generally means either the employee or the employer can end the employment relationship at any time, with or without notice, as long as the reason isn't unlawful and there isn't some contractual limitation.
- 2:53SPEAKER_02: And that's that last part really matters.
- 2:58SPEAKER_00: So, yeah, let's let's talk about what that really means.
- 3:02SPEAKER_00: So well, I want to ask you a question first, and this kind of throws people off, but not all states are at will.
- 3:12SPEAKER_00: There's one state that's not at will.
- 3:15SPEAKER_00: And I'm wondering if anybody that's listening knows what that is.
- 3:20SPEAKER_00: But it's a weird one too.
- 3:22SPEAKER_00: Montana is the only state that's not at will, and I think that's kind of funny because I wouldn't think it would be at Montana.
- 3:30SPEAKER_00: I thought it'd be somewhere else.
- 3:32SPEAKER_02: Absolutely.
- 3:33SPEAKER_00: Right?
- 3:33SPEAKER_00: Well, anyway, so what does it really mean?
- 3:35SPEAKER_00: When a business owner says they're at will, so I don't really need a reason, right?
- 3:41SPEAKER_00: What's the problem with that, Linda?
- 3:43SPEAKER_02: So the problem is what happens next.
- 3:46SPEAKER_02: The employee may say, I don't know why they really fired me.
- 3:50SPEAKER_02: Again, that that's the why, right?
- 3:53SPEAKER_02: The employee doesn't know why they got fired.
- 3:56SPEAKER_02: Maybe they recently complained about harassment.
- 3:59SPEAKER_02: Maybe they requested an accommodation, maybe they took protected leave, maybe they raised a wage concern.
- 4:06SPEAKER_02: And suddenly the question isn't whether you could terminate them, it's whether you can demonstrate a legitimate, non-discriminatory, non-retaliatory reason for the decision.
- 4:20SPEAKER_00: Right.
- 4:20SPEAKER_00: So what I'm hearing you say is at will doesn't really mean no consequences.
- 4:26SPEAKER_00: It's not a get out of jail free card.
- 4:29SPEAKER_00: It doesn't provide complete protection, right?
- 4:33SPEAKER_02: Absolutely.
- 4:34SPEAKER_02: And this leads us directly into our second mistake.
- 4:38SPEAKER_02: Mistake number two, not documenting performance problems.
- 4:44SPEAKER_00: Yeah, so if you've listened to any of our episodes, I think we bring up documentation every single time.
- 4:52SPEAKER_00: It's like the greatest defense with your decisions, it builds the wall, really, to help you protect yourself.
- 5:01SPEAKER_00: And this one drives you crazy.
- 5:03SPEAKER_00: Let right, Linda.
- 5:04SPEAKER_00: Tell me about it.
- 5:05SPEAKER_02: Yes, it does.
- 5:07SPEAKER_02: So we get the call, and it starts with Gary, we need to fire somebody.
- 5:16SPEAKER_02: And our first question is usually, okay, tell me what's been happening.
- 5:20SPEAKER_02: Then I hear six months worth of problems.
- 5:24SPEAKER_02: They're late, they're missing deadlines, customers have complained, their manager has talked to them repeatedly, they keep making mistakes.
- 5:32SPEAKER_02: So I ask, what have you documented?
- 5:35SPEAKER_02: And the answer is what, Gary?
- 5:39SPEAKER_00: Silence.
- 5:40SPEAKER_00: Cricket.
- 5:42SPEAKER_01: Crickets.
- 5:43SPEAKER_00: Nothing.
- 5:44SPEAKER_00: We don't have any.
- 5:46SPEAKER_02: That's my favorite.
- 5:48SPEAKER_02: And sometimes the employee's last performance review says they're doing a great job and they got a five.
- 5:56SPEAKER_00: That's a pretty big disconnect, and really that's a that's an epic fail.
- 6:02SPEAKER_02: Yeah.
- 6:03SPEAKER_02: Huge mistake.
- 6:04SPEAKER_02: So managers sometimes think documentation is about building a case to fire somebody, but it shouldn't be.
- 6:12SPEAKER_02: Documentation is about clarity, expectations.
- 6:16SPEAKER_02: One of your other favorite words, Gary.
- 6:19SPEAKER_02: If an employee isn't meeting expectations, then tell them, explain what needs to change, give them an opportunity to improve when appropriate, and document the conversation.
- 6:31SPEAKER_00: Right.
- 6:32SPEAKER_00: We have that conversation all the time.
- 6:34SPEAKER_00: And owners typically don't like it, right?
- 6:36SPEAKER_00: Like the best safest course of action, hey, let's document this because you know they're going to do it again, and let them kind of just hurt themselves, if you will, and then you're safer, right?
- 6:50SPEAKER_00: It's a little bit better.
- 6:51SPEAKER_00: And there's another side to this, though, too, right?
- 6:53SPEAKER_00: Is if nobody has actually told me I'm failing, I probably genuinely believe I'm doing fine.
- 7:02SPEAKER_00: And most of the time, that's what the employee really thinks.
- 7:06SPEAKER_00: I'm good or I'm doing great because no one's told me anything.
- 7:09SPEAKER_02: Yes, that happens all the time.
- 7:12SPEAKER_02: And when you have good documentation, that protects the company and it, but it also creates fairness for the employee.
- 7:19SPEAKER_02: So here's a simple test for business owners.
- 7:22SPEAKER_02: If you terminated this employee tomorrow and someone looks at their personnel file, what would the file tell you?
- 7:32SPEAKER_01: And if the answer is no, you don't have a problem, that's just craziness.
- 7:42SPEAKER_00: Right.
- 7:42SPEAKER_00: It's gotta, it's gonna, there's gotta be a path, right?
- 7:46SPEAKER_00: It's gotta go like you can see the steps.
- 7:48SPEAKER_00: Oh, here's the here's the reason why.
- 7:51SPEAKER_00: Oh, I can see it.
- 7:52SPEAKER_00: You had the conversation.
- 7:53SPEAKER_00: But if there's no anything, and if an independent person looked at it and there's no idea why this person got fired, you have a problem, right?
- 8:04SPEAKER_02: So mistake number three, they want to be a 1099, so we're good.
- 8:10SPEAKER_00: Uh, this is this is one of the ones that gets me the most, right?
- 8:13SPEAKER_00: We've we've talked about this one before, and it I talked about it with someone today.
- 8:18SPEAKER_00: Um, but I know you see it constantly, and it gets it really gets me every dang time.
- 8:25SPEAKER_00: Someone says the worker wants to be a contractor, we want them to be a contractor.
- 8:30SPEAKER_00: Everybody agrees.
- 8:32SPEAKER_00: Maybe there's an agreement.
- 8:34SPEAKER_00: What's the problem?
- 8:35SPEAKER_00: That's what they tell us, right?
- 8:36SPEAKER_00: I don't get it.
- 8:38SPEAKER_00: So, what does that really mean, Linda?
- 8:40SPEAKER_00: To be an independent contract.
- 8:42SPEAKER_00: What's the problem?
- 8:43SPEAKER_02: The problem is the worker classification generally isn't determined simply by what you call someone or what you agreed to.
- 8:52SPEAKER_02: You have to look at the actual working relationship and the applicable legal tests.
- 8:58SPEAKER_02: How much does how much uh control does the company have?
- 9:03SPEAKER_02: How is the work performed?
- 9:05SPEAKER_02: What is the nature of the relationship?
- 9:08SPEAKER_02: And the exact test can differ depending on the law and jurisdiction involved.
- 9:14SPEAKER_00: Yeah, absolutely.
- 9:15SPEAKER_00: So what you're telling me is signing an independent contractor agreement doesn't automatically make someone an independent contractor, does it?
- 9:25SPEAKER_02: Gary.
- 9:27SPEAKER_00: Yeah.
- 9:28SPEAKER_02: And in some businesses sometimes think they're saving money by classifying somebody as a contractor.
- 9:34SPEAKER_02: But if they're misclassified, then you've got potential costs that can include back wages, potential overtime, payroll taxes, penalties, benefit issues, and other liabilities.
- 9:47SPEAKER_00: The risk is really big, but it makes that original savings that you think you're getting look pretty small if there is one at all.
- 9:56SPEAKER_02: Yeah, very small.
- 9:58SPEAKER_02: And this is one of those HR issues where it's much cheaper to get the answer right at the beginning than to fix it later.
- 10:07SPEAKER_00: Absolutely.
- 10:08SPEAKER_00: So you ready for number four?
- 10:10SPEAKER_02: Yes.
- 10:11SPEAKER_00: Tell me, what is it?
- 10:13SPEAKER_02: Treating similar situations differently.
- 10:17SPEAKER_00: Oh, you want to talk about consistency?
- 10:20SPEAKER_00: Yes.
- 10:21SPEAKER_00: All right, let's talk about consistency because I think this happens a lot at companies that are growing, right?
- 10:27SPEAKER_00: When when you've got five employees or 10, the owner knows everything that's going on because they're involved in everything, what's happening, but then you go to 25 and then to 50 and then to 100 employees, and suddenly different managers are handling things inconsistently.
- 10:46SPEAKER_00: They're this manager's hiring it different than that manager.
- 10:50SPEAKER_00: Then what?
- 10:51SPEAKER_02: Yeah, it's the the the larger they grow, the and most companies don't train the managers, so that's that's a whole other episode.
- 11:02SPEAKER_02: Um, so let's talk about manager A has an employee who's late three times and gives them an actual written warning.
- 11:09SPEAKER_02: That's documented, it's great.
- 11:11SPEAKER_02: But manager B, it's their favorite employee who's late 10 times and says, Oh, don't worry about it.
- 11:19SPEAKER_02: We've got very, very inconsistent treatment here.
- 11:23SPEAKER_00: Yeah, but but do you really have to treat everybody exactly the same when it comes to policies?
- 11:29SPEAKER_02: No, and and that's an important distinction.
- 11:32SPEAKER_02: Different circumstances can justify different decisions.
- 11:37SPEAKER_02: And what you want is consistency in how decisions are made and legitimate reasons for the differences.
- 11:44SPEAKER_02: And the danger comes when nobody can explain why two similar situations were handled very differently.
- 11:51SPEAKER_00: Yeah, especially when the employees start comparing notes, like this is what happened to me, or you know, the third person goes, Well, wait a minute, that was really different between those two, and then they get something even more different, right?
- 12:04SPEAKER_02: And you know they're gonna talk and compare notes.
- 12:08SPEAKER_00: Yeah, yeah.
- 12:09SPEAKER_02: So that's why manager training is so important.
- 12:12SPEAKER_02: Your handbook can say one thing, but your managers are the ones implementing your policies every day.
- 12:18SPEAKER_02: They're the ones that are approving the time off, addressing attendance, managing performance, responding to complaints, having difficult conversations.
- 12:26SPEAKER_02: And a poorly trained manager can create significant risk without realizing they're doing it.
- 12:33SPEAKER_00: Yeah, which I mean is really interesting because companies often promote their best employees, like you said, right?
- 12:39SPEAKER_00: They they the person is a great individual contributor, they're promoted into management or leadership, and they assume that they're gonna know how to manage people.
- 12:49SPEAKER_00: Because you know, when you get promoted, that automatically you get a handbook on how to promote people or how to manage people, right?
- 12:55SPEAKER_00: But those people get no real training, no real guidance, they get they get nothing.
- 13:00SPEAKER_02: They they can get us if they wanted to.
- 13:03SPEAKER_02: Yeah.
- 13:03SPEAKER_02: Yeah, we know how to get this back on track.
- 13:08SPEAKER_02: Um, so being great at your job doesn't automatically make you great at managing people.
- 13:14SPEAKER_00: No, it doesn't.
- 13:15SPEAKER_00: So, all right.
- 13:16SPEAKER_00: What are we doing next?
- 13:18SPEAKER_02: Mistake number five waiting until there's a problem to call HR.
- 13:23SPEAKER_00: Oh, yeah.
- 13:25SPEAKER_00: Why why would why making no decision is not a good decision, right?
- 13:30SPEAKER_00: This one ties directly into our our last episode.
- 13:34SPEAKER_00: You don't have HR, but you should have HR.
- 13:37SPEAKER_00: You should have us working with you.
- 13:39SPEAKER_00: A lot of businesses don't think they need HR until guess what?
- 13:43SPEAKER_00: Until something does happen and goes wrong.
- 13:47SPEAKER_02: Yeah, absolutely.
- 13:48SPEAKER_02: And by the time we get the call, sometimes the problem has been developing for months.
- 13:53SPEAKER_02: The complaint has already been made, the manager has already said something they shouldn't have said, and the employee has already been terminated, or the business owner says, I need you to fix this, Gary.
- 14:09SPEAKER_02: And and sometimes my answer has to be, I wish you would have called us two weeks ago.
- 14:15SPEAKER_00: Yeah, right.
- 14:16SPEAKER_00: Um so let's be real for everyone listening, Linda.
- 14:21SPEAKER_00: Let's guide people before this happens.
- 14:24SPEAKER_00: So, what's the better approach?
- 14:27SPEAKER_02: Better approach is use us.
- 14:31SPEAKER_02: Use us as a sounding board.
- 14:33SPEAKER_02: Call us before you make the decision.
- 14:36SPEAKER_02: Before you terminate somebody, call.
- 14:38SPEAKER_02: Before you classify somebody as a contractor, call.
- 14:42SPEAKER_02: Before you ignore an employee complaint because you think it's minor, call.
- 14:47SPEAKER_02: Before you roll out a policy that affects everybody, call.
- 14:52SPEAKER_02: Before your manager has a really difficult conversation and has no idea what to say, call.
- 14:59SPEAKER_02: HR should not be your cleanup crew.
- 15:02SPEAKER_00: Yeah, that's that's probably one of the big misconceptions about HR, right?
- 15:07SPEAKER_00: Is I'm a leader, I don't need HR.
- 15:09SPEAKER_00: People think HR comes in after something happens just to react, and we don't get a seat at the table before decisions are made, right?
- 15:18SPEAKER_00: It's all reactive.
- 15:21SPEAKER_02: Yeah, so good HR is proactive.
- 15:24SPEAKER_02: So what we're asking is where's the risk?
- 15:28SPEAKER_02: What's coming next?
- 15:30SPEAKER_02: What do managers need?
- 15:31SPEAKER_02: What don't we have documented?
- 15:33SPEAKER_02: Are the policies keeping up with the growth of the company?
- 15:37SPEAKER_02: It it's so much easier to prevent the fire than to put one out.
- 15:41SPEAKER_00: Oh, I like that.
- 15:42SPEAKER_00: That's a good one.
- 15:43SPEAKER_00: Okay, let's do a bonus.
- 15:45SPEAKER_00: Bonus round.
- 15:46SPEAKER_02: All right.
- 15:48SPEAKER_02: What is it, Gary?
- 15:50SPEAKER_00: The we've always done it this way mistake, right?
- 15:55SPEAKER_00: Can I add a bonus mistake, Linda?
- 15:58SPEAKER_00: Absolutely.
- 16:00SPEAKER_00: Okay, so yeah, we've always done it this way.
- 16:03SPEAKER_00: One of my favorites, right?
- 16:05SPEAKER_00: What do you do?
- 16:06SPEAKER_02: Yes, that sentence makes HR people very, very nervous.
- 16:11SPEAKER_00: Yeah, it's more than nervous.
- 16:13SPEAKER_00: It bothers me.
- 16:17SPEAKER_00: Right?
- 16:17SPEAKER_00: Because something working for 10 years or 20 years doesn't necessarily mean it was right for 10 years.
- 16:24SPEAKER_00: It just means this is what you did once.
- 16:26SPEAKER_02: Yeah.
- 16:27SPEAKER_02: And even if that was um correct or right 10 years ago, your company has changed, your employee count may have changed, you may now have employees in multiple states, the laws change, your workforces change, growth changes your HR responsibility.
- 16:46SPEAKER_02: So periodically, you need to step back and ask are the policies still correct?
- 16:51SPEAKER_02: Are do we have all the people classified correctly?
- 16:54SPEAKER_02: Are the managers properly trained?
- 16:56SPEAKER_02: Are we documenting appropriately?
- 16:58SPEAKER_02: Are we compliant in every single state where we have employees?
- 17:03SPEAKER_00: Yeah.
- 17:03SPEAKER_00: So in other words, don't confuse nothing bad has happened yet with we're doing it right, right?
- 17:10SPEAKER_00: And it's not protecting you, that's for sure.
- 17:12SPEAKER_02: Yeah.
- 17:14SPEAKER_02: So that I think that's my favorite line from this episode, right?
- 17:18SPEAKER_02: Is nothing bad has happened yet.
- 17:21SPEAKER_00: But the key word is yet.
- 17:25unknown: Yeah.
- 17:25SPEAKER_00: Right?
- 17:26SPEAKER_00: Nothing's happened yet.
- 17:28SPEAKER_00: All right.
- 17:29SPEAKER_00: So let's let's recap the mistakes, Linda.
- 17:31SPEAKER_00: Number one, assuming at will means you can fire anyone without thinking through the risk.
- 17:38SPEAKER_00: Number two, failing to document the performance issues, document people.
- 17:45SPEAKER_00: And number three, assuming someone is a 1099 contractor just because just because everybody agreed upon it.
- 17:54SPEAKER_00: What's next?
- 17:55SPEAKER_02: Number four, allowing managers to handle similar employee situations inconsistently.
- 18:01SPEAKER_02: And lastly, number five, waiting until something goes wrong before you involve HR.
- 18:06SPEAKER_02: Plus, Gary's bonus.
- 18:08SPEAKER_02: We've always done it this way.
- 18:10SPEAKER_00: Yeah, Gary's bonus.
- 18:11SPEAKER_00: I love it.
- 18:12SPEAKER_00: We've always done it this way.
- 18:14SPEAKER_00: Or, you know, at my last company is the other one I love too.
- 18:17SPEAKER_00: But and I I think there's a common threat through all of them, right?
- 18:22SPEAKER_00: Is none of these are necessarily start as a big problem.
- 18:26SPEAKER_00: They're little decisions that businesses make every day.
- 18:32SPEAKER_02: Yes.
- 18:33SPEAKER_02: And that's what I want to want business owners to take away from today's episode is HR problems usually don't start as HR emergencies.
- 18:42SPEAKER_02: They start as a conversation that wasn't documented, a manager who wasn't trained, a worker who was classified incorrectly, a policy that hasn't been reviewed in years, or a decision somebody made without stopping to ask, is there an HR issue here that I'm not seeing?
- 18:59SPEAKER_00: Wouldn't it be great if someone actually asked themselves?
- 19:02unknown: Yeah.
- 19:03SPEAKER_00: Hey, what would HR, what would Linda say right now if I had brought this to her, right?
- 19:08SPEAKER_00: And if you're wondering out there whether you might be making one of these mistakes.
- 19:14SPEAKER_02: That's probably a good reason to have somebody take a look.
- 19:19SPEAKER_02: You don't necessarily need a full-time internal HR department, but you do need access to an experienced HR professional before small issues become very expensive ones.
- 19:32SPEAKER_00: Right.
- 19:32SPEAKER_00: And let's I'm gonna put a little asterisk there, right?
- 19:34SPEAKER_00: Like ask someone, but ask someone in HR.
- 19:37SPEAKER_00: Like, don't go ask, you know, the office manager what they think, or the line manager or the field employee, like, what do you think?
- 19:45SPEAKER_00: It's probably a good idea to go to the correct person or department, right?
- 19:50SPEAKER_00: But I think that's probably a perfect place to end it.
- 19:53SPEAKER_00: So let's let's call it a wrap, Linda.
- 19:56SPEAKER_02: Okay.
- 19:57SPEAKER_02: Well, we appreciate your time.
- 20:00SPEAKER_02: We hope you took away a nugget or two from today's episode.
- 20:04SPEAKER_02: Don't be afraid to reach out, call us, ask us for guidance, uh, ask us for manager training, something we love to do.
- 20:12SPEAKER_02: Uh, leadership training.
- 20:14SPEAKER_02: How can they reach us, Gary?
- 20:17SPEAKER_00: Well, they can reach Linda by you sending her an email at lynda at azhrhub.com.
- 20:25SPEAKER_00: Go to the website.
- 20:26SPEAKER_00: You can email Gary.
- 20:28SPEAKER_00: You can email me at Gary at az H R Hub, and we'll get back to you right away.
- 20:34SPEAKER_02: Absolutely.
- 20:35SPEAKER_02: Well, we'll catch you next time.
- 20:37SPEAKER_02: And remember, do business, not HR.
- 20:42SPEAKER_01: That's a good one.