How does the Employee Turnover Rate Effect the Bottom-line?

If your employee turnover rate is high, then your bottom-line will be significantly affected. Unexpected resignations cost between 100% & 300% of the person’s salary to replace. The costs that feed in to these percentages include recruitment costs, lost knowledge and productivity, down time to hire and train new hires and so on. What is considered a high turnover rate for your company will depend on the industry you are in. Check with your Industry Body for trending data. Generally though, a staff turnover rate of 15% or higher can add significant cost to your business. Measuring and Benchmarking the Turnover Rate This is done in percentage terms. Firstly, calculate the average number of employees.  Add together the number of employees working at the beginning of the time period and the number of employees working at the end of the... Read More

What are Employment Policies?

Employment policies are those sleep inducing documents, usually given to new recruits to read during their workplace induction. Employment policies are usually wordy and boring documentzzzzzzzzzz, setting out the rules and responsibilities to help maintain compliance with legislation, fairness, order, and make expectations clear in the workplace. This is important information for building a good company culture and maintaining appropriate conduct. The challenge is to make employment policies more engaging, to help encourage staff to read and understand them. How about approaching your employment policies in a fun way, here’s an example:                   Now look at this version of the same employment policy:                   Which one would... Read More

What are disciplinary procedures?

Disciplinary procedures are what an employer follows when an employee is suspected of unacceptable behaviour i.e. being frequently late, falsifying their timesheet, theft, spending too much time on the internet, being verbally abusive, not meeting their performance targets and so on. These examples are what are known as conduct issues. Disciplinary procedures help address these conduct issues in a legally defensible way. Disciplinary procedures enable employers to set boundaries, in other words “define the rules”. When the rules are broken, disciplinary procedures give the employer some legal clout to address the conduct issue i.e. zero tolerance to fraud, theft, abuse, or poor performance. Why have disciplinary procedures? Without them an employer’s pencil is blunt. They don’t have the right tools, and will need to rely more on legal... Read More

What is pay for performance, and does it work?

Pay for performance is extra pay the employee receives when certain work goals, targets, piece rate items, or key performance measures are achieved. It is used as a motivational tool. For example: Increase revenue by 10% by end of financial year to receive $5,000 Pack 12 bottles of wine per box to receive a 10 cent bonus per box Create a team based work culture by end of the financial year to receive $3,000   Does pay for performance work? The answer is sometimes…. The London School of Economics says “an analysis of 51 separate experimental studies of financial incentives in employment relations found overwhelming evidence that these incentives may reduce an employee’s natural inclination to complete a task and derive pleasure from doing so.” Why is that? The reason is found in part of our brain physiology and function.... Read More

Performance results – how do you get them?

When it comes to getting performance results, one way to do it is to tell your employees what to do. This approach can be a lottery – sometimes they do it, and sometimes they don’t. Why is that? Neuroscience is discovering the human brain can be like a two year old, tell it what to do and it automatically pushes back. The reason for this is we all have unique ways of thinking about things, this is because of the unique pathways we have developed in our brain. Our brain has over 100 billion neurons. Each neuron has the possibility of connecting with 10,000 adjoining neurons. This means there are many different ways we can connect the neural pathways in our brain, creating our own unique way of thinking. If someone tells us something that does not match our thinking (neural pathways) we discard it. Meaning if you tell an employee to... Read More

How to write a job description

To understand how to write a job description, first you need to understand why have a job description in the first place. The key reasons for having a job description are: The Employment Relations Act 2000 requires an employer to have ‘a description of the work to be performed by the employee’ in their employment agreement Avoid hefty non-compliance fines which can be up to $20,000 Provide clear objectives/goals for the employee Helps the employee understand where their position fits in the big picture Provide the employee with an understanding of what is expected of them Job descriptions define what outcomes are required, and what the person needs personally to be successful in the job i.e. qualifications, skills, personal attributes. To write a job description it usually has 4 sections: Purpose of the job – Describes WHY you... Read More

Employee Assistance

Have you heard of Employee Assistance?  It is a great tool for managers, and comes in handy when an employee tells you something that crosses the boundaries between work and personal problems  i.e. their personal financial problems, gambling issues, personal relationship problems…what do you do? You want to be compassionate, however set some boundaries about what you can and can’t do to help them. Employee Assistance is a great middle ground. So what is it? Employee Assistance is an outsourced service which provides the following services: Counselling Budgeting – managing money Stress management Alcohol and drug counselling and rehabilitation Some of the benefits of Employee Assistance include: Easier to deal with employee personal problems Helps support employee well-being The courts look favourably on employers that help their... Read More

Employee Engagement

According to a Towers Watson Study, employee engagement is the willingness to put additional discretionary effort into work (extra time, brainpower and energy), beyond what is considered ‘enough’. Engaged employees have the desire and commitment to do the best they can and make a measurable contribution to an organisation’s performance. In other words your employees are performing at over 100%.     Some of the benefits of employee engagement: Decrease employee turnover rate Decrease recruitment costs Greater productivity Greater profitability How is employee engagement increased? After years of extensive research the Gallup Organisation distilled the triggers down to 12 key elements known as the Q12. Here is a snap shot of a few of the elements employees need to have to be engaged: clear expectations (code of conduct, KPIs,... Read More

Why Psychometric Assessments help Hire the Right Person

Psychometric assessments are the best crystal balls I’ve found in the hiring process. Clients often feedback a couple of months into their new hire’s employment “I can’t believe how spot on that psychometric assessment was”. The best psychometric assessments are based on what psychologist term ‘The Big Five Model’. As these can validly predict future workplace performance, and we use these at Aureum. Our clients can’t believe how bang on they are for predicting ‘on the job’ performance. Not all psychometric assessments are so good though. Avoid the cheap or free pop psychology ones abundant on the internet. Why are psychometric assessments based on The Big Five Model so good? The CV and interview uncover the person’s skills, knowledge, and experience. These are much easier to spot in a structured interview... Read More

What Psychosocial Hazards Must all Workplaces Manage?

Worksafe New Zealand has made it mandatory for all workplaces to actively manage the following psychosocial health hazards: Stress Bullying Fatigue Workplaces need to be able to demonstrate a risk assessment has been completed for these psychosocial hazards. Plus controls to manage these health hazards must be in place. Controls can include things like: Having an inappropriate behaviour policy, and a process to manage it if it occurs i.e. complaint of bullying or harassment Encouraging workers to take their annual leave Implementing a stress management policy and ensuring it is adhered to Ensuring people don’t work unreasonable hours (even if they want to) Providing options for flexible work hours Furthermore there is no one size fits all, it is best to tailor these psychosocial controls to suit the work environment. The first step is... Read More

Does your Employment Agreement Comply with the new Employment Standards?

Did you know that since 1 April 2017 new employment standards must be reflected in the employment agreement for the following: Availability Clause for Agreed Hours of Work Cancellation of Shift Clause Secondary Employment Clause 1. Availability Clause for Agreed Hours of Work for the Employment Agreement “Zero-hour” contracts are now prohibited. What this means is if the employer requires an employee be available to work hours as the need arises but does not provide any guaranteed hours or payment (whether for all of their hours or only for additional hours) then their employment agreement will need revising. And this additional availability clause can only be included in the employment agreement if: it specifies agreed hours of work and includes guaranteed hours of work (start finish times, days of the week the work will be... Read More

Got Health and Safety Covered?

New Zealand’s she’ll be right attitude to health and safety is a thing of the past given our new Health and Safety at Work Act. Furthermore like paying taxes, it is now mandatory to manage worker health and safety in all workplaces (PCBU). This means not having processes like these for example: carrying out a risk assessment, assessing incidents or near misses. Can lead to fines of up to: $100,000 for an individual officer (CEO, Board Member, and possibly Senior Managers depending on their influence in the workplace) $500,000 for an organisation This is due to simply not having the processes in place, no accident needs to have occurred either. So what processes at a minimum must be in place in every workplace?: Risk Management – a process to identify risks and hazards, assess and control them Incidents or Near Misses – a process... Read More

Social Media – How to Manage Workers Use of Social Media

Social media is here to stay as a business tool and its use continues to evolve. It brings its own benefits and risks to employers, managing reputation and confidentiality being the core risks. Workers can easily tap out some words in anger or frustration and post it before their brain has fully engaged, often not really thinking about the consequences. A Social Media Policy helps educates your team on expectations when using Social Media and the consequences for misuse. Whether that misuse is: Posting disparaging or negative remarks against the company’s workers, customers or suppliers Harassment of any worker or agent of the company Disclosure of confidential or commercially confidential information Posting material which could affect the reputation of the company in the eyes of the public Does your Social Media Policy need developing/updating? Need... Read More

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