Dealing Effectively With Employees

HIRING and retaining good employees is the hot button issue today for most employers in the truck body manufacturing and equipment distribution industries.

"Your business is only as good as your people," said Michael Scarfo, human resource consultant at the National Truck Equipment Association (NTEA) in Farmington Hills, Michigan.

Scarfo made his comments during a workshop in February at the NTEA's 35th Annual Convention & Exhibition in Indianapolis, Indiana. The workshop was attended by representatives from truck body manufacturers and truck equipment distributors.

A change employers should be aware of is that human resources must now provide guidance to a corporation, Scarfo said. In progressive corporations, the human resources department is aligned with the people who run the business.

Placing a classified advertisement in a newspaper is one of the most common ways to hire, recruit, and attract applicants, he said. But by using this method, a company competes with many other employers for applicants.

In a tight labor market, a company may need to offer training to applicants that lack experience, Scarfo said. Sometimes applicants have limited training gained in the military or at vocational schools that can be used in a manufacturing job.

The Internet is another source for job applicants. Companies with webpages can advertise, or employers can list jobs on the NTEA's joblink website.

Sources for Employees

Distributors attending the workshop said they pay employees bonuses if they refer a job applicant that is hired by the company. However, this can backfire if employees inflate recommendations for friends or relatives.

"We empower our employees to take ownership in the hiring process," said Ruthan Miller of the human resources department at Crysteel Manufacturing in Lake Crystal, Minnesota. "Our bonus referral program has worked well."

When employees leave or don't work out, there is a cost in time and the revenue lost from a vacant position such as a mechanic, Scarfo said. One shop represented in the seminar bills the work a mechanic does at about $50 per hour, which could represent $8,000 in lost revenue if the position is vacant a month.

At a minimum, it can cost $500 to advertise a job when all the expenses are totaled, he said. Consider adding a border or highlighting the advertisement because the cost is often low.

When an applicant applies for a job, use a job application for everyone. Applications garner the basic information needed about an emyployee such as whether or not they have a driver's license and are able to drive a delivery truck.

Gaps in employment should be investigated in the interview, Scarfo said. Applicants should not have personal reasons for refusing to account for gaps in employment.

Review Backgrounds Carefully

"An applicant doesn't have to answer, but you don't have to hire them either," Scarfo said. "As you compare the qualifications of that applicant to everyone else, not having an clear answer can be a reason for finding them less qualified."

About 10 years ago, many forms of testing were dropped because of complaints to the Equal Employment Opportunity Commission (EEOC), he said. If tests are vaildated, they can be used to determine if an employee qualifies for a job.

"But then Japanese companies doing business in the US began interviewing the same applicant five or six times just for an hourly position," Scarfo said.

If a company does its own testing, it is a good way to weed out the applicants you don't want and find the ones you want to hire, he said. Profiles can identify people who are doing jobs successfully. Hire employees that fit the profile.

The initial applicant interview for mechanics is often done by the shop foreman, said John Messer, president of WA Messer Company in Westbrook, Maine. Second interviews take place with the owner or president of the company.

Develop interview questions that are designed around your needs, Scarfo said. During an interview, use fact specific questions. Ask for facts and you'll get the applicant's experience, history, and skills.

Ask Specific Questions

These are the hard questions where you find out exactly what kind of welding the person can do. You can ask if they do heliarc or acetylene welding, and the quality of their workmanship.

Open-ended questions should use the 80/20 or 90/10 rule. The applicant should be doing 80% to 90% of the talking. Let the job applicant talk or create a work-related scenario where they are required to give a solution.

"Let the job applicant talk," Scarfo said. "That's how you learn in an interview, by asking open-ended questions and then listening. People who don't know how to interview talk too much."

Another good idea is to use a team interview with managers sitting around a table. When interviewing an applicant for a mechanic's job, you might want a mechanic in your shop to sit in the interview.

"He might ask some questions you didn't think of," Scarfo said.

With successive interviews, each person may spend an hour talking to the same job candidate, he said. Team interviews are more efficient because everyone is spending the same hour talking with the job applicant.

When interviewing an applicant for a position in the shop, provide them with opportunties to talk, Scarfo said. But when interviewing an applicant for a professional job position, let them do most of the talking.

Find Likeable Characteristics

When interviewing job applicants decide which characteristics you would like to see in an employee, Scarfo said. Get as much information from a previous employer as possible.

Look for red flags on a job candidate's application. Red flags include gaps in employment and hopping from one job to the next.

"Investigate to see what's behind the red flags to decide whether you want to hire this person," Scarfo said.

Try to find references that are not listed on the job application, Scarfo said. When calling for a reference, ask to speak with anyone else the employee worked for at the company.

In a job offer, it is best to state a salary using figures that are biweekly or monthly, Scarfo said. An annual salary figure could be construed as an agreement to pay the employee for up to a year. This can cause problems if the employee doesn't work out.

When it comes to evaluating an employee's performance, work reviews should be used in non-union shops, Scarfo said. Employees in shops with a union are generally covered by a collective bargaining agreement.

Criticism of an employee during a review should be phrased as "an area for improvement," Scarfo said. Demeaning or putting an employee down is counter productive. Review points where an employee can improve.

Use Constructive Criticism

A performance review gives an employer a chance to speak to employees about their skills, quality of work, attitude, and attendance. When giving merit raises, employers discriminate between employees.

Employers know if their wages are competitive. Flat-rate compensation is used by 22% of employers. Retaining good employees is a result of correct compensation.

Flat-rate shops pay mechanics for completing each job. A set rate applies for each job such as installing a snowplow or a service body. Some truck equipment shops with a flat-rate system guarantee a base pay for 40 hours a week.

Job benefits are not required by law, Scarfo said. Payment of minimum wage is required and many states often require employers to pay worker's compensation insurance and to contribute to unemployment benefits.

When presenting a compensation package to a job applicant, deciding what to include is based partly on what the competition is offering, Scarfo said. Holidays, vacation time, the prevailing rate are all considerations.

The Bureau of Labor Statistics (BLS) is a good place to find regional hourly pay scale information, Scarfo said. Employer associations sometimes have an annual survey, or call competitors to determine the prevailing wage for a position. When making comparisons consider what else is in the compensation package such as a 401K or year-end bonus.

Use Compensation Surveys

NTEA does a compensation survey. The key in any survey is if compensation is listed for jobs at your company. If it is, find the range and decide what you want to pay.

When it comes to performance-based bonuses, employers should show employees where it comes from, Scarfo said. Then when the company experiences a lean year, employees will understand why a bonus was less or not paid at all.

"This won't make it more acceptable, but it will make it more understandable," Scarfo said."Incentives should pay for themselves and put more money into the profit till of the business."

Employee relations begin with trust and confidentiality, he said. The human resoures department is built on confidentialilty. The best employee relations are built on trust.

A discipline procedure begins with a verbal and then a written warning, Scarfo said. Supervisors should respond immediately to any violation of company rules.

In applying discipline, supervisors should always get both employees sides of the story, he said. When an employee is on probation for a performance infraction, the employee's behavior must be modified and maintained after it is corrected.

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