Fortify your 401(k)

sherrie-suski-401kThe middle of the year seems like a good time, albeit, not as good as the beginning of the year, but good none the less, to ensure that you are on track to set aside the maximum amount allowed in your 401(k) plan.  If there is some catching up to do, contributions spread out over the remaining 6 months are infinitely easier to handle than if you wait until the last quarter of the year, which will necessitate such choices as rent versus 401(k) contributions or tasty meals versus 401(k) contributions, in which case the 401(k) almost never wins.  There are many variables when investing and your 401(k) is no different and not immune to any of them. It not always just how much you save that predicts your outcome when you retire, but how you save and what the economic environment looks like.

Your Contributions

The IRS has generously increased the maximum annual contribution limit in 2019 to $19,000, up from $18,500 in 2018. However, if you are moving toward those golden years and will be 50 years old or older at any time in 2019, you can contribute an additional $6,000 in the form of catch-up contributions. This means you’ll be able to contribute up to $25,000, which includes the catch-up contributions. If your employer makes matching contributions, the amount going into your 401(k) could be much higher.

Employer Matching

Any employer match is a good employer match!  Most employers have a 3,4 or 5 year vesting schedule on their match contributions so that employees are encouraged to stay around to actually collect 100% of their match.  This employer match is set aside as you make your own personal contributions, but should you leave before you are fully vested in the company match, you will only receive a portion of it.  Occasionally you will hear about companies with Safe Harbor plans. In this case, the employer match is vested 100% and immediately.  There is no vesting period at all. The reason this is attractive to many companies is that it significantly decreases the discrimination testing that must be done annually on all 401(k) plans and it ensures that you plan will not be found to have to refund dollars contributed back to your highly compensated employees.  Many of whom happen to be your senior staff and C-Suite individuals.

Economic Environment

To some extent this is beyond your control.  Certainly, the economy’s performance is beyond your grasp to influence, but how you react to the economy and the types of investments you make is very much within your control.  Forbes economic advisors are predicting on a 20% chance of a recession this year and a 30% chance of a recession next year.  One of the best predictors of a potential slow down is the US bond yield curve which inverted in March of this year for the first time since 2007.  An inverted yield-curve occurs when long-term debts have a lower yield as compared with short-term debt. An inverted yield curve is generally considered a recession predictor. It won’t be immediate, but recessions have followed inversions a few months to two years later several times over many decades. When you see this economic phenomenon, money market funds, CD;s and short terms treasury notes start to look more attractive.

Your 401(k) should not be a set and forget savings tool but one that is actively managed, at least quarterly, to ensure that the results are what you are hoping for when you do finally decide it is time to retire. 

Defensiveness

sherrie-suski-defensivenessDefensiveness is defined as the quality of being anxious to avoid criticism and/or the behavior intended to defend or protect.  Some have even defined it as reacting with a war mentality to a non-war issue. While none of us relishes criticism, it is a necessary part of growth.  To be able to see ourselves as others see us is a gift that allows us to leave old habits behind and adopt new, healthier ways of having relationships with others.  

An Open Heart

Changing defensive behavior stars with being able to listen with an open heart to what is being said.  Assume the person has your best interests in mind and is sharing something that you need to hear. Try and clear you mind so that you are truly listening and not rehearsing your next defensive statement in your mind while they are speaking.

Express Your Feelings

Being able to openly express your feelings is requisite to becoming less defensive.  Letting people know in a calm manner when they have upset you is not being defensive.  Lashing out with an inflammatory statement is. 

Building Trust

Working through conflict builds trust in any relationship.  It assures both partners that they can trust each other; they can be honest and acknowledge that any relationship is a work in progress, not fixed or defined on just one person’s terms or one moment in time.

Toxic Comments

Bottom line: if we don’t learn how to deal with our grievances head on, inevitably we deal with them indirectly, most often in more toxic forms: by teasing or making snide comments, holding grudges, or by growing more indifferent over time. 

Of course, it’s difficult to give and receive healthy criticism if we’re clinging to a defensive attitude. If you feel yourself become defensive, try to see if you can simply acknowledge it, and work through the conflict as honestly and generously as possible.

Self- esteem

Temperament, history, and, most importantly self-esteem can impact how we respond to criticism.  Some people have so much negative self talk occurring in their heads that they feel they just can’t accept any more from someone else.  Realizing that just because someone is criticizing one issue, does not mean you are a bad person overall is key to building better relationships

People who are more prone to defensiveness may perceive an attack in certain situations in which people with resilient and calm temperaments would perceive none. Experiment with viewing the situation from different vantage points.

Overall, defensiveness in life will hold you back from building better relationships and from growing as an individual

Human Resources Strategy

Once you have assessed your Organizational Culture and understand where you stand, you can move on to HR Strategy in support of that strategy.

The journey toward assessing and implementing your HR strategy may follow the same below five stages.

Functional

Minimal overarching strategies direct the HR team’s efforts. The HR team is largely reactive to the business stakeholders with respect to independent processes (talent acquisition, training, succession, compliance, compensation, etc.) The scope of HR’s roles and structure hold the function back from understanding the business and the employees. Several HR systems may still be manual. The team is focused on the day to day activities without understanding their impact on the organization.

Cross- functional

Strategies regarding critical HR functions (talent acquisition, management development and performance management) are project managed and process-driven, but they are not integrated. There may also be differing degrees of maturity. All functions within HR begin to engage more proactively with the business to ensure alignment, but efforts are not consistent, and change tends to happen slowly.  There are no launch plans and programs introduced, while valuable, may seem disjointed.

Building

Key HR processes start to become integrated as the organization recognizes the need for greater adaptability. Better alignment between the HR strategies and the business strategies is starting to take place. The cascading of organizational goals as a way to guide individual and team objectives and development begins to become pervasive.  Employees start to see the alignment between HR programs from various functions.

Enhancing

HR Programs such as talent acquisition, management development, succession, engagement and incentives are connected to one another in order to heighten the output of the organization. The business strategies are routinely translated into HR strategies, so the HR team remains in-step with the company.  There is a path that HR is capable of walking the organization down. An understanding of how each program introduced flows into and builds upon the one before.

Optimized

Sophisticated and integrated near and long-term HR strategies exist, usually in the 3-year range. Strategic objectives, which are typically cross-organizational, require HR leaders to collaborate cross functionally, creating shared goals and actions. Collectively these behaviors drive successful business outcomes. The strategy is continually reviewed to ensure it is on track with the business and averting unnecessary risk. When necessary, the strategy is rapidly altered based on data-driven inputs to stay on course.  Automation and data based decision making are key at this advanced stage.

Not every organization will achieve the optimized state, but it is, nevertheless, a worthy goal.  HR gains their seat at the table by being able to positively impact the business and align their processes to business outcomes.

Workplace Anxiety

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The numbers of people who are affected by anxiety are on the rise.  Recent reports estimate that 40 million people are affected by anxiety, roughly 18 percent of the nation’s population. 

While it is hard to tell whether this rise is an actual increase in those affected by anxiety or simply an increase in those willing to report it, one thing is for sure, uncontrolled anxiety impacts a person’s quality of life both at home and at work.  

 

Strategies for coping with Anxiety

  • Ensure that you have a strong support system both at home and at work.  Spending time with family and friends is one of the best ways to ease the stress of the day.  People who develop strong emotional connections at work have built in safety nets for diffusing some of that stress before it becomes harmful.
  • Exercise before, during or after work.  Everyone has a time when they feel their best.  Some may prefer to get up early and for others it is the perfect release after the end of a long day.  Some are lucky enough to have company or company sponsored gyms that they can take advantage of during the workday
  • Take a different perspective, remembering that not everything is urgent. Learning to laugh a little at how busy things can get, automatically eases the stress level.  
  • Try looking at things a different way the next time you feel stressed.  For example: Instead of rolling your eyes when yet one more person walks into your office, think of it as how many opportunities you have to impact someone’s life in a positive way.  The more the better!
  • Do something to lighten your own mood.  Maybe it’s wearing a funny saying under your work shirt or leaving yourself inspirational messages.  Whatever breaks to constant stream of stress, even for a few minutes, will be helpful
  • Keep a journal of all the crazy, wacky, unbelievable things that happen.  Then, after a particularly stressful day, you will be able to review the past happenings and realize that today was no worse than some of the past days have been.  They passed and you got through them.
  • Fake it until you make it.  Pretend that you’re not anxious or bothered by what happens at work. Because of something known as cognitive dissonance, the mind can actually adapt to the way you act. If you act like a great, confident, happy employee every day even when you’re genuinely not, you can start to feel the very same positive emotions that you’re pretending to experience, and ultimately reduce your anxiety that way.

 

The way you handle the anxiety is not as important as finding the approach that works best for you.  Don’t be reluctant to reach out for professional help if you have tried numerous approached and nothing seems to be working.  Left untreated, anxiety has a negative impact on your quality of life and you deserve only the best!

 

Compensation- putting the plan in place

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Last week we talked about establishing your Compensation Strategy and how to determine the competition and your rationale for certain recommendations.  Once you have a thorough well thought out strategy, though, you need to execute.  Careful, well thought out execution is every bit as important as developing your strategy.  Remember, it is likely that you understand compensation better than anyone else in your organization so start at the top.

 

Get your Executive Team Bought in

Keep in mind that executive teams have a lot on their mind and are likely not up to speed with why a compensation strategy is important, so start simple.  https://www.shrm.org/ResourcesAndTools/hr-topics/compensation/Pages/AlignPay.aspx The payroll in a company is by far the largest expenditure and compensation touches all areas like candidate attraction, retention, turnover and satisfaction to some degree.  Pay ranks in the number three spot as to reasons why employees leave positions and the cost to replace that employee is anywhere between 100-200% of their base salary. https://www.appleone.com/Employers/SCALE/2017/EngagementTools/cost-of-turnover-calculator.aspx  Plenty of reason to make sure that compensation is NOT the driving force behind your resignations.

 

Train your Managers to have Compensation Conversations

Once your executive team is bought into your strategy, it’s time to train your managers to talk about compensation. https://hbr.org/2014/04/how-to-discuss-pay-with-your-employees  We have all heard or experienced firsthand the horror stories of employees finding out what their raise is when their paycheck comes out, never having had a conversation with their manager, or the manager walking into a group of employees, handing each a piece of paper with their raise on it and walking out, thus missing a critical opportunity to further enhance the employee’s satisfaction and level of engagement. https://compensation.blr.com/Compensation-news/Compensation/Compensation-Administration/Preparing-for-Compensation-Conversations-with-Empl/  The first step is to listen.  Listen to what the employee has to say, repeat back what you think you have heard.  Share critical information, such as the merit budget pool for the year and the compensation philosophy.  

 

Communicate the Process

Letting the team know up front and reminding them often of who will do what we go a long ways towards preparing for success. http://www.simplehrguide.com/compensation-strategy-key-content.html  Communicate the roles that HR will play-to establish salary grades and structures, to provide compa-ratios, to set the merit pool amount and to weigh in on any recommended market adjustments.  The first line managers will be responsible for recommending salary increase, justifying recommendations for promotions or market adjustments and communicating the approved increases to the individual employees. Your executive team has the responsibility to communicate and support the compensation strategy and philosophy they have approved. Employees, too, play a role.  They have the responsibility to ask questions and ensure that they get a satisfactory answer.  Make sure that they know their manager is their first stop, but if questions remain unanswered that HR’s door is always open.

Do you best to create an environment where compensation is not practiced in a black box, but is implemented in a thoughtful, straight forward way, where everyone understands what it is meant to achieve and feels comfortable offering suggestions to enhance the process.  A compensation strategy, created and implemented well, can enhance many aspects of the organization and the employee experience.

Holocracy- Implementation Challenges

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Last week we talked about Holocracy, what it is and what its advocates say the potential benefits are.  But in reality, does Holocracy work ?  Can a type of self-management that gives decision making power to fluid teams, or “circles,” and roles rather than individuals yield results and better decisions than a traditional structure?  How well do people deal with the uncertainty that a holocratic approach creates

Sourcing and Hiring

Holocracy models complicate sourcing and hiring decisions.  How do you advertise for a job that is comprised of ever changing micro roles and how do you assess whether the person sitting in front of you actually is competent at those micro roles and any other talents they might have?  People are used to looking for traditional job titles, but in holocracy, there are no traditional job titles.  Do management level employees worry that deviating from their career path might stall out their careers.  What if they are at a Director level now and you are trying to recruit for a team member with a skill set normally held by an Accounting Dir.  How many would take a “team or circle member” title?

Micro Roles

Another issue that holocracy creates is the formation of micro roles.  No longer is one individual responsible for a specific set of set roles, but a swirling set of micro roles that are ever changing.  It can complicate the work actually getting done as employees may be responsible for up to 25 different responsibilities and struggle with prioritizing them and deciding where to focus first.  They may be members of a number of different circles and have weighty responsibilities to each, but not be able to satisfy all of them or be forced to prioritize in conflict with others. 

Compensation

Compensation becomes difficult as well.  Not only are there struggles with determining internal equity as this now requires each of 100’s of micro roles to be assessed and the value of these roles change as new circles are created and as the organization matures and different skills become more or less valuable, but external equity is an issue.  How do you go to the market to assess the worth of a position when there is no longer a match for the position?  There is nothing to compare the person’s position to.

Unlearning old behavior

For holocrcay to be successful it necessitates that both bosses and subordinates unlearn old behavior.  If everyone is truly to be tapped for their full potential then there cannot be those who are hesitant to express opposing views in front of what used to be superiors.  This is a hard habit to break for both bosses and subordinates.  It is hard for leaders to learn to step back and not lead all the time.

Holocary has yet to be proven as a model that offers significant benefits over a traditional structure. The best of both worlds may be to incorporate some of the circle mentality into the traditional structure allowing everyone a voice to be heard and encouraging growth horizontally as well as vertically.

Putting Words into Action

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There is never a time more appropriate for putting our words into action than in the midst of unforeseen crises and disasters. We all speak of our employees being our biggest asset, of creating a workforce that is engaged and more productive.  We know that when we treat our employees well it builds loyalty, a great culture and better metrics at the bottom line.  But how many of us really show our employees, in a meaningful way, that we care about them as more than just employees? That we care about their lives and families outside of work?

I am proud to work for a Company that does just that in a bigger way than I have previously witnessed.  The unfortunate, recent, back to back hurricanes have devastated parts of Houston, Texas and many parts of Florida.  While many companies put out words of encouragement to stay safe, how many really went the extra mile, went above and beyond?

Here are just a few of the more meaningful ways you can show your employees that you care and, hopefully set an example for other companies to follow:

 

Full Pay

Ensure your workforce that they will continue to be paid full pay for all the hours/days they are unable to get into the office to work due to the storm or subsequent damage or flooding.  Many employees live very close to their paychecks and losing even 1-2 days of pay creates an undue hardship and stress on the family.

 

Insurance

Many employees do carry renter’s or homeowner’s insurance, as well as car insurance, but may not be able to easily afford the deductibles.  Some have purposely chosen policies with lower premiums and higher deductibles in the hopes that they would not run into a situation where they needed them.  Most of these deductibles are in the $100-$500 range.  Think about what it would mean to your employees if you were to offer to reimburse them for their deductibles?

 

Housing

We are fortunate enough to be a property management company with homes all over the US.  We offered all of our employees under evacuation orders, vacant homes to move into, on a short term basis, in other geographical areas out of harm’s way.  Even if you are not so fortunate as to have vacant homes to offer, you can offer to pick up the cost of hotels for the time that the employees are forced to evacuate.

 

Donations

It probably goes without saying that others want to help in times of need.  Set up a Red Cross donation through payroll deduction.   Make it easy for the rest of your workforce to assist those in need.  When we set this up last week, we have over 20% participation with 45 minutes.

Take this opportunity to put your words into action and show your employees that you do truly care about what they and their families are going through and you are here to help.  It’s time we learn to take care of one another out of and in the workplace!

Time management

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There have been copious articles written about time management and everyone no doubt has their favorite strategies. The below are a few that I have found to be helpful in the workplace and in life in general.

 

Know yourself

Part of being a good time manager is knowing what behaviors prevent you from managing your time effectively. The link below gives you a quick summary spreadsheet for determining what your behavior is to day and what your behavior should be in the future to maximize your time. It is helpful to know when your energy is at its peak- is that early morning, late night or somewhere in between. This will help you to plan critical activities for when your energy level is the highest.

 

Multi-task

I know this is contrary to many time management theories out there, but wherever possible, multi-task, especially when something does not require your full attention. When you give up the idea of doing only one thing at a time and look for ways to do two, you can get a whole lot more done. Some quick examples: If you’re on the West coast, schedule East Coast calls on your drive into work. Owe the Far East a call back, pop in your earbuds and make the call while you’re making dinner. 6:00pm pst is around 8:00am there.

 

Touch each e-mail or piece of paper once

This one is big. We all have a tendency to want to “think about” it for a bit and then answer which is likely the answer you would have given in the first place. Force yourself, unless there is truly research that is needed, to answer right away.

 

Start the night before

A big time saver is to lay out your next day the night before. This allows you to hit the ground running in the morning and not have to stop and get organized. Know what you need to accomplish that day, in terms of key deliverables and follow up items.

Get your follow up items out early so that it allows people time to work on them during the day.

 

Take a break

While this may sound counterintuitive, often times taking a quick 10 minute break will help you to re- focus and complete a task in a shorter amount of time than if you had stayed with it past your ability to really focus.

 

Determine what is urgent and what isn’t

Not every e-mail that comes in must be answered right away. Some of the best time managers only answer their e-mails 1-2 times/day. You would be amazed at how many strings of conversation there are where you are only peripherally involved and if you just let them play out, you can catch the last e-mail and be completely up to speed.

 

Everyone has strategies that work better for them than others. Don’t be afraid to try 20 or 3- and then pick the top 5 that really do save you time and increase efficiency.

Compensation systems

The last component of an effective HRIS is a Compensation system.  A sophisticated compensation system will save you hours of number crunching using excel spreadsheets.  Many of these systems are sold as a component of Performance Management systems, but there are a few stand alone ones as well.  It is always best to integrate where possible because you save yourself the time and effort involved in paying someone to write the integration software for you and the headaches that come with integrating two systems that were not designed to work together.

The capabilities you want to look for in your Compensation Systems are:

Integration

Ensure that your performance management system and your compensation system are fully integrated so that all the performance scores from the manager’s appraisal,  employees’ self-appraisals and any 360 reviews you have, flow over to your compensation system.  This will make is significantly easier for your managers to be able to rank employees and doll out the appropriate performance based merit increases.

Pro-ration

You want to ensure that your system has the ability to handle pro-rations, preferably down to the day, so that employees who start on September 1st are not eligible to receive the same increase as employees who started January 1st.  If you have implemented an annual bonus program, ensure that the pro-ration will apply here as well.  Also ask if it will handle lump sum increases if someone is at the range max.

Edit Capability

One of the most frustrating aspects of a poorly designed compensation system is when it does not allow for edit capability all the way up the line.  If the spreadsheet gets to your VP’s and they have to send it all the way back to the supervisors to make changes, you will lengthen your process considerably.  You should be able to pick and choose who you want to give edit capability to for each spreadsheet.

Co-planners

Invariably someone will pick an inconvenient time to terminate and you will be left with a situation where you need to assign another person to actually complete the merit increases for their group.  Your system should allow you to select a co-planner or, even better, to switch managers once the process has already launched. 

Custom Reporting

Your system should come equipped with an easy to use and easy to understand reporting functionality.  Nothing is as frustrating as having a new system and then having to dump everything in excel in order to actually manipulate the data.  Spend some time up front fully understand the reporting capability and figuring out whether it will truly provide you with the info you need to report on.

Multiple types of Compensation

Your system should handle base salary increases, short term incentives and long term incentives like Equity awards or RSU’s.  A system that cannot adequately handle long term equity incentives will give you a lopsided view of your employees’ compensation and how that compares to market

As with the other components of the HRIS that we have talked about, putting twice as much time in up front as you expected will yield the best results in the end. 

Interview Like A Pro – Part 2

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In last month’s blog, I begin to delve into some of the most important tips and tricks of the interviewing preparation period. If you follow those three steps, you will have a solid foundation to work off of when walking into your interview.

But one must always prepare for the worst, and there is always the possibility that you will not be ready for a question or scenario that an interviewer throws at you. So, for part two of “Interview Like a Pro”, we’ll be covering what to do if you end up stumped during your interview.

Take a Deep Breath and Remain Calm

The last thing that you want to do when you feel stuck is to panic. Of course, this is easier said than done, but it’s of the utmost importance that you don’t allow your brain to slip into a frenzy.  Once panic sets in, it will be extremely difficult to recover, and your body will start to have physical reactions to the stress.  Try to avoid blurting out the first thing that comes to mind, and do not immediately say “I don’t know”.

The key is to remember to breathe. It’s been proven that deep breaths help to clear your mind. Remind yourself that it is perfectly fine to not know the full answer, and then focus on coming up with something viable.

 

Don’t Be Afraid to Ask Questions

It is perfectly acceptable to ask for clarification if you feel as though the question is unclear. Depending on your industry, it may even be expected that you ask questions. In web development interviews, interviewers actually prefer that you ask questions, so that they can have access to your thought process.

Pro Tip: Talking through your response may actually help you to clarify your thought process.

 

Be Okay With (Gracefully) Admitting Defeat

If you’ve tried talking through your thought process, and still can’t come to a conclusion( or you know for a fact that the question you are being asked requires specific knowledge you do not have, it’s okay to say that you truly do not know. Promise that you will follow up with the correct answer post-interview.

 

Final Note:

Always send a follow up! If you promised an answer, make sure you send it. Otherwise, send a follow-up email that thanks the interviewer(s) for their time.

Source/Reference: Lifehacker