Today's world is far different than it was three years ago. Change is so rapid, the economic environment is different week to week. The job market has narrowed, and there may not be as much attrition, or employees lost to competitors, as there once was in the industry. Nonetheless, it's still important to attract and retain top-notch employees. Your staff is a reflection of your business to the public. What they say and do has a dramatic effect on the volume of your business.
As an example of just how dramatic, I heard a story a few years ago about an owner who promised his office staff a bonus if they hit a certain sales number. They were thrilled at the potential to earn more and worked hard during the next few months to hit the targeted number. Each month, sales rose, and by the third month, they achieved the sales goal. The next Friday, when the paychecks came, no one received a bonus. When they questioned the owner about it, he conveniently didn't have any recollection of the agreed number and produced phony documentation outlining a much higher sales goal. Needless to say, every employee put the brakes on and sent customers away for the next few months. Sales plummeted, and the entire staff quit when they found better opportunities.I calculated the numbers, and told the owner he lost about $60,000 in sales by not paying the bonuses as promised. The real kicker is that the bonuses were only $500 each. Three people worked in the office, so for $1,500, the owner almost lost his business.
Your people are your most important asset. Take care of them, and your business will grow.
Hundreds of pay plans and compensation methods have been implemented throughout the years. Innovation in compensation plans doesn't involve just paying someone more. That's difficult in just about any economic climate, especially this one. It involves interaction, conversation and the willingness to be flexible. Look at what you can do to create plans that reward employees fairly and in ways that are most meaningful to them.
Back to basics
Most employees still want some of what they've always wanted: recognition for a job well done, fair compensation, guidance, understanding and motivation. Think about your kids, friends and the people you know. When they do something well, they want others to recognize them for what they did.
Basic #1 – Recognition. Praise employees often for a job well done, and do it sincerely. When a tech repairs a vehicle well, tell him so. When you're reviewing receivables and notice they're clean, tell the staff you noticed and the thorough work is appreciated. You don't have to make a huge production to show your appreciation. Simply pull the person aside, and tell him you appreciate his effort. You won't believe the goodwill the gesture will foster.
Basic #2 – Conversation. Most of us pay our people local market value in which the average pay by position is often dictated by the competition in the marketplace. Doing so is unfair to the employer and employee because underperformers will earn a similar salary compared to those who perform at a higher level.
Familiarize yourself with the market and salary ranges by position by joining a local shop owner 20 group or something similar in which you can share ideas with other local shops. Check with local jobbers, too. They generally have a good handle on what's happening in your market.
Once you've determined what the average compensation is in the marketplace, think about what you can do to offer more. More isn't always more money. Have a conversation with your existing or prospective employees and ask them what's important to them in their daily lives. If you can arrange for people to have flexible hours so they can do the things they're involved with outside work, you'll build loyalty and attract the best.
This can be accomplished through conversation and compromise. Spend a few minutes with each employee and talk to them about this. Any consideration you give an employee in the form of flexible hours must be consistent with sound business decisions. You'll probably find a few small adjustments will reap large rewards.
Basic #3 – Be fair and keep your promises. Even though general compensation may be similar in the marketplace by position, it doesn't mean you can't or shouldn't reward employees who perform at a higher level than average with compensation that's better as well. The easiest way to do this is with an incentive, such as a bonus or increased commission for more hours produced, higher customer satisfaction scores, fewer comebacks or faster cycle time. Whatever key performance indicator you're looking to improve, tie incentive to it. Mix it up. Make it a contest and change the criteria every 90 days. Your staff will have fun, produce better results and make a few more bucks. So will you.
Instead of strictly more money, offer extra vacation days. If you offer a three-day vacation package, for example, don't make the employee use vacation time to claim the trip. Give them an extra few days. Just make sure the trip is taken during your slower times when you have coverage. You can control that easily, and it'll mean much more to the employee if you don't steal away coveted, much needed vacation days. Whatever additional compensation method you employ, keep your promises and deliver what you say you're going to.
Basic #4 – What about benefits? Benefits come in many different forms. Health insurance is probably considered one of the most important benefits, but it's also one that's rapidly changing. I recently heard only 40 percent of small businesses offer health insurance. That number is down from 60 percent from just a few years ago. This is in large part because health insurance premiums have skyrocketed. It's difficult to afford insurance that offers the protection your employees want and need. You have several options to choose from: standard plans, health savings plans and shared plans through larger human resources outsourcing firms such administaff. Talk with your employees frankly about this benefit.
I worked for a company that told me it was paying half my insurance premiums. I found out later I was paying the entire premium, and the company just told me they were paying half. I wasn't happy when I found out.
Always look at the highest quality coverage you can afford or that's available. Whatever you pay will be expensive, so it makes sense to get the best coverage you can. Most employees are willing to share more in the cost of good coverage than you might think.
The most important aspect is to get your employees involved. Ask them for their opinions. Provide them options, and as a group, choose the best and most sensible insurance coverage you can. If you involve your employees in this process, they'll be much happier with the plan than if you just pick cheap coverage and force it on them.
Basic #5 - Guide and motivate. You shouldn't ask someone to do something you wouldn't do yourself. You need to guide and motivate your staff by example. I was highly impressed by McDonald's CEOs and upper managers who spend a few days every year flipping burgers at a local McDonald's restaurant. This allows management to reconnect and understand what the average employee deals with daily.
From that perspective, it's easier to set policy guidelines. Once every six months, every staff member should spend a day with another shop employee as a mentor. Have your estimator spend a day with the CSR, or have your body tech spend a day with your estimator.
As a manager, don't forget what it's like to be on the front lines. Your expectations will become more realistic and position centric. By understanding what the job entails, you can offer direction and motivation better. If you jump in and help when it's needed, your staff will likely do the same.
As a supervisor, part of your responsibility is to handle multiple personalities and work with, and get the most out of, each one. Understand that compensation isn't just about what you pay someone; it's about quality of life and fulfillment and happiness on the job. Molding the environment in the workplace is a huge part of compensation plans.
Money is important, and your employees should be compensated fairly by position. But the intangible things that are overlooked often by many employers are more important. The most successful companies in the world go out of their way to take care of their most valuable asset. Keep this basic thought in mind, and your company will be one of these elite companies that stay afloat amid the changing economic environment.
