6. Ignoring Your Employees

Use recruiting and retention methods that work regardless of the kind of person you can afford. There are just as many mistakes made by hiring an expensive person who can’t perform, as hiring someone without the experience or qualifications because recruiting them is too expensive. It is easier and less costly to develop internal management and key personnel then to go outside your company. In order to do that successfully, you must develop an effective process that is defined, tested, routine, and communicated to the targeted employees. Beyond defining training processes to the candidates, you must also define your expectations of them, what they should expect for themselves and what’s in it for them. That will allow you to develop the personnel who might otherwise choose to leave for a better opportunity with another company. However, do not promote someone who is great at a current job to a position for which they are not fully prepared because they will fail, and you will lose money and your valued employee. Typically, a truly performing employee should not have to be promoted to receive more pay. As described under “pay for performance”, a great producing employee could make more money than the manager who manages them. Remember, a manager is there to support those they manage and to nudge them back when their actions take them “out of bounds” of the company policies, job or business plan. If you have control processes in place, use your employees to “sell” the company; promote these policies on your website under employment opportunities inclusive of testimonials of current and past employees who benefited from these policies. Develop a rational business culture of communications that confront and coach coupled with a working pay for performance plan, and you’ll become a leader in recruitment and retention of valued employees.

Use Pay for Performance plans that work and sell others on your company. If your company is under control as defined by the previous 5 noted steps, you should introduce a pay for performance plan. I do not mean the plans that are Christmas bonuses, or subjective bonuses that become entitlements. You do not want your employee questioning what they got, why they received it, if it was enough, or if it is what they deserve. A true PFP plan establishes measurable standards attributable to the job the person performs with at least one of the measurements dealing with the link between what the person does and profit. If what they do is not measurable directly to profit, such as the accounting department, the timeliness and accuracy of what they do weekly and monthly is, as are evaluations monthly or quarterly by their internal customers in other departments. Ultimately the combination of values that comprise the bonus score is taken as a % of the pool created by the % of the company profit as defined as to what profit means, the pool available to the department or profit center, and the pool available to the individual by job classification. The PFP plan is a scorecard that shows the employee how they are doing periodically in measurable terms and money. Each company plan should be unique. Each company plan should incorporate standards that support the company goals of revenue, profit, customer branding, and internal culture. Each plan should be implemented when the company has successfully implemented the first 5 steps above. Do not begin unless the 5 controls are in place or the plan will fail and harm the company.

Include middle managers in senior management meetings. A development process for performing key staff is important. Regardless of the process, it is always useful to include non-management staff in appropriate business meetings to introduce them to the real process of managing the company. It gives them a sense of inclusion, an opportunity to learn, contribute and makes them feel valued. Of course, it is critical to hold a meeting that begins on time, has an agenda, involves participation by attendees and is followed up.

Listen to and respond to suggestions from the field and staff. Employees sometimes will state a concern or idea but there is no structured response to them. There is no response such as “great idea, good insight, won’t work and why”. The opportunity to coach the employee as to how the business needs to make decisions is lost. I recognize the issue of response is often about money…can’t afford it, not in the budget…or the like. However, the opportunity is to put the response into a “coaching/learning” moment, by explaining the need for a return on investment that is accountable to someone to do anything in business. In effect, if someone has an idea that can be measured as to ROI to an amount and timeline, and if the business is willing to take the risk, and the person managing the process or key to it (typically the one making the suggestion) is willing to “take the hit” within their pay for performance plan if it doesn’t work, then the company has the basis for making a decision to go forward with the idea. Conversely, if an employee suggests something that is beneficial to the company and has a measurable effect on the profit of the company or sales of the company, then the employee should be rewarded within the PFP plan or in addition to it based on the measurable gain to the company. In the end, it is ok to say “No” when the “No” is explained. It is important to let someone know that you listened by following up with the employee. It is the essence of good management, and it keeps the employee from “going to the well too many times and finding it dry” and “losing the emotional investment of trying anymore”. This of course is measured in lost productivity and profit/revenue loss.