HR Assessment Private Client – Partial Document

Dr. Alicia Michelle Straughter THE OWENS GROUP, INC. , 19 S. LaSalle Street, 500, Chicago, IL 60603

TABLE OF CONTENTS

THE OWENS GROUP, INC. .............................................................................................................................. 1

ETHICAL ACCOUNTABILITY ...................................................................................................................... 3 ETHICAL CONSIDERATIONS........................................................................................................................... 3 VALIDITY AND RELIABILITY OF THE HR ASSESSMENT .......................................................................................... 3 DISCLOSURE ............................................................................................................................................. 3

EXECUTIVE SUMMARY ............................................................................................................................ 7

GENERAL BACKGROUND OF THE VILLAGE ...................................................................................................... 9 HR ASSESSMENT OVERVIEW ..................................................................................................................... 10 BENEFITS OF THE ASSESSMENT .................................................................................................................. 10

SUMMARY OF THE FINDINGS ................................................................................................................. 11 FINDINGS............................................................................................................................................... 11 POSITIVE AND NECESSARY OPPORTUNITIES FOR IMPROVEMENT ....................................................................... 11 S.W.O.T. ANALYSIS: HR STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS ......................................... 12

HUMAN RESOURCE ASSESSMENT ....................................................................................................... 14

INTRODUCTION ...................................................................................................................................... 14 RECOMMENDATIONS FOR SECURING AN EXPERIENCED AND QUALIFIED HR MANAGER ........................................ 14 BENEFITS TO THE VILLAGE IF IT OUTSOURCES A HR MANAGER ........................................................................ 16 STRATEGIC HUMAN RESOURCES ................................................................................................................ 17

UNDERSTANDING HOW STRATEGIC HR WORKS ..................................................................................... 17 CHAMPIONING HIGH PERFORMANCE THROUGH STRATEGIC HR................................................................. 17

RECOMMENDATIONS FOR DEVELOPING A HR DEPARTMENT WITH A PROFICIENT AND SKILLED HR MANAGER ......... 19 HR ADMINISTRATION .............................................................................................................................. 20 CHARACTERISTICS OF A HR MANAGER AND DEPARTMENT ....................................................................... 20 WORKERS COMP BY YEAR………………………………………………………………………………………………………………22 LIABILITY CLAIMS BY YEAR……………………………………………………………………………………………………………….23 CONSIDER COST VERSUS SAVINGS RELATED TO HR .................................................................................. 24

ESTABLISH EFFICIENT HUMAN RESOURCE INFORMATION SYSTEM .............................................................. 24 BEST PRACTICE FOR HR RECORDS MANAGEMENT .................................................................................. 27 BEST PRACTICE TO ESTABLISH CONSISTENT HR SYSTEMS.......................................................................... 27

COMPENSATION ..................................................................................................................................... 29 BEST PRACTICE FOR ADMINISTRATION .................................................................................................. 29 ESTABLISH SALARY RANGES ................................................................................................................ 30 INSTITUTE ELECTRONIC TIMEKEEPING ................................................................................................... 30 CONTROL OVERTIME ......................................................................................................................... 32 BEST PRACTICE FOR PERFORMANCE EVALUATIONS .................................................................................. 32 BEST PRACTICE FOR JOB ANALYSES ...................................................................................................... 34

EMPLOYEE RELATIONS ............................................................................................................................. 36 BEST PRACTICE TO ESTABLISH ORGANIZATIONAL BEHAVIOR (OB) .............................................................. 36 BEST PRACTICE FOR EMPLOYEE RELATIONS ............................................................................................ 36 ENHANCE EMPLOYEE ENGAGEMENT..................................................................................................... 37 CHANGE THE EXISTING CULTURE ......................................................................................................... 37

COMMUNICATION .................................................................................................................................. 39 ESTABLISH EFFECTIVE HR COMMUNICATION ......................................................................................... 39 FACILITATE TRANSFER OF KNOWLEDGE ................................................................................................. 40

POLICY/COMPLIANCE AND BENEFITS .......................................................................................................... 42 BEST PRACTICE FOR COMPLIANCE WITH POLICIES AND EMPLOYMENT LAWS ................................................ 42 RECOMMENDATIONS TO AVOID LIABILITY LOSSES/LAWSUITS .................................................................... 49 BEST PRACTICE FOR “EMPLOYMENT AT WILL” LAW ................................................................................ 50 BEST PRACTICE FOR AVOIDING WRONGFUL TERMINATION LIABILITY ISSUES ................................................ 50 BEST PRACTICE TO DEAL WITH EMPLOYEES’ PRIVATE ISSUES ..................................................................... 52 BEST PRACTICE FOR BACKGROUND CHECKS ........................................................................................... 53 BEST PRACTICE FOR RISK MANAGEMENT .............................................................................................. 56 BEST PRACTICE FOR MANAGING EMPLOYEE BENEFITS ............................................................................. 57 BEST PRACTICE FOR WORKERS’ COMPENSATION .................................................................................... 59

HUMAN RESOURCE ASSESSMENT SUMMARY ...................................................................................... 60

CONCLUSION ...................................................................................................................................... 61 ETHICAL OBLIGATIONS OF THE HR DEPARTMENT AND HR MANAGER ............................................................... 61 OVERALL RECOMMENDATION FOR BEST PRACTICES – HUMAN RESOURCE MANAGEMENT ................................... 62

STRIVE FOR OPERATIONAL EXCELLENCE ................................................................................................. 62 ENGAGE A STRONG HR MANAGER WITH LEADERSHIP ABILITIES ................................................................ 63 PROMOTE A CULTURE OF CONTINUOUS IMPROVEMENT ........................................................................... 63 IMPLEMENT EFFECTIVE TOOLS AND SYSTEMS ......................................................................................... 63 CAPITALIZE ON RESULTS ..................................................................................................................... 63

RECOMMENDATIONS FOR THE VILLAGE ....................................................................................................... 64 ACKNOWLEDGMENTS ........................................................................................................................ 67 HUMAN RESOURCE ASSESSMENT SCORECARD.............................................................................................. 68

APPENDICES (A –N) ............................................................................................................................... 69

HR Assessment Overview Any municipal, nonprofit, or for-profit organization that is not familiar with its Human Resource responsibilities is one step away from exorbitant lawsuits and penalties. Courts of law do not view inexperience or budgetary issues as justification for not providing proper HR accountability. HR compliance entails that the Village must recognize the applicable laws, create proper policies relative to the laws, and ensure that all staff members comprehend and constantly follow all employment laws and policies. This report will present the assessment’s outcomes in a detailed and objective summary with a prioritized sequence of recommendations to serve as the foundation of forming an effective HR Department with leadership, strategies and solutions. Additionally, the assessment will serve as a strategic planning instrument to be predominantly used by the Mayor, Village Administrator/Manager, and HR Manager as they define where to best focus energies and priorities during times of change. The assessment will also be a valuable resource during the process of hiring a new HR Manager, because it will provide a guide to the qualities, abilities and talent essential in the individual who will effectively execute and manage the Village’s HR department.

Benefits of the Assessment This assessment will provide guidance and support for the Village as it works to achieve the following:

Support leadership in improving organizational policies and practices.

Confirm compliance with employment, benefits and safety laws.

Retain detailed records, ensure confidentiality and adhere to retention schedules.

Maintain, develop, attract and motivate qualified employees.

Communicate with and educate staff and directors to minimize organizational liability.

Safeguard the Village from unlawful harassment and discrimination law suits.

Improve and apply a fair and equitable compensation system.

Cultivate and implement a fair and legally defensible disciplinary system and termination procedure.

Provide a roadmap for contracting a candidate who possesses the necessary skills for the HR Manager’s role with the Village.

Specify the depth and scope of all the essential HR functions required to run the department.

SUMMARY OF THE FINDINGS

The HR Assessment included questions related to human resources issues and needs for the Village. The Assessor asked over 50 questions to each of the Village Directors who handle some HR duties and who volunteered to participate in an interview. Findings:

1. Most of the individuals conducting HR tasks knew that it would be required. 2. The overall turnover rate in the Village is 1 to 2 employees a year. 3. Directors perform their normal work duties along with HR functions. 4. The employees’ average length of employment is 15 to 20 years.

Positive and Necessary Opportunities for Improvement:

1. Develop a promotion policy and guidelines for employees. 2. Regularly perform employee performance evaluations. 3. Contract a part-time HR Manager to review benefits programs and collective bargaining

agreements. 4. Implement a clear process for reporting and following through on workers’ compensation

cases. 5. Execute an electronic time keeping system that is consistent throughout the Village. 6. Store all the employee HR files in one central location of the Village. 7. Implement new policies and procedures related to background checks, workers’

compensation, and grievances. 8. Develop a compensation scale with written compensation guidelines. 9. Update or create job descriptions. 10. Conduct a job analyses on all the Village’s positions. 11. Develop an overtime policy to be in compliance with the new law. 12. Facilitate recognition programs for employees. 13. Improve the payroll, time keeping and time-off procedures through a Cloud-based

system. 14. Improve the Village’s HR Services so that employees will have access to an experienced

HR Manager. 15. Provide consistent and timely communication to employees on changes in policies,

procedures and benefits. 16. Incorporate an employee assistance program (EAP). 17. Ensure all HR forms are available electronically and are easily accessible to employees

(change of address form, benefit changes forms, onboarding forms, employee data form, IRS forms, accident reporting forms, time-off request forms, vacation request forms, sick leave forms, off boarding forms, etc.).

18. Perfect the language in the three collective bargaining agreements which will include an experienced and skilled HR Manager working with the Village’s Labor Attorney.

S.W.O.T. Analysis: HR Strengths, Weaknesses, Opportunities, and Threats

Leaders must always weigh the positive and negative consequences associated with any decision; for example, the Village must evaluate the choice to not have a HR Department and leader. One strength of the Village’s current situation is the directors and the Village Administrator/Manager, who all by default have taken on numerous HR duties. Another strength is that the average tenure of existing employees is 15 to 20 years. The weaknesses include the lack of leadership from a HR Department, the absence of engagement with employment laws, compliance issues, lack of clear policies/procedures, lack of consistency for employees, lack of clear and consistent structure in the Village’s daily operations, an outdated employee handbook (last updated in 2006) and exposure to lawsuits. As a result of these weaknesses, the Village faced missed opportunities, including the benefits of employee development, the strength of a strategic HR Department, and the chance to provide exemplary service to the Village’s full- and part-time employees. The resultant threats to the Village include continued dysfunction related to HR requirements. Other threats are potential lawsuits by employees and employment law compliance issues.

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There are no two ways about it, HR is mandatory.

The directors and Village Administrator/Manager all step up to handle HR functions

STRENGTHS:

THREATS: Employees will eventually find employment elsewhere, continued dysfunction related to HR requirements

WEAKNESSES: No HR department or leadership, the absence of employment laws, compliance issues, exposure to law suits, and policies/procedures are not in place and no consistency for employees

OPPORTUNITIES: Missed opportunities include providing HR service to staff and employee development and strategic HR

This HR Assessment will support the Village leaders in evaluating the strengths and weaknesses

associated with not having a HR Department and Manager; it will assist with identifying and

eliminating potential areas of threat and concern. The primary purpose of a HR Department is

to keep the Village furnished with a knowledgeable and fulfilled workforce.

The HR Department advertises for employees, interviews employees, and makes employment

recommendations. When an employee is hired, the HR Department completes the required

paperwork and makes sure that legal requirements for employment are met. When an employee

resigns, retirees or is terminated, the HR Department completes the necessary exit documents.

Therefore, it is critical for the Village to grasp that the best way of properly staffing the Village

starts and ends with a Human Resource Department. The Owens Group, Inc. recommends

performing periodic human resource compliance assessments to analyze all aspects of the HR

practices to minimize potential liability. The following section outlines the human resource

assessment, recommendations, and next steps appropriate for the Village.

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“You can have the best strategy and the best building in the world, but if you don’t have the hearts and minds of

the people who work with you, none of it comes to life.” – Renee West, Luxor and Excalibur Hotel

Human Resource Assessment

Introduction

The Village is only as effective as its workforce. The primary job of Human Resource departments today is to help individuals and organizations grow. A major concern that the Village may not have considered is that whenever any municipality eliminates portions of the HR functions, the Mayor and Council must take on all the financial and strategic risks. To protect and nurture the organization, HR functions must be conducted for every municipality or business—no matter how small or large. One of the biggest challenges the Village faces is the lack of an effective HR Department and the absence of a HR Manager with a strategy aligned to support the Village’s short- and long-term goals. A HR Department deals with staff-related concerns, policy/compliance, HR management and two types of services: administrative and strategic.

Recommendations for Securing an Experienced and Qualified HR Manager

An effective HR Manager must comprehend the business set-up of the Village. Some of the Village’s businesses include revenues from water, taxes, and other services, including annual sticker fees, as well as commercial and residential development opportunities. All HR functions signify services provided by a HR Department for the Village’s operations. HR procedures, or operational amenities, include administrative services, recruitment, job analysis, and employee relationship management. HR practices are intended to support the Mayor, Village Administrator/Manager, departmental managers, and staff in their daily operational endeavors, and HR’s purpose is to help the Village meet its goals.

An effective HR Manager should be very familiar and comfortable working smoothly with staff, the Mayor, departmental managers, and external customers. A conscientious, authentic HR Manager must define and remain neutral in their role while meeting with everyone. HR representatives remain focused; operate with integrity, knowledge and skill; and interact with each staff member with equal respect, regardless of their title, position, or department.

Administrative Strategic Human Resources

A proactive human resources leader attracts, develops and maintains a strong team through recruiting, training, and planning Village-wide events; the individual working as HR Manager will have a big impact on the Village’s success. It is imperative that this success and focus are a priority to the person (with an extensive HR background) retained to build a sustainable HR Department and workforce for the Village.

The department should include a HR Manager, who will enforce policies and procedures through employee relations and manage multiple functions, including employee benefits, employee engagement, new hire onboarding processes, and off boarding processes for employees facing termination or retirement.

As a best practice, no Village should operate without a HR Department or HR Manager. The Village should contract a HR Manager according to budgetary provision. It is recommended that the Village hire a part-time highly-skilled, experienced, educated individual for 120 days to set up the infrastructure for the department. Once the infrastructure has been established, a HR Manager should be needed on a weekly basis (3-4 day(s) a week, 8:30 am – 3:00 pm) for basic administration and larger issues related to employment situations, which can be handled on a case-by-case basis (e.g., potential lawsuits, compliance issues, collective bargaining agreement discussions, organizational redesign, grievances, and provision of training).

Supplementary factors, such as the HR Department’s commitment to the Village’s vision, as developed by the Mayor, as well as its operational design, budget and service readiness, are vital considerations to the HR Manager and the Village. It is essential for the Village to staff its HR Department very well. The Village may establish an in-house HR Department, contract with an outsourced HR Manager, or implement a combination of the two options. The average cost to contract a HR Manager at minimal is $50k - $75k a year.

Human Resources

Staff

Village Operations

Village Administrator

The number of staff the HR Department will require depends on the size of the Village and on the operations the department is expected to achieve. Currently, the Assessor strongly recommends one part-time experienced HR Manager, employed on an outsourced basis, to help keep the HR running smoothly and to avoid the high overhead costs associated with hiring a full-time employee. In most cases, the expense of using human resource outsourcing to manage various aspects of the Village’s business will be much lower than adding full-time employees to the HR Department.

Benefits to the Village if it Outsources a HR Manager:

1. Reduce overhead costs, such as salary and benefits, incurred by the Village for full-time HR personnel.

2. Reduction of exposure to additional employment lawsuits by outsourcing an HR Manager to ensure compliance with laws.

3. Consistent administrative and strategic HR services will keep the department running to service the Village’s employees.

4. HR Manager will provide visible and continuous services to employees by addressing any performance or training issues.

5. HR infrastructure will be developed to help with immediate HR needs related to staffing vacancies or employee retention concerns.

6. An experienced HR Manager with additional outside resources will help build a strong presence.

7. Additional benefits of having a highly skilled HR Manager is the ability to make sound decisions on situations to minimize any liability; importantly, the person should be well-versed in all areas of the HR practices.

Overall, outsourcing a Human Resources Manager will improve efficiency and help align the employees with the Village’s goals. If the Village chooses to outsource human resources, the Village will be paying not only for the services but also for the HR vendor's expertise and experience in selecting top-quality employees, HR management, strategic HR and online capability for employee access. Additionally, outsourcing human resources will allow the Village to reduce the amount of paperwork and manual processing required of its workforce. As the needs for the Village continue to increase and technology improves, outsourcing requirements will continue to be strengthened. Some municipalities without an in-house HR Department outsource the position to ensure employment compliance and to provide proper HR support to their workforce.

Strategic Human Resources (SHR) – Mission, Vision, Values & Goals

This assessment defines strategic human resources as a discipline that shields the perceptions and practices that guide and align Human Resource Management, tactical planning and practice with the strategic and long-term goals of the Village, with a particular emphasis on human capital. The strategic approach to HR operations will begin with a succinct mission statement that articulates the Village's purpose for existing. Furthermore, it is imperative that the HR Manager reviews the Village’s mission statement, values, vision and goals to connect them with the HR Department’s purpose. This Assessment revealed that the Village does not have statements of a current mission, vision, goals or core values; therefore, the Assessor strongly recommends that the Village Administrator/Manager and Mayor look into developing these essential parts of operating and functioning for any nonprofit, for-profit or municipal organization.

As a best practice, The Owens Group, Inc., recommends that the new HR Manager compose a HR

mission statement, describing how the department will support the mission of the Village once

the Village develops a mission statement. For instance, the Village’s mission statement might

address how the Village will provide the finest possible service to its citizens and business

customers, while the HR department’s mission statement addresses how the department will

work to grow and maintain the employees in support of the Village’s mission.

Understanding How Strategic HR Works Strategic human resources will be the key to the Village’s success. For the intent of this HR assessment, success will be defined as assisting the Village to achieve the mission, vision, goals, and strategy set to improve the quality of services for the citizens and businesses. The HR Manager must confirm a direct link between the policies, procedures, programs and services the department offers and the Village’s higher purposes of developing the business district and various communities. An important first step for the Human Resources Manager will be to take a strategic approach to the work of connecting all the appropriate elements. Strategy begins with thinking, long before executing. Strategic human resource is a best practice approach, aimed at effectively utilizing human potential. HR’s role will be much clearer once strategic HR is adapted and employed. Championing High Performance through Strategic HR A strategic HR approach should champion high performance instead of serving employees. HR should be devoted to developing, supporting, uplifting and empowering staff. Once the Village implements a Human Resource Information System (HRIS), the HR Manager must help the Village with harnessing the human potential and directing them down the exact path toward the achievement of the Village’s mission, values, and goals. This is the starting point to efficient strategic HR. A strategic HR department focuses on empowering, enabling and involving staff in achieving the purpose of the Village. This strategic approach should fit any size HR department or organization that employs staff to perform work duties to increase profit or growth.

The Human Resources Department must execute its specialized tasks effectively and efficiently

to meet the needs of the Village’s core businesses. The Village must allow the HR Manager to use

his/her knowledge of technical competencies and staff to influence the Village’s focus, along with

its goals. The Village’s strategy must be to comprehend that each area of the Village is slightly

diverse, entailing a unique array of resources and provision.

There are several reasons why the Village needs to contract a qualified and talented HR

Manager or to partner with a firm and outsource the talent required to run the department:

1. A forward thinker will explore what’s ahead to anticipate and plan1 for the human

capital of the future of the Village.

2. An effective HR Manager will be capable of securing competent, stable, reliable and skilled workers and developing tomorrow’s leaders.

3. A strategic thinker can develop strategies to re-energize the Village’s staff about what they do and about the Village’s stance on culture, future and values. An engaged employee or employees can push financial performance. Studies have shown that employees who are truly engaged are more likely to stay and contribute to the organization.

4. An exceptional HR Manager will ensure that the Human Resource/Human Capital function becomes more responsive as a whole. Research has shown that organizational agility is an essential response to the instability of the working environment.

5. Finally, a HR Manager will be present to provide service to employees and make all staff aware of employment laws and the possible violation of them.

1 Human resources (HR) play a critical role in the success of organizations; indeed, human capital can be the most critical component for maintaining a competitive advantage (Pfeffer, 1998).

Recommendations for Developing a HR Department with a Proficient and Skilled HR Manager

This section of the HR assessment will discuss important elements missing from the current

structure of the Village; furthermore, throughout the assessment, recommendations for best

practices to develop a HR Department with appropriate leadership will be presented. Assessment

questions covered five essential areas of a functioning and effective HR Department with a

talented HR Manager: HR Administration, Compensation, Employee Relations,

Communications, and Policy/Compliance and Benefits. This HR Assessment was prepared by Dr.

Straughter; all the suggestions are intended to provide clear direction for the areas of major

concern.

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“Human Resources isn’t a thing we do. It’s the thing that runs our business.” – Steve Wynn, Wynn Las Vegas

"Human Resource Management is arguably

the most important aspect of any municipality or business."

HR Administration

Characteristics of a HR Manager and Department

The role of Human Resources Manager is a complicated position because the individual must pay close attention to the Village’s needs and goals while simultaneously safeguarding employees’ rights and ensuring their needs are met. The department’s accountabilities range from benefits and compensation to training and organizational effectiveness. The HR Department is most efficient when run by a skilled and well-rounded individual with a reputation for being reliable concerning important confidential data. A functional HR Department will help the Village’s culture grow with its businesses, and HR will become the conduit for honest and valuable feedback from the staff to the Mayor and department leaders. The HR Manager should understand the Village’s operations and be able to present attractive approaches to improve retention and meet the Village’s needs. Finally, an effective HR Department must innovate. With knowledge of the whole business, the HR Manager can contribute to the growth and strategic direction of the Village.

________________________________________ It is not the strongest or the most intelligent who will survive but those who can best manage change. --Charles Darwin

Human Resources

Staff

Village

HR should be a strategic partner to every department. The Human Resources Department should not be taken for granted; it is a valuable business resource to the entire Village. Once the Village’s HR department has shown it can handle its operations, with few or no problems, the administrative aspect will start to impact the strategic capabilities of the Village as a whole. The HR Manager should foster and develop constant trust and confidence with the Village leaders over time. Recommendations for the best practices of developing a HR Department as a strategic HR partner to the Village; a strategic HR Manager should possess the following attributes:

Be a good listener and confidant to employees.

Demonstrate at least 10 years of experience in a human resource management role.

Provide guidance where applicable to related policies, corrective issues and employment practice compliance.

Thoroughly assess the concerns of employees related to job effectiveness.

Be dependable, accessible and resourceful for additional concentrated HR areas.

Be trustworthy and strategic with HR approaches to move the Village forward with high performing staff.

The HR Manager should work with the departmental leaders on their directions and performance expectations and offer strategic suggestions for managing talent to achieve goals. The HR Manager should also offer distinctive strategic resolutions to departmental concerns. Becoming a strategic HR partner involves both a high level of competency on HR issues and a strong understanding of the Village’s issues.

There are several important reasons why it is crucial to for the Village to develop a HR Department. A well-functioning HR Department will enable the Village to:

Appreciate the significance of its human capital

Better handle budget planning and restrictions

Manage conflict resolutions and grievances

Realize cost savings on recruitment

Improve performance planning and evaluation

Sustain the Village via efficient, consistent operations

Maintain persistent focus on values and philosophy.