thepeopleplan

the People Plan- Solving Your People Pains

8 Questions to Ask- Compensating Key Employees

As your business grows beyond just a single owner in the role of general manager, you begin to build team of managers and senior professionals.

You find people who are willing to come onboard and help you build the business, and they are committed and loyal and hardworking. They came to work for your company for a paycheck but ultimately they would like to share in the success of the organization. Or perhaps you have a profit sharing/ bonus/ incentive plan that you offer now.

Many organizations design plans with the intention of rewarding key people with more than base pay, and every possible type of plan can emerge as a result.

As Dr. Phil has been known to say “how is that working for you?”

Here are 8 questions to ask about how you are compensating your key employees (count how many you can answer with “yes”):

  1. Do managers know exactly what they need to do this year to achieve the business goals (do they have a dashboard or scorecard)?
  2. Do managers know what the reward will be if they hit the results on their scorecard? (For example, if they achieve the goals exactly, what will they earn?)
  3. Is there a significant individual component to incentive compensation?
  4. Does the current reward structure emphasize long-term (5+ years) results/ metrics (more than just annual ones)?
  5. Have you gathered official data in the last 18 months to check if current base pay and annual incentive is “market competitive”?
  6. What is the perception of your compensation including incentives—is there a meaningful reward for exceptional results? Is it considered “fair”?
  7. How have you designed a plan that uses the different levers (base pay, short term incentive, long term incentive and benefits) for the highest value to employees, the best alignment with company goals, and the lowest post tax payroll cost?
  8. Have you built any mechanism to use compensation for future plans- owner retirement and/or ownership transition?

If you answered YES to at least 5 of those questions, I would suggest you have a well designed and possibly effective “pay for performance” program for your key employees.

If you only answered yes to a few or several answers are “sort of” you are not alone— we work with many very successful small companies that have outgrown their rewards programs and are challenged with each of these issues. (Some are $50 to $500 million in revenue!).

The good news that you can leverage the impact of an effective Total Rewards program, and this will align compensation with business results and be designed for future growth.

Email us to find out about our systematic 5 phase design process that customizes a solution for your unique needs, and can be ready in about 6 months.

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Filed under: Compensation, Engagement, Recognition & Rewards, , , ,

12 No Cost Ways to Reward Your Employees

The beginning of a new year and also that time of year when employee thoughts turn to… (well on the East Coast everyone is thinking wistfully of spring) “When am I going to get a pay increase?”

Thanks to 50 years of prosperity and a small dose of influence from union contracts, the American worker has been conditioned into thinking (expecting) that they will get a regularly schedule raise in pay in January. The legacy of 20 years of consistent pay practices lives on.

I don’t need to rehash the economic news of the last 6 years, but pay increases since 2008 have been well below the former 3% standard set by the prosperous years, and wage freezes and 18-24 spans between increases are fairly common.

If you are smaller employer or one who has limited profits to continually raise your payroll budget 3% every year, how will you possibly attract great people and retain your top performers?

The good news is that you actually have 12 non-financial ways to reward your employees. Here is a list with some possible solutions.

1. Voluntary (employee paid) benefits—many employers now offer the option for employees to purchase additional benefits at their own cost. The employee typically receives a lower cost for the coverage and it may have tax advantages.

Solution- insurance plans- dental insurance, long term disability or life insurance

2. Work itself– the number one factor in job satisfaction is a sense of achievement. Ask employees how you can improve their work with more variety, sense of purpose or meaning, and challenging assignments

Solution- give your high potential employee a project to manage

3. Autonomy— show of hands- who likes to be micromanaged? Anyone? If you train someone and give appropriate guidelines you can trust the work will be done as needed.

Solution: consider the last 5 questions that someone “ran by you” – is there nugget of wisdom you can share so that you do not have to be consulted or are you just being the chief problem solver?

4. Work load— are you overloading your best performer because she will always take on more and get it done? Does this sound like a recipe for burnout?

Solution: ask your busiest person what you can take off their plate, and then create a plan to do this immediately

5. Resources one of the top reasons people leave their job is because they do not have the tools to do the job properly

Solution: have a meeting to list out hassles and pick the biggest time waster to that inexpensive resources or tools will improve

6. Reliable coworkers– If you have ever worked with someone is who not pulling their weight, then you know how this can make you hopping mad. People have one of three responses: work harder and put up with the slacker, work less so that you don’t feel taken advantage of, or look for another job. If you allow lower contributions you are actually driving out the good performers. And then you are left with the lowest ones.

Solution: If you know who is your weakest link do not wait to have a crucial conversation (see feedback below). Sometimes you have a sense someone is not doing their best but others cover for that person so you don’t know the full extent of the gap. Also allow confidential opportunities to get this feedback from your team.

7. Performance discussions- Yes everyone hates the “performance review,” but on the flip side employees want the opportunity to talk about their role, aspirations and to be appreciated for all their hard work.

Solution: change up your process- stop focusing so much on putting a numerical rating on last year, and more about how the last year provided insights for how to reach goals for this year. I when I say goals I mean how the employee can reach his/her goals within the job.

8. Feedback- Employees expect you to tell them right away if they are not meeting expectations. And they should expect that you deliver this feedback in a positive and constructive manner.

Solution: If you are not comfortable delivering constructive feedback then I suggest reading a few books (101 Tough Conversations is a good start) and then starting small. Trust me, your other employees will thank you for finally have those crucial conversations.

9. Recognition- Timely and targeted public praise is only the cheapest and most powerful reward tool a manager has. If you don’t know what to recognize then you need to sit down and make a list of what behaviors will reach your organization’s goals this year.

Solution: Be on the lookout for a person that did something terrific that is on your list of things to recognize, and publicly praise in your weekly team meeting (you have one, right?)

10. Training and development– Most people want to feel that we are “good” at our job and will be frustrated or demoralized if something is too difficult. A lack of challenging work is also a main reason people look for another job, so you may want to continually upgrade the knowledge and skills so that people don’t get bored. It’s a win-win- employees feel valued and broaden their knowledge and capability, and now you have an employee who can contribute and perform more.

Solution: employees may not be open about their so you want to ask find out what training would dramatically improve performance or if they want a new challenge.

11. Opportunity for Advancement– Surveys show that about half of employees feel there is not a chance for promotion at their employer. For the generation Y who will comprise almost half the workers in the US, a clear career path and opportunities to advance is the top reason for job engagement.

Solutions: If you want people to be loyal, committed and willing to go above and beyond (aka engaged), identify and share the “next” job (not necessarily in management), the change in duties and responsibility, and a training plan to develop into that role.

12. A great boss (I mean coach)- as the saying goes, people leave supervisors, not companies. If you feel unappreciated, criticized, or just plain frustrated by your direct manager you will consider looking for a new one. Coaches are clear about the goals, deliver feedback and train in a positive supportive and appreciative way, and focus on improvement.

Solution: There are so many books and training on how to be a coach and not a boss, but it might help to ask some of the employees you trust where you should work first. We all have blind spots and perhaps a few key changes will dramatically change how you are perceived and the impact you make.

Want to learn more about how to use Total Rewards to attract, engage and retain your best teammates?

Register for an upcoming lunchtime webinar: “13 Total Rewards For Employee Satisfaction — It’s More than Pay!?”

Filed under: Engagement, Recognition & Rewards, , , , , , , , , , , , , , ,

Engagement Driver #4- Development Opportunities

Our prior article “What Drives Engagement?” listed the top 10 engagement drivers.

Three areas impact employee perceptions of available development and career opportunities (category 4):

1. Enjoy challenging work assignments that broaden skills

2. Improved my skills and capabilities over the last year

3. Have excellent career advancement opportunities

Many people are comfortable and happy in their current job and do not wish to take on additional responsibilities.

Others crave challenging work and the opportunity to learn and grow. A key component in keeping the second group of employees at your organization is to figure out how to meet these needs.

If you are small business, you usually do not have a “career paths” or a training department. However, you have many informal opportunities for additional development—these include cross-training, job enrichment, project assignments, and team lead opportunities.

It is always best to have a “back up” for each role– and developing someone as a  backup cross-trains another team member and gives a sense of skill development. Job “enrichment” means learning a bit deeper or broader on current tasks, such as increasing knowledge of accounting principles or equipment repair. We can always learn more about the work we do.

Even if your organization does not have “layers of management,” some employees are interesting in a newly emerging role of team leader. Team leaders are the “go-to” people who peers ask for help or to get another opinion for a decision. They often assist managers with routine supervisory tasks such as scheduling, assigning specific work, compiling reports, and side by side skill training. You may have someone now that is informally in this role.

Three steps you can take NOW to improve employee perceptions of development opportunities

  1. Think of one project or ongoing task that would be a stretch assignment for a team member, and delegate to someone with the competencies to accomplish.
  2. Spend 30 minutes one morning each week meeting with a team member to discuss “What skills or knowledge do you want to develop in the next year? How can this be accomplished?” Then create a timeline and action plan to achieve.
  3. Identify and start developing a team leader: If you have a great performer with interpersonal skills and a desire for additional responsibility, start with delegating a routine team task (scheduling, weekly project report, train new employee). If this person continues to grow in this role, create a team leader position with specific responsibilities and coach to achieve.

Two articles for more reading

For a source of stretch assignments, read our People plan article: “Too busy to delegate

Inc Magazine article How to Tell If Your Employees Are Bored

Filed under: Development, Engagement, , , , , , , , ,

Engagement Driver #3- Employee Relationship with Supervisor

Our prior article “What Drives Engagement?” listed the top 10 engagement drivers.

Two areas impact employee perceptions of  their relationship with the supervisor (category 3):

1. Good relationship with supervisor  

According to author James Robbins in his book “9 Minutes on Monday,” trust is the key component in a good relationship with your direct reports. He suggests a weekly “walkabout” to spend a few minutes talking informally with one team member to discuss something personal (not about work!) to show that you care.

2. Input into decision-making in my department

You don’t have to abdicate a decision to employees to get their input and improve their perceptions of “having a say.” Read our related post about “Total Reward #5 Autonomy” that shows a graph of the continuum of decision-making involvement

Three steps you can take NOW to improve employee perceptions of their relationship and role with (you) their direct manager:

  1. Schedule a time each week to do your “walkabout” to chat about the personal life of one employee.
  2. Find one moderately important decision you need to make soon, hold a meeting where you outline the issue and ask everyone to give input, discuss the ideas without “shooting them down” (you can share your thoughts and why you are considering this approach), and be sure to thank everyone for their contributions.
  3. After you have made the final decision, communicate this with your reasoning, again with recognition and appreciation for everyone’s input.

Article for more reading:

How to be a Better Boss in 2013 by leadership expert Jack Zenger (great tips here based on study of thousands of managers rated by their employees!)

Filed under: Engagement, Leadership, Recognition & Rewards, , , , , , , , , ,

Engagment Drivers #2- What is Valued?

Our prior article What Drives Engagement? listed the top 10 engagement drivers.

Two areas impact employee perceptions of what the organization values (category 2):

#1. “(My boss) sets high personal standards”

  • Share what excellence and success looks like in their job (do you have any key performance indicators to discuss/ share/ track?)
  • Hold everyone accountable to do their job to expectations (including yourself- walk the walk)

#2. “Organization encourages innovative thinking”

  • Listen to new ideas and process suggestions, thoughtfully consider and discuss the viability of the idea

Three steps you can take NOW to improve employee perceptions of work standards and innovation:

  1. Regularly discuss work load and priorities, find out if team members have the tools and information to complete their tasks, and invite updates to re-direct if things aren’t on track
  2. Manage by results, not micromanage the process—this allows your team member to come up with a different (and often better) way to achieve the same outcome, then occasionally have staff share their methods with others doing the same task
  3. Ask your team- “What is one thing that could be improved for better customer service or to reduce a big hassle?” Then outline an action plan, assign tasks with deadlines, and revisit at your weekly meeting to implement this innovative improvement

Two articles for more reading:

It’s a fine line between setting high standards and being demanding. Read what NOT to do on Forbes: 10 tips on for dealing with an overly demanding boss

For tips on getting more practice at innovative thinking and turning into a habit, read “Innovation Is Everyone’s Job” on Harvard Business Review

Filed under: Engagement, Performance Management, , , , , , , , , ,

What Drives Engagement?

Top ten global engagement drivers

You have at least met (if not work with) someone who is NOT engaged– they show up and barely do the job.

What can be a delight for co-workers and managers is someone who is “actively engaged.” Engagement is when an employee expends discretionary extra effort in their job— studies show that about 20% of US workers fit this category but some organizations have more than 40% engaged workers.

What influences an employee to go “Above and beyond?”

I have grouped them into four categories and will discuss suggestions for improving these (see number 1 below) with future articles.

1. How the organization treats people

  • Senior management sincerely interested in employee well-being
  • Organization’s reputation for social responsibility
  • Organization quickly resolves customer concerns

2. What is valued at the organization?

  • Set high personal standards
  • Organization encourages innovative thinking

3. Employee role/ relationship

  • Good relationship with supervisor
  • Employees feel they have input into decision-making in their department

4. Development and career opportunities

  • Enjoy challenging work assignments that broaden skills
  • Improved my skills and capabilities over the last year
  • Have excellent career advancement opportunities

(Source : Towers Watson study of the global workforce, Closing the Engagement Gap)

Many managers may be surprised that social responsibility and how customers are treated impacts employee performance. But employees are always considering not just how they are treated, but also how others are treated, and want to take pride in their employer and the organization’s decisions and direction. (For example, I have a colleague who begrudgingly took a job at a local company that is under investigation by the DEC for polluting the neighborhood, and she is not exactly “proud” to promote her new position.)

Three steps you can take NOW to improve employee perceptions of how people are treated:

  1. Spend 10 minutes once a week going around to exchange “small talk” with employees, finding out more about their lives outside the office and what is important to them (bonus points if you know names of kids, grandkids, and pets as well as favorite hobbies)
  2. Ask your key team members to suggest one way the organization can improve social or environmental responsibility, and then implement this idea
  3. Decide one way customers requests can be fulfilled more quickly or conveniently.

Thanks to Terry Williams of the Brain Based Boss for alerting me to this interesting research.

Filed under: Culture, Development, Engagement, Strategy & Alignment, , , , , , ,

Quick recognition template

Our recent blog post showed that employees desire more appreciation and recognition, so here is a quick template for you to develop your own semi-formal recognition program.

(If you involve your team members in the development process, we will give you bonus points).

•List 3 ABC’s (ABC- attitudes, behaviors and contributions) that would improve your internal team work
•List 3 ABC’s that would improve your customer care
•List 3 ABC’s that support your organization’s core values
•Communicate list of 9 ABC’s to your employees (team meeting? poster on the wall?) and what you plan to do with it
•Make a list of when you can recognize at least one employee publicly for demonstrating one of these ABC’s
•Invite team members to recognize each other when they witness an ABC
•Take one minute to recognize an employee privately if you witness a great ABC
•Schedule and recognize based on your plan

Filed under: Engagement, Recognition, Recognition & Rewards, , , , , , , ,

What Managers Think Employees Want

In a study by the Labor Relations Institute of NY, managers selected what they thought employees valued most, and then asked employees what they valued:

Manager /Employee rank- Job Reward      

  • 1/ 5- Good wages
  • 2/ 4- Job security
  • 3/ 8- Promotion and growth
  • 4/ 9- Good working conditions
  • 5/ 6- Interesting work
  • 6/ 7- Personal loyalty to workers
  • 7/10- Tactful discipline
  • 8/ 1- Appreciation for work done
  • 9/ 3- Sympathetic help with personal problems
  • 10/2- Feeling “in” on things

You can see that the TOP 3 for employees were listed as the BOTTOM 3 in the eyes of managers. Hmm.. I wonder how much time and effort these managers put into these “bottom” rewards if they consider such each a low priority?

As a specialist in compensation, we regularly visit prospective clients who are convinced that their organization needs to pay more to attract, retain and motivate their team members. (And some of them do indeed have issues with pay below the market or internally inequitable.)

However, if your pay is fair for the work you expect and compared to others in your organization, one of the best investments you can make in building a terrific team is with recognition.

Recognition is practically free and creates an immediate impact such as:

  • reinforcing company values
  • aligning employee efforts to achieve organizational results
  • appreciating specific employee efforts (then they continue to do these)
  • modeling what ABC- attitudes, behaviors and contributions are valued (others start doing these)
  • creating a positive work environment and culture (as more employees demonstrate the desired ABC’s and are recognized for them)

(Manager Survey Source: Foreman Facts, Labor Relations Institute of NY, 2004)

For a Quick recognition template view our 4/23 blog post

Filed under: Compensation, Culture, Engagement, Recognition, , , , , , , , ,

Total Reward #13- Supervisors

Supervisors—you can’t fire yours, but you certainly can leave them…

The topic of the supervisor- employee relationship has been researched and written about since “industrial psychology” started as a field. A recent book title summarize the importance of this dynamic in retaining and engaging employees, “People Leave Managers, Not Organizations.”

How many times did you come home from work and shared your frustration with your manager to friends or family? If this continued, was this a factor in a new job search?

Okay, you say, good supervisors are important, but what is the real impact of a great one? Perhaps you have a few good ones, and few okay ones and only one that is really struggling to connect with her staff and/or achieve important results.

Consider these findings from Zenger Folkman group (see charts below):

  • The best leaders had more than twice as many committed and engaged employees
  • The worst leaders had more than four times as many employes thinking about quitting
  • The best leader’s team had almost twice the customer satisfaction levels
  • The best leader’s team in a sales study had almost 10 times (!) the sales compared to the worst leader’s team and about 50% more than the average leader’s team

What makes supervisors “multipliers” or “diminishers”—read Zenger Folkman article that lists the key “fatal flaws” of managers

Filed under: Engagement, Recognition & Rewards, Total Rewards Series, , , , , ,

Total Reward # 12- People

I remember a Seinfeld episode where Jerry and Kramer pretended to be a traditional couple “How was your day, dear?”
Yes, they mocked this but how important are the People experiences to your day at work?

If you had a “bad day” it is often because of the people experiences you had—you had to assuage a difficult customer, a subordinate made a poor decision or behaved badly, a team member did not complete his part of the project and you had to do more work, your supervisor or co-worker was grumpy or critical, or you had to deal with petty politics.

Your day to day experiences with customers, managers and your team and the climate and culture of the office can be motivational or sapping to your energy.

Our firm’s founder Dr Jerry Newman found that social interaction was a key indicator in job satisfaction and retaining good workers in his book My Secret Life on the McJob. In fact, he found that many teenagers stayed at their fast food job even after college graduation partly based on the great camaraderie they felt at work.

A recent Gallup poll found that if someone had a “best friend at work” they reported more positive perceptions of their job, including much higher ratings of recognition, development, co-worker reliability, job importance, and achievement factors.

McDonald’s is leveraging the importance of what they call “Friends & Family” to attract employees.

According to a recent article by our firm’s founder Dr. Jerry Newman and McDonald’s Executive Vice President and Chief Human Resources Officer Richard Floersch, McDonald’s actually has very high employee perceptions of their people experiences in their job.

Reward/ Percent Who Love This About McDonald’s:

  • Culture 82%
  • Teamwork 80%
  • People I work with 78%

Filed under: Engagement, Recognition & Rewards, Total Rewards Series, , , , ,

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