Got Drama? Act 2

No-Drama-Button

 

“Don’t tell me what they say about me.
Tell me why they feel comfortable telling you.”
— Unknown

To review Act 1, we defined workplace drama as gossip, finger-pointing, whining, bickering and more.

You may be savoring a business which is not infected with the rot of workplace drama. If so, congratulations. Keep up the good work.

Some of you, though, fight the fires of discontent daily. You spend an inordinate amount of time dealing with drama in all its insidious forms. It kills the productivity and potential of the entire company, and sends you home drained. And, any “A Players” you were lucky enough to hire? They’re out of Dodge on the first available train.

Sound like your workplace? If so, go back to read and implement the recommendations from Act 1. That will put the foundations in place for curing this plague.

Then read on for ways to wade directly into the fray and wage combat wh your Nattering Nay-Bobs.

Circle the troops. Look ‘em in the eye. Tell them that you ask for and expect everyone’s full support for a new start. All the drama and nonsense stops today! Be firm.

Then, go over your new rules. Make them crystal clear and non-negotiable. Here’s a list to jump-start your thinking:

  • Treat everyone the way you’d like to be treated OR the way THEY want to be treated … whichever is better.
  • Attack the problem, not the person.
  • Don’t say anything about a person you wouldn’t say in their presence.
  • Zero tolerance for drama, talking behind someone’s back, etc. If someone tries to engage you in such a discussion, refuse to participate. If they have a problem with someone, tell them to discuss it directly with that person, take it to their supervisor or to the other person’s supervisor. If you listen to the drama you’re just as guilty as the person spewing it.
  • When we’re in a meeting and we ask if there are any questions or comments, we REALLY do want your feedback. If you’re unwilling to share your comments in the meeting, then get with your manager afterward. If you’re still unwilling to speak up, you lose the right to complain back in the workplace. If someone complains about a topic we just covered in a meeting, don’t listen. Tell ‘em to take it to management.

Whenever there’s a flare-up, deal with it swiftly. Speak with the offender directly. Don’t set up more rules or punish everyone because of one person’s actions.

Be willing to have this conversation: “Despite our best efforts, you continue to be unhappy here. Maybe we should help you transition to a place of employment that you find more acceptable.”

Warning: If you establish “zero tolerance” and then turn your head the other way, you’ll lose your credibility. Be prepared to enforce it!

Next time, we’ll talk about keeping score. Assigning accountability for numbers eliminates much workplace drama. This is just one of the ways GGOB really shines in helping you craft a winning culture.

 

 

 

Got Drama? Act 1

work-hard-have-fun-and-no-drama-pleaseDo you have drama in your company?

“Drama” covers a myriad of people issues … gossip, finger-pointing, whining, talking behind folks’ backs, can’t/won’t get along, complaining, blame, excuses, under-performing, bickering and more.

If you’re embarking on the Great Game of Business journey, here’s some good news: GGOB is a culture transformation. It’s all about building a culture of winning and learning.

Some organizations have deep-seated people issues, and I find that leaders in this situation like to try to resolve some of their issues as a run-up to launching GGOB.

Even though GGOB itself is a good portion of the cure for what ails your organization, let’s talk about some approaches to removing drama, and for keeping it out in the first place.

Since an ounce of prevention is worth a pound of cure, let’s first talk about preventing as much drama as possible so we don’t have to correct it.

Culture and good hiring go hand in hand. It’s much like the chicken and egg. Which comes first? One begets the other.

A strong, positive culture is exemplified by employees who know they have a good thing going, and who want to keep out the bad ones while welcoming in the good ones. If your hiring process indeed keeps out those who don’t fit your culture, that’s way more than half the battle.

I’ve written quite a bit about the importance of a “culture document” before. A set of Core Values can be invaluable IF they are genuinely used to guide decisions about hiring, firing, promoting and rewarding. If they’ll just be hollow words or a plaque on the wall, don’t bother.

Once you know what values are important, the company’s leaders must set the tone (and the example), educate the troops, and be unwavering in running the business according to these principles.

Here are some ideas for getting your management team on board:

  • Our Core Values apply to everyone in the company. ALL decisions are made with our values in mind.
  • Set the example
  • Hold others accountable. Do it tactfully and professionally, but do it.
  • Speak up in our management meetings. Debate is healthy as long as we keep it professional and not mean-spirited. We don’t need “yes-people” or nattering nay-bobs.
  • Once a decision is made we each support it as fully as if it was our own idea, both among the other managers and especially with all others in the company. Acting like you support an idea and then undermining it or not supporting it in front of employees is not acceptable.
  • Let’s issue an “Adult Card” to everybody in the company … starting with the CEO and our management team. If there’s a problem, we deal with it like the mature professionals we are: with open, honest, direct communications.
  • You can’t just say all this once and think it’s fixed. You’ll have to remind folks over and over. And over.

Hatim Tyabji grew Verifone into a dominant, global credit card transaction company. His key leadership tool was a booklet that explained Verifone’s eight core values. He says, “I essentially spent the last six years repeating myself.”

A stellar smaller example is Sandy Jaffe, who grew his tiny Paperback Supply into GL Group, an admired local multi-divisional company in St. Louis (and GGOB All-Star winner) with over 200 employees. Their main guiding principle over the last 40 years? The Golden Rule.

In Act 2, we’ll talk about taking the message to the rest of the company.

Your Most Important Document

In a previous column titled Great Expectations, I urged business owners to have realistic expectations for their employees.

Now let’s build on that message: Define your expectations.

In my role as a business coach, most of the issues I hear about are related to employees. And more often than not, a lack of clear expectations is at the root of the problem.

We usually let our people know how to do a job. “Open the software. Click the blue icon. Use the menu to find the customer …”

But how often do we let them know what behavior we expect, or perhaps more importantly, why we expect it?

If the only clues to acceptable behavior are the inevitable corrections that come when straying off course, it may take a long time for your team to figure things out for themselves.

If you expect your team members to treat others with respect, just say so. Clearly. Directly. Early and often.

Some of you may know that I own a company called Arch Engraving in Kirkwood, Missouri. We make and sell awards, signs, nametags and personalized gifts. In 2010, I bought out my two partners and became sole owner. After that, we were busy moving the facility and creating a spin-off business. The dust has settled so I finally found time to create a “culture document.” It was rolled out in late 2012 and early 2013 for our 10 full-timers and various part-timers.

This document contains our Mission, Vision and 6 Guiding Principles. Under each Guiding Principle are 4 or 5 bullet points to explain the principle.

The contents were reviewed individually with each employee. The Guiding Principles and underlying bullet points were used as the performance review form. Since this is brand new for everyone, the review meetings were mostly about explaining our direction and our “why”, with suggested (and in some cases, required) improvements noted as appropriate. I tried to use these primarily as educational meetings, and as my opportunity to get feedback on the document. After all, they were seeing these expectations in writing for the first time so there was no justification to get all worked up about non-compliance.

Going forward, though, this document will be our guide. Everyone now knows we will hire, fire, reward and promote based on it. They know to filter all decisions through it. Our Mission tells them what we’re all about. Our Vision shows where we’re going.

I’m not kidding myself – there will be set-backs. But staying the course and using the document in our daily work will make it real. It’s not just a plaque on the wall.

Some experts advise to make this sort of work a team effort. In this case, I did it myself and tweaked it based on employee feedback. Right or wrong, I felt the business should reflect my own values and expectations.

There’s no doubt in my mind that this is now the company’s most important document.

Do you have a culture document? I’ll show you mine if you’ll show me yours. I intend to write more on this topic and would love to find great examples to highlight. Send me an email.

 

It’s Free!

free

It’s a typical day at Bob’s Company, Inc. Bob notices that a recently-hired employee is now eligible for dental benefits. So, Bob hands her an application. As he walks away, she asks, “What’s the cost?”

Bob’s reply? “It’s free. The company pays for it.”

If this was a movie rather than an article, the startling shower music from “Psycho” would come on at this point.

Or maybe it would turn into a take-off from “Young Frankenstein.” Instead of “It’s alive!” the line could be “It’s Free!”

Shame, shame on Bob. He wasted a terrific opportunity for a “teachable moment” with a new employee.

Of course it’s not “free.” Every benefit provided by the company costs good money.

Free. What was Bob thinking? He should have responded something like this: “Our dental insurance costs about $25 per month. The company pays for it. It’s part of your compensation – just as our other benefits are.”

Too often employees think only about base wage or salary when the subject of compensation arises. This happens because we business owners and employers let it happen. You’re likely to hear something like “I make $35,000 per year.” You are very unlikely to hear an employee say, “Well, my base is $35,000, but on top of that my employer generously pays another $12,000 for my health insurance. Counting my paid time off, my other benefits and my payroll taxes, I cost my employer a whopping $58,000 per year.”

So, how do we get our “bang for the buck”? How do we get our employees to recognize and appreciate all aspects of the compensation package – so the company can enjoy a fine ROI in the form of increased employee satisfaction, improved productivity and reduced turnover? How do we drive the “entitlement culture” out of our companies?

Here are some approaches to use:

  • During hiring interviews, listen for signals. If the candidate is focused like a laser beam on your vacation plan or grimaces noticeably when you explain that you don’t pay 100% of the health insurance, these are not good signs. (Note: Yelling “Next!” is not a tactful way to end an interview.)
  • Your candidate job offer letter should outline the entire compensation package and focus on the total value – not just the salary.
  • Make ongoing education part of your company’s culture. Talk about the cost of doing business. Let your folks know how much insurance rates go up every year. Make sure the employees know that they have a vested interest in the company’s success … if they help the company succeed, you can continue to subsidize their insurance costs and provide excellent benefits.
  • Print a year-end statement for each employee, showing his or her total compensation and benefits costs.
  • Consider all aspects of compensation costs when budgeting and projecting pay increases. Example: Let’s say you like to provide an average 4% pay increase per year, and your total company compensation expense (including benefits) is $800,000. A 4% overall increase is $32,000. If you expect your health insurance to go up $5,000, you now have $27,000 left for salary increases. (Back to education: Explain your rationale and the math to your employees. Involve them in the decision. Maybe they want more salary increases and are willing to bear more of the insurance costs. If they help make these decisions, you’ll get better buy-in.)

You invest lots of money in your company in the form of salaries and benefits. Chances are, payroll and related expenses are the largest line items on your income statement. Spend the additional time and effort to maximize the investment. Done right, it can pay you back many times over.

PS: Bob’s story has a happy ending. He realized the error of his ways and corrected his statement to his employee.


Talking about Values is Good Business

What do “values” have to do with business? Everything!

This isn’t about “touchy-feely.” I see core values as a hard-nosed business practice, just like reducing costs. It’s simply a way to ensure that everyone on the team knows what is important.

As owner, you can – and should – shape your company’s culture. You can let it happen or you can make it happen.

So, what makes up a culture? All sorts of things. Fun versus serious. Honest versus dishonest. Friendly versus confrontational. Lunch with others or eat at your desk. All this and much more is the stuff of company culture.

A big part of a business’ culture centers on its values. You may not care whether your employees eat at the desk or go out, but you darn sure better care whether they are being honest with your customers.

My recommendation: Determine what principles are important to you, and then inject them into the workplace.

If you don’t spell out what’s important, then the implication is that either nothing is important or everything is important – trouble either way.

Here’s an example: Barry is the new guy in sales. He was put place with no orientation on what’s important to the company. He brought some bad habits, including breaking promises to customers. His manager doesn’t find out until a furious customer calls him.

But George works at a company where breaking promises to customers is unacceptable. The owners and managers “walk the talk”, setting the example for others. It’s discussed in meetings and in new employee orientations. It’s used in performance reviews and job descriptions. Do you think George shares Barry’s cavalier attitude toward commitments to customers?

This is the difference between ignoring what’s important and building a values-based culture on purpose.

Adopting a set of values is not about picking a litany of lofty goals that nobody can live up to. A company must identify those principles that the top people are passionate about and can adopt without hesitation.

What values to pick then? Each company must answer that question for itself. The answer may be found in things like the founder’s personal values and vision for the company.

Whatever values are chosen – and a handful is plenty – the company needs to really work at making them second nature for all employees. This doesn’t happen overnight. About the time you think your staff is getting tired of hearing a message, that’s about the time it’s just starting to soak in.

Here is perhaps the most powerful sign that it’s working: Your employees start enforcing the culture. When you hear one of them tell another, “That’s not how we do things around here”, you’ll know your work is paying off.

Adopting and living up to a set of guiding values can literally transform your business. Don’t assume your people know what’s important. Tell them. It’s hard work and a long process, but it will eventually have a positive impact on your bottom line.

It’s the Spread

“Thirty six thousand dollars!”

“You’re proposing to pay him thirty six thousand dollars a year? We can’t afford that.”

“It will be tight, but I’m pretty sure that’s what it will take to get him. I really like this candidate.”

Discussions such as this happen all the time in small businesses. The company is in a hiring mode, the recruiting and interviewing has happened, and now it’s time to narrow it down to a specific candidate and make an offer.

It can be agonizing. I’ve been there and I’ll bet you have, too. Help is desperately needed but the best candidate seems too expensive. Heck, maybe any candidate seems too expensive.

Let’s listen in on the discussion the other interested parties in this situation are having:

“Thirty six thousand dollars!”

“Honey, you were making forty thousand when you were laid off. I don’t think we can afford to accept thirty six.”

“It will be tight, but I’m pretty sure that’s the best they can do. I really like this company.”

Two sets of people on either side of a salary negotiation. Both are looking at the same number and of course considering things from their vantage point, and with their own interests in mind.

The number they’re all focused on – annual salary – is the number we all use. Employers use annual salary to measure the cost to the company, and employees use it as the measure of compensation received.

But let’s dig deeper. What’s the real, full cost to the company for a $36,000 per year employee?

Salary                               $36,000
Plus payroll taxes           $  3,750
Plus benefits                    $  6,000
Total cost to company:  $45,750

What appears to be a $36,000 cost is in reality going to cost the company almost $46,000.

Now, let’s look at the employee’s side of the ledger.

Salary                                                           $36,000
Less payroll taxes                                        $  2,754
Less income tax withholdings                    $  7,200
Less employee’s share of benefits cost     $  1,000
Employee take-home:                                 $25,046

To drive home the point:

Employer cost                                  $45,750
Less employee take-home              $25,046
Difference                                          $20,704

That’s quite a spread between the company’s actual cost and the employee’s actual spendable net.

I suggest that these are the two numbers that deserve the attention of the folks involved. In this light, the annual salary almost becomes meaningless.

Yet, time and energy are spent negotiating a number that has little real-life importance.

I know – we won’t stop talking about annual salary. Too much pride is tied up in that number, and it is admittedly a convenient yardstick.

To me, the big deal is the spread. Here are the take-aways:

  •  Employees deserve to know what it costs their company to employ them, and the total value of their compensation package. Let’s tell ‘em.
  • Both employers and employees can help reduce the spread. For instance, employers can choose pre-tax benefits, reducing payroll tax. Employees can make healthy choices and wisely spend deductibles and company-provided benefit dollars.

I’d rather spend my time cooperating with employees to reduce the spread than arguing over annual salary. How about you?

No Sweat Compensation Planning

You’re sitting in your office, and like most business owners, you’re up to your elbows in a variety of challenges and opportunities. Suddenly, one of your employees appears at your door and asks the dreaded question, “Since my anniversary date was two weeks ago, am I due for a review and a raise?”

You buy some time by telling the employee you plan to work on it within the next few days. But you can’t help feeling guilty. First, you just lied because until you were reminded, you had no idea that the review was due and had no intention of addressing it. Second, you feel a sense of guilt because your lack of a systemized approach to reviews and raises repeatedly ruins your schedule.

As if this wasn’t enough, the next interruption is your accountant who brings the news that salary expense is way over budget, ending with, “Oh, and by the way, we just got our health insurance renewal. It’s going up 22% next year.”

Most small business owners operate in exactly this fashion. The employee anniversary date, by default, creates the expectation of a raise. (Reviews are generally dreaded by all involved, but as part and parcel of an annual raise, they go along for the ride.) Health insurance and other compensation-related expense increases take us by surprise. We’re supposed to be in charge of our companies, but we’re at the mercy of employees, vendors, and arbitrary schedules.

It doesn’t have to be this way.

How about a system that lets you take charge of schedules, accurately budget for increases in salaries and benefits (and actually stay within that budget), and eliminates the constant stream of mid-year raises?

Sound too good to be true? Read on.

First, who says that an employee’s anniversary date has to trigger a review or a raise? I suggest you do two things:

  1. Perform all the performance reviews in your company within a 2-3 month timeframe, near the end of your fiscal year.
  2. Schedule all pay raises to kick in at the same time – the beginning of the new fiscal year.

What does this do for you? For one thing, it eliminates the constant stream of interruptions and unplanned, hastily-prepared reviews (which hopefully equates to better, more thoughtful reviews.) It also gives you the structure to proactively look at your entire team and corresponding salary expense at one time, and to take the time to budget this expense for the new year.

Yes, it can be a lot of work. Yes, it requires plenty of discipline and organization. But in my mind, the benefits outweighs the costs. You’ve got to do this work anyway, right?

Here’s another change to consider: Try to move your health insurance and other benefit renewals to coincide with the start of your fiscal year. Then, by the time you’re doing your annual planning and budgeting for the new year, you’ve got your renewal quote in hand – ready to be plugged into your budget.

Finally, here’s the biggie: Lump ALL of your compensation-related expenses and focus on that number, and not just on the salary expense. Aim to keep this number growing more slowly than revenue. Better yet, manage to keep it growing more slowly than your gross profit. After all, that’s the number that pays all your overhead expenses.

So, if in the past you tried to have an average annual salary increase of 4%, consider having an annual total compensation expense increase of 4%.

This way of thinking requires some trade-offs. If health insurance is going up a bunch, it may eat up some of the funds that would otherwise be available for raises.

This approach also requires you to have some frank discussions and some educational sessions with your employees. Most are probably unaware that you pay FICA, Medicare and unemployment taxes. They may not know about your cost for their health insurance, worker compensation insurance and other benefits. One way to drive home the total cost to the company is to prepare a year-end summary for each employee, detailing each compensation-related expense.

Eliminate the chaos and take control. Spend some quality time once a year doing this admittedly hard work, and the rest of the year you can focus on growing your business.