What are the most relevant factors that make businesses vulnerable to significant damages from employment practices risk?
Kathleen Long, co-founder and CEO of Montage Analytics, which is rolling out the EPL Risk Index later this year, says employees' perceived lack of "organizational justice" and poor employee appraisal processes are among key contributors.
(For more on the EPL Risk Index, see related article, Montage Analytics Adds Behavioral Science To EPL Risk Assessment)
Explaining the justice driver, she highlights "interactional justice"—the behavior of front-line supervisors as they interact with their employees and carry out management decisions, acting as the face of the company. A lack of justice at that level is associated with a high percentage of workplace homicides, she says.
How do Montage's tools evaluate what goes on at that interactional level, assuming that higher-level managers answer the questions that produce the EPL Risk Index score?
Long says Montage recommends that more than one person answer the questions, explaining that for big companies, the risk test should be taken for each geographic location, each business unit and each job function. When responses come together, Montage examines them to see if everyone is on the same page, or if instead there is uneven understanding or application of organizational processes.
In addition, she says the test includes questions that get at the company's attention to interactional issues and its concern for employee well-being: "Do you conduct workplace climate surveys?" "Is there a way for people to complain in a safe way?"
If tests reveal an interactional justice issue, Long says one step she might recommend to minimize the problem in addition to training would be the use of behavioral interviewing—asking management-level new hires to describe how they have dealt with a subordinate's performance problem.
Long also recommends looking at how a company keeps employees informed about its business goals and their progress in achieving them, noting that the stresses of economic pressures can intensify risk vulnerability.
Ineffective employee evaluations "are a huge contributor" to interpersonal risk problems, she adds, suggesting that 90 percent of the companies she has worked with over the past 25 years have ineffective performance-appraisal processes.
Appraisals "are generally inflated because supervisors and managers are loath to confront a problem employee." They may "give everybody good-to-better reviews and wait until problems are intolerable," then hammer someone with a bad one, she says, noting that the blindsided employee is then put in an emotionally threatening position and may strike back or want to get even with an EEOC complaint or lawsuit.
Retaliation claims are increasingly becoming a significant problem in the workplace. As NU reported in January, the U.S. Equal Employment Opportunity Commission tallied more retaliation charges than charges for any other type of discrimination for the first time last year.
"The heat is on for companies to do more with less. The pressure is on the front-line supervisor to implement these kinds of changes and the way they carry that out—the relationships they have with those they manage—determine whether employees will feel wronged or betrayed," Long concludes.
|Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.