International HR – Germany

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There are significant differences when it comes to the Human Resources organizations in the US versus companies in Germany, and many other countries in the EU.

 

Managerial Discretion

Anyone who has worked in the US understands that managers and HR have a lot of discretion over who to hire and who and when to terminate.  Sometimes these kinds of decisions can be made in a few days or weeks.  In Germany, specifically, these types of decisions are months if not years long, with serious infractions needing to have taken place.  Germany has a co-determination practice.  Co-determination is a practice whereby the employees have a role in the management of a company. The word is a literal translation from the German word Mitbestimmung.. In some countries, like the USA, the workers have virtually no role in corporate management; and in others, like Germany, their role is more important.

 

Wage differences

In the US, many studies show that white collar workers can make as much as 20 times that of blue collar workers in the same company.  This is drastically different than in Germany. Germany  is known for its balanced remuneration system.  The average white-collar worker’s wage is only 20% over the average blue collar worker`s wage. In addition, companies are not allowed to hire skilled workers from other companies by offering higher salaries.

 

Company Loyalty

Here too, the perception differs.  In the US, workers are generally always in search of something new or better, and there is very little company loyalty.  In Germany, employees feel a much greater sense of loyalty to their companies and, general, will not leave.  They will look for opportunities within their current company or subsidiaries and the company will work hard to provide those. 

 

Management decisions

While the US is typically a very individualistic society, making quick decisions and reversing them if necessary, Germany, in stark contrast, tends to work like a democracy in their companies. It is important the whole team has a say and the whole team is bought into the decision.  While this can seem appealing, the trade off is time.  Decision making will take much longer with a group of employees when everyone needs to be in agreement. 

Both cultures have their pros and cons and neither is necessarily best.  The US, acting as an impulsive, decisive,  all knowing teenager and Germany as the wise parent, moving slowly with certain purpose.

HR Systems

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Sherrie Suski, HR Systems

The choices in HR systems today are mind boggling.  Everyone wants to get on the band wagon and sell you something that will supposedly make your life easier, is user friendly, (read good UX), allows you to crunch large volumes of data in minutes.  HR systems can be as basic as an HRIS or as complicated as a performance management system with 360 review capability and goal planning and accomplishments.

Let’s talk first about functionality and next week about what you want to look for.

HRIS

An HRIS is a Human Resources Information System.  

This is your basic system that tracks all the pertinent information about your employees.  

HRIS solutions typically track:

  • Training of employees
  • Open enrollment and management of benefits
  • Compensation management
  • Human resources reporting
  • Self-service for applicants, employees, and managers
  • Personal information, Pay information, title, job grade etc..

Performance Management Systems

You may also have a separate Performance System.  A Performance Management System normally includes performance appraisal data and productivity information data. Documentation of employee performance and of how the performance was measured and reported is critical to your employees understanding this type of system.  Many of these systems come with the capability to offer:

  • Performance appraisals
  • 360 reviews where an employee is reviewed by the manager, their peers and their subordinates
  • goal planning, setting and accomplishments
  • Succession and development plans

Applicant Tracking Systems

Applicant Tracking Systems are systems that allow you to create a user/applicant experience.

The application process becomes paperless with an applicant tracking system, so it is simple to store, recall, or purge applications from the system with just a few clicks. This helps to ensure that no critical information is lost and all necessary information is readily available for open positions now or in the future.

Compensation systems

Ideally your compensation system should track all aspects of your employee’s compensation including:

  • Base salary
  • Bonuses
  • Incentive comp
  • Long term incentive comp
  • Equity/stock/RSU’s etc..

It is helpful if your Performance Appraisal system feeds directly into your compensation system, meaning less manual input or expensive integration for you.

Be very careful in selecting your systems.  Spend at least 3x the time you allotted to understanding and testing the system before you commit.  On a personal note, we have had a very bad experience with Cornestone.  While their systems have a lot of capability, you would literally need to be a system admin in order to build out the back end which they require you to do.  They are the farthest thing from user friendly with very poor UX design.

How to Properly Terminate an Employee

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sherrie-suski-parting-waysYou may have done everything right.  You may have given verbal warnings, written warnings, worked through an honest Performance Improvement Plan and coached and counseled, but there comes time when it becomes obvious that your employee is either unwilling to or incapable of performing the essential job functions.  

It’s a hard decision to come to as all of would like to see our subordinates succeed and when one fails, it is a failure, of sorts, for you and your whole team. There are a few steps you can take, though to make it easiest on yourself and the employee you are separating.

 

No Surprises

If you have done everything right, it will not come as a surprise to your employee that the time has come for them to move on.  They may be sad, but they will not stare at you with a look of incredulousness.  If you believe your employee will be surprised, revisit your process, because you have not done all you should have.

Focus on Behavior, not the Person

This really does make a difference.  It is not the person you cannot tolerate (or if it is the person, then pretend that it is not) it is the behavior.  Acknowledge that not everyone is good at everything and that there may be positions where this person would be much better suited.

Be unapologetically Truthful

Be matter of fact when discussing their shortcomings.  Outline the reasons you have come to the decision to terminate their employment.  You don’t need to be sorry about it or apologize for your decision.  Although it may seem kind to leave the door open for them to appeal your decision, it really is not.

Offer to Help

Not that someone being terminated will usually take you up on this, but it’s a nice gesture.  You can offer to review a resume, assure them that only dates of employment and title of last position will be released.  Assure them that you will not contest unemployment, assuming you will not.

Don’t give References

Resist the urge to offer or agree to give them a reference.  Although it sounds odd, I have had more people than not ask for references, verbal or written, after hearing they will be terminated.  I usually tell them that they would not want the reference I would give.
Carried out correctly, although never pleasant, a termination does not have to be unduly uncomfortable.  I have gotten plenty of hugs and even a few Christmas cards from employees I have had to terminate.  It can be done with dignity and respect.

Writing a Performance Appraisal

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sherrie suski_performance appraisalWhether they are anniversary review dates or focal review dates, many managers dread sitting down to write their subordinates’ Performance Appraisals.  They aren’t sure what to say, how to say it and don’t want to disappoint or to give undeserved praise.  Below are some tips for writing effective appraisals.

Think- Spend some time thinking about what message you want to deliver.  What were some of their major accomplishments during the last year?  How do they compare to others on your team or to others in the organization?  What would you like to see them improve on?

Use specifics– where you can, give specific examples to support your ratings.  All ratings that are above or below a 3 on 1-5 rating scale should have comments.  State specifically what the positive impact of a project was or the negative consequences of continuously missed deadlines.  Employees need examples that they can relate to before you know that understanding has taken place.

Don’t use generic verbiage– Many software programs today will allow you to pick your comments from a drop down menu.  Resist the urge to do this.  It sends the wrong message to your subordinates, that you didn’t take the time to think of something unique to say about them.  It doesn’t have to be eloquent.  It does have to be honest and professional.

Keep it Professional– This is a document that will live in the employee’s file.  It says as much about you, the manager, as it does about the employee.  Do not use inappropriate language and do not use words like “lazy” or “doesn’t care”.  Those are judgements and do little to help the employee know what to improve upon.

Give honest ratings– not everyone is a 5 on a 1-5 scale, nor is everyone a 5 in all categories.  As a rule of thumb, about 10% of your team could be rated 5’s.  If you have performance issues, now is the right time to address these.  Do not give someone a 4 on a performance appraisal and expect to terminate them for performance the next month.

Be confident– When writing your assessment, be confidant in the thoughts you want to express and the words you use to express them.  You are the manager and your team is looking to you for guidance.  

Offer growth- no one wants to be in a stagnant position.  Everyone deserves the right to have the opportunity to grow either within their position or within the Company.  Let them know what areas you see that they could improve in, or that you could offer to get them involved in, in order to broaden their skill set.

Spend the time to write an honest and thoughtful performance appraisal and you will be rewarded with a staff that is continually improving!