Applying Risk Management Principles: Analyzing Risk In Death Care to Reduce the Chance of Loss

1. May 12, 2011 • Vol. 2 No. 19
This Issue:
Give Your Employees a Hand [Book]......................................... P. 1
Applying Risk Management Principles: Analyzing Risk
In Death Care to Reduce the Chance of Loss......................... P. 2
California Hydrolysis Bill May Be Shelved Due to Costs.......... P. 4
The Notebook............................................................................. P. 5
From the Editor’s Desk............................................................... P. 6
Give Your Employees a Hand [Book]
Effective Employee Handbooks Are Used –
Not Stuck Away on a Shelf
By Bill Ford Although nothing beats “face-to-face” and “one-on-one”
President and CEO of SESCO Management Consultants
management-employee communication in establishing and
maintaining your management credibility (earning the trust,
Bristol, Tenn. – Your employees can tell you – if they are confidence and respect of employees), it is too easy for verbal
like employees in most industries – that communication within explanations given by managers to be forgotten, misunderstood
the firm helps keep them satisfied with their jobs. Good com- or misinterpreted. Funeral home managers preempt these
munication lays a foundation for trust in the workplace and problems by putting in writing all the details, facts and proce-
clearly defines employer expectations. One tool that helps lay a dures.
foundation for consistent, clear employer-employee communi-
cation is an employee handbook. Written or printed personnel policies and procedures rein-
force the intent as well as the practical understanding of the
A vital, usable and updated handbook is necessary for pro- firm’s personnel and benefit policies, standards of performance,
ductive employee relations in your firm, regardless of size. Em- history, mission, values, culture and expectations. By publish-
ployees should know the contents of your handbook and keep ing and distributing this information in an employee handbook,
it as a handy reference – not as a review-once-every-couple-of- you can measurably improve the management-employee com-
years-then-stick-it-on-the-shelf piece of corporate jargon and munication that is the hallmark of delivering professional ser-
propaganda. Clearly worded up-to-date employee handbooks vices.
apply equally to the attorneys and staff.
Employee handbooks serve as management’s fundamental,
An employee handbook is a basic, written publication that is published communications tool. They promote consistency in
designed, published and distributed for the purpose of provid- the day-to-day administration of personnel and benefits poli-
ing partners, technical support staff and their family members cies. A second objective is to prevent employee misunderstand-
with two major pieces of information: ings, complaints, grievances and job dissatisfactions that often
• What can staff expect from the firm? occur due to a lack of understanding of the firm’s personnel
• What does the firm expect from staff? benefits policies.
800-228-6332 www.nfda.org

2. 2 Memorial Business Journal May 12, 2011
An up-to-date, published employee handbook benefits your firm. It promotes understanding of the firm’s personnel
and benefit policies.
Properly written and kept current, the employee handbook is the basic management communications tool for explain-
ing to employees the advantages and benefits of working for you. It can clarify all your important employment policies
including compensation, benefits, performance standards, discipline, client service and other employee obligations. The
following sections are good content for any employee handbook:
• an introduction to the funeral home;
• a statement of objectives;
• an organizational chart;
• policies on workdays, office hours, leaves of absence, compensation, transfers, sick leave, holidays, leave and emer-
gency closings;
• statement on training and performance evaluation;
• policy statements regarding military service, jury duty, outside employment, travel and automobile use;
• a statement on personal conduct, professional ethics such as confidentiality, personal use of family client files and
theft;
• a policy statement on equal employment opportunity;
• a policy statement on sexual and other forms of illegal harassment;
• a smoking policy;
• policy statements on receiving gifts from family clients, personal telephone calls, supplies, fund collection, participa-
tion in professional and civic associations;
• general office procedures, including responsibility for the safe and proper operation of equipment;
• a protocol for resolving complaints; and
• a policy on social media and PDA’s.
The employee handbook also communicates the firm’s history, mission, values, culture and expectations. These factors
provide the basis of what professionalism and family client service means. This, in turn, influences the level and quality
of service delivered.
Consistency and Management Credibility
A published employee handbook, distributed to all employees, is your road map for consistent, fair and firm personnel
administration and human resources management. Articulated policies that are administered in a consistent manner will
assist in reducing and defending discrimination claims. Discrimination claims are the largest employment-related liability
for most service firms.
Employee handbooks communicate critical information concerning how employees should handle personnel issues
such as discrimination, harassment, ethics and general complaints regarding the firm’s policies or issues involving co-
workers.
Recent cases brought before the U.S. Supreme Court establish requirements for employers. Employers need to state
policies clearly – especially those that address harassment – and provide employees a means of protecting themselves and
reporting illegal or hostile behavior in the workplace.
An employee handbook can save valued time in management operating costs. These guides allow managers avoid day-
to-day, week-to-week, spontaneous, lengthy “brainstorming” sessions to decide how to handle questions regarding various
employment and benefit policies and procedures.
Providing a copy of the handbook to new employees creates a favorable impression and provides excellent two-way
communication.
An employee handbook can also be used as an effective recruiting tool. Presenting employee handbooks to prospec-
tive employees provides a positive, persuasive image of your funeral home. Through them you can highlight your major
personnel and employee benefits policies – a good thing in recruiting and retaining staff.
Written employee handbooks are good-faith evidence that your funeral home is committed to fair employment prac-
tices. Title VII of the U.S. Civil Rights Act focuses attention on human resources policies. A handbook should be the basis
of good-faith efforts to prove non-discrimination and to provide equal employment opportunity to everyone in all phases
of human resources action.
800-228-6332 www.nfda.org

3. May 12, 2011 Memorial Business Journal 3
An employee handbook can be a valuable legal defense for a funeral home faced with an employee lawsuit alleging
that the former employee was entitled to a certain length of employment or “permanent” status. A properly worded, up-
to-date employee handbook will contain a disclaimer statement that neither the handbook nor the personnel policies or
benefit statements it contains are for the purpose of establishing an employment agreement or employee contract with
anyone. Properly worded disclaimers provide the employer with a persuasive defense to employee claims that the hand-
book is a contract, provided that the wording, as well as the intent of the disclaimer statement, is clear.
In a number of recent court cases, if the employer had not had a current, clearly worded employee handbook with
properly worded disclaimer statements, the employer would have been vulnerable to an employee lawsuit. Many workers
base claims on verbal promises made during employment. These can stem from interviews and performance appraisals
that address job security, permanency of employment and job tenure.
Although no organization can avoid all human resources problems by maintaining an up-to-date employee handbook,
it’s a good idea for firms to add (or revise) a properly worded disclaimer statement. Effective handbooks also include
a “reservation of rights” clause that informs employees of management’s right to modify or change personnel policies,
working conditions and employee benefits at its discretion.
Employee handbooks should be differentiated from a policy and procedures manual. These are two very different
documents and should not be treated as the same thing. Employee handbooks are designed to introduce employees to the
organization and familiarize them with the benefits and responsibilities of employment with the firm. Policy and proce-
dure manuals are designed to lay out in detail for managers, supervisors, and administrators the policies and how each is
to be applied.
In Summary
Clearly, there are legal requirements and liabilities that are best met through the development and publication of a well
articulated, federally and state compliant, employee-sensitive handbook. There may also be many legal advantages. For
example, some federal laws allow employers to develop their own policies within certain guidelines. These allow an em-
ployer some degree of flexibility in how they choose to meet federal requirements.
However, in the absence of a set employer policy, the government will impose its own policy, taking away the employ-
er’s legal advantage of choosing for itself how best to comply with governmental requirements. In an era of increasing
litigation, having clearly written and communicated guidelines will help ensure a professional, equitable environment that
can protect your funeral home from legal liability.
MBJ
Bill Ford is the President/CEO of SESCO management consultants, a human resources management consulting firm. He can be
reached by e-mail at bill@sescomgt.com or by telephone at 423-764-4127
Applying Risk Management Principles: Analyzing Risk
In Death Care to Reduce the Chance of Loss
By Jim Starks
President of Starks Consulting
Lutz, Fla. – Often, when flying to funeral homes for consultations, the person next to me asks what I do for a living.
I respond that I specialize in risk management for the death care profession. And, most commonly, the person replies:
“What risks do funeral homes have? The people are dead!” But the idea that risk does not exist in death care is a wild mis-
conception. After more than a superficial consideration, the areas involving substantial risk in death care are numerous
and sometimes obvious.
Consider the word risk. According to the dictionary, it means “exposure to the chance of injury or loss.” Now consider
the word management. According to the dictionary, it means “the act of managing, handling, direction, or control.” Com-
bine risk and management and you get the act of managing, handling, directing, or controlling the exposure to the chance
of injury or loss.
800-228-6332 www.nfda.org

4. 4 Memorial Business Journal May 12, 2011
The death care industry has changed markedly with the passing of time. Effective risk management must change then,
as well. When I began my career, for example, the cremation rate was low, almost nonexistent even. It now registers just
under 40 percent. Thus, risk management for the death care industry must address strategies to reduce risk of loss during
the process of cremation when the human remains are possibly outside the funeral home’s care. Also when I began, ambu-
lances were a goodwill service you gave your community and your fee did not cover your cost. Most importantly, lawsuits
were not yet prevalent. These factors, among others, have shaped the topics and strategies that are most relevant today in
risk management for the death care industry.
To analyze risk, the cost versus the reward must be examined in each area of your business. For example, trip-and-fall
accidents are one of the top areas of loss for businesses. Maintaining the outside of your firm and keeping the walkways
free from natural obstacles such as branches, landscaping, and bark is easy and affordable compared to replacing an old
and cracked parking lot that will cost thousands of dollars. These kinds of costs versus rewards examinations will help de-
termine where to spend time and money when reviewing the outside condition of your firm.
Practices and policies should also exist for the following tasks:
• Human remains should be identified at the place of death upon removal from the place of death. An identification tag
should be attached to the human remains.
• Your automobiles should be stored in a secure location during non-business hours. And you should check all of your
employees’ driving records. It is not unheard of to find out that an employee does not have a valid driver’s license but does
have multiple DWI convictions only after a MVR (motor vehicle records) request.
• Keep your extra checks stocked in a locked and secured location with limited access. It only takes one person, em-
ployee or nonemployee, to take a check that could result in lost money.
• Petty cash available on the honor system is a license to steal. Frequently reconcile the receipts turned in against the
money remaining in petty cash. Require actual receipts to be submitted, not just a hand-written note from the employee.
• Create and execute a process to review contracts before they are processed to ensure proper charges were placed on
California Hydrolysis Bill May Be Shelved Due to Costs
Sacramento, Calif. – The fate of California Assembly Bill AB 4, which would amend the state Health and Safety
Code definition of cremation to include alkaline hydrolysis, became more uncertain this week in light of the state’s fis-
cal problems.
According to Johannes D. Escudero, legislative director for the office of Assemblyman Jeff Miller, author of the bill,
AB 4 may be headed to the Assembly Appropriations Suspense File. What this means is that any measure that incurs a
cost to the state in excess of $150,000 triggers an automatic referral to the Suspense File, where bills are usually held
until they expire. In light of this development Miller waived his presentation on the measure in Appropriations Com-
mittee. Last month by a 5-0 vote, the State Assembly Committee on Business, Professions and Consumer Protections
approved AB 4. The next step would have been a hearing before the Assembly Appropriations Committee.
“We are proud of the history of collaborative work, and the resulting consensus achieved relative to permitting, li-
censure, investigation and regulation for the safe operation of commercial alkaline hydrolysis, that is reflected in the
language of the bill,” Escudero said. “While AB 4 includes a fee structure similar to the existing statute for cremation,
the reality is that initial start-up costs to the state for administration of the program, before fees could be collected to
offset costs, triggered the referral to Suspense.
Escudero added that even though AB 4 would ultimately generate revenue and result in new job opportunities, “this
is the appropriate fiscal decision given the economic condition of our state.”
But Miller is not throwing in the towel. “We will be offering cooperative amendments in attempt to eliminate or
reimburse all initial cost to the state,” Escudero said. “Lastly, we will also request that AB 4 (Miller) be removed from
off of Suspense.”
This bill would require the state’s Cemetery and Funeral Bureau to license and regulate, as specified, hydrolysis
facilities and hydrolysis facility managers, and would enact requirements substantially similar to those applicable to
crematories.
MBJ
800-228-6332 www.nfda.org

5. May 12, 2011 Memorial Business Journal 5
the contract.
Cremation is the greatest potential liability facing the death care industry, and without policies and procedures in place
a firm could face major problems. The following procedures are recommended to reduce risk of loss:
• Obtain a positive identification in the container the authorizing agent selected.
• The authorizing agents, those signing the authorizations to cremate, should be all the individuals of the same lineage.
• If the authorization to cremate is the same form that has been used for years, it might be missing a necessary disclo-
sure. Check to make sure the authorization is current with all necessary disclosures.
• How frequently you inspect the crematory that you are using is probably not as imperative as whether you know what
to look for when inspecting. Crematory inspection forms are available from different trade associations, but if you are not
trained to look for particulars you will overlook a major part of the inspection.
• Know what your crematory is doing with residue and medical metal implants.
• Cremated human remains that are returned to the funeral home should be kept in a locked and secured area accom-
panied by a current and accurately maintained inventory form.
• When they receive the cremated human remains from the funeral home, retain a signed receipt from the authorizing
agent along with a copy of their identification.
While other issues certainly exist regarding cremation, failing to implement similar guidelines could cost your firm ex-
ponentially. The guidelines must be created and performed to be effective. It is hugely important to enforce policies. For
example, you surely have a harassment policy in place. But, more importantly, is it followed? The guidelines you establish
must be carried out.
The computer and the internet are a major part of all business in today’s world, and they have exploded into a new cat-
egory of risk management. Your employees are probably on the internet during working hours. What sites are they visit-
ing? They might be on Facebook, a job search website, or even a porn site. Regardless of the website they’re visiting, if
what they are doing is not working then they are costing you money. And depending on what they’re looking at, it could
cost you more in harassment charges.
Again, these are just a few of the areas that firms must be cognizant of. Each firm should determine the level of risk
they are willing to assume. Many firm’s policies and practices occur as a result of a problem, not as a precaution to avoid
or prevent a problem. The idea of risk management is to reduce or eliminate the problem before it happens.
MBJ
Jim Starks is president of J. Starks Consulting, advises both funeral home and crematory operations and risk management. Starks,
a licensed funeral director and embalmer in Michigan and Indiana, has used his experience in both funeral home and crematory op-
erations and risk management, combined with his involvement with funeral homes of all sizes and geographies, to become an authority
at controlling risk and loss in the death care industry, providing lectures and presentations to private firms, as well as regional, state
and national associations. He also conducts private audits and risk assessments to independent funeral homes and crematories. He can
be reached at 813-765-9844 or jim@jstarksconsulting.com.
The Notebook
Matthews International has appointed Steven Gackenbach as chief commercial officer of its Memorialization Group.
In this newly created role, Gackenbach will oversee strategic marketing and business planning, national account man-
agement and marketing communications. He also will be responsible for Caggiati and Arrow, Matthews’ European and
Australian cemetery product businesses. Gackenbach will report directly to James Doyle, president of Matthews Memo-
rialization Group. Most recently, Gackenbach was senior director of strategy for the Kraft Foods Cheese Division. Dur-
ing his 18 years with the company, he held a number of positions of increasing responsibility, including the management
of flagship businesses like Kraft Mac & Cheese and Philadelphia Cream Cheese. Gackenbach holds a bachelor’s degree
from the Wharton School at the University of Pennsylvania and a master of business administration degree from Harvard
Business School. He will be working in the Pittsburgh Headquarters office.
Aurora Casket Company has named Calvin Toler as a strategic account manager. Toler has been a licensed funeral
director for more than 30 years and has worked with funeral firms across the country on merchandising and service en-
hancement. Based in Orlando, Toler will be responsible for business development and key account management through-
out the southeast United States. After beginning his career in family funeral homes, Toler has worked with some of the
most prominent names in death care, including Thomas-Pierce and Company, Batesville Casket, The Doody Group, The
York Group and Matthews International. He was part of the design team that created the York Merchandising System.
For additional information about Aurora Casket, visit www.auroracasket.com.
MBJ
800-228-6332 www.nfda.org

6. From the Editor’s Desk…
‘Is This a Good Idea?’ Memorial Business Journal
13625 Bishop’s Dr.
Sometimes I see or read something that causes that narrator voice in my head to Brookfield, WI 53005-6607
ask, “is this a good idea?” More often than not that when I have to ask myself this 800-228-6332
question, it is safe to say that I have already formed my opinion. or 609-815-8145
www.nfda.org
One item in particular I came across this week caused me to ask myself this ques-
tion. This week I read a news article about a concert that will be held at the Hol- Editor
lywood Forever Cemetery in Los Angeles on June 14-15. While offering diverse Edward J. Defort
usage of a cemetery property is undeniably a good idea, this particular event had (edefort@nfda.org)
some nuances that, for me, might have steered it off course a tad. First, the concert
involves the band, The Flaming Lips, whose live performances have been described Managing Editor
as “elaborate.” OK, lets go with elaborate. Dawn M. Behr
(dbehr@nfda.org)
But then again, Hollywood Forever is not a typical cemetery, nor does it pretend
to be. Graphics
Scott High
For these upcoming concerts, the band is offering a limited-edition sale of 300 (shigh@nfda.org)
candy skulls with a USB drive in the center that will include a live version of the
Gordon Nason
band’s song “The Soft Bulletin” and two music videos. To some this might sound
(gnason@nfda.org)
like an odd concept but don’t let anyone accuse The Flaming Lips of not doing
their marketing due diligence. There are some of the basic steps and questions to
ask yourself when contemplating and developing any marketing campaign. And just
before you think you are ready to proceed, test your campaign with a sample audi-
Memorial Business Journal is a weekly
ence. Testing will stop you from throwing good money after bad. Earlier this year
publication of the National Funeral
the band released a skull made of Gummy Bear candy that contained a USB with
Directors Association. The mission of
four new songs. All told, 500 copies of the gummy skull sold out, at $150 a piece –
this publication is to provide objective,
so it is a market-tested idea.
comprehensive news and analysis to all
providers and suppliers of goods and
While this might be an unusual example, the basics are the same for any idea.
services to the deathcare profession.
Who is the target audience? What is the message? What is the call to action? What
is the vehicle that will deliver this message? What are the anticipated results? These
Subscription Rates:
are some of the basic steps and questions to ask yourself when contemplating and
The Memorial Business Journal
developing any marketing campaign. And just before you think you are ready to
is a benefit for NFDA members.
proceed, test your campaign with a sample audience. Testing will stop you from
Non-members rates are
throwing good money after bad. Advertising and marketing are too expensive just
$199 for one year (52 issues)
to throw ideas at the wall and hope that something sticks.
$349 for two years (104 issues)
Several years ago, Q magazine rated The Flaming Lips as one of the “50 bands to
Unauthorized redistribution of this
see before you die.” I can only guess that scheduling a psychedelic rock concert in a
copyrighted material is unlawful.
cemetery will go along way to satisfying Q’s readership.
No part of this publication may be
reproduced by any means without prior
written permission of the publisher.
Contents © 2011
Edward J. Defort
NFDA Services Inc.
Editor
Stay in contact with
Memorial Business Journal
by becoming a fan on Facebook.
Follow us on Twitter
at MemorialBizJour
800-228-6332 www.nfda.org