Episode 089: HR Issues: The Biggest Trouble Spot

Speaker 1: You’re listening to Your Practice Made Perfect; support, protection and advice for practicing medical professionals, brought to you by SVMIC.

J. Baugh: Thank you for joining us in this episode of Your Practice Made Perfect. This is the third of three episodes with attorney Scott Hickman in which we discussed HR issues that practices can face. So if you haven't heard the other two episodes with Scott, you'll want to make sure and go back to listen to those. You can find links to those in the show notes for this episode. Now, let's pick back up with attorney Scott Hickman, who practices in the area of employment law and business dispute resolution, as he continues to share his experience with HR issues and fostering a healthy work environment.

So between January 1st and January 15th of each year, I undergo what's called an employee review. I meet with the vice president of the claims department where I work here at SVMIC, and we have a review every year that talks about my performance, what I've done well, what maybe I could improve in the future. So what advice would you give regarding employee reviews?

Scott: Well first, it is important to do them on a regular schedule. Treat them from the employer's standpoint as mandatory, not optional.

J. Baugh: Right.

Scott: It's the kind of thing that's easy to let slide, especially if you're in a smaller environment where things may not be as regulated as they are here at SVMIC, where you know you have a regular schedule, but they really are very important to do on a regular basis.

And the other thing that it's really important is to be honest. If an employee has performance deficiencies, they should be addressed constructively. If you're simply doing employee reviews and everyone checks the box at four out of five, everyone's acceptable, that's great if that's the case. It's unlikely to be the case. And then when you have a claim down the road and you want to claim that the employee has performance issues and those performance issues have been longstanding, the first thing that anyone's going to look at is the employee performance reviews. And there you have it in writing with your signature on it that this employee meets expectations and has done so for nine years in a row.

J. Baugh: Yeah. That becomes difficult to explain later on if something happens and you didn't address it upfront. It seems to me that that's really beneficial to be honest, not only from the employer's standpoint, but I think most employees want some constructive criticism. They want to know, "What can I do to provide more of a benefit, more of a service to this practice?" They want to be a part of what's going on and if there's something that they can do better, they would like to know that so that they can become a better employee because they're part of the team and they really want to help out as much as they can.

Scott: I think you're absolutely right about that, J. It in some way cheats both the employer and the employee not to have those types of constructive conversations. Plus, let's assume for a moment that in a singular instance, the opposite is true. If you have an employee that's not open to constructive criticism and doesn't seem to want to work towards improving their job performance and being a part of the team, don't you want to know that as well?

J. Baugh: Yes.

Scott: And you learn that by having these types of conversations. I think the most constructive advice that I can give is to be candid and be honest in these employee reviews. Too often they're simply dreaded and you want to get through them as quickly as possible so you feel like you can check a box, but if the entire process is a check the box process, it can be problematic after the fact.

J. Baugh: So then one of the ideas that might grow out of an employee review would be a performance improvement plan. So tell us a little bit about what is involved with a performance improvement plan.

Scott: Performance improvement plans are a very constructive and in my experience, underutilized tool to improve employee performance. When I'm advising clients in putting a performance improvement plan together, I always tell them to put not only what the performance issue is, but what the plan is to address and improve the performance as well as what the consequences will be if the issue is not addressed successfully. Include, for example, how and by whom the employee will be coached for example by stating, "I'm going to meet with you every week for the next month or every other week for the next 90 days in order to go over what process needs to be addressed and how well we're doing in dealing with the problems that are before us."

So a good performance improvement plan in my mind is less of a disciplinary notice, although it serves that purpose. It's less of a report card, although it serves that purpose, but if done properly, it's a communications map that guides both the employer and the employee to successfully mitigate any deficiencies that exist. We know that good communication is the best tool we have to increase the chances of being successful in these instances, and a performance improvement plan can and should facilitate that type of communication.

J. Baugh: I think you make a great point with the performance improvement plan that it needs to be something that explains to the employee how they will be coached. In other words, I can't just have an employee review with you, Scott, and say, "Okay, here are some things that you need to fix. Now go fix them." Instead, you can have a plan that says, "We're going to work together because I know that together we can fix these problems. We can address these issues," and it doesn't just leave the employee out there hanging to defend him or herself. They have the help that they need so that together as a team, we can resolve the issues that works better for everyone.

Scott: Exactly, and I have the misfortune because of my training and my experience and what I do for a living, I have to look at things in terms of, "How is this going to look if everything goes poorly and the employee ends up making a claim and we're taking depositions 16 months from now"?

J. Baugh: Right.

Scott: So you want to write a performance improvement plan that will look good in retrospect, and that's not the first reason you do it. The first reason you do it that way is because it works. It's a better way to do things. It's more collaborative, etc. But another reason to do it is because if it is looked at in retrospect, you want it to be as plain as can be that you did everything you could to help this employee, to coach this employee, to provide this employee with the resources, including your time, that were needed for them to succeed. And it wasn't for the lack of any of those things that the relationship didn't work out.

J. Baugh: Okay, great advice. So let's assume that we've done an employee review. We've done a performance improvement plan. We've worked through some of the issues that we've talked about and unfortunately, we've now come to the scenario in which we feel that we need to terminate the employment of this particular person. Nobody wants to have to terminate an employee, but sometimes it's just unavoidable. It's the only option that you have. So what would be the recommended process for terminating an employee?

Scott: Well, we talked about onboarding and offboarding, of course, is the other. In the HR world, these are the two times of greatest risk for the employer because there are more things that can go wrong. The most important thing with employee termination is what we talk about in HR all the time, and that is documentation, documentation, documentation.

J. Baugh: Yes.

Scott: There certainly are instances where you will need to do something quickly and on the spot, but those tend to be the easy ones. If someone does something that merits immediate termination, that is unlikely to cause a great deal of controversy or less likely, but with issues with job performance that may be long-standing, that have been attempted to be addressed but were unsuccessful, with progressive discipline where the employee's been coached, been given written warnings, been given final warnings, and still doesn't mitigate the problems successfully, it's vitally important that all of those steps have been accurately documented.

So the first thing that we do when we get that phone call that says, "Let me tell you about what I'm thinking about doing. I think I need to terminate an employment relationship with one of my team members," is we want to know what the documentation looks like. So it's important that you be disciplined in doing that all along and don't skip that step. I tell your insureds when I have the privilege of speaking at SVMIC seminars every year that your rule as an employer should be if you don't write it down, it never happened.

J. Baugh: That's right. We give that advice a lot when it comes to medical care and so it applies equally with employment issues, doesn't it?

Scott: The same principles absolutely do apply. And also, if you do act on something of a relatively sudden nature, then it's perfectly acceptable to document it after the fact.

J. Baugh: Okay.

Scott: You might want to say, "I had a discussion with this employee today about this problem that came up and here's what I told the employee." So again, it is vital that these types of things be documented because they show what happened and why. And they're your best assistance in the event that any type of post-employment claim is made by the employee. So that is the best advice that I can give. And if there's just one thing that a listener does because they've listened to this podcast, I'd put that at the top of the list. Document those types of interactions. Just be relentless in documenting.

J. Baugh: So after we have all of this documentation in place, what is the law or maybe the recommendations about how long that you should retain all of the documentation that you have regarding a particular employee?

Scott: I'm old enough to remember when this used to be a hard question.

J. Baugh: Okay.

Scott: Because we had a thing back in the day called paper.

J. Baugh: Yes, I remember that.

Scott: And so the idea of how long to keep files used to actually be an issue of some expense and logistical difficulty. Various regulatory obligations have different numbers on them. I've always given my clients seven years. Part of that is because of the way the statute of limitations for some claims work in Tennessee might be a different number in other places, but the good news is now we can digitize these types of files and storage is insanely cheap. So just make sure that you're taking advantage of that. And the fact of the matter is these types of files in most instances are going to be kept indefinitely now.

J. Baugh: Because the cost isn't what it used to be.

Scott: Exactly, exactly.

J. Baugh: As we talk about employee reviews and plans and hearing about these issues, it reminds me that it's important to have all of these processes in place, not just for the employee that we're specifically addressing, but also for the entire team. It seems to me that if an employee of a practice sees how one of the employees is being treated, and if they feel that that employee is being treated fairly in terms of having a plan in place, coaching is being done, documentation is being done, that it just creates a great work atmosphere for everyone, and it really benefits the practice as a whole rather than just something that you specifically have to do for one particular employee.

Scott: J., I think that's exactly right. I always try to mention when I teach seminars that from an HR perspective, what you want is consistency. Employees expect you to be consistent in the way that you treat each of them compared to their coworkers, and that's what the law requires as well. We treat everyone the same. And it's very difficult to do that if you don't have processes and policies in place that guide you. It's difficult to be consistent if you are doing things off the cuff or on the go, but if you are able to discipline yourself to have these types of processes in place, it makes that very important task much easier.

J. Baugh: And I can imagine as an employer, one of the difficult questions that you have to answer is, "You treated this employee this way. Why did you treat me a different way?" Or, "Why did you treat someone else a different way?" And if you've got these processes in place, documentation, something that everyone can go to to see what the practice ought to be, then that makes answering those questions a lot easier.

Scott: Well, it does. Keep in mind that the predicate of every discrimination claim is, "I was treated differently on the basis of my maybe gender, maybe national origin, maybe religion, maybe disability status, maybe race," and we focus a lot on the list, the categories. We don't focus as much on the first part of the sentence, "I was treated differently because of."

J. Baugh: Yes.

Scott: If an employee isn't treated differently in the first instance, we never have to worry about those types of discrimination claims.

J. Baugh: That's right.

Scott: And I think that employers can get a good return on their investment for making sure that they have procedures and policies in place that prevent employees from being treated differently in the first instance.

J. Baugh: So we've talked about a lot of different HR issues today and you've given some great advice on a lot of different issues that are important to our insureds and to their practices. So what do you think would be the biggest HR trouble spot that you see?

Scott: In my practice, I think the wage and hour issues are probably the most consequential. And I say that hopefully without downplaying the importance of any of the other things that we have talked about. But like we have already discussed in every area, an ounce of prevention is worth a pound of cure. So with respect to your wage and hour policies, make sure you obtain and follow reliable advice on your payroll and employee classification issues, because as I mentioned earlier, the consequences to mistakes here can be quite, quite severe. And so if you asked me to pick out one HR trouble spot that is of the most consequence, that would be my choice.

J. Baugh: So as we get ready to bring this discussion to a close, are there any helpful tips or advice that you would like to leave us with?

Scott: I hope that I've given some advice along the way that I'll simply summarize now. Always, always, always take the time to document your HR interactions. It makes everything so much easier. Be candid with your employees. HR is an everyday job, and it may well be, it's been my experience in some practices that it is someone's second or third job responsibility, and that can be unfortunate and lead to consequences. Employees that are well-managed don't need to wait until they get a performance review, for example, to know that they're doing something that needs to be changed or addressed. Again, documentation helps make sure there are no surprises and if I could wish one thing for our listeners, it's that they don't have any surprises in their HR interactions. I think that should be the goal and I hope that some of the points that we've covered and some of the advice and experience that I've shared will help our listeners to make that more true in their practice.

J. Baugh: Well, Scott, I think you've certainly provided a lot of information on several different HR issues that I know will be helpful to those who are listening to this podcast. Scott, we want to thank you for being today and giving us such great advice on very difficult issues.

Scott: My pleasure. I've enjoyed being with you, J. Thanks.

Speaker 1: Thank you for listening to this episode of Your Practice Made Perfect with your host J. Baugh. Listen to more episodes, subscribe to the podcast and find show notes at SVMIC.com/podcast. 

The contents of this podcast are intended for informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice as specific legal requirements may vary from state to state and change over time.