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Workforce

Author: David Teplow

Posted on March 17, 2000July 10, 2018

Recognition and Rewards Help Motivate and Retain Talent

Much of your corporate culture is reflected and reinforced through your compensation plan, and, more specifically, your bonus program. Traditional salary does not fully reward employee commitment. A reward system is needed to demonstrate to employees what’s in it for them.


To get the best performance from employees, a significant percentage of their salary has to be in their control. At my former company, Database Technologies, 20% to 30% of compensation was based on performance, which is well above the industry average. Employees were rewarded well for their hard work, as they should be.


Having a highly variable compensation plan helped attract the best employees. Employees who looked only at salary would go elsewhere, since our base salary was below the industry average. Those looking at total compensation, however, would be attracted to Database Technologies, since it exceeded the industry average.


Employees were also compensated for intangible contributions to the company, such as teaching courses and writing white papers. All employees were rated each quarter on a scale of one to five, with five being worth an additional $2,000 per quarter.


It was important to reward employees not only for the quantity of billable hours they provided, but for the quality of their work. All clients were given satisfaction surveys to fill out. Those employees who received high marks from clients became part of the Quality Club. Each year, the entire Quality Club was invited on a company cruise. The cruise was top-shelf all the way, and talk about work was forbidden.


Recognition should be used to complement rewards. Positive reinforcement is the most powerful and effective behavior modifier known. Every manager should know when and how to apply it. It should not be limited to job performance reviews.


When managers and employers recognize employees for the good things they do, constructive criticism about the things they do wrong will be accepted more readily. In general, I try to make four positive statements to an employee for every negative statement I make, but, of course, praise must be earned. Undeserved praise is rightly perceived as being insincere and undermines the impact of more appropriate positive reinforcement.


Rewarding employees pays dividends, and can help your company attract, motivate and retain high-quality employees.

Posted on March 16, 2000July 10, 2018

Trust is a Must, But How Do You Earn It

If you want your employees to trust you, you must trust them.


As simple and obvious as that premise may seem, it is violated in workplaces across America every day.


A lack of trust is often reflected in seemingly minor acts, such as locked supply cabinets or a policy requiring a note from a doctor when someone is out sick. Such actions set people up to deceive you.


Recognizing that employees sometimes take sick time when they are not sick, we eliminated sick time at my former company, Database Technologies. Instead, everyone received four weeks of vacation. We told employees: “You’re adults. You determine when you will work.”


We also gave employees a great deal of autonomy, rather than establishing layers of management to tell them what to do. As Robert Levering once said, “Bureaucracy is a manifestation of distrust.” Bureaucracy is a way of checking up on people.


In addition to showing employees that you trust them, you must also gain their trust by telling the truth and keeping your promises. Don’t schedule meetings for which you do not plan to show up on time, and avoid canceling or postponing meetings when at all possible. Be careful not to exaggerate, too. For example, don’t tell employees revenues grew by 55% when they grew by 45%.


Trust is a two-way proposition. If you want trustworthy employees, you must be a trustworthy employer.

Posted on March 15, 2000July 10, 2018

Investing in Retention Can Save Money

The success of a cutting edge high-tech business often depends more on attracting and maintaining a qualified workforce than it does on finding new business.


In high-tech businesses, turnover averages 30 to 40 percent! Human resources experts estimate that it costs four to five times an employee’s salary to replace the employee, including search fees, lost time, retraining and other costs.


When a third of the workforce leaves each year and it costs four times an employee’s salary to find a replacement, more money is spent replenishing the workforce than is spent on salaries for the existing workforce.


So what can an employer do to improve employee retention? The following are among the elements a successful retention strategy might include:


  • Hire carefully. A job candidate with the technical skills you need is not enough. Consider whether the candidate shares your company’s vision and will adapt to your workplace.
  • Communicate. Ongoing two-way communication with employees is essential.
  • Recognize good work. Don’t wait until the next job performance review to tell your employees what a good job they’re doing. Provide positive reinforcement on an ongoing basis. Try to be positive four times as often as you make negative comments.
  • Reward good work. It is much more cost effective to reward employees for good work than it is to recruit new talent. Make a significant percentage of your compensation package variable, so that both you and your employee benefit from high-caliber performance.

These are just a few of the elements that should be included in a retention strategy. It takes a great deal of effort to develop staying power, but if you have the right employees, it’s worth the effort.

Posted on March 12, 2000July 10, 2018

A Clear Vision Will Help Attract, Motivate and Retain Employees

If your employees don’t know what you hope to achieve, they can’t help you achieve it.


Conversely, a clear vision will challenge and excite your employees. Your vision must be something you and your employees believe in not just intellectually, but emotionally.


In addition, it should reflect an understanding of your core ideology, what you do better than your competitors and how you can make money with it.


Disney’s vision, for example, is, “To make people happy.” Merck’s is, “To preserve and enhance human life.” These are great examples of successful corporate vision statements, but the best example I’ve seen of a grand and noble vision was President Kennedy’s vision for NASA’s space program. President Eisenhower’s vision for NASA was, “Maximum capability in space.”


It was succinct, certainly, but not inspiring.


Compare it with President Kennedy’s vision: “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.” His vision had a measurable goal and a timeline for achieving it. To hear him state this vision, which he did often during his administration, is to be inspired.


A vision statement is just part of how a company defines itself. Every company should have not only a clear vision statement, but a mission statement and a values statement. What is the difference between the three?


Your mission statement defines what game you’re in. Your values statement defines the rules of the game–at least the way your company will play it. And your vision statement defines how you plan to win the game.


A company that fails to define itself clearly lacks direction, and so does its employees.


 

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