The Newsletter dedicated to Managers and Business Owners

6 Keys to Highly Profitable Employees

Are Your Employees Stealing from You?

Probably not… at least in an obvious or intentional way.

But, statistically speaking, they most likely are by “under-performing” at many aspects of their jobs, and that costs you big-time!

Research shows that if they aren’t really loyal to you, they may be costing you as much as twice what you’re paying them.

To guide you in your challenge to motivate your team, we have turned to “20 years of management experience” to get the answers for you.

Here’s the success factors we know to be effective (and have verified) to stand the test of time…

1. YOU must create an “Atmosphere of Respect and Trust”.

One of the most important factors, in whether or not a team member is producing, is how “engaged” they are in their work.

A study done by George Mason University said that an employee’s greatest concern is whether or not they are “contributing”.

In other words, their greatest internal need is to feel that they are contributing something toward some “greater cause”, and that they get recognized for it.

By creating an atmosphere where you value their opinion, they will blow you away with some of the great ideas they can come up with. It’s like pulling the cork from the bottle.

The ideas will flow from any individual who knows you actually value their opinion. But… they won’t know unless YOU ask. That’s the key.

Every employee on your team will be much happier working for someone that listens to them. Take the time to… listen. There are no exceptions to this rule.

2. Measure and Track Employee Performance

“What you Expect, you must FIRST Inspect”. Read that again, because this one simple task will greatly determine how successful you will be as a manager.

Simply measuring employee performance has been proven to increase output by no less than 10%.

So, if every one of your staff were operating at 10% more output (or greater), what would that mean for store revenues, and your future pay raises?

Here’s an Example: If you have 100 employees and you increase each employee’s performance by only 10%, you will in effect have added 10 employees without adding one more dollar in payroll. The managers that accomplish this are your company’s future leaders. Imagine your profitability when this happens. Would that effect your salary, or annual performance bonuses? You bet!

The key here is to define what the important measures are, and then setup a system to track them. Measure your current numbers and add 10% for a baseline of what you expect.

What if you want to decrease the time it takes to get a task done by 10%? Watch someone do it, and then show them how to reduce the time to accomplish that task.

Our company has spent many thousands of dollars learning Kaizen (Japanese term for “continuous improvement”). Over the years, by investing in learning how to be more efficient in everything we do, we have been able to constantly improve our processes.

If you’re interested in improving your chances for success, I recommend the book “Becoming Lean” by James P. Womack as your start. Get the book, read it, implement it, and you’ll be one of most successful managers in your company… Guaranteed!

3. Know the “Strengths” of Each Employee

Knowing what your team member’s individual strengths are can enable you to position employees where they will give you the best return.

Also, people are ten times happier doing things they are good at.

All our lives we’ve been told to work on our “weaknesses”. But imagine how productive we would be if we only had to work with our “strengths”.

Note: If an employee excels at a particular task, let them teach that task to others. “Play to people’s strengths”. Let them shine.

4. Create “Systems” for Consistency

Many times, when someone does a poor job, we like to come down on them hard.

Sometimes we blame them for something that they just didn’t clearly understand. That’s our fault.

Michael Gerber, the great business coach, said that “if you ever have a poor performer in your store, look first at the system and not the person”.

If your systems are solid enough, there will be little area for employee error. Case in point: McDonald’s hamburgers are the same in New York as they are in Los Angeles. That’s a “system”…

“Systems Create Consistency”. Endeavor to make every aspect of your store into a system. Then, if one employee leaves, another already knows how to do their job. That also protects your company from “coming to a screeching halt” when someone is gone.

5. Know How to Hire, Know When to Fire

It’s been said, “Hire slow, Fire fast”.

One of the largest expenses in an organization is training new hires. It’s the same for every company.
Add to that the money that you lose by keeping a poor performer and you’ve got some serious profit losses coming your way.

When looking at your hiring process, always keep in mind that a miss-hire is typically 10 times more expensive than their pay and training costs.

The time costs and money paid out to everyone else involved adds up to much more than we typically account for. Know what those costs are.

6. Employee Recognition

This is the reason we are in business, so you would expect us to be biased towards this. Yes, we actually believe in it so much that we do far more than the average company. We currently have 36 employees, and we recognize three employees every month. That’s one employee “singled out” and recognized (once per month) for every twelve employees we have. So, how’s that working for us? We just finished 2008 with a 42% sales gain over 2007. Recognition works!

We all like to be recognized when we do a good job or “go the extra mile” for our employers. It’s a basic human need that we are born with.

That never changes.

Remember the last time your boss overlooked what you did? How did that make you feel? Remember THAT anytime you are considering whether or not to reward someone for a job well-done.

A few minutes of your time can mean the world to your team members, and to your bottom line.

Also, remember to always reward them based on the numbers that you get by tracking and measuring their performance.

This will allow you to avoid the “popularity contest” mentality of recognition, and your team will respect you more for being objective in your praise. Popularity isn’t a factor in whether or not an employee does better than another. Remember, “Reward what you want more of”. This is the key to effective employee recognition.

NOTE: We are doing everything we have suggested for you to do in this short article. It works if you will only implement it.

Thank You

I just want to say “thank you” for another great year of being our client. Our relationship with you literally means the world to us. Without you we would be nothing, and if there is anything we can ever do to make your life better please let us know. You and I are just real people trying to always do the best we can, and together… maybe we can make the world a better place.

I hope you enjoyed this article and I want to wish you a happy new year. Finish out 2008 with style and friendship, and I’ll see you on the other side.

To Your Success,

Josh Long