Year-End Housekeeping

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Making HR audits meaningful

The end of the year is a good time to reflect on what went well this past year and what may need to be revisited. There are many different reasons to assess your HR practices and conduct an audit. Whether you are part of a growing start-up, a company that has reached the milestone of 50 employees, or an established organization looking to ensure HR is strategically aligned to goals, an HR audit will help you determine compliance and the overall efficiency of the human resource function.

When conducting an assessment, there are several key areas you will want to take a look at:

·         Legal compliance

·         Employment practices

·         Performance management

·         Compensation and benefits

·         Payroll

·         Termination

·         Record keeping

When identifying gaps, it is also very important to look at how your company — or whether your company — is actually upholding its own policies and procedures. Checking a box on an audit list is not enough; you will also need to examine if you are walking your talk. A true assessment will include a reality check on just how things are done. Look hard and look deep to ensure you are working smartly.

Once the assessment is papered, you will need to prioritize action items. Correcting compliance matters should top your list, as violations can be costly. Next, target any inadequacies in each area, and decide strategically what requires attention and when. It’s OK to pick the low-hanging fruit first, but then prioritize based on company goals and budget. Implementing best practices wraps it up.

The decision to complete an HR audit should not be taken lightly. You will need to determine who will complete the assessment internally or if an outsourced solution makes sense. Set a timeline and goals you want to achieve for your end result. And most importantly, act on your findings. An audit does no good if it just sits there.

For an audit template or assistance with your internal audit, e-mail me.

Leann Proud

HR Consultant and Practice Manager

California Health Care — What’s Next?

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With a potential dismantling of the Affordable Care Act still looming, California is taking steps to ensure no one is left behind when it comes to health care. It comes with a big sticker price, though: $4 billion, half of which would come from re-purposing existing federal, state and local funds, and the other $2 billion from new taxes.

SB 562 Healthy California, a proposal for a single-payer health-care plan, was passed in June by the California Senate. The state Assembly still needs to approve the plan, as does the governor. A budget will need to be developed and a board of nine health-care experts will need to be in place for authority and oversight. Ultimately, this will not become operative until the state has the revenue to fund the costs for implementation. 

The proposal is radical and will change the environment for California’s health care — covering every resident, regardless of immigration status — with enrolled participants not having to pay premiums, co-pays or deductibles. With this big of a change, it is uncertain how it will be implemented and maintained. For now, we have a fully operational marketplace, CoveredCA, which allows residents to obtain quotes and compare health-insurance plans online. Although ACA subsidies may go away, CoveredCA is still accessible for those needing individual health care coverage.

A step in the right direction? Some say so. At least we are taking action rather than sitting on the sidelines. You gotta love California!

If you have questions about how to ensure you are on top of employee benefits,  e-mail me.

Leann Proud

HR Consultant and Practice Manager

Documenting Performance Matters: Best Practices

I recently attended a labor law conference by Ogletree Deakins, one of the largest labor and employment law firms in the country and recently named Law Firm of the Year by U.S. News & World Report.  I like attending this particular conference, because it’s four days of nonstop education conducted by attorneys who are experts in their field.  I came across the following Ogletree guidelines (edited) for personnel documentation while I was flipping through the conference materials:

1.      Prepare for the appraisal or disciplinary meeting.  Create a script for the meeting that is reasonable, with objective goals for the session.  If the meeting is an evaluation of performance, include objectives for the performance period, and fully discuss them with the employee.  If the meeting is disciplinary, outline points that explain the problem being addressed, as well as objectives for correcting or resolving the issue for the future.  The script may also assist you later, if you are asked to recall the substance of your discussion with the employee.

2.      Choose an appropriate setting for the meeting: For either performance appraisals or disciplinary meetings, neutral territory is best.  Although managers normally feel more comfortable in their own offices, such territory may send the wrong message and create an adversarial situation that fuels tension while undermining any positive message that might be attempted.

3.      Deliver the message clearly, and document fully — use simple language.  Whether the message is one informing the employee of poor performance or imposing discipline, the information must be clearly understood to have the maximum impact.  By minimizing poor performance or actions that warrant discipline, managers expose the company to liability.  Be sure the primary points are communicated well and documented completely.

4.      Follow up.  An important aspect of both the appraisal process and the disciplinary process is following up to ensure the objectives set forth in the initial meeting have been met, and the appropriate change in performance or behavior has happened.  As in the initial meeting, careful planning, supportive goal-setting and clear communication are critical — and documentation is key.

I wholeheartedly agree with these guidelines.  Another documentation trick I like is to e-mail the individual after the meeting to recap the conversation, with a few bullet points from the discussion.  This will also establish expectations.  The e-mail is date- and time-stamped, which can become very handy if further action is needed later. 

As with everything in HR, consistency is key — applying these tips and best practices can help keep you out of court.

For advice on personnel documentation, e-mail me.

HR Consultant and Practice Manager

SaaS Revenue Recognition Updates

SaaS Impacts of ASC 606 / IFRS 15

In the six months since the release of the new revenue recognition standards, companies have had a bit of time to digest and wonder – what does this mean for my company? 


 ASC Topic 606 or IFRS 15 aims to clarify the standards around revenue recognition and cost guidance.  It is a major change, and non-public entities are required to apply the revenue recognition standard for annual reporting periods starting in fiscal years beginning after 12/15/18.


The general idea of the new code is to identify performance obligations and allocate revenue by transactions as they are fulfilled.  Sounds simple, right? 

Key aspects to be aware of include: 

•         Setup Fees – will they be recognized proportionate to the revenue recognized under the contract rather than over the customer life. This will typically speed up revenue recognition for SaaS companies.

•         Licenses – A company must decide whether it is providing a software license as a separate performance obligation, distinct from the hosting services, or a service wherein the license and hosting services together constitute a single performance obligation. 

•         Implementation – Whether the implementation services should be treated as a separate performance obligation. 

•         Premium Support or Consulting – whether both the premium support and consulting services are distinct from the other performance obligations.

•         Other Capitalized Expenses – including direct labor and materials, bid costs, sales commissions and more. 

Entities may choose one of two adoption methods: full or modified retrospective. We are advising our clients to perform a preliminary analysis of the financial impact of the changes prescribed by the news standard and to use the analysis to determine the most appropriate adoption method.  In brief, you may restate earnings for comparative periods, or adjust retained earnings and disclose the change in policy.  We plan to describe how the efficiently perform the analysis at a later time.

Our recommendation is to avoid overreaction but be prepared.  It’s good to have a conversation now with your finance team to prepare.  Changes don’t need to start today – most companies will start on the hard work of making the transition in the second half of 2018. 

Some good resources for further reading:




SaaS-Specific Information

All Around

How to Use Executive 360s Effectively

I believe a well-rounded performance evaluation plan should include executive 360s, a professional tool to assess the management team’s strengths and development needs, in which feedback is gathered from workers at various levels of the company to create a “whole” picture of performance.  With the right questions, the information obtained in this type of review can be incredibly valuable to the organization for management and executive performance, culture and environment data, and overall happiness of your employees — which can lead to a bump in your retention.

360s can be overly detailed.  I like to keep them as simple as possible, with no more than the top five areas the company wants to focus on.  This will help make the results truly measurable from year to year, as well as easier to act upon.  Treat the areas as you would goals.  If they are not reasonably attainable, why are you putting them in there?

Some suggested key areas of focus:

·      Strengths and attributes

·      Areas for continued development

·      Communication/listening skills

·      Clarity of direction

·      Supervisor/coach/mentor effectiveness

·      Teamwork fostering

You can also throw in a few company/overall satisfaction questions, such as:

·      What is the company culture and environment?

·      What do you like best?

·      What would you change?

There are many tools and software available to help you.  Another convenient way to administer the 360 process is an easy-to-use online service, such as SurveyMonkey  [] or Small-Improvements []. This makes data collection and analysis easy and, most importantly, confidential.  When presenting the information, I like to strip potential “identifiers” out. Comments that can easily be traced back to an employee should be scrubbed or, at least, watered down to reduce the common denominator.  Just as you would with an employee appraisal, schedule time away from the office or distractions to review, so the meeting is uninterrupted. The data should be presented in a format that is easy to digest and able to be taken constructively.  Most of all, this should be empowering for the person receiving it.

For advice on implementing 360-degree reviews, contact me e-mail

Leann Proud

HR Consultant and Practice Manager