This blog post is our second article in a series on Employee Management. Our first article was concerned with Hiring and Onboarding the Right Employees. In contrast, this article focuses on retaining them and turning them into your most significant asset once you have them on board.
Before you can set goals for your employees, you need to set goals and objectives for the business. For a business, you should have a 3-5 year strategy with a list of items over each year that have to be done to obtain your goals. You then must determine the goals and objectives you need each of your employees to meet to help meet the business's overall goals. They need to be quantitative so that you can measure them as well.
You want to reduce your accounts receivables from 90 days to 30.
Your accounts receivable clerk will have a role in this by possibly putting processes in place to collect earlier.
Your salespersons may have a role to play and follow up with the client or visit them.
The goals also should not be self-serving and need to be achievable. You need to make sure you are looking after your employees as well. One way might be that you have a goal for them to complete a course that will help them in their job. This not only helps the business but also helps the employees. Also, do not overload employees with too many goals to meet in a year.
The goals must be documented, written down, and part of the employee's permanent record.
Managing Goals and Expectations
Whether the owner or a manager, the individual managing the employee should not just set the goals and then check back in a year and expect them to have been met. The manager should meet with the employee monthly or quarterly to understand where they are and any obstacles in the way of the employee completing the goals.
If there are issues with an employee, the manager must address them at the time of the problem and document them. It is up to the manager to help the employee resolve any issues. This could be from a performance problem to a behavioural one. As an employer, you are taking a chance to eliminate a problem employee without discussing the issues with the employee when they happen. This could cost the business if the employee seeks legal counsel and it has not been seen that help was offered to the employee or there is no proper documentation.
Annual or Quarterly Reviews
It may be dependent on the business on whether you perform reviews on a quarterly or annual basis. If you are in a fast-paced company where changes need to be made quickly, such as high-tech, you may need quarterly reviews and set the goals accordingly.
Reviews are a two-way street. At the time of the review, the employee should rate how they think they performed on each goal set and the manager. In addition, the employee should be able to provide feedback to the manager without repercussions on the support they were given to help them. There should then be a meeting with the employee to review both sides and provide positive and constructive feedback to the employee. A final document incorporating the two should be completed and put in the employee file.
Performance Management Summary
If performed correctly, performance management can be an integral tool for the success of your employees. Most employees want to work hard and do well for their employer, but it is up to the employer to set the direction for the employee. They have to know what the expectations are and what they are working towards achieving. Employees will be more motivated if they feel that they are all working towards a common goal.
Meetings in a business need a purpose, and employees should not meet just for meeting as that is a waste of everyone's time.
Businesses that thrive share crucial information with their employees as everyone is on the same wavelength. This information mainly includes company direction and strategy and go-forward goals. Employees want to feel part of the business and not just work to help improve the owner's wallet size.
Depending on the business, sometimes all employees can't participate for an hour or two and be away, but it would be good to record the meeting for anyone who cannot attend, so they feel connected.
I worked years ago as General Manager of a small business that a large corporation purchased. The employees were demotivated, and morale was in the toilet. They didn't feel they had a voice or were taken seriously, and most employees had been there for over ten years before the purchase. We started quarterly meetings where we discussed the last quarter and things that went right and wrong, including what needed to be done the next quarter. We did it in the morning, provided breakfast, then had a group team-building activity and provided awards associated with incentives that we will discuss later. The meeting lasted around 1.5 to 2 hours. The employees' morale went from 0 to 180 degrees within a few quarters. You saw smiles on the employees' faces versus frowns, and they felt again like they were a part of the business and were important.
Management meetings with the owners and the key members of the business should meet monthly. Before the meeting, the members should provide status reports (red, yellow, and green). There should be no interruptions for that period which should be no longer than an hour, and there should be an agenda. There may be management in some businesses; in others, 2 or 3 owners meet.
The owner should be driving the agenda for the meeting, such as reviewing business goals, financials, budgets and issues.
Manager Team Meetings
Depending on the team will determine how often the group should meet. For example, a sales team will most likely need to meet weekly, whereas other teams in the organization may only need to meet once a month. As with management meetings, there should be an agenda and a set time limit for the meeting without interruptions.
It is essential to have meetings within every business to review and discuss goals, accomplishments, and issues and determine solutions. One should never have meetings and waste time for the sake of having a meeting. If nothing is on the agenda, either cancel the meeting or reduce the time.
EMPLOYEE ENGAGEMENT & REWARDS
There is nothing better than having employees that are engaged in the business. Engaged employees tend to be those that are retained as well. Nothing is worse than going to work, sitting at a desk from 9 to 5 without interaction and drawing a paycheque. Those employees, over time, become apathetic and will do the minimum they need to get paid, and that is not what an owner should want out of one of their greatest assets.
Employers mistakenly believe that the only thing that is important to employees is money. In fact, for most, it is about job satisfaction and working in a positive work environment where they are treated fairly.
There are different ways that small business owners can help engage and improve employee morale which does not have to cost an arm and a leg for you as a small business. Depending on your work environment and business, here are some examples of things that you can try:
Flexible work hours or working a couple of times virtually a week
Pay for lunch for your employees once a week or once a month
If you have a formal work environment, let the employees dress down on Fridays
Give employee recognition for a job well done with either an award or monetization.
Provide company picnics, barbeques, and holiday parties where the employees can interact outside company time
Let employees take off half a day on Friday in the summer.
Provide gift cards or give the day off to employees on their birthday
Have team-building events offsite
Rewards & Incentives
Rewards are another way to engage your employees while helping your own business. Some feel this rewards employees for doing their job, but it is not the case. You want to reward employees that go up and beyond the call of duty. There are ways to allow all your employees to participate so that everyone has a fair shot. Reward and Incentive Programs always work well with sales personnel and help drive your desired behaviour. Rewards and incentives can also work with any employee.
At the business where I was the General Manager, the reward program started to help motivate sales personnel to sell what we wanted and not discount. We ran quarterly programs with stretch goals. One quarter was a gift certificate for $100.00 for selling the highest number of used, refurbished equipment with a higher margin; another quarter was a jacket monogrammed with the company logo for selling the most service contracts. The salesperson that did the best for that goal would get something.
You will find that the rewards will more than pay for themselves. In that particular business, my accounts payable and purchasing clerk saved the company $5000.00 by changing vendors and paying early, which reduced the payables by 2-3%. This only works if you are not crunched in the cash flow department but provides you with an example. My customer service rep reduced the call time to close customer problems by 5 minutes, increasing the team's productivity. These programs helped the business while rewarding employees for exceeding their common performance goals. This also builds goodwill with your employees. And yes, there are always those who will not take part, but they are most likely not the employees you want to ensure you retain.
Summary of Engagement and Rewards
Employee retention is as necessary as customer retention, and turnover can be as costly. If you have a continual revolving door of employees, you have those that are not trained to the level of those that left, most likely have a morale problem, and your productivity is not what it could be.
Employees who are engaged, happy, and look forward to coming to work will be one of your greatest assets.
Once you hire an employee and they are on board, that is only the first step. You need to nurture that employee and provide them with goals, guidance, and ways to measure their success. As an owner, you must regularly meet with employees and know what is happening in your management team and the general population. Those businesses with a high employee engagement score provide a work environment where employees excel. Employees are genuinely one of your greatest assets. If you decide to sell your business down the road and have employees who provide value to the next owner, you will see that you receive value in the sale price you receive for your business. Happy employees are a business strength and provide a good marketing story for your business. If your employees are happy, your customers will notice it as well. Conversely, if there is turmoil, your customers will likely experience this in some interactions with your business.