HR Effectiveness
(PLANO, Tex.) Senior executives are happy with their human resources departments but their opinions are based on feelings and not facts, an international study found.
HR departments themselves are also failing to link their effectiveness to overall corporate performance, according to a report by information technology services company EDS.
Too many international-level executives make HR decisions based on “limited metrics” and form opinions of their HR departments subjectively instead of objectively, because their companies simply don’t have the right tools to measure HR performance, the study found. The study notes that people costs can account for up to 65% of corporate spending and valid measurements are essential.
A survey of Canadian, American, and European companies found that 90% of them evaluate their HR functions based on just three criteria: employee retention and turnover, corporate morale and employee satisfaction, and HR expense as a percentage of operational expense. At least the executives realize their shortcomings: about half of those surveyed said there are important aspects of HR in their companies that are not being adequately measured.
And even the factors that are quantified are not being measured properly: methodology and data reliability are questionable, and there doesn’t seem to be any link between HR metrics and the company’s overall performance, the report says. Less than half of firms surveyed use measurements such as revenue per employee or return on human capital.
"You can't improve something you're not tracking and measuring. This new research validates that there's room for improvement in the area of effective HR performance metrics,” says Steve Bohannon, President, EDS Human Resource Services service line. “In the study, several performance categories showed that inaccuracy of measurement was seen as the biggest obstacle to evaluating performance and effectiveness."
Overall, respondents were satisfied with their HR departments. In Canada and the U.S., 92% of executives said their HR department plays a key role in their companies’ success.
When asked how the HR function can best contribute to their firms, 40% of North American executives cited its ability to do human capital planning and strategy, followed by employee satisfaction (21%), ongoing administration (19%), program design and implementation (17%), and compensation (4%).
Executives assessed the performance of their HR departments and gave them highest marks for how they performed in transactional and administrative functions such as payroll and regulatory compliance. On the downside, HR departments functioned the poorest when it came to operational inefficiencies in processes and technology, often due to inadequate funding and resources.
"The good news is that there is overall satisfaction with the functioning of HR departments today,” says Bohannon. "The bad news is that these opinions are based on subjective impressions rather than informed by sound performance metrics."
EDS recommends several ways to strengthen the link between people management and corporate performance. Developing better measurement tools are critical to managing people costs and assessing overall HR performance more effectively. Firms should start with “clean” data, and organize it effectively.
Companies must determine which measures must be captured in the area of human capital performance. They should look for data in four key areas: enterprise financial metrics, such as revenue per employee; plan and program costs, such as health benefit costs per employee and compensation spent; HR department effectiveness, such as time to hire and succession plan performance; and HR transactional-level effectiveness, such as the number of paycheques processed accurately and on time.
For the study, EDS commissioned Harris Interactive to conduct interviews with vice presidents or higher in companies with 15,000 employees or more, with 53 interviews occurring in the U.S. and Canada, and 23 interviews occurring in the United Kingdom, Germany, and France.
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No Leave Build-up
A Canadian Human Rights Tribunal has dismissed complaints from 103 female government employees who allege that they are discriminated against because of their sex because they are not permitted to build-up annual leave or sick leave credits, nor retain their monthly bilingual bonus, during maternity leave.
The complainants are covered by different collective agreements that treat the accumulation of annual leave and sick leave and the bilingual bonus in the same way when women are on maternity leave. The credits and the entitlement to the bonus are earned in any month in which the employee receives at least 10 days' remuneration.
One of the complainants filed a complaint with the Canadian Human Rights Commission against her union, arguing that it had discriminated against her by negotiating a collective agreement under which she cannot receive annual and sick leave credits while on maternity leave.
The women allege that they are discriminated against on the ground of sex because when on maternity leave, they are prevented from earning these benefits. Men never find themselves in this situation, because they do not go on maternity leave. The Tribunal wrote, "(I)t is not sufficient here to compare the situation of a pregnant woman with that of a man who will never be pregnant."
The Tribunal found that maternity leave is unpaid leave. Women are not receiving remuneration while they are on maternity leave. Instead, they receive a maternity allowance to compensate them for the wages that they lose. Maternity benefits are not remuneration, and maternity leave is an unpaid leave.
Under other unpaid leaves, employees are also not entitled to accumulate annual leave and sick leave credits, nor do they retain entitlement to the bilingual bonus. The tribunal concluded that all employees on unpaid leaves are treated the same, and there is no discrimination based on sex.
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Five Months’ Notice
The plaintiff was employed as head cook and kitchen manager for the defendant. She was dismissed at the end of her maternity leave because she had not provided written notice or medical certificates to her employer. As a result, the defendant claimed that it did not have any legal obligation to re-employ her following her maternity leave.
A year before her dismissal, the plaintiff had returned to work following a maternity leave. That maternity leave was subject to a very informal arrangement and at that time no written notice or medical certificate was given by the plaintiff.
As a result, the trial judge held that the plaintiff was unjustly dismissed and assessed that the plaintiff was entitled to five months' notice. In response to the plaintiff's allegation that her acceptance of a lower position from head cook to cook at lower pay should not factor into the amount of money to which she was entitled during the notice, the trial judge held that the plaintiff was not legally obliged to take a lower paid position. However, once the plaintiff accepted a lower paying position, this had to be taken into account for the purposes of mitigation.
After her termination, the plaintiff suffered from mental distress and had an outburst of a rash. As a result, the judge held that she was entitled to mental distress damages in the amount of $1,000 in addition to the five months notice for her seven years of employment. The judge also awarded costs against the defendant.
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Nurses’ Retirement
(OTTAWA) More than one-quarter of Canada’s registered nurses (RNs) may retire by 2006, a national report estimates.
Assuming nurses retire by age 55, which is about the current average, some 28% of all RNs working in 2001 are forecast to be retired by 2006, according to the study, Bringing the Future into Focus: Projecting RN Retirement in Canada, by the non-profit Canadian Institute for Health Information and the University of Toronto’s Nursing Effectiveness, Utilization and Outcomes Research Unit.
If nurses waited until age 65 to stop working, only 13% of current RNs would retire by 2006.
"We know from other studies that more health care workers retire early (before age 65) than people in other professions: about 49% compared to 43% in all fields. RNs in particular tend to retire around age 56 to 58," says Dr. Linda O'Brien-Pallas, one of the study’s authors and a professor of nursing at the University of Toronto. "We also know that RNs as a group are aging, so we can expect retirement to place increasing pressure on the RN workforce. The good news today is that effective retention strategies could make a big difference."
Retention strategies must have a regional focus, since retirement patterns vary by region and health care sector, the study found. "This could help different jurisdictions focus their efforts where they would give the greatest return," says Dr. O'Brien-Pallas. "Our projections show that RN losses due to retirement or death are likely to be greatest in Quebec and B.C., so the potential payoff from successful retention is greatest there. On the other hand, the projected losses are smallest in Alberta and the Atlantic regions."
If nurses worked longer and delayed retirement, the projected losses could be reduced by more than half if 100% of nurses aged 50-54 kept working, 75% of those aged 55-59, and 50% of those aged 60-64, the study says. This could be a potential savings of nearly 15,000 nurses. Currently, almost one-third of Canada’s RNs are aged 50 or over.
Nursing shortages due to retirement are expected to be particularly severe in the long-term care sector, where the equivalent of 19% of the 2001 RN workforce could be lost to retirement or death by 2006, compared with 12% in hospitals, 10% in the community sector, and 14% in the “other employment” sector, the study estimates.
The report shows that aggressive retention and recruitment initiatives are needed to sustain the nursing profession, the Registered Nurses Association of Ontario (RNAO) says in response to the study. Ontario could lose nearly 10,000 RNs aged 50 and over by 2006. "If we don't quickly improve this scenario, nothing less than the health and safety of the people of Ontario is at stake," says RNAO president Adeline Falk-Rafael. "Pending RN retirements mixed with Ontario's overreliance on casual and part-time nurses is a recipe for disaster."
The RNAO recommends reducing nurses’ workloads and boosting the percentage of nurses who work full-time hours to 70%. The association says its own efforts to address the nursing shortage are paying off: the number of Ontario high school students who have applied to RN programs for this fall has nearly doubled.
The RNAO says the cost of replacing an RN who has left the profession is one and a half times their salary on average.
The Alberta Association of Registered Nurses echoed similar sentiments. "This report underscores the urgency of addressing workplace issues which are affecting retention of registered nurses," says Donna Hutton, executive director. "Demanding workloads coupled with a sense that their expertise and experience are not valued by the system lead registered nurses to view early retirement as a very viable option. We simply cannot afford to lose experienced nurses who provide excellent patient care and act as mentors and supervisors for new graduates."
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WCB Rates Stable
(RICHMOND, B.C.) British Columbia’s Workers’ Compensation Board (WCB) expects its 2004 employer premiums to remain virtually unchanged.
The 2004 average premium is projected to be $2.062 per $100 of assessable payroll, essentially the same as the 2003 rate of $2.059.
The WCB says its forecast rates will be among the lowest in Canada, six cents above Alberta’s and substantially below Ontario’s. The rate is 10% lower than the average rate peak of $2.29 in 1996.
"In the context of sharply rising insurance rates not only for workers' compensation but for general insurance in North America, this is a good news story for B.C. employers," says WCB Chief Financial Officer, Sid Fattedad.
Employers can take part of the credit for keeping rates at bay, thanks to improved injury rates in industries targetted by the WCB. "The employers of B.C. have contributed significantly to the stable rate situation by sustaining the improving trend in the injury rate in recent years," says Fattedad.
Rates are forecast to drop between 14% to 20% for acute, short-term, and long-term care facilities. Lower rates are also predicted for local governments, financial institutions, and supermarkets.
Premiums will likely rise in agriculture, construction, highway maintenance, and shake and shingle mills, among other industries.
In B.C., employer premiums are determined by the injury rate in each one of 94 industry rate groups: there is no cross-subsidization of premium rates between rate groups.
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Pension Agreement
The Royal Bank of Canada has reached a tentative settlement of a pension dispute with Royal Trust employees. To read this article, please Click Here.
False Harassment Claims
A judge found that a woman made false harassment claims because her employer wouldn't give her a letter of reference... To read this article, please Click Here.
School Board Retaliated
A school board retaliated against an educator for filing a human rights complaint, a board of inquiry found. To read this article, please Click Here.
Insurance Industry
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Quebec Employment
Quebec created nearly half of all new jobs in Canada in the first six months of 2002. To read this article, please Click Here.
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