Costly Employees

"Start with good people, lay out the rules, communicate with your employees, motivate them and reward them. If you do all those things effectively, you can't miss.."  --- Lee Iacocca
 

In a typical small business, labor is your biggest expense of the business.  The cost adds up when you factor in attracting ideal candidates, interviewing and orientation costs, training expenses, and compensation and benefits.  If so much is being spent on employees, why do we miss opportunities for continual development of talents and skills?  Why do we get so frustrated with employee retention efforts and keeping our team members' eyes on the ball?

In order to keep the employees you want to keep and create a better, more dedicated team, there are at least four things you can incorporate into your monthly schedule for 2013 that are painless and not too time consuming.  Be diligent in applying these and you should begin seeing immediate returns on your employee investments:

1.) Initiate true performance reviews.  No, not the annual forms that rate an employee from 1-5 where almost everyone is a 3.  Those have little value.  Instead, review every employee's performance (at least your top leaders if you have too many employees to review yourself) and personally and in confidence address any issues with the employee.  The reason for the performance meeting is to see how the two of you can help to improve the employee's performance.  Solicit feedback from the employee and together come up with a six-week plan addressing the particular issue.  Be sure to follow-up with the employee at the six week mark.

2.) Communicate employee's role.  This is a biggie that is usually overlooked in many businesses.  This simple process helps to eliminate headaches down the road.  Explain, in writing, what the role of the employee is.  Some call these job descriptions, but whatever you label it, make sure that the employee understands what his or her job is at the company.  Explain in detail how their job affects others and how what they are doing impacts the success of the business.

3.) Communicate your role.  Let your employees know what they can expect from you in terms of honesty, transparency, a good paying job, training, benefits, rewards for value added, etc.  This is another area some business leaders overlook.  Yes, it's true that they took the job assuming these things, but it is good, and necessary to remind team members from time to time about the relationship and what is expected of each other.  Leaders, as well as employees, become too relaxed in their positions and lazy in the relationship.  Communication will restate the reason for being at the company.

4.) Money IS a motivator.  Don't fall for the studies that say employees want more than money.  Of course they do, but they are working in order to make a better life for themselves and their family.  Reward your team members handsomely and especially after a value-added event.  Recognition, growth, personal development, purpose--- all of these are necessary, but money does motivate.  If you've hired the right person and want to keep him or her, pay them what they are worth to your business, and then some.