As you open this edition of Business Essentials, you will no doubt notice that there is one common theme: virtually every aspect of your practice touches upon your human assets—your employees.
Your employees are the critical and valued component of your practice and the satisfaction of your patients. Whether you are focusing on their performance, or you are preparing a retirement plan benefit or staying current with the legal requirements of your current pension plan, or are planning to sell your practice (both the physical and human assets), or you are clarifying employees’ expectation of computer privacy, the employee component of your practice requires a considerable investment of your time to stay current on emerging themes, trends and laws, as well as good management practice.
As you will find
in each edition of Business Essentials,
we are committed to providing you with the most current and
relevant information and insights into all aspects of your practice.
One direct or indirect theme, however, will be evident in most articles:
timely and relevant information associated with people management ‘Best
Practices,’ and trends and legal and regulatory compliance requirements
associated with the human assets of your practice.
It will continue to be our goal to provide you with current and relevant information on targeted topics essential to the success of your practice and to those of you who are business owners. Your feedback is important (
Here), so do take a moment and let us know your ideas on articles and subjects of interest to you and your colleagues.
Jr. is the managing partner of Aligned Growth Partners, LLC, a strategic,
operational and organizational consulting and executive search firm
Lawson also serves as consulting editor for Jobson's Business Essentials
monthly e-newsletter. To read current and past issues of the newsletter
can I do to effectively engage my employees in the practice?
a recent study presented at the June 2006 Society of Human Resource
Management Convention in Washington D.C., the firm ISR,
presented the results of its most recent Global Employee Engagement
study revealed a substantial performance advantage in overall financial results
for companies who effectively and successfully engage associates as opposed
to their industry peers where associates showed low engagement scores.
The ISR study
showed that there was almost a 52 percent gap in the one-year performance
in operating income between companies in the highly engaged category as
opposed to those with poorly engaged associates.
here are a few tips on what you can do to more effectively engage your
- Make hiring
the very best talent a company imperative. Less talented associates
may very likely become less engaged associates.
- Link all
associates jobs and performance objectives to your company’s
strategies, not simply doing their job according to their job
organizational layers. Flat and fleet organizations have a
higher probability of being better focused organizations, with
more highly engaged associates.
- Focus associates
on “The Critical Few;” that is,
those company objectives that are essential to financial success,
customer growth and retention, innovation and creativity, and
similar business imperatives.
continuous communication to all associates about your company’s
performance, including financial, operational, organizational,
product and service, highlighting successes and shortcomings.
Rally associates to improve upon successes and buoy performance
in areas needing improvement.
and reward associates who consistently deliver value—to
your company and your customers—and who are mentors to
and coaches for other associates.
to web resources about human resource policies and rules
U.S. Department of Labor
Department of Health and Human Services
Bills in Congress
U.S. Department of Labor
401 (k) Plans for Small
How to Prepare Your Practice for Sale
a practice can be the largest and most important deal of an entrepreneur's
career. Whatever prompts the sale, selling a business has both financial
and emotional consequences.
In the best
of all worlds, the owner must prepare the practice for
sale at least one year in advance. Assessing the financials with
a view toward creating audited financial statements and projections
that illustrate the practice's revenue and growth potential should
be the starting point.
records should be documented so that potential buyers
can evaluate the practice and so that a new owner can transition
with minimal training.
your supplier and customer contracts. Make sure terms and conditions
will not expire or require renegotiation as a result of the change
in ownership. And consider terminating any contracts that might not
add value to the potential buyer.
Take time to
review and document company policies and procedures that
exist as unwritten rules. If necessary, create formal documents that
clarify how the practice actually operates.
real estate and equipment leases, and material contracts,
especially if your practice is tied to its location. Make sure the
lease or contract does not expire or require renegotiation at the
same time you plan to sell your practice. If the location will discourage
buyers, consider moving the location before you put the business
up for sale. Take a view of the leases and contracts from the buyers
and catalog company assets, including property and inventory.
If you delayed investing in computer upgrades designed to manage
and control the flow of inventory, now is the time to modernize.
forget about your employees. The loss of key employees during a sale
can jeopardize a deal. Document your historical and current employee
headcount by job and function. Key employees may be crucial to the
new owner's success, so it's important to determine which employees
are prepared to stay with the company both during and after the transition.
And remember, its important that employees don't hear about the pending
sale of the company from a third party.
- By Hedley
A Performance Appraisal Check-Up
performance appraisal system is key to helping employees grow and
develop on the job and can help you to identify and reward your top
performers. At the same time, a good system will assist you in identifying
sub-par performers and developing plans to either improve their performance
or transition them out of your practice.
If you're updating
your appraisal program—or looking to implement one—here are some points
1. Appraisal form. Companies today are taking many different approaches to formal evaluation systems. Some organizations rely on a brief form of two or three paragraphs, while others use elaborate rating schedules and multi-page documents to evaluate their workers. How elaborate a system your organization uses depends on your needs. You may need to use different forms for different categories of employees. However, all appraisal forms should embody these two elements: 1) They should cover all relevant performance criteria; and 2) They should be understandable to both the evaluator and the employee.
2. Ratings. Rating scales are relatively easy to develop and can be adapted to many kinds of jobs. In any event, try to focus on qualitative aspects of one’s performance as opposed to numerical ratings.
3. Job description. Accurate, detailed job descriptions are the building blocks of your evaluation system. Make sure that all of your job descriptions clearly describe the skills, knowledge, abilities and competencies needed to do the job, and the duties the position entails.
4. Appraisal period. Most organizations evaluate employees periodically, usually annually on the anniversary of each employee's hire date. Some firms review all employees at the same time each year. Quarterly formal evaluations are never too often to provide positive or negative performance feedback to employees.
5. Delivery. In most cases, the supervisor or manager will be delivering the employee’s evaluation. In some situations where job performance is sub-par, a human resources representative may choose to sit in on the appraisal with the supervisor.
6. Training. Make sure your organization's managers and supervisors are thoroughly trained in the specifics of the performance evaluation and in how to effectively conduct the meeting.
- By Hedley
|Pension Reform Bill Enacted Into Law
The U.S. Senate and House of Representatives recently passed the Pension Protection Act of 2006, and President Bush signed the measure in August 2006. It is the most comprehensive overhaul of pension laws in 30 years.
Among other things, the new legislation will cover the following: require employers to fully fund pensions, with time limits for funding shortfalls; encourage more employers to use automatic enrollment in 401(k) plans; increase 401(k) contribution limits; require single-employer plans that are fully funded to pay variable-rate premiums to the Pension Benefit Guaranty Corporation (PBGC); and set standards for retirement plan compliance with age discrimination rules.
Tips for Selecting a Pension Plan Consultant
federal employee benefits law, fiduciaries of employee benefit
plans must administer and manage their plans prudently and in
the interest of the plan's participants and beneficiaries. In
carrying out these important duties, plan fiduciaries often rely
heavily on pension consultants and other professionals for help.
But sometimes these consultants fail to disclose potential conflicts
of interest that can affect the objectivity of the advice they
provide to their pension plan clients, and violate federal law.
If you're shopping around for a pension consultant, or just checking up on
your current consultant, here's a list of 10 questions, courtesy of the U.S.
Department of Labor, you can ask to find out whether there are any conflicts
of interest that could affect the advice you and your employees are getting:
Are you registered with the SEC or a state securities regulator
as an investment adviser? If so, have you provided me with all
the disclosures required under those laws?
2. Do you or a related company have relationships with money managers that
you recommend, consider for recommendation, or otherwise mention to the plan?
If so, describe those relationships.
3. Do you or a related company receive any payments from money managers you
recommend, consider for recommendation, or otherwise mention to the plan for
our consideration? If so, what is the extent of these payments in relation
to your other income (revenue)?
4. Do you have any policies or procedures to address conflicts of interest
or to prevent these payments or relationships from being a factor when you
provide advice to your clients?
5. If you allow plans to pay your consulting fees using the plan's brokerage
commissions, do you monitor the amount of commissions paid and alert plans
when consulting fees have been paid in full? If not, how can a plan make sure
it does not over-pay its consulting fees?
6. If you allow plans to pay your consulting fees using the plan's brokerage
commissions, what steps do you take to ensure that the plan receives best execution
for its securities trades?
7. Do you have any arrangements with broker-dealers under which you or a related
company will benefit if money managers place trades for their clients with
8. If you are hired, will you acknowledge in writing that you have a fiduciary
obligation as an investment adviser to the plan while providing the consulting
services we are seeking?
9. Do you consider yourself a fiduciary under ERISA with respect to the recommendations
you provide the plan?
10. What percentage of your client’s plan use money managers, investment
funds, brokerage services or other service providers from whom you receive
|In this edition...
It's Your Business
From the Top
How to Prepare Your Practice for Sale
10 Tips for Selecting a Pension Plan Consultant
Privacy in Use of Workplace Computers
A Performance Appraisal
Rules & Regulations Pension Reform Bill Enacted Into Law
Links to Important Resources
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No Expectation of Privacy in Use of Workplace Computers
The Ninth Circuit
Court of Appeals, which covers California, has ruled that an employee
who was accused of receiving child pornography had no reasonable expectation
of privacy in his use of a workplace computer.
The case involved
Jeffrey Ziegler, who was the director of operations for Frontline
Processing, a Montana company that services Internet merchants.
Frontline's Internet service provider notified the FBI that child-porn
Web sites had been accessed on a Frontline computer. Then, in connection
with an FBI investigation into the matter, Frontline confirmed that
the offending sites were accessed from a computer in Ziegler's office
at the company. Frontline turned Ziegler's computer, along with
backups of the hard drive, over to the FBI, which discovered many
pornographic images of children on the computer.
After Ziegler was
indicted on several counts of receiving and possessing child
pornography, he argued that evidence obtained from the search of
this workplace computer should be suppressed. In particular, he contended,
the FBI, lacking a warrant, violated the Fourth Amendment by directing
Frontline employees to search his computer.
But the Ninth Circuit
rejected Ziegler's argument: "The record evidence in this case
establishes that the workplace computer was company-owned; Frontline's
computer policy included routine monitoring, a right of access by
the employer, and a prohibition against private use by its employees.
As such, Ziegler had no objectively reasonable expectation of privacy
in his workplace computer and thus no standing to invoke Fourth Amendment