Do Business Well

 

Compensation Concepts

Most honest individuals will put in a decent day’s work with little more motivation than a reasonable wage. You’ll probably want more than that from your people. I know that nothing tickles me more than to see an employee use his opportunity with our company to grow and prosper. However, to get these results, you must provide motivation.

The better you know your people the better you’ll know how to motivate them. There are certain key things you can do, though, that will result in employees consistently going the extra mile.

1. Appreciation. Horticulturists now believe that plants respond better to someone who really cares about them. If it’s so for the lowly flower, how much more important must this be for humans?

My picture of the job of manager is one who helps and encourages employees to live up to their own expectations and beyond. For me, that starts with my walk around the building after arrival each morning. I make it a point to seek out each person and wish them a good morning. I address everyone by name. This greeting may result in a few moments of additional conversation on subjects ranging from aspects of the job to their childrens’ success in the soccer play-offs.

The routine is repeated as the second shift arrives. And during the course of the day there are usually five more times that I walk throughout the facility. As I go, I try to find positive things to say about the work being performed. This is not to say that shoddy results are overlooked, but the emphasis is on encouraging good work.

Another aspect of these daily walks is to attempt to evaluate the overall performance of individuals. Are any of them showing leadership tendencies? Is someone ill suited to his current assignment who might do wonderfully at another position? Who are the troublemakers, the laggards, the undesirables? Who looks as if he could use cheering up?

1. Opportunities for growth and advancement. Most people are seeking to better themselves. They’d like to make more money and have more prestige. In motivating your employees you have a wonderful opportunity to discover talent and turn average workers into real assets.

Make it clear to your staff that you prefer to promote from within. I generally let new managers know that even my job is available if someone wants it bad enough to earn it. We’re constantly cross-training everyone to do related jobs. As each individual’s knowledge increases, so do his worth and feeling of self-esteem.

1. Spontaneous raises and bonuses. It’s important to me that I give a raise or bonus to deserving employees before they ask for it. Many workers, when anticipating an annual wage increase, will put on a strong showing just before the review. Once they’ve received their increase they commonly drop down in performance. If your employees know they might get a raise or bonus when they’ve shown themselves to be superior workers, they’ll likely show increased productivity all the time.

4. Piece work compensation. If you have positions in your company that lend themselves to piece work compensation, by all means use it. I’ve never had a bad experience with this approach when it was feasible.

In order for piece work compensation to be successful, the worker must be able to control the speed of production. At one point we were paying piece work rates for a task whose speed was controlled by the maximum output of the machinery. We were wasting money. On the other hand, I’ve had situations where we were paying $6.00 per hour to turn out three hundred pieces of work or $.02 per piece. No matter what we did to motivate these workers, we got three hundred per hour.

Then we went to piece work. We offered $.015 per piece. In no time at all we had several employees making six hundred per hour and taking home $9.00 per hour. Never once did I begrudge those $9.00-per-hour paychecks. I was saving 25 percent on my labor!

5. Performance bonus. A kissing cousin to piece work is a bonus tied to specific performance criteria. On several occasions, we’ve passed out a letter to each employee at the beginning of the month. In the letter we’ve indicated that we wanted to reach a certain sales level that month. We went on to explain that everyone in the company could contribute to our goal. Production needed to make enough; sales had to sell enough; bookkeeping had to keep up with the order writing, credit checking, invoicing, and collecting; purchasing had to stay on top of the vendors to ensure delivery of component parts; and everyone in the organization could be a bit of a nag with those who might be falling behind.

The final paragraph of the letter indicated the specific dollar amount of the bonus that this employee would earn if the team made the goal. We reached the goal 75 percent of the time. When we didn’t, it was close enough to be a big help. On one occasion, we paid, even though we were a few percentage points shy of the goal.

Put your imagination to work. Your specific type of business and work force will respond best to ideas that fit their personality.

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