January 2012 Newsletter

Set Up Your Employees for Success

It’s a New Year and time to reflect on what your company did well in 2011, and how you can translate that success into an even bigger achievement in 2012.  It’s also important to consider what your company could have done better.  Did sales increase and revenue grow according to the plan?  Did the customer base grow and did client relationships improve? Were clients provided value-added services?  Was there an assessment of customer expectations and satisfaction? Were short- and long-term plans drafted?

Answer these questions and then ask yourself why your company did or didn’t achieve its goals. If you’ve fallen short, why did it happen? Of all of the factors that contribute to your business operations, none is more important than your team of employees. They are your most important asset and the key to exceeding client expectations.  If your employees had a good orientation to the business then they:

  • Know the company mission and the vision for the future
  • Reviewed the company handbook so that they know what is expected of them
  • Received a job description that accurately reflects the work they do
  • Know corporate policy and were introduced to the company value statement
  • Understand who the customers are and how to exceed expectations
  • Have built solid relationships with co-workers and act effectively as a team to achieve department goals
  • Understand how best to communicate with their manager, and communication flows freely and clearly.

If any of these points gave you pause, it may be time to think about updating the mission, employee handbook or job descriptions.  If the values need to be realigned, team building needs to be enhanced, clearer department goals need to be set, or communication needs to take a step up — start now.  Be sure that all of these components are updated for 2012.   It will get the New Year off on the right foot, and your organization will know where to focus.  Setting your employees up for success allows you to focus as well.

Over the next 12 months, this column will highlight some tools you may need.  Often, employee successes are a direct reflection of your ability to:

  • Update job descriptions so existing employees focus on the most important aspects of their work
  • Interview and select the best person applying for a job and identify the candidate that is a good “fit” with the team
  • Orient and train a new employee, or train an existing employee on a new process
  • Coach employees for success and then regularly “catch them” doing a great job
  • Communicate effectively and regularly with your staff – whether it’s about new customers or updating yearly goals
  • Create an effective performance appraisal process, and take the time to give meaningful feedback
  • Find a positive way to deliver corrective action, and help good employees get back on track.

Our HR team looks forward to sharing these ideas and many more, and we wish all of you every success in 2012.

Importance of Dress and Appearance Policies

When employers make decisions about raises and promotions for staff, issues of personal appearance and grooming often arise. An employee’s bad breath, dirty hair or messy appearance can legally play a part in their employer’s decision not to promote or offer a raise. These factors are not considered discriminatory as long as the characteristics do not violate Title VII and are not in any way associated with the employee’s race, religion, sex or national origin.

While there is no legal requirement for a dress or appearance policy, with the correct and justifiable policies in place as part of the overall employee handbook, employees clearly understand what is expected of them. A well-written employee handbook can protect a company’s public image and represent it appropriately, encourage productivity, comply with health and safety standards and even prevent claims of unlawful harassment.  This helps a company better ensure that highly qualified employees are not overlooked. As with all employment policies, make sure they are applied consistently and fairly without regard to an applicant’s or an employee’s protected status. 

Source: October 2011 Labor Letter article authored by Grace Y. Horoupian and Matthew C. Irvine

2012 Financial Resolutions

Along with the typical 2012 resolutions to exercise more, eat healthier, and quit bad habits, why not resolve to have a more financially secure year? A recent study found that families with a financial plan in place felt more secure, more optimistic about their future, and more in control of their lives. Start a financial plan for yourself with these 3 steps:

1. Set Goals and Save
Set goals for the money that you earn. Whether the goal is to buy a new car, to save for retirement, or to pay for college, it is important to set goals and then establish a financial plan to reach those goals. Consider the amount you need to spend on bills, the amount you spend on things that you want, and the amount that should be saved in order to reach the stated goals and stick to your plan.

2. Create A Budget And Stick To It
Although it is not necessary to itemize expenses down to the penny, monitor your income and spending on a weekly basis and enter the numbers into a budget to get a real picture of your financial situation. Look carefully at how your family makes and spends money. Are you working toward the goals set in step one?  If there is more money going out each month than is coming in, consider ways to reduce your expenses such as:

    • Contact your utility companies to find out if you have the best-priced package / plan based on your usage. For instance, if you are paying for cable channels that you don’t watch, cancel them.
    • Go paperless. Most utilities and credit card companies offer discounts for paperless billing.
    • Call your credit card companies to see if you can negotiate a lesser APR.
    • Cut coupons and read the supermarket inserts in your Sunday newspaper. Saving money at the grocery store feels great.
    • Instead of meeting friends out at a restaurant, have a progressive dinner at your homes.
    • Make your own morning coffee and bring lunch to work.
    • Sum up all of the money spent on entertainment – movies, sports, going out, video games, concerts, etc. – and take a hard look at the number. Where would you like that number to be and what can you cut to get there?

3. Pay Off Debt Sensibly
The benefits of paying down consumer debt are great. To begin, debt should be ordered and prioritized from highest interest rate to lowest. Include mortgage and home equity line payments in this list. Send available extra cash to the highest priority debt each month. Once that debt is paid off, reorder and reprioritize, if appropriate. Should you hold onto your credit cards with zero balance or close them? Consider that your debt-to-credit-limit ratio, the money you owe in credit card expenses divided by your total credit limit, makes up 30% of your credit score. The lower the percentage, the better your score. If you tend to hold balances on your credit card, having only one or two credit cards may affect your debt-to-credit-limit ratio negatively, and thus your credit score.

Industrial Rehab

Industrial Rehabilitation is a branch of rehabilitative therapy that focuses on bringing injured workers back into the workplace quickly and safely.    This therapy can help reduce workers’ compensation spending and decrease lost time in the workplace.   According to the National Institute for Occupational Safety and Health (NIOSH), an average of approximately 9,000 workers will be injured at work every day this year, badly enough to go to the emergency room. About 6,000 of them will require job transfers, work restrictions or time away from their jobs after the injuries. Sixteen of them will die. Another 137 workers and retirees will die from diseases they developed at their current or former jobs.

An Industrial Rehab specialist is typically an Occupational or Physical Therapist who has specialized in the area of evaluation and treatment of work related injuries through physician referral.  Following is a brief overview to clarify some of the terminology and assessment and treatment techniques used in this field:

  • Work Hardening – Systematic program of progressive work related activities performed with proper body mechanics to physically recondition the client to return to full employment.
  • Functional Capacity Evaluations – Physical assessment of an individual’s ability to perform work-related tasks and skills.
  • Job Demands Analysis – Analysis of a job to determine a functional job description and determine job requirements, demands, and risk factors.
  • Ergonomic Consultation – Assessment designed to remove work related barriers and provide recommendations to decrease work related injuries.
  • WorkSTEPS – Functional employment testing program to match a worker’s functional capabilities to the essential functions of the job.

Industrial rehabilitation programs can create safe work environments for employees, reduce costs from work-related injuries, and help injured employees return to their jobs. 

Contributed By:  Julie Wilkins OTR/L
Occupational Therapist, www.TherapySolutionsNetwork.com

Business Meal and Entertainment Deductions

The beginning of 2012 signals both the start of the New Year and the start of the 2011 tax return preparation season. There is a lot to consider when preparing returns, and one area of business expense deductions that can be misunderstood is meals and entertainment.  During an IRS audit, meals and entertainment deductions are certain to be scrutinized, so we’ll review a few of the rules and help clarify what the IRS allows.

First, any entertaining must be related directly to your affiliated business.  In order for the expense to be a valid deduction, the business meal or entertainment should be directly related to a business discussion between the parties involving some aspect of the business.  For example, if a manager and a accounts payable clerk go to lunch to discuss new company polices for reimbursing employee expenses, the lunch is an allowed expense because they discussed business relevant to both of them. If the same two individuals go to lunch and spend the time talking about their children’s soccer team, it cannot be taken as a business expense as the lunch was personal in nature.

If a company hosts a party, the purpose and the nature of the party determine if it is a viable business entertainment deduction.  For example, if the business has a party for company employees and their spouses at the local country club to toast the past year, the cost of this party is deductible. (The dues for the country club are not.)  If the company holds the same meeting aboard a luxury cruise, it would not be deductible as a business entertainment expense.  The IRS generally will not allow a company to deduct expenses when the business event is held at an entertainment facility such as a vacation home, hunting lodge, bowling alley, swim club or yacht. 

When determining the validity of a business entertainment expense, the IRS will put it to two tests:  directly-related test and the associated test.  IRS Publication 463 outlines these tests as follows:

Directly-Related Test

  • Entertainment took place in a clear business setting, or
  • Main purpose of entertainment was the active conduct of business, and
  • You did engage in business with the person during the entertainment period, and
  • You had more than a general expectation of getting income or some other specific business benefit.

Associated test   

  • Entertainment is associated with your trade or business, and
  • Entertainment directly before or after a substantial business discussion.

To protect yourself, keep backup documentation. Document meals and entertainment expenses with the purpose and the attendees. Keep a copy of the invitation to the company party along with guest list and a few pictures. 

In summary, do not go overboard on business entertainment.  The IRS dictates that entertainment cannot be lavish or extravagant.  The business entertainment should fit the company budget and the over all picture of the company. 

The tips in this article do not constitute tax advice. Please refer to IRS Publication 463 for more information on Business Meals and Entertainment Deductions.

State Minimum Wage Changes for 2012

Eight states will increase their minimum wage, effective January 1, 2012. Although the Federal minimum wage remains at $7.25 per hour, each state has the ability to set a rate that differs from the Federal rate. However, if the State sets their rate lower than the Federally mandated minimum, the Federal wage would apply as the higher rate. The State changes are:

STATE

RATE

Arizona

from $7.35 to $7.65

Colorado

from $7.36 to $7.64

Florida

from $7.67 to $7.65

Montana

from $7.35 to $7.65

Ohio

from $7.40 to $7.70

Oregon

from $8.50 to $8.80

Vermont

from $8.15 to $8.46

Washington

from $8.67 to $9.04

Although the majority of businesses fall under the Federal minimum requirements, if the job is not subject to the federal Fair Labor Standards Act, the state takes over the determination of the minimum wage. This can also be governed by the city or other local laws.

There are few exemptions to the minimum wage requirements. One exemption to the federal minimum wage is for companies that have revenue of less than $500,000 per year and that are not engaging in any interstate commerce. Interstate commerce is defined as commercial trade, movement of goods/money or transportation from one state to another.

Blog Corner: Tip to Reduce Turnover

Before you begin the interview process, clearly define what you are looking for in a prospective employee.  You should divide these characteristics between value-related qualities and job-specific skill sets.  To understand what those qualities are, start asking questions.  Go to your best performers to get an idea of how previous employees fell short or did not thrive in your workplace.  Ask other business owners, whom you respect, what they look for when they interview employees.  Once you have a good sense of the values and skills that you seek, establish a set of interview questions to find out whether a candidate possesses these qualities.