Last time I noted that we are facing broadly the same employment compliance headaches as a decade ago, but with new twists. The first area I’m going to tackle this time has been a problem for far longer than that.
Discrimination, harassment and retaliation
On the fiftieth anniversary of Martin Luther King’s “I have a dream” speech, it is incredible that we are still fighting discrimination in the workplace.
But Equal Employment Opportunity Commission (EEOC) charges are increasing, not decreasing. And although the blatant denial of a job or promotion on the grounds of race, gender, age, ethnicity, or other protected category may be rare today, subtler forms of bias in the form of co-worker harassment, or retaliation for speaking up for one’s rights, still undermine the working environment, and pose a serious risk for the bank.
Take, for example, ageism. Numerous studies have documented that the recent recession and “jobless” recovery have been particularly hard on older workers. Turning down an older applicant may not be a high litigation risk—workers still hopeful of landing a job elsewhere know that “frequent litigant” doesn’t look good on a resume.
The risk here is missing out on the experience, loyalty, and reliability that older workers often bring to the table.
Retaliation is now the leading basis for filing an EEOC charge. In 2008, the Supreme Court widened the definition of retaliatory activity beyond demotion or termination to any action that “materially adversely effects” an individual’s terms and conditions of employment.
The Supreme Court also tightened the standards for supervisor behavior where harassment is alleged: The bank will be liable if a supervisor harasses a subordinate, unless it can prove it made “good faith efforts” to prevent and address harassment in the workplace.
As the categories protected from harassment increase on a state-by-state basis to include LGBT and other groups, this means regular and meaningful management training. Indeed, such training is required in some states.
Dealing with the poor performer
Payroll is typically the bank’s biggest expense. Have you ever assessed how many of those payroll dollars are wasted?
While I’m not advocating Jack Welch’s policy at General Electric of culling the bottom 10% of workers each year, it is important to focus on how ignoring lackluster performance drags on financial returns.
The problem—and it hasn’t changed in decades—is that many bank managers are simply not trained to manage people.
They may do well with figures, business plans, and financial statements, but coaching, evaluating, and motivating employees is not something that comes naturally.
Three essentials shifts that often must be made:
• Accept responsibility for a subordinate’s performance. Managing performance is not a spectator sport.
• Remember that performance improvement planning is a two-person endeavor. The manager’s job is to work out with the employee what tools and training are needed and to provide them, whether that’s an updated software program or an online webinar.
• Set aside the time to spend with the employee on setting specific, meaningful goals, and reviewing progress towards them on a regular basis. The is the most important—and difficult—thing to do.
As more and more banks move to a “pay for performance” model, it is in the manager’s self-interest to develop performance management skills. The metrics that determine compensation are in large part determined by how well the team performs.
Employee privacy vs. employer rights
I’ve been telling employees for years that they have no expectation of privacy in their use of the employer’s technology, for example, to send emails or browse the web. As internet connectivity expands, devices proliferate, and the line blurs between “at work” time and “private” time, this simple warning no longer answers all questions.
We have undergone a cultural revolution in the last decade. Instant and constant communication is now the norm. It is probably unrealistic for the bank to expect employees to leave their smart phones at home, or confine their use of them to the break room. However, an electronic communications policy needs to be drafted that sets some basic ground rules. Consider these elements:
• The bank’s time should be respected, and excessive time spent on personal internet use will result in discipline. That means that a quick text to make sure the kid made it to soccer practice is fine. A lengthy daily review of Facebook postings is not.
• Employees are bound by law to keep some bank information confidential. Similarly, trademark and copyright law restricts use of protected content. Comments about co-workers that are deemed offensive or harassing will result in discipline.
Employees who tweet, blog, or post on Facebook should bear all this in mind.
Gender pay equity
This is a thorny topic for community banks.
On the one hand, banks employ high numbers of women, including many in quite senior positions.
On the other hand, many bankers (though not you, obviously!) are traditional, conservative, or just plain good ol’ boys. Often, unintentionally, these attitudes may lead to gender pay disparities.
It is not illegal to pay a man more than a woman in the same job—as long as you have a good reason. A “good reason” under the law is basically either seniority in the job, or objectively demonstrated superior performance in the job.
A good reason is NOT:
• “He wouldn’t take the job unless we matched his previous salary.”
• “He has a CPA license/law degree” (if a CPA license/law degree is not necessary to the performance of the job).
• “He has three small children and a stay-at-home wife”
With increased attention focused on pay equity by the Office of Federal Contract Compliance Programs (OFCCP), the agency charged with enforcing affirmative action requirements, it may be worth doing a compensation analysis to find out if you have a problem.
Before undertaking this exercise, make sure senior management has anticipated taking corrective measures, if necessary.
New affirmative action obligations
Speaking of the OFCCP, the long-awaited Final Rules extending affirmative action requirements for veterans and the disabled were released on August 27.
Affirmative action planning is already one of the greatest areas of compliance risk for banks with more than 50 employees, and these new regulations will impose additional burdens as they are phased in.
The topic deserves an entire blog posting, so I’ll address it separately. Also watch out for an ABA Telephone Briefing on the changes on October 9.