By Mark Brock
Illustrations: ©2020 Getty Images. www.gettyimages.com.
Specialty retailers generally agree that the people who work for them are their business’ most important asset. Selling and servicing upscale hearth, barbecue, and patio products requires the best of the best to compete successfully.
Going hand-in-hand with the proposition of people as the most important asset is the need for solid human resources (HR). The ways in which retailers hire and manage their people can go a long way in providing a positive culture that’s motivating and encouraging of long-term employment.
The challenge, however, is that most retailers wear many different hats so that having a member of management dedicated to HR is a luxury few can afford. In most cases, a senior manager will have done a deep dive into HR policy, and likely reached out for professional advice but would not claim expert status.
Reaching out for professional advice is exactly what we did for this article, in the person of Timothy J. Ford, a partner in the employment practice group as well as the On-Call for Business group of Einhorn, Barbarito, Frost & Botwinick in Denville, New Jersey. Ford works with a variety of clients on human resources issues ranging from benefits and wrongful termination to sexual harassment and employment contracts. We spoke with Ford for his insights in 10 areas of human resources. Below is a summary of some of his comments that are intended as thought-starters on complex issues:
One of the most important issues in the hiring process is to know the questions you can ask during an interview, and which questions are taboo. They vary by state and are continually changing. Questions about criminal backgrounds and arrest history are generally off-limits, but you should also avoid questions related to marital and family status. Even questions concerning gender can be off limits these days. Questions related to salaries in previous jobs are also being outlawed in some states.
Another area where someone can get into trouble is with information discovered on social media. Certainly many employers will research a job candidate on social media prior to an interview, but the information you find relative to politics, religion, and sexual preference are not relevant to employment and should not be part of the interview process. Employers are advised not to delve too deeply into social media, or base questions on the information found.
It’s essential that a company have a written disciplinary policy and follow it consistently. Closely related to disciplinary policies is the need for a personnel file on each employee with annual performance evaluations and any disciplinary actions documented. Consistency is key when it comes to discipline, particularly relative to protected classes of employees based on age, religion, ethnicity, and gender.
For specialty retailers who often employ family members, discipline can be a tough issue in ensuring everyone is treated fairly. Family members should be treated just like everyone else, and if there are issues with a family member, it’s wise to employ an objective outside source to review the situation and render a decision.
Company policies should clearly spell out in writing the grounds for termination. Again, termination is an area where personnel files are essential, with annual performance evaluations and notations of subpar performance. No employer wants to face a situation of terminating an employee who has glowing performance reviews or no reviews at all.
Even if your business is in a right-to-work state, you have to be cautious when it comes to terminations that could be seen as discriminatory against a protected class. Employers often find that offering a terminated employee severance of one or two week’s pay in exchange for signing a release is money well spent compared to managing a wrongful termination claim later on.
In regards to sales incentives, the most important thing is that these programs are in writing and easily understood by everyone covered, as evidenced by their actually signing a form. Management should explain incentive programs in detail and take needed steps to ensure that everyone is on board with a common understanding of how the incentives work.
One area that causes headaches for some employers is the question of what happens to earned commissions or incentives if an employee leaves the company. Does the employee have to be onboard throughout a specific time period? Make sure this detail is covered by incentive program materials.
Harassment policies should begin with the premise of zero tolerance and build from there. Again, put the policies in writing and post them prominently, outlining how harassment is to be reported and the process for review. Training is also essential, and in some states mandatory. Employers may balk at the cost of having an outside trainer and having employees off the job during training, but the cost of a harassment lawsuit can far outweigh the cost of annual harassment training.
Finally, it is incumbent on employers to take every harassment claim seriously and investigate thoroughly. The use of outside investigators is recommended, particularly if a member of management is implicated. Speaking of management, if a harassment claim is filed, but not acted upon diligently, the manager who failed to act can become personally liable for aiding and abetting the harassment.
A leading trend today concerning conflict resolution is the requirement that disputes with employees go through arbitration. While arbitration may be the best route, there are a few words of caution. First, arbitration is not necessarily less expensive than litigation when you consider the administrative costs involved and the services of an arbitrator. Second, many companies favor arbitration since they see it as a private process as opposed to litigation, but in some states employees are not bound by confidentiality agreements and the details of the dispute may become public.
Companies should weigh alternative conflict resolution approaches based on state and federal law and their specific business. If arbitration is selected, there should be a separate agreement for each employee to sign and a clear understanding of the rights that the employee is signing away.
As with sexual harassment, the only tenable policy is zero tolerance. Should an employee attack or threaten another employee, or the overall workplace, the incident should be reported and appropriate action taken, including contacting law enforcement. If a company receives a credible threat to an employee or the place of business and fails to act, it can be held liable should an incident occur. Contacting police, changing keys and security access, and modifying passwords are just some of the steps that management should follow to avoid being found negligent.
As mentioned previously, written performance reviews should form the backbone of a personnel record for every employee. If an employee is exemplary, it’s an opportunity for congratulations. If the employee is below par, it’s an opportunity to create an improvement plan. And if termination becomes necessary, the employer has a paper trail to document the reasons for firing, which brings up another point. Performance reviews should be honest and objective and based on the facts of employee performance, not a formality to pat everyone on the back regardless.
There are two issues with employee manuals – every company should have one, and every company should review and update the manual annually. The review and update process is where many employers are lacking, either because they are distracted by more pressing issues or they don’t want to invest in hiring outside experts to review their manuals. Annual reviews are important because employment law changes and your manual could become out of date and present problems for you should there be litigation or internal issues. The only thing worse than not having an employee manual is having one that’s out of date.
An excellent example of how changing times affect employee manuals is social media and the use of company electronic devices. While you don’t want to restrict your employees’ rights to free speech, there should be guidelines concerning company information that can be posted on social media. When using company devices, e.g., laptops, cell phones or desk computers, employees should understand there is no guarantee of privacy when using a device for personal communications.
Again, it’s simply good business practice to have regular and open communications with employees. Engaging in a healthy dialogue improves morale and encourages innovation, but employers should be cautious concerning information that’s committed to writing – either hard copy or digital. Everyone is also cautioned to avoid humor that may be funny to some, but offensive to others.