Human Resource Handbook A Guide to Effective Employee Management Russell R Mueller Retail Hardware Research Foundation 5822 West 74th Street Indianapolis, IN 46278 Human Resource Handbook A Guide to Effective Employee Management By Raymond A Parker Chief Executive Officer, PHRST & Company Inc Vice President of Human Resource Outsourcing, SOI (Strategic Outsourcing Inc.) Russell R Mueller Retail Hardware Research Foundation 5822 West 74th Street Indianapolis, Indiana 46278 The information presented in this Human Resource Handbook is being provided by the Russell R Mueller Retail Hardware Research Foundation as a service to the retail hardware community Although every effort has been made to ensure the accuracy and completeness of this information, the Russell R Mueller Retail Hardware Research Foundation cannot be held responsible for any errors or omissions, nor any agency’s interpretations, applications and changes of regulations described herein This Handbook is designed to provide accurate and authoritative information in a highly summarized manner with regard to the subject matter covered The information in this Handbook is subject to constant change and, therefore, should serve only as a foundation for further investigation and study It is made available with the understanding that the publisher and others associated with this Handbook are not engaged in rendering legal, technical or other professional service on any specific fact or circumstances The Russell R Mueller Retail Hardware Research Foundation makes no representation that adherence to subject matter herein will be considered adequate compliance with human resource related laws and regulations as interpreted by federal and state agencies charged with enforcement of such laws and regulations The contents are intended for general information only Users of the information contained in the Human Resource Handbook are urged to consult their own attorneys or other technical specialists concerning their own situations and specific legal or technical questions ©2008 by the Russell R Mueller Retail Hardware Research Foundation All rights reserved Except as permitted under the United States Copyright Act of 1976, no part of the Human Resource Handbook may be reproduced or distributed in any form or by any means or stored in a database or retrieval system without prior written permission of the publisher Published in the United States of America Published by Russell R Mueller Retail Hardware Research Foundation 5822 West 74th Street Indianapolis, Indiana 46278 (317) 290-0338 • Fax (317) 328-4354 • www.nrha.org ■ Russell R Mueller Retail Hardware Research Foundation RUSSELL R MUELLER Managing Director National Retail Hardware Association 1952-1967 Board of Directors 2007-2008 President Richard N Thomes Thomes Brothers Do it Best Hardware & Appliance Arlington, Minnesota Directors Kenneth Eilers Borderland Hardware Mercedes, Texas Myron Boswell Orgill Inc Memphis, Tennessee William Hudson H.D Hudson Manufacturing Co Chicago, Illinois John Haka Midwest Hardware Association Stevens Point, Wisconsin Mac Hardin Minnesota-Dakotas Retail Hardware Association Hopkins, Minnesota Executive Vice President John P Hammond North American Retail Hardware Association Indianapolis, Indiana Secretary/Treasurer Thomas W Smith North American Retail Hardware Association Indianapolis, Indiana Organization The Russell R Mueller Retail Hardware Research Foundation was established in 1968 as a living memorial to Russell R Mueller, managing director of the North American Retail Hardware Association from 1952 through 1967 Mr Mueller made major contributions to the hardware industry as an advocate for the independent retail hardware dealer Objectives The purpose of the Mueller Foundation is to conduct continuing research and educational activities for the improvement of hardware retailing According to the Foundation’s charter, all such research and education activities must fulfill a basic need, must not duplicate projects or programs of the North American Retail Hardware Association or any other industry organization, must be of industry-wide interest and application, must have retention value over a period of years and must serve to perpetuate the causes for which Russ Mueller worked All information developed by the Foundation is made available throughout the industry Financial Funded by an initial grant of $50,000 from the Board of Directors of the National (now North American) Retail Hardware Association, the Mueller Foundation is organized as a non-profit business league Continuing research projects are funded by voluntary contributions from individuals, companies and organizations at all levels of distribution throughout the hardware industry and by grants Administration The Board of Directors of the Mueller Foundation consists of representatives of the major segments of hardware distribution, including retailing, wholesaling and manufacturing All Board members serve without compensation, assuring that 100 percent of the Foundation’s income is available to finance research and education projects ■ About the Author Raymond A Parker, SPHR, is senior vice president/human resources outsourcing for SOI (Strategic Outsourcing Inc.) of Flagler Beach, Florida He is also founder and chief executive officer of PHRST & Company Inc., a full-service human resource outsourcing company Mr Parker has been in human resource management since 1972; he incorporated PHRST (Professional Human Resource Service Teams) in 1993 ad has been its CEO since 1997 He also has experience in corporate human resource management Mr Parker has experience in all areas of human resources with concentrations in international human resources, labor relations and compensation He holds a bachelor’s degree in motivational research psychology from Pennsylvania State University and a master’s degree in management science and psychology from the College of New Jersey Mr Parker is available to answer questions or for consultation at 1-800-285-8380 Code 14; ray.parker@soi.com or www.soi.com Acknowledgements The Russell R Mueller Retail Hardware Research Foundations wishes to thank to following individual for giving of their time and talents to produce the Human Resource Handbook: North American Retail Hardware Association Ellen Hackney Erin Couch Scott Wright John P Hammond Executive Vice President PHRST & Company Inc Claudia Parker ■ Table of Contents Introduction Attracting Employees 1-1 What kind of employees you want? What job are you offering? Where you look for employees? How you contact prospective employees? What are ethical considerations? What prospective employees look for? Making the Job Offer 2-1 How you read a resume or application form? How you conduct an interview? What questions should you ask and not ask? How can you make a job offer without making promises that will get you in trouble? Screening/Testing 3-1 What is legal and what isn’t? How much weight should you give tests in hiring decisions? How you evaluate results? What is effective and what isn’t? Building a Personnel File 4-1 What’s required? What’s helpful? What’s dangerous? How long should you keep records? It’s the Law 5-1 A summar y of federal employment laws including disabilities, discrimination, downsizing, on-the-job injuries, workplace harassment Creating a Training Program 6-1 Subjects include orientation, training for new employees, work rules, continuing education for existing employees, training schedule and resources Developing Effective Employees 7-1 Subjects include creating career opportunities, management training, performance management and performance reviews Rewarding Employees 8-1 Topics include compensation, traditional incentives and benefits, non-traditional incentives and benefits and finding out what employees want and giving it to them When It’s Time to Part 9-1 How you know when it’s time to terminate? Subjects include legal issues on termination, proper termination procedures, protecting yourself from lawsuits, emotional issues on termination and exit interviews When It’s All Said and Done 10-1 What makes a happy, productive staff? Why are some employers successful at keeping employees? What owners and managers say? Why good employees leave? Glossary G-1 Frequently Asked Questions F-1 Appendix A-1 ■ Introduction The purpose of the Russell R Mueller Retail Hardware Research Foundation is “to conduct continuing research and education activities dedicated to improving hardlines retailing.” The Human Resource Handbook, first published in 2000, was developed as a practical desktop guide and reference for small and medium-size businesses in the hardware/home improvement industry It was designed primarily for owners and managers who deal with human resource management matters without the support of large, corporatestyle human resource departments It was an immediate success, with more than 5,000 copies going into distribution within weeks of publication During the intervening years, some of the information became outdated and the Human Resource Handbook was taken out of circulation But requests for it continued This current edition of the Human Resource Handbook contains the same kind of helpful information as the original but has been updated to ensure that information is current The Handbook is designed to provide accurate and authoritative information with regard to the subject matter covered It is provided with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services If legal advice or other expert assistance is required, the services of a competent professional person should be sought General topic areas discussed include hiring, compensation and benefits, discipline, regulatory issues, training and development, recordkeeping and related subjects Numerous forms, charts and resource lists are included The Handbook follows the logical employment progression beginning with recruitment, through career development to termination of service Throughout, the Handbook explains how to apply common and correct principles of human resource management in a simple, straightforward manner The Mueller Foundation, the author and those contributing to its development are pleased to offer this revised and updated Human Resource Handbook as a practical and valuable tool to facilitate and enhance the effectiveness of hardware/home improvement owners and managers in their everyday dealings with employees How to Use the Human Resource Handbook This electronic version of the Human Resource Handbook is designed to make it easy to navigate from chapter to chapter and section to section It can be printed out in its entirety or by individual page The Appendix at the end of the Handbook contains forms that can be easily downloaded for your use Many of these forms are available in Microsoft Word documents that can be customized with your company's name and logo, or printed out on company letterhead Simply click on the forms in the Appendix to download these forms Introduction IN CHAPTER ONE: • WHAT KIND OF EMPLOYEES DO YOU WANT? • WHAT JOB ARE YOU OFFERING? • WHERE TO LOOK FOR EMPLOYEES • HOW TO CONTACT PROSPECTIVE EMPLOYEES • ETHICAL CONSIDERATIONS • WHAT PROSPECTIVE EMPLOYEES LOOK FOR ■ Attracting Employees Finding the best employees is an ongoing process requiring thorough planning and careful execution It involves figuring out what jobs need to be done, what education, training or skills are necessary to them and what pay levels are appropriate and matching the employee to the job WHAT KIND OF EMPLOYEES DO YOU WANT? Owners and managers are quick to answer this question with, “The best and most qualified people available.” It is a good general answer Yet it is not specific enough for our real job needs We need to describe the person we want by specifically identifying the knowledge, skills and abilities required for the job In doing so we must be fair, accurate and objective Fairness is necessary for legal and regulatory compliance Accuracy is needed so we get what we need and not overstate or understate the job And we need to be objective so we can decide between candidates based only upon specifically what is needed for the job We need a basic description of the job and the person we want We can this easily using Table 1-1 Later we will discuss developing a detailed job description Begin by developing two simple lists Five items for each is enough Identify the primary functions of the job Think in terms of “What does the job (person) get done?” Avoid just listing tasks Next, insert the prerequisites for the job These should answer the question, “What does the person need to bring to the job to the job?” Consider: • Background • Experience • Education • Special skills - example: speaking another language • Purpose for seeking the job example: wanting to own his/her own company • Only the knowledge, skills and abilities specific to the job you wish to fill This is easy as we think about what we really need in the job Review the sample in Table 1-1a Fill in what you need in Table 1-1b Remember not to over- or under-represent the position Doing so may lead to a mismatch for the person filling the job And it can lead to more difficulty finding the best person for the job, if, for example, you put too many requirements on the person’s background There is more to decide about the job An employer needs to decide if the position is to be management or nonmanagement and if it is to pay hourly wages or a salary By definition, employees are paid salary when they are paid a consistent amount from pay period to pay period regardless of the number of hours they work “Hourly” pay means the employee is paid only for hours worked As an example, if an employee is paid hourly pay and misses work for one hour for a dental appointment on Monday, s/he would receive 39 hours of pay for the week As a salary-paid employee, s/he would be paid 40 hours even though the hour was not worked More information on hourly vs salaried employees is in Table 1-2 and the Glossary These are important points The federal government provides guidelines under the Fair Labor Standards Act (FLSA) to determine the classification of a position There is a distinction made between management and non-management personnel Management jobs are referred to as exempt Non-management jobs are referred to as non-exempt Management jobs not get (are exempt from) overtime pay Nonmanagement jobs get paid CHAPTER ONE: Attracting Employees 1-1 over time (they are not exempted from overtime pay) Basically the classes and pay are shown in Table 1-2 Employers make the decision whether personnel are paid a salary or hourly wages for non-exempt employees Deciding if an employee is exempt or non-exempt can be more difficult And there can be legal consequences It is improper to classify a job and person as exempt just to avoid overtime So how we make the right decision? Table 1-3 is helpful in deciding whom we can classify as exempt Note the Department of Labor Internet site where there is additional helpful information for determining management versus non-management status If there is a question on the employee’s exempt or non-exempt classification, it would be wise to seek professional assistance The Wage and Hour Division of the U.S Department of Labor (see your local phone book for numbers) can be helpful Check with a legal adviser for additional help Table 1-1 (A) SAMPLE: SALESPERSON PRIMARY FUNCTIONS PREREQUISITES Greets customers High school or equivalent Displays and explains items months retail experience Estimates customers’ needs Able to speak one-on-one Solves customers’ problems Able to relate needs to products Maintains department inventory Willingness to learn, take responsibility Table 1-1 (B) YOUR JOB REQUIREMENTS: SALESPERSON PRIMARY FUNCTIONS PREREQUISITES Many employers hire independent contractors We must take care in the way we designate and manage contract personnel working for us, too If an issue arises, a legal investigation may take place Sometimes those we think are contractors really are not Table 1-4 is a guide for a basic decision on contractor status We are beginning to develop a good picture of the job Next we need to decide if we will make it a full-time or part-time job There are many pieces of information we are evaluating A simple table like Table 1-5 can help us Here we used the example of a salesperson and selected the relevant factors which indicate that the job is a non-exempt salary job, that it is paid overtime, and that it is a full-time position Now we have an idea of the job How many people we need to fill the job? This sounds easy, but what if we want to some creative planning for coverage? Maybe we can use job sharing, which is where two or more people perform the same job for a varied number of hours, perhaps splitting the day or working different days of the week Or what if we have to cover shifts or heavy sales periods? Plan ahead Do not misrepresent the vacancies This can have an impact on morale, cause too many applicants to apply and/or have other consequences WHAT JOB ARE YOU OFFERING? At this point we have good answers to this question In our example we would Table 1-2 JOB CLASSIFICATION AND PAY 1-2 CLASSIFICATION TYPICAL FUNCTION PAY METHOD OVERTIME Exempt Owners, executives, managers, supervisors Salary No overtime Non-exempt (salary) Clerical, technical, sales, etc Salary Paid overtime Non-exempt (hourly) Operations, maintenance, labor Hourly Paid overtime Human Resource Handbook Table 1-3 MANAGEMENT (EXEMPT) AND NON-MANAGEMENT (NON-EXEMPT) STATUS FACTORS SALARY BASIS REQUIREMENT • FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional, outside sales and certain computer employees • To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week EXECUTIVE EXEMPTION - To qualify for exemption all of the following tests must be met: • Must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week • Primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise • Must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent • Must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight ADMINISTRATIVE EXEMPTION - To qualify for exemption all of the following tests must be met: • Must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week • Primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers • Primary duty includes the exercise of discretion and independent judgment with respect to matters of significance LEARNED PROFESSIONAL EXEMPTION - To qualify for exemption all of the following must be met: • Must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week • Primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment • Advanced knowledge must be in a field of science or learning • Advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction COMPUTER EMPLOYEE EXEMPTION - To qualify for exemption the following tests must be met: • Must be compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour • Must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below • Primary duty must consist of: 1) Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; 2) Design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; 3) Design, documentation, testing, creation or modification of computer programs related to machine operating systems; 4) A combination of the aforementioned duties, the performance of which requires the same level of skills • Exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (e.g., engineers, drafters and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations identified in the primary duties test described above, are also not exempt under the computer employee exemption OUTSIDE SALES EXEMPTION - To qualify for exemption all of the following tests must be met: • Primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer • Must be customarily and regularly engaged away from the employer’s place or places of business Source: US Department of Labor (See http://www.dol.gov/elaws/esa/flsa/overtime/menu.htm) CHAPTER ONE: Attracting Employees 1-3 .. .Human Resource Handbook A Guide to Effective Employee Management By Raymond A Parker Chief Executive Officer, PHRST & Company Inc Vice President of Human Resource Outsourcing,... employees How to Use the Human Resource Handbook This electronic version of the Human Resource Handbook is designed to make it easy to navigate from chapter to chapter and section to section It can... suggested employee file make-up, items to include in the files and furnish suggested periods of time to keep materials, including selected non -human resource management items What goes into an employee? ??s