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Employee-assistance programs have been helping workers deal with personal issues for decades, but new data reveals organizations are increasingly using them to help managers resolve performance issues too.

Monday, April 2, 2012
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When an internal discipline process failed to correct the nascent performance issues of an otherwise-valued employee, Melissa Barry had no choice but to present the worker with a choice: the employee-assistance program or the door.

Barry, an interim manager at a casino owned and managed by the Keeweenaw Bay Indian Community in Michigan's Upper Peninsula, remembers well being driven to this last resort after her erstwhile good performer started having serious attendance issues after six years on the job.

"She was increasingly tardy and had been reprimanded, and even suspended," Barry says. "But I wanted to help her [keep her job] because she's a good employee otherwise."

So Barry placed a call to the management-services team at Minneapolis-based Ceridian, which has provided employee-assistance services to the KBIC since April 2010. She confidentially shared the situation with a consultant and the two agreed that a formal referral should be made to the employee to work with the EAP on resolving her issue. Barry then called the worker into her office and -- after first praising her for the positive work she had done -- laid out her remaining options.

" 'I want to help you keep your job,' " Barry recalls telling her, " 'so I am going to reprimand you [for the attendance issues], as well as mandate you go through the EAP. And, if you don't go through the EAP, then I can't help you [avoid termination].' "

The worker, Barry says, immediately agreed to go along with the formal referral.

While the issues discussed between the EAP counselor and the employee remained confidential -- due to the privacy laws governing employees' protected health information -- the worker signed an authorization form to release compliance information to the company, so Barry was kept apprised of her status through weekly emails from Ceridian.

After nearly three months of sessions, Barry says, she got an email notifying her that the worker had successfully completed her program and that no further action was needed.

"And," Barry adds, "I've seen a very big turnaround in her work performance."

Jim Nardi, the human resource director for the KBIC, says manager referrals for its approximately 350 employees are now "approaching once a week."

"We hope that we never have to do them," he says. "But [on the positive side], we now have another tool for our managers' toolbox. Before, the employee would simply go through the disciplinary process, and then the next step would be dismissal."

This is just one example of an emerging trend in which organizations are increasingly calling on their EAPs for more formalized -- and productive -- methods of addressing employee-performance issues, despite the heightened boundaries on privacy under which EAPs operate.

Indeed, New York-based employee resource firm Harris, Rothenberg International recently noted an increase of 120 percent in management referrals and fitness-for-duty evaluations over the past four years, from 23 per month in 2008 to 51 per month in 2011.

"People in HR departments and managers are now seeing this ability to partner with EAPs to manage these situations," says Randy Martin, HRI's director of clinical services. "It really gets into how to help work groups and manager/employee situations, and how to get employees back on track when they get off track."

He adds that the rise in formal referrals to EAPs is a by-product of increased workplace stress.

"This is yet another clinical marker of the tremendous stress that the economic downturn has placed on employees," Martin says. "As a result, managers and other corporate leaders are recognizing the importance of EAP services to help manage these difficult employee situations, if not head them off entirely."

"Part and Parcel"

While formal manager referrals have been a core service offered at Ceridian for the last two decades, they make up only about 10 percent of incoming calls from its 1,600 client companies worldwide, says Sharon O'Brien, vice president of EAP/WorkLife Operations at Ceridian's U.S. operations in Blue Bell, Pa.

"And it should be ... higher," she says, "because I don't think a lot of managers even know they exist. We feel it's an important part and parcel of the EAP product."

With a dedicated team of eight licensed, master's-level EAP professionals with backgrounds in both HR and crisis management at the ready, O'Brien says, Ceridian's management-services team can provide a key resource to managers who may be feeling overwhelmed by a situation.

In addition to the live team, O'Brien says, Ceridian also offers a manager's toolkit on its website to provide additional resources because "they don't teach you in M.B.A. school how to deal with employees' personal problems that impact everyone in the workplace."

And O'Brien adds that there is no limit to the frequency or reasons for which managers can call and get a consultation, whether it's about how to handle a particular employee, a reduction in force, an employee who may have behavioral issues or who may have violent tendencies, or even for workers testing positive for substance abuse.

"These situations are very stressful to managers as well, and here they can talk to someone who isn't their HR [professional] or the employee," she says. "At least this gives them some kind of stress reduction, talking to someone who really understands and can help manage a difficult situation."

For employers, one of the challenges inherent in using EAPs for performance-management issues is the fact that privacy rules restrict the information the EAP can share with them regarding the employee, O'Brien says.

"We're bound by the same laws as the medical profession [regarding privacy], so we're only going to report compliance or noncompliance," she says. "We're never going to give out any treatment details."

O'Brien acknowledges that some employers struggle with the limited level of information that an EAP can provide a manager regarding a troubled employee, but adds: "As far as I can see, there's not a clear understanding of all the benefits of having a manager just consult with someone objective outside the organization who can say, 'Let's really talk about this case and let me give you some recommendations [on dealing with a troubled employee].' "

EAP as a Cost Saver

While manager referrals can be an effective route to saving a valued employee's job, they also may have an ameliorative effect on an organization's bottom line, according to one Chicago-based EAP.

"Based on costs saved in avoiding terminations, the ComPsych EAP pays for itself many times over in manager referrals alone, in addition to costs saved in reduced absenteeism, improved productivity and decreased turnover in the overall employee population," according to the company.

Ewa Antonowicz, the company's clinical director, says she has also witnessed an increase in organizations using manager referrals to address performance-management issues over the past few years, adding that approximately 20 percent of ComPsych's incoming calls are now performance-related.

And that trend seems to fall in line with the need of organizations to save on costs amid the struggling economy.

"In that sense," she says, "[manager referrals] can be a win-win for both employer and employee."

In one case involving ComPsych, an unnamed food and agricultural company was experiencing a higher-than-typical rate of involuntary turnover of 24 percent at one of its rural manufacturing facilities.

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That translates to approximately 60 workers terminated involuntarily each year at the 250-employee facility.

According to ComPsych, the EAP tracked all formal referrals made by managers over a six-month period for workers at the facility, then conducted follow-ups with each employee six months after each formal referral.

The formal referral program, in this case, included consultation with ComPsych's management-referral team; monitoring and follow-up of each referred employee's progress; return-to-work planning by ComPsych, the supervisor and the employee; and appropriate services, such as counseling, provided to the referred employee.

As a result of the program, the company notes, "the involuntary turnover rate was reduced to 17 percent and only 43 employees were terminated ... ."

In a second example provided by ComPsych, a manufacturing company with 35,000 employees was struggling with a turnover rate of 16 percent in one of its 500-worker divisions, so ComPsych tracked the formal referrals over a six-month period and conducted follow-ups with each referred employee six months after the referral was initiated.

In addition to the resources to the first company mentioned above, ComPsych also provided additional training and educational material for the second company's internal managers.

The program there ended up netting the company $437,500 in savings, based on a reduction in turnover and terminations of slightly less than 50 percent.

HR's Role

While the benefits of manager referrals may be manifold to both employer and employee, getting managers to use them can be tricky, says John Melo, vice president of human resources for global field operations at Bedford, Mass.-based Progress Software, which uses E4 Health as its EAP.

"The biggest challenge is walking that fine line between not trying to solve an individual's personal problem, but still addressing the day-to-day performance issues," Melo says, adding that eldercare issues are becoming "incredibly significant" for his employees.

"We're seeing where employees who would normally be doing very great jobs, all of a sudden, we notice a dip in their productivity," he says. "So when the managers sit down and have conversations with those workers, they find there are issues outside the workplace.

"And that's a critical thing," he adds. "After determining that it's personal in nature, we're not in the business of counseling on personal issues. That's why we have the EAP."

But for an organization to get the most out of its EAP, Melo says, it's crucial to partner with one that understands its client's business.

"The EAP needs to understand the constraints the employee may be under," he says, "and the particular pressures [he or she] may feel."

It's also incumbent upon HR leaders, he adds, to regularly remind their workforce that manager referrals can be "a path" to solving problems.

"I find, more often than not, that managers tend to forget that formal referrals exist," he says. "If you don't remind them constantly, it's easy to get lost in the day-to-day noise."

Melo says Progress Software regularly invites its EAP to "marketing vehicles" such as health fairs and workshops "to broadcast the benefit that sits in front of managers every day but they may not recognize it."

However an organization publicizes the availability of such a resource, ComPsych's Antonowicz says, manager referrals can be a great way to show "the employees that the employer really cares" about them, in addition to saving the company money by avoiding costs associated with termination.

Perhaps just as important is the effect the use of such referrals can have on the managers themselves.

"Formal referrals," KBIC's Barry says, "give me more confidence to handle future performance-management issues [myself]."

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