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Professional Service Agreement

The SESCO Report – September 2007

Special Insert — Management Coaching and Development

In considering the coaching and development process, we must first understand that there is a clear link between an organization's level of success and the effectiveness of its top management. Effective organizational leaders rely on sound business analysis to assess the implications of their behavior and to make strategic business decisions. Top leaders are visionary in their approach, proactive in their decisions, innovative in their actions and aggressive in the business opportunities they seek. Most importantly, organizational leaders work intimately with their management team to provide daily guidance and leadership to every person they employ.

Every leader defines leadership in a different fashion; a mix of culture, technique, communication and tools that have made them successful — patterns of behavior that have been developed over a lifetime. Every successful and striving leader also recognizes that leadership is a fine art that must continually be refined and honed to maximize its potential.

At SESCO, we strive to assist leaders in this process of self-discovery and ongoing transformation. We implement processes that allow the strong leader to develop into a superior leader. SESCO's core leadership principle recognizes that unless we understand ourselves better we cannot attempt to understand and effectively lead others. Based on the initial assessment of the leader, SESCO will select and utilize self-evaluated measurements to help develop a coaching plan of action that is specific to him or her to foster the greatest degree of success.

Upon evaluation, we subsequently coach the leader through the designed plan of action program. This program often includes four (4) major components: strength evaluation, trend analysis, goal setting and goal measurement.

? Strength Evaluation ? We work with the leader to produce a thorough S.W.O.T. analysis based upon self-observation, feedback, assessments and evaluative measures. The candidate and the SESCO coach will candidly define strengths, weaknesses, opportunities and threats which are present and measurable.

? Trend Analysis ? We recognize that there are ever-present forces that impact the way we behave and manage which subsequently affect the decisions we make on a daily basis. The trend analysis process examines what trends may be present that may negatively impact the achievement of the defined goals.

? Goal Setting and Goal Measurements ? This critical phase is the culmination of the steps previously discussed. Goals will be defined and action items will be implemented that will refine and strengthen the leadership style and skills of the candidate; hence, his or her performance within the organization. This process is implemented under the ongoing
guidance and coaching of the SESCO consultant.

SESCO Client Inquiry — Staff Response

Question: Can we have a mandatory retirement age in our retirement plan provisions?

Answer: The Age Discrimination in Employment Act (ADEA) and the Internal Revenue Code generally prohibit a qualified plan from discriminating against a participant because of age. Such discrimination includes stipulating a mandatory retirement age for employees. A qualified plan must allow all employees to participate, regardless of age, when they meet the plan's eligibility requirements. A qualified plan may not reduce or stop the accrual of benefits under the plan simply because the participant has reached a certain age. Plans may set a normal retirement age, which is the lowest age specified in the plan at which the employee may retire and still receive full benefits under the plan.

There is one exception for certain high level employees. Compulsory retirement is allowed for any employee who has attained 65 years of age, and who, for a 2-year period immediately before retirement, is employed in a bona fide executive or higher policy making position, provided the individual is entitled to an immediate annual retirement benefit totaling at least $44,000.

SESCO Client Feedback

"SESCO staff always takes the time to answer any questions or explain anything that we have questions regarding our human resources." — Janet Yates, Grundy National Bank

Delegating with Clarity and Purpose

There are good habits that we hope our supervisors and managers have to help them handle the often powerful and complex challenges of leadership. Delegating with clarity and purpose might be considered an art by some while others find it completely difficult. Leaders who regularly delegate are strategically aligned with their employees to improve business processes and provide feedback. This engages employees so that they are aligned with their leaders and strategic business goals.

Delegating demonstrates trust and encourages development. When you have these two factors at work in your organization, you have a positive environment in which empowered employees are focused on organizational goals.

Leaders must be able to communicate the "what" and the "why" of every task they delegate. Without taking the time to communicate correctly, misunderstandings occur, workloads become imbalanced, bonds are broken, processes stall and strategic alignment with goals never occurs.

Therefore, to delegate and empower appropriately, managers and supervisors must learn the following skills:

? Explain the need for delegation.
? Use delegation of tasks to motivate.
? Explain tasks and ask team member's view (getting feedback).
? Specify responsibility and authority (empowerment).
? Confirming team member's understanding and set up time review (process improvement).

Delegating, one of SESCO's Leadership Essentials training programs, provides leadership tools that will empower your organization. For more information on this program or other training solutions, visit the training section of our website, or contact SESCO at 423-764-4127.

- Joel Cullum, Senior Vice President

Employee Turnover: Are Your Managers to Blame?

Never underestimate the power of a good relationship between your company's managers and employees. The "quality of life" factor that employees highly prize in a job goes beyond the number of hours they work, the distance of their commute, and their ability to achieve a work/life balance. How employees are treated on the job will obviously affect the quality of their work lives. It will also color their personal lives; employees who are mistreated by management will certainly bring some of their stress, complaints, and unhappiness home with them.

It is often said that employees don't leave companies, they leave managers. That's why it is so important to educate your managers on their starring role in creating a positive environment that will help make employees want to stay. Here are a few:

1. Communicate. Employees want their managers to communicate their expectations; provide feedback on their performance; report company news; inform them of changes that affect them; explain policies, procedures, and practices. But it goes both ways. Employees want to be heard, too. Open and honest communication builds trust, and employees are more likely to stick with a manager they trust than one they don't.

2. Appreciate. How often have you heard that a simple "thank you" goes a long way? But are your managers actually saying it — and saying it enough?

3. Reward performance. Most people work to live, rather than the other way around, so make sure managers: reward good performers with ample raises and bonuses; promote from within instead of placing someone from the outside into a plum position; and give employees the training, responsibilities, and duties that can lead to promotions, raises, and bonuses.

4. Set a good example. Good managers set the performance bar high for employees and crack down on mediocre behavior. Bad ones act as though the bar, and the rules, don't apply to them.

5. Show genuine concern. Human Resources professionals may have to remind managers about the "human" side of business. If an employee asks for leave to take care of an elderly parent, a manager's main concern should not be how inconvenient the employee's absence will be.

A company can spend much time and energy coming up with interesting perks and fun events, but they can quickly be trumped by a bad manager.

SESCO provides management training and development, one-on-one coaching, and a validated Employee Satisfaction Survey process, all designed to improve management/employee relations and reduce costly turnover.

Leadership Quotes

"Leadership is a combination of strategy and character. If you must be without one, be without the strategy." — Gen. H. Norman Schwarzkopf

"Outstanding leaders go out of the way to boost the self-esteem of their personnel. If people believe in themselves, it's amazing what they can accomplish." — Sam Walton

Immigration Alert — Worksite Enforcement

In addition to issuing the "no-match" regulation that extends the compliance window from 14 to 90 days of receiving a no-match letter, the Department of Homeland Security (DHS) has also issued the following:

1. In coming months, the Administration will publish a new regulation that will reduce the number of documents that employers must accept to confirm the identity and work eligibility of employees.

2. The Department of Homeland Security (DHS) will raise the civil fines imposed on employers who knowingly hire illegal immigrants by approximately 25%.

3. The Administration will continue to expand criminal investigations against employers who knowingly hire large numbers of illegal aliens.

4. The Administration will commence a rule making process to require all federal contractors and vendors to use E-Verify ? the federal electronic employment verification system.

5. The Administration will help states make greater use of this E-Verify system.

Although the process of complying with Immigration regulations for the most part is straightforward, it is becoming more complicated and challenging as illegal immigration increases. This trend places the employer in a difficult situation as fraud and illegal behavior is difficult to detect. Therefore, administrative staff, managers and human resource professionals need to be well trained in the process of complying with Immigration regulations and the I-9 form.

SESCO provides this training as well as conducts audits for retainer clients to ensure compliance. Those who are not retainer clients and are interested in an audit of not only Immigration compliance but compliance to all federal and state employment regulations, can call to establish a professional relationship through our monthly Service Agreement.

- Stephanie Peters, Regional Vice President

Would Your Personnel Records Stand Up to Scrutiny in Court?

In today's litigious and legally complex employment environment, maintaining personnel files is no longer a simple process of making sure all documents reach the appropriate employee's file. More types of information are being maintained about employees and more legal restrictions imposed concerning what factors may be considered when making personnel decisions.

As a result, employers must establish separate files for separate purposes to ensure that private information about employees is not used inappropriately. It is generally recommended that at least two (2) separate files be maintained on all current employees; a general personnel file and a confidential medical information file.

The employee's general personnel file, will contain all job related information dealing with the current employee, including the following information:

? The original Employment Application, signed and dated;

? The employee's acknowledgement of receipt of the employee handbook, agreement to abide by its rules and understanding that it does not constitute a contract of employment for any specified length of time;

? Employee payroll records to comply with the FLSA;

? All written authorizations signed by the employee for criminal, credit, and employment background checks;

? Signed and dated copies of tax forms;

? Signed and dated I-9 forms;

? Initial COBRA Notices (if applicable);

? A copy of any and all disciplinary action reports taken against an employee, including oral warnings, written warnings, suspensions, terminations, and other disciplinary actions;

? Signed and dated copies of performance appraisals;

? Personnel action forms which indicate a change of status of the employee in terms of pay, job classification, department, or facility;

? Information concerning who is to be contacted in the event of an emergency;

? If applicable, copies of college transcripts or other certifications indicating the employee's credentials for performing the relative job duties. It is important to remember that these certifications and transcripts should be reasonably related to the job duties required of the employee;

? Results of the criminal, credit, and/or employment background reference checks performed on the employee prior to hiring;

? Copies of any written complaint made by the employee regarding his or her supervisor or other member of manager including resolution of the dispute;

? Signed and dated Separation of Employment Notice (if applicable);

? In the event that the employee is asked to resign or terminated under adverse circumstances, a settlement agreement, release and waiver by the employee providing a guarantee to the employer that the employee does not plan to initiate litigation adverse to the company's interest; and

? New Hire Reporting.

Medical files must be developed and maintained separately, under lock and key as required by the ADA. Typical information maintained in medical files includes:

? Injuries/workers' comp.

? Results of physicals, return to work documentation, FMLA and other "medical" related information.

? Notice to Applicants (applicant accommodation form, in case of a known disability).

SESCO sells both general personnel and confidential medical file folders and all other required and suggested personnel forms. Call 423-764-4127 for a catalog or order online.