Consultants / Service Firms: Why Hourly Billing Isn’t Best

 

One of the first lessons I learned in business-performance consulting was to sell results, not my time.

During the tail end of the 1990 recession, I had purchased a five-year-old print-marketing firm. Quickly, I realized I was overlooking opportunities for growth. My newly acquired company soon evolved into a full-service management consulting firm, which I incorporated into a vision plan.

Technically, it didn’t become a pure consulting firm, it was more of a hybrid – consulting and management services. Some clients required more than my advice and information. They needed some heavy lifting.

Here’s a case study:

One of my early clients was a big office-furniture retailer, which grew too big without proper planning. We did the retailer’s print-marketing projects, but in client meetings after the owner complained bitterly to me about his sales staff, I offered to set up a sales-management program.

It was an highly chaotic situation. The whole sales and customer-service culture had to be fixed.

Initially, my outsourcing services were labor intensive as the sales staff was dysfunctional, and it got away with a lot of nonsense, which was hurting profits.

For example, salespeople were desperate to make sales to indecisive customers. Often, a salesperson arranged for free delivery of an eight-foot mahogany conference-room table to the customer’s business for a 30-day trial look-see – without payment or any safeguards for the retailer. Half the time, the table was returned – with a big scratch. The sales-opportunity costs were enormous.

Therefore, in addition to showing the client how to conduct meetings, I literally had to provide ethics, communication, sales and management training.

Valuable lessons

But I quickly learned I hadn’t initially set boundaries with the client.

After solving the major issues – getting his staff to work better – I was anxious to turn my attention to other clients. But my client was so accustomed to my being there every day, he expected it indefinitely.

He also didn’t understand why I only trained and advised him so he didn’t have to fire anybody, which would have increased his payroll even higher. He didn’t get why I didn’t have legal authority and why I always used my own materials.

So, the lessons prompted me to use a different upfront process – to sell results with benchmarks, to train the client about how I deliver results, and to explain how I’m paid and the timeline to expect.

It’s a relationship that requires trust by both parties.

To facilitate the relationship-building process, I changed my focus with strategies to build trust with clients.

Businesspeople want strong results that include:

• Efficiency
• Information
• Innovation
• Objectivity
• Productivity

This means projects are completed on schedule, within budget, and with measurable results.

To be able to accomplish such objectives, I had decided against hourly billing – I had to charge enough for my time to cover my business expenses, but some prospective clients had sticker shock from hourly rates.

Sometimes, the prospective client didn’t value some services as others. They thought I should provide them with a multi-tiered billing depending on the services. I had to get it ingrained in my mind that my time, consideration and energy were just as valuable whether I was training a class, mentoring one-on-one or writing advertising copy. All services had the same value.

Value pricing

So unless it was a big prospect who insisted on hourly billing, I began to talk to each prospect about investing in projects for strong results. I saved a ton of grief and time by charging retainers. I began to work off the retainer without nickel-and-diming clients for miscellaneous charges. Only on occasion would I bill for miscellaneous expenses, after getting approval in advance.

In contrast, professional service firms like hourly billing. They use software to track time. Candidly, if I hired a CPA or attorney, I insisted on knowing in advance what their total charges would be. I had heard horror stories. For example, the timer wouldn’t be stopped when the professional ducked into the lunchroom for a cup of coffee or took a phone call – or the hourly increments would be rounded up.

Further, whether I was hiring a professional-service firm or quoting a project fee, I wanted the focus to be on the work at-hand. I didn’t want to hire someone to get paid for tracking their time. As a consultant, most businesses have never hired me unless they had challenges they couldn’t solve. So I wanted to spend my time on providing results, not watching the clock.

In other words, my reputation depended on my ability to prevent negative surprises, so I’ve always offered value-pricing based on a retainer. Oh, and I stopped spending my valuable hours on penning proposals. The prospect and I will chat about the situation, and I’ll present a short letter of agreement, but I won’t incur any sales-opportunity costs to write proposals.

Remember, clients don’t want to pay for your time.

From the Coach’s Corner, here are 60 ground rules for effective client service.

“Hiring consultants to conduct studies can be an excellent means of turning problems into gold; your problems into their gold.”

-Norman R. Augustine

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

15 HR Strategies to Improve Your Business Performance

 

Studies show many employees are dissatisfied in their workplaces. Employee dissatisfaction, of course, will adversely affect a company’s performance.

In fact, a 2010 Hewitt Associates study indicated employee engagement is at an historical low – well, at least since the firm began researching the issue in the mid-1990s.

A lack of employee engagement means:

• Higher costly turnover
• Less focus on customer service
• Less productivity
• Weak profits.

In the UK, employees of family-operated companies have better employee relationships than other businesses. A University of Birmingham study concludes family business workers – 21 percent of the workforce – are more loyal. They are more engaged with their employers, show more commitment and have higher morale.

Another consulting firm, Mercer, concluded in its 2011 global study that 33 percent of U.S. workers are thinking about quitting their employers. Forty percent of millennials are also considering a job change.

There are countless other human resources studies with similar findings.

Higher pay and benefits are important to workers. But they’re not the greatest motivators, and employees often have more salient concerns.

So, the key is to take steps that lead to higher employee morale and performance. The bottom-line question for you: Do your employees mirror what you expect?

Assuming you’ve hired the best talent in terms of attitude, to improve your business performance, here are 15 HR strategies:

1. Be authentic, not a patronizing employer.
2. Walk the floor twice a day to engage your staff. Show empathy. Ask questions, such as “How are you?”
3. Demonstrate your listening skills with open-ended questions. (“What is the dumbest thing you are on which you’re working?” or “Where is the company wasting resources – in time or money?”)
4. Communicate what the company is doing and how it’s performing.
5. Help employees to understand how they contribute to your bottom line. Show them your company-wide objectives and how their work contributes to your company’s performance.
6. Give workers a purpose with challenges.
7. Without being verbose, teach them how you think and why.
8. Create collegial teams of workers without micromanaging them.
9. Make employees a CEO of their work. Empower them to contribute ideas and allow them as much autonomy as feasible to make decisions.
10. Encourage each employee to be customer-focused.
11. Immediately, show appreciation for good work and counsel employees following sub-par work.
12. Budget for development and training.
13. Show flexibility to enhance employee balance for career and personal life.
14. Establish an employee assistance program. Do what you can to help eliminate the employees’ stress factors so they can have maximum focus on their responsibilities. That includes financial tips. As my dad once told me: “It’s not how much you make, it’s how much you bring home.”
15. Employees know who their toxic co-workers are. Don’t let the toxic workers hurt your workplace environment.

From the Coach’s Corner, here are more management suggestions:

20 Tell-Tale Signs – If You’re Under-Performing as a Manager

21 Quick Tips to Avoid the Dark Side of Management

Human Resources – Profit By Not Letting Your Stars Become Free Agents

Boss Checklist: 16 Strategies for a Competitive Edge

Human Resources: 12 Errors to Avoid in Evaluations

 

“So much of what we call management consists in making it difficult for people to work.”

-Peter Drucker 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

20 Tell-Tale Signs – If You’re Under-Performing as a Manager

 

Whether new or experienced, managers can often struggle. Poor management, of course, leads to poor performance.

As red flags, under-performing managers share one of two common traits with ineffective employees. Such managers aren’t fully aware of their shortcomings. Even if they are aware of deficiencies, they’re afraid to admit it.

Either way, nothing is done about the shortcomings. Accountability suffers. There are 20 typical warning signs.

Here’s a list of questions – 20 tell-tale signs – if you’re under-performing as a manager:

1. Is your department underperforming? It can be attributed to ineffective management.
2. Are you getting positive performance reviews from your boss? If not, that’s an indicator.
3. Do you have a strong image ? If you don’t enjoy employee loyalty or if peers are snubbing you, those are omens.
4. Are you a stress carrier? Whether its personal stress caused by conditions at home or career challenges, it can adversely affect your work relationships.
5. Do you engage in self-doubt? Weak decisions prompt actions leading to poor results.
6. Do your employees communicate well with you? Sometimes employees are distant because they’re unhappy with your style.
7. Are you careful to surround yourself with great employees? You don’t want a lot of yes-people. You want thinkers who will take ownership of their work.
8. Are you clear with your expectations of employee performance? If you’re nebulous in day-to-day interactions, instructions or in formal reviews, employees won’t deliver.
9. Do you make good investment for short-term and long-term success? Whether it’s technology or human resources training, good managers take productive steps and make insightful investments.
10. Are you a go-to person? Does your boss look to you for solutions and projects, or are you overlooked? This means you’re not viewed as being a valuable resource.
11. Are you open-minded? Do you step outside your comfort zone? This means being able to be innovative and assertive, and you don’t settle for mediocrity.
12. Are you a big-picture manager with strong potential for the C-suite? A manager who is good CEO-material has knowledge and ability in all areas of the business, not necessarily a doctorate-level expertise in any particular segment of the business.
13. Are you constantly looking for ways to improve? The best managers are voracious readers, and look for sources of good ideas and processes.
14. Do you instill a customer-focused organization? Task-oriented managers who are not focused on customer needs will not maximize profits.
15. Do you meet goals? If goals aren’t being met – whether it’s your department or your individual employees – performance will not been enhanced.
16. Do you have weak links on your team? It’s possible to have high-performing workers, but prima donnas are a liability if they don’t work well with others.
17. Are you ensuring company policies and values are upheld? If not the culture will be endangered and profits will suffer.
18. Are you on top of budgetary matters? In this business climate, it’s imperative to have a clear view of your department or company finances.
19. Do you regularly assess your business strengths, weaknesses, opportunities and threats? This is crucial for goal-setting and strategic planning.
20. Do you recognize employee and company success? Celebrations are good for everyone’s morale.

From the Coach’s Corner, for effective management, here are more resource links:

Leadership Strategies to Profit from Employee Respect

Human Resources – Power Your Brand with Employee Empowerment

Management Best-Practices Include Solid Operations Checklists

21 Quick Tips to Avoid the Dark Side of Management

“The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.”

-Theodore Roosevelt

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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complementary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Management Best-Practices Include Solid Operations Checklists

 

Are you concerned about profits? Would you like for your business to be in a class of its own?

Not to oversimplify, obstacles to profits result from two basic barriers: External and internal challenges, or a combination of both.

External difficulties include challenging, complex issues in competitive marketplace forces. True, the economy is a factor. Unfortunately, many companies don’t have competitive intelligence. Their inaccurate assessments lead to using the wrong marketing channels, budget, or branding.

And yes, internally, many organizations in businesses and the public sector mistakenly ignore shortcomings in how they operate. Instead, they believe that a magic wand – a better marketing focus – will solve all the problems.

Hopefully, such organizations eventually learn that even a world-class marketing approach can’t overcome the internal factors that impede the control of costs, performance and quality.

Candidly, as a business-performance consultant, here’s one of my first epiphanies – best-practices in marketing will not help a client who doesn’t operate a business well.

Here’s another awakening about management – most internal problems stem from poor stewardship and fear. Fear is apropos here as acronyms – FEAR – “frantic effort to avoid responsibility” or “false evidence appearing real.”

Fear also leads to arrogance. I like the famous Peter Drucker quote: “Arrogance is being proud of ignorance.” Remember, Avis made a ton of profits despite being a second to first-place Hertz. Not by slashing prices, but Avis maintained an image consistent with its 1960’s branding slogan – “We try harder.” 

Consider these common symptoms that trigger internal challenges:

• A lack of self-esteem by the business owner. Cockiness is not confidence. Celebrating prematurely over ostensible successes only leads to disaster.
• Not listening to the right counsel.  
• Engaging in self-doubt repeatedly, reversing course even before a qualified strategic plan is completely implemented. Marketing is not a 100 meter dash.
• Procrastination. Ignoring problems and hoping they’ll go away.
• Improperly inventorying products.
• Not working well with vendors.
• Hiring the wrong people, and poorly motivating or supervising workers.
• Using gauche business etiquette, such as a failure to send a handwritten thank you note to centers of influence and customers.

What’s the solution? Consider a famous statement by Louis Pasteur: “Chance favors the prepared mind.” Therefore, to be prepared, it’s vital to perform a strategic analysis – of your strengths, weaknesses, opportunities and threats.

Start by asking the five Ws:

• Who
• What
• When
• Where
• Why

A well-operated business learns the right answers to such question and develops an action plan. That must include an operations checklist for all salient functions in likely scenarios, and for special situations.

But you’re not done. It doesn’t end in operations-preparation.

For a thorough action plan for maximum profits, additionally here are three key questions to ask:

Do you mentor your employees? You and your managers must perform ongoing coaching; explain the why along with what needs to be done.

Do your customers love you? Your company must take all the steps to earn fans among your customers, so they remain loyal customers and will refer others to you. A case in point – there’s a grocery store near me that I patronize, but only when I’m in a hurry. I shop at competitors whenever I get the chance, particularly, the stores with employees who say “thank you.”

How would a journalist report on your business? Do what you have to do in order to provide value and earn respect.

Develop and implement systems in every facet of your business. You’ll save time and money, and, of course, you will increase profits. Fears about profits will be alleviated. Your business will be in a class of its own.

From the Coach’s Corner, here’s related reading:

Case Study: Mistakes Companies Make When Losing Profits

Hottest Tactics to Beat Your Competitors

Human Resources – Profit By Not Letting Your Stars Become Free Agents

Diverse Age Differences at Work Mean Return to Status Quo in Attitudes – Robert Half Study

 

Despite the 21st century’s widespread age differences in the workplace, at least one thing hasn’t changed – many attitudes of workers are similar. For example, employees are often most-interested in company stability, according to a study by Robert Half.

Sadly, for many companies, that might also be why 40 percent of respondents are apt to shop around in seeking a new job.

“There has been considerable focus on the differences among various generations, but our research confirms many similarities,” said Max Messmer, chairman and CEO of Robert Half International. “Understanding the values shared by nearly all employees, particularly in light of changing economic conditions, can help companies enhance their recruitment and retention efforts.”

The study involves more than 1,400 people working fulltime in North America. The respondents are either college graduates or are in school. Just over 500 are hiring managers. The demographics include baby boomers, aged 46 to 64; Generation X, 32 to 45; and Generation Y, 21 to 31.

Among the three generations, the study reveals five similarities:

• Job security are preferred over working for a community-minded firm or even a shorter commute
• Salary, company stability and benefits were the most salient
• Most-prized benefits – Healthcare and dental coverage, vacation time and matching 401 (k) plans
• The recession is the main reason for those planning to work past 65
• Diversity in work experience is believed to be beneficial

Here are the generational differences:

• Following the downturn, many plan to job hunt. The breakdown includes 36 percent of Generation Ys, 30 percent of Generation Xs, and 24 percent of baby boomers.
• Among the Generation X, 38 percent plan to upgrade skills and 33 percent percent plan to stay with their employers.
• For the respondents planning to work past 65, 54 percent are baby boomers, 46 percent are Generation X, and 39 percent are Generation Y.
• 34 percent of Generation X and 27 percent of baby boomers managed to add to their retirement nest eggs since the beginning of the downturn.
• Many are concerned about differences in coworker work ethics and balancing career with their lives. That’s 54 percent of baby boomers, 45 percent of Generation X, and 35 percent of Generation Y.

“Many employees, particularly Gen Y professionals, are biding their time in their current employment situations and plan to make a move when they feel the economy is on firmer footing,” said Brett Good, a Robert Half International district president. “Now is the time for employers to take action and outline career paths within their company for strong performers. Compensation reviews also should be conducted to ensure that pay is competitive.”

Well said.

If you want, you can get a copy of the study.

From the Coach’s Corner, if you want 18 strategies for better employee relations, see Leadership Strategies to Profit from Employee Respect.

HR Management: Which Employees Are Most-Likely to Quit?

 

If you need help in retaining talent, an HR study contends there is a way to determine how to anticipate which employees are likely to leave, according to an article in CFODailyNews.com.

The study by eePulse, Inc, the HR software company, contends there are four criteria of employees who are most likely to quit.

The four are:

• Workers aged 41 to 45
• IT and marketing professionals
• Directors and supervisor/managers
• Employees working at companies at average or below average pay

The article suggests monitoring more-closely workers who took on added responsibilities during the downturn. Those employees are more inclined to feel taken for granted. You know what that means. They’ll look for work with your with your competitors.

For possible solutions, here are some key questions for you to consider:

1. Have you gauged the attitudes of your employees?
2. Have you conducted a wage and compensation study?
3. What does your employee-recognition program look like?
4. Do you make education and training programs available?
5. What training do you provide to upgrade the skills of your managers?
6. What have you accomplished to increase sales for better cash flow to reward deserving workers?

Once you have positive answers to these questions, you’ll lessen the likelihood of having to suffer from employee turnover. Notice that most of the challenges to retaining workers is solved by skilled management. It’s important to have great relationships with your workers and to be empathetic with them. Within reason, they need to know that you care about them.

Who wants to lose valuable employees? Especially, losing valuable employees to competitors is not only a human-capital loss, it means a loss in profit. Plus, it results in a marketplace stigma. You want to be known as one of the best places to work.

From the Coach’s Corner, this site’s HR section has dozens of HR-coaching topics.

Here’s a sample:

• How to avoid EEOC Discrimination Suits
• Management and HR for higher performance
• Human Resources: 12 Errors to Avoid in Evaluations

Management and HR for higher performance

 Part three: How to grow your small business

 

In analyzing the growth rates of small businesses – every great entrepreneur has one salient quality – the ability to be an effective manager.

An effective manager efficiently allocates resources for achieving goals. Quality management usually results from an independent SWOT analysis – assessing internal strengths and weaknesses along with evaluating external opportunities and threats.

Self-employed people need to carefully inventory their own strengths and weaknesses as business personalities. They should also assess how to maintain their good health because they’ll suffer if they don’t. Larger companies should focus on several factors in a strength-weakness analysis of their human resources, such as recruitment, training and development, compensation, culture, leadership, reliability, and salespeople.

Once a business owner looks in the mirror to assess management strengths and weaknesses, then he or she is ready to analyze opportunities and threats for a strategic plan.

Even if a strategic plan is well-written, beware: Management practices that work well in the early growth of a small firm often cause problems later, according to a series of articles in the Harvard Business Review (HBR) by Dr. Larry E. Greiner. He believes such managers fail to take into account “present events or market dynamics.”

“Creative activities are essential for a company to get off the ground. But as the company grows, those very activities become the problem,” Dr. Greiner wrote in a 1998 HBR article, “Evolution and revolution as organizations grow.” His thesis is still accurate.

Red Flags

Business expert Neil Delisanti agrees that managers often fail to solve red flags: “There are forces inside the organization that they control; forces outside the organization over which they have little, if any, control; and probably most important, red flags in themselves, about which they may or may not be aware. A good manager must be constantly aware of the impact of all these forces. One of the common failings in managers is that they blame all sorts of things for their failures, rather than admitting they didn’t have a good handle on what’s happening.”

Mr. Delisanti has gifted insights because he speaks from both an academic and solid mentoring perspective. He was a faculty member at both the University of Puget Sound and The Evergreen State College. As the guru for the Small Business Development Center in Tacoma, he counseled more than 2,000 companies.

Mr. Deslisanti believes too many small business owners micro-manage: “Many folks start a business and believe it is their inspiration that made it a success. Although this is sometimes true, what we find on closer inspection is that it was their perspiration and natural management ability that was more responsible. They have invested a lot, money, time, and sanity, in their enterprise and find it hard turning it over, often even small parts, to someone else to possibly blow it. Any business can grow to where the owner just cannot physically, mentally or emotionally, do it all.”

Does he believe managers limit their business growth by poor human-resource management techniques? “Often, yes. This is particularly true of a company that starts with an owner and spouse sitting at the dining room table. Not only are there innumerable government restrictions on what is legal, we have to look at what the workforce expects from employers today. The management of people isn’t as simple as the old my way or the highway anymore. Diversity in all areas requires that SBOs have to look at differences in age, gender, race, ethnicity, education, background and experience – just to mention a few facets that have to be considered.”

When to start HR function

“I strongly recommend that as a business gets above the 15-20 employee range, the owner set up some sort of human resource function, and get some assistance in designing job descriptions, recruitment policies, pre-tests, application forms and very importantly – interview policies and procedures,” he suggested.

To underscore his concerns about HR precautions, I agree. I’ve been called upon to help two businesses:

1. A cable TV company was fined $15,000 by U.S. District Court for sexual discrimination of an applicant. The company’s law firm asked me to provide a three-hour seminar on Equal Employment Opportunity laws as part of the sentencing to close the case.

2. An interstate trucking firm was fined $100,000 and required to design a new wage and compensation plan (Note: the company’s pay system worked fine when it was smaller).

In both cases, the bosses were nice people unaware of the dangers in a litigious society.

Because small businesspeople often seem to feel they’re under siege, Mr. Delisanti suggests: “Have a vision or goal and incorporate it into a strategic plan, which is different than a business plan. This can come in many forms, but it should be organized and written. Identify your vision and then develop a list of goals that will let you succeed, quantify them, put some time frames on completing them. Most important – assign some responsibility to someone to get it done. This will have you on a course of your choosing and let you become proactive instead of reactive.”

Premature growth

He says some companies grow too fast: “This happens when growth gets out of control when you can’t fill the orders, due to a lack of materials, equipment, people or cash. This can also happen when the company gets too big for the owner to handle.”

Others grow too slow to cover added costs and expenses: “Usually, this is a result of overly optimistic forecasts that bring about expenditures that far exceed revenues. Many reasons cause this, such as an SBO’s enthusiasm; level of success with business on a smaller scale; and non-credible or insufficient marketing research,” he said.

Mr. Delisanti warns about unforeseen situations in the external environment: “Even the best forecasting can’t predict a tsunamis, earthquake and the level of destruction that natural disasters can wreak upon an industry. Consider skiing in the Pacific Northwest some seasons – there can be a bad time to open a new ski shop.”

He says challenges result from miscalculating factors in what he calls an “uncontrollable” industry environment: “When a business conducts an opportunity-threat analysis, it should look closely at a number of factors and make its decision, based on what it thinks will happen and how the chain of events will impact its goal attainment. If the business thinks incorrectly, it might lose the competitive advantage over somebody thinking correctly. Remember: Everybody can’t win. If you look at all the data and think that interest rates will go up 9 percent and take the actions that will best help you achieve your goals under those conditions, but if they only go up 2 percent, other companies will probably have an advantage over you.”

So, there you have an overview – how to grow your small business – in a three-part series.

The two previous columns:

Marketing Essentials on a Shoestring Budget

10 Scholarly Solutions for Selling More Products

From the Coach’s Corner, for more free counsel, he suggests that you contact the nearest SBDC office.

Leadership Strategies to Profit from Employee Respect

 

Even though Wall Street is ecstatic over productivity growth, merely slashing costs and jobs to create profit is not sustainable for profits. I know investors mistakenly believe the earnings for such publicly held companies are good, but it will not last.

Workers are realizing they’re not sharing in the wealth. Poor morale will cause profits to plummet, and consumer demand will continue to plunge. What will investors and CEOs do when it gets much worse?

So try a new strategy with a vision for growth.

The key to long-term profits is organizational cohesion. Some businesses are profitable simply because employees trust and implement management’s vision. Let’s consider how to increase worker productivity and reduce labor costs.

If you want to increase worker productivity and reduce labor costs, here’s a question: Are your employees buying into your vision for growth?

Leadership style is important. Earning respect is paramount.

In fact, mutual respect is the first step in getting employees to share your vision. That results from implementing strategies for healthy worker satisfaction, which might seem like an impossible dream for some employers in this economy.

When a company underperforms, do employees blame managers? In all probability, the answer is yes. At a lot of businesses, the workforces are unhappy with management. And the majority of employees want their bosses to invest in them.

Is your business suffering from poor morale? If so, take steps to increase your profits by communicating better with your employees. Generally speaking, employees who are satisfied with their jobs perform at higher levels, which is really a result of their satisfaction with their employers.

A study from a 2006 Biz Coach column confirmed this supposition. That’s when I reported Deloitte Consulting concluded that the 56 public companies included in Fortune’s list of “Best Companies to work for” had a 78-percent higher stock performance than the S&P 500. And I’m betting a similar study about profitability would have the same result today – in either big or small companies.

So what do workers want monetarily? They want what is probably impossible for cash-poor firms.

The top worker preferences:

• Competitive wages
• 100 percent paid health-care
• 100 percent company-funded 401(k) plans
• A compressed work week
• Flexible schedules
• Bonuses

Great profits or not, you can tap into other worker emotions that satiate them. Do your workers respect you? Do they feel treated with respect? Companies failing to take the necessary employee-motivation measures can expect employee turnover – whether or not the economy improves.

Here’s a leadership checklist for success with employees:

1. If you’re new to the job, earn your stripes and demonstrate humility. Unless it’s a crisis turnaround situation, take several months before implementing changes. New bosses inherently intimidate workers – give them a chance to like you or least feel they know you.
2. New or not, be accessible. Walk the floor twice a day. Spend five minutes a week with each employee whenever feasible. Show interest in them. Ask open-ended questions to get them to talk with you. If you do, they’ll conclude you’re a brilliant conversationalist.
3. Actively listen to your employees. When you’re approached put down the pen or turn away from your computer. Employees rave about bosses who give their full attention.
4. Encourage workers to suggest ideas for business success. If an employee makes a suggestion – even if you’re not in full agreement – look for reasons to be accepting of the idea. The worker will give 1000% to make an idea work, and the person’s morale will skyrocket. If it doesn’t work, the employee will endeavor extra hard to fix it in order to save face.
5. If you’re not the top person in the company, use your influence to help employees to achieve their career goals. If you are the top manager, do whatever you can.
6. Recognize top performance publicly. Praise immediately.
7. If you must criticize an employee, try to use the layered-sandwich approach – two positives, the negative and a positive.
8. Avoid criticizing an employee publicly.
9. Ask questions before you start reprimanding. Sometimes there are good reasons for negative surprises. So avoid unnecessary embarrassment for your employee and you.
10. Consider the Pareto principle when you honor workers – the top 20 percent deliver 80 percent of top performance.
11. Maintain a steady disposition. Otherwise, when you’re under duress about a business matter, many employees will take it personally and mistakenly think you’re unhappy with them.
12. Try to get key employees to buy-in to your new initiatives before implementation.
13. Use good technique when implementing instructions. That means being direct, low-key but firm and maintaining strong eye contact. Explain the reasons whenever possible, but don’t be tentative or apologetic.
14. For complex projects, be careful in how you give instructions. Take adequate time to list and document your wishes and deadlines. Recap in memos or emails. Like good meetings, everyone should know who will do what and when they’ll do it.
15. Follow up and inspect your employees’ work or deliverables. Show your interest.
16. Be courageous, especially in unpopular positions, but be cool under fire.
17. Give your employees freedom – don’t micromanage. Make certain your subordinate supervisors do the same.
18. Assess your strengths and weaknesses as a leader. Take appropriate steps to alleviate weaknesses and hone your strengths.

If you execute these ideas, you will profit from good labor relations and you will be in a position to leverage the perspective of your company’s human capital.

From the Coach’s Corner, here’s a question from a reader about proper etiquette:

Q: Lately I’ve attended several business meetings where I have already met the other attendees, but my bosses have not. When introducing the vice-president or president of our company, (I am a manager), should I use his title, “John Doe, President of ABC Company,” or simply say “John Doe, also with ABC Company?” 

A: That’s an excellent question. It’s refreshing that your company employs such a conscientious person. It’s proper protocol to introduce guests to your boss first, such as: “This is John Doe, president of ABC Company.” Then, introduce your boss to the other person.

How to avoid EEOC Discrimination Suits

 

Updated May 20, 2010 9:30 a.m.

If you’re an out-of-work attorney, the good news is that the Equal Employment Opportunity Commission (EEOC) is on a hiring binge. The EEOC’s Web site also indicates the agency is recruiting for investigators to handle employment discrimination complaints. Of course, mediators, administrative support, managers, and IT personnel are also in demand.

That means employment discrimination complaints are sky-high. For example, in 2010, Boeing’s Mesa, Arizona operation settled two sexual harassment cases for $380,000. A KFC franchisee was forced to pay $1.1 million in a sexual harassment case involving 19 female employees.

Here’s a look at years 2007 through 2009:

In late 2007, I wrote about several respected companies caught in the crosshairs of the EEOC for alleged violation of federal law. It was hard to believe they included Nordstrom, the American Ballet Theatre, Delphi and Bloomberg.

That year’s EEOC-related cases resulted in massive monetary damages: An aggregate $54.8 million.

In 2008, the EEOC charged 95,402 companies with employment violations. The monetary damages totaled $102.2 million.

In 2009, there was a slight drop in EEOC charge statistics – 93,277 cases, but the early indication is that the aggregate amount will prove to be higher when the cases are finally settled.

Among all the categories in 2009, retaliation cases comprised 36 percent of the total – a slight increase from 2008 when retaliation cases were 34.3 percent.

That’s a sad commentary for businesses and public agencies that are large enough for a human resources department. Increasingly, HR departments appear to be supporting and implementing such retaliation. As a Biz Coach, I’ve heard from employees seeking tips from abusive employers in both the private and public sectors.

And that’s just the federal cases. State courts across the nation are filled with discrimination cases, too, because complainants want to avoid the federal caps on monetary damages.

Historically, high-profile harassment cases are a catalyst for additional complaints by other workers. EEOC cases also lead to declining morale, retention problems and poor productivity, which are also costly.

While a federal-agency investigation doesn’t indicate a company is guilty of discrimination, there are several measures that will insure success.

The six basics for micro-companies:

1. Get a mentor and join your local chamber of commerce.
2. Consider outsourcing your payroll.
3. Implement benefits and retirement plans.
4. Create a policy and procedures handbook (job descriptions, hiring, appraisals, compensation, firing and operations).
5. Stay aware of all employment laws.
6. Document everything.

For larger companies, every company’s situation is different, but in general there are 13 basics to avoid EEOC headaches. In my experience, it’s important to learn how and why complaints are filed, and to treat employees with respect and confidentiality.

Law firms have asked my company to help their clients after U.S. District Court actions. In one case, I was asked to implement a wage and compensation plan after a trucking firm inadvertently violated federal laws. A well-meaning technology employer was fined for comments in an inappropriate interview-process and I was asked to conduct sexual harassment training.

Both companies were heavily fined and their lawyers cost even more. One company is no longer in business. So, it’s vital to know the proactive steps to eliminate workplace discrimination and harassment, and the practical benefits to you of equal opportunities for employees.

The key is to start where the proverbial tire meets the road – when employees are hired.

Here are 13 strategies:

Fully understand the required skillsets. Naturally, first decide what each job requires. When a person leaves, decide what additional qualities you want in the job description. While experience and skills are an important consideration for meeting your requirements, there are several other considerations, so take your time.

Keep in mind the three A’s of hiring: Attitude, appearance, and ability – in that order – to fit both your culture and customer service initiatives.

Review your application process. The appearance of discrimination can be unfortunate opportunities for applicants or the EEOC to file complaints regarding your hiring decisions. Review your interview checklist questions and employment applications so that you only inquire about applicants’ talent for the job and availability for attendance according to your required work hours.

When anyone requests an application stay safe by providing it, but don’t do it selectively to avoid the appearance of discrimination. Don’t set deadlines for applicants to apply unless you strictly adhere to them.

Interviewing. When you interview, ask open-ended questions to get the applicant to talk about any issues related to the job. Closed-ended answers in which an applicant answers with a “yes” or “no” won’t be productive. You’ll want to know about the person’s attitudes, expectations and values. A skilled interviewer is careful about commenting on an applicant’s answers.

Background checks. A background check is critical. If you ask questions of a reference or former employer, make certain to take the same precautions as you do with the applicant. If you utilize credit reports, adhere to the provisos in the Fair Credit Reporting Act.

Making an offer. Put your offer in writing to successful applicants, but stipulate that you’re an at-will employer. State the salary in weekly or monthly amounts – so that longtime employment tenure is not implied – and whether there are any contingencies, such pre-employment medical exams. Hopefully, you have highly trained interviewers, but make clear that the letter is your company’s last word in employment and that it supersedes any other representations by interviewers.

Drug testing is often valuable for screening purposes. Applicants with a drug history will sometimes withdraw their applications, but the test is effective for those who don’t. In my experience, drug users are the most dishonest employees – at a much higher rate than even alcoholics.

Insuring success. Make full use of your probationary period. Assuming an employee adequately demonstrates technical skills, remember the No. 1 employer-complaint about new hires is their lack of soft skills – a poor attitude and inability to communicate effectively with coworkers and customers. Appraise them accordingly.

Employee handbook. For legal and productivity reasons, the employee handbook should be utilized to inform employees of your expectations. But clearly state a disclaimer – it’s not an employment contract – employment is conditional. Either party may terminate without cause or notice. Preferably, employees will be given an acknowledgment form regarding their at-will employment status.

The handbook should include policies such as attendance, benefits, vacation, employee-monitoring systems, probationary periods, sick leave, and FMLA (family and medical leave, if you employ 50 or more workers).

Make clear the company will not tolerate harassment and the procedures for reporting it. Remember, employers are liable for behavior of their employees. Should harassment allegations be raised by an employee, be sure to follow through with an immediate investigation and discipline, if proven, and don’t tolerate retaliation. Sexual harassment training, in particular, should be regularly given.

Avoid favoritism. Be consistent make sure of adherence to policies.

Be proactive about workplace complaints. Do not avoid taking action. Make sure you are actively listening.

Safety counts. Be empathetic and show respect. Be safety conscious.

Wage and hour practices. Stay current with all state and federal wage and hour laws and regulations. Some companies have run into trouble because their hourly employees are working longer hours as exempt managers and not paid for overtime. Carefully document your records.

Of course, try to be competitive in pay and benefits.

Continuous policy training. To insure success, make certain managers, human resource interviewers and workers are knowledgeable about your business policies. You’ll be in a better position to prevent harassment, hire correctly and appraise employees accurately. You’ll also be in a stronger position, if you do encounter the threat of litigation. Stay on top of all details, but also be mindful of the protected classes of workers to avoid federal intervention.

Evaluations and terminations. Supervisors and managers must be schooled in worker behavior, performance and if necessary, terminations. Not to oversimplify, but remember every employee is entitled to know three things: What’s expected; what’s in it for them; and how they’re doing.

Make certain that terminated employees can’t conclude they’re being let go for reasons of discrimination. Again, that means documentation and thorough footwork.

These minimal reminders will help you to avoid employment and EEOC traps. However, if you do find yourself in the EEOC crosshairs, be careful how you respond in crafting your position.

From the Coach’s Corner, here are informative federal-government Web sites:

- U.S. Department of Labor, www.dol.gov

- U.S. Equal Employment Opportunity Commission, www.eeoc.gov

30 Time Management, Stress Reducing Skills

Updated May 5, 2011

Stress factors abound everywhere. The unemployment picture continues to be murky. General Motors disclosed it earned $3.2 billion in Q1 2011, not long after its bankruptcy and taxpayer bailout.

OK, so you didn’t get a bailout, but Goldman Sachs faced a fraud investigation and paid $20 billion in bonuses just one year after taxpayers rescued the firm with a massive cash transfusion. If you’re a Main Street businessperson, the firm’s behavior is likely to contribute to your stress factors.

Moreover, published reports indicate the firm now disingenuously tries to justify its bonus program by claiming it didn’t need the taxpayer bailout. You might recall it was engineered by former Treasury Secretary Henry Paulson, a Goldman Sachs alum. Where is their moral compass you wonder?

And you might not be convinced the U.S. is embarking on an economic recovery. Many economists are calling it a jobless recovery, but with respect for their opinions, the phrase is actually an oxymoron.

The economy will continue to be difficult with many economic stress factors.

They include:

• Tight credit
• Layoffs
• Rapacious behavior by many credit card companies
• Natural disasters
• Home foreclosures
• Bankruptcies
• Health care costs
• Declining profit
• College tuition

And such factors make businesses reluctant to take bold measures to invest in their future with needed equipment, marketing and training their workers. It’s time for performance solutions.

Start by reducing stress and saving time. Why?

Executives and workers, alike, feel powerless over most of stress factors. Indeed, the 2007 American Psychological Association study, “Stress in America,” had some startling conclusions (www.apa.org). The study is relevant years later.

For example, 74 percent cited work stress, 73 percent had money worries and 66 percent complained about their workloads.

Pressure turns into stress for many.

Trauma in your personal life can affect your business and career. Short of psychotherapy or meditation, time-management skills are a solution.

Here are 30 ways to reduce stress:

1. Identify your stress factors and take steps to eliminate them. Whether it is nasty surprise letter from the IRS, credit-card company predatory behavior, or a complaint from your best customer, do what you can to solve the problem quickly so you can move forward.  Paraphrasing a philosophy of former President Gerald Ford, clear the table and move forward.
2. Know your capabilities and limitations. Don’t take on too much.
3. Find a trustworthy person with whom you can vent and give you empathetic feedback when asked.
4. Understand when you need to say “no.”
5. Get refreshed by taking regular breaks, vacations, recreation and exercise. And when you can, a simple walk will work wonders.
6. Set time limits and goals for meetings.
7. Review your long range goals. Frequently during your work day, ask yourself: “Is this helping me to reach my goals?”
8. Record and analyze how you spend your time.
9. Make sure the first hour of every day is the most productive. Tackle the hardest task first. The rest of the day will seem like a walk in the park.
10. Practice excellence in every responsibility. Do the very best you can and you will prevent regrets.
11. Do everything gently. As famed entertainer Hoagy Carmichael once said, “Slower motion gets you there faster.”
12. Remember:  If you don’t take the time to do it right, when will you have time to do it over?
13. Instead of “post-it notes”, put all the necessary folders away in the appropriate file drawers. Once the clutter is off your desk, the “to do” list serves as the master organizer.
14. Look for progress – not perfection.
15. Plan your time. Make your “to do” list by Friday for the following week. If you’re in sales, have your list ready by Thursday.
16. Review the next day’s schedule before going home each night.
17. Prioritize your work: A, B, or C. Your A duties get done first – immediately.
18. Learn how to structure your e-mail system for maximum efficiency.
19. Eat the right foods for sustained energy.
20. Get enough sleep. If you feel tired by mid-day, ask your doctor for a sleep study. Insomnia and sleep apnea routinely lead to high blood pressure and even strokes.
21. Make your work fun.
22. Learn from baseball player Ichiro and do stretching exercises.
23. Listen to the right music. For many successful people that means classical music.
24. Look around to help someone who is less fortunate. Volunteerism is gratifying.
25. Learn breathing techniques.
26. If you commute to work, consider mass transit and take a good book to read.
27. Review inspiring thoughts, such as “No matter what, there are no big deals.” Taking the emotional sting out of your reactions to events will help. Learn to respond, not react.
28. Develop positive affirmations about yourself, keep your notes handy, frequently review them and rehearse them in front of the mirror.
29. Remember, the remedy for depression is action.
30. Become more active socially. Yes, that’s a time management skill. If you are not alone, you are not lonely. Loneliness contributes to stress.

Get busy and you’ll soon feel ready to take on the world and head toward to profits. Start investing in your future with needed equipment, marketing and training of workers. And talk with your public officials about policies that will improve the nation’s economic health and create jobs.

From the Coach’s Corner, for related career tips, here is another Biz Column:

10 Strategies to Overcome Stress and Energize Your Career

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