Why do you employ people? For each of them to produce value, resulting in net profit in excess of the amount you pay them.
Why would you accept less than that? I know some of us are saddled with unions, relatives that work for us, people we’ve inherited and can’t easily get rid of, and many other excuses, however here are a few pointers that I think will help.
Remember, getting the job is the first job of someone who wants to be an employee. After that, every day, they have to prove to you why you should still hire them. and not give them the sack.
1. Link their income to their production.
Work out what your real net profit is, your incremental profit, and a way to measure the output of every employee. This takes some analysis and a spot of Work Study (Organization and Methods), but it is well worth the exercise.
- Don’t be too generous, and remember you’re not a socialist organization. People should get paid according to what they produce, not what they need.
- Set traps to catch rats. Take a really good look at productivity, shop your own business, record phone calls, restrict Internet use, use Secret Shoppers, send one employee on leave for a week and see if the others cope. If they do, get rid of the worst one.
- Educate your employees about profit and business.
- Look after your champions, and remember that people change.
2. Increase the production of your salespeople.
Teach your salespeople to sell, make them accountable, don’t accept excuses, have a sales meeting EVERY day, and fire your worst salesperson on a regular basis. Focus on results, not pipe-line, reputation, branding, market share – just the bottom line. Get them all onto a commission-only basis. Beware of “sales trainers” – they usually can’t sell.
3. Weed out the leeches and parasites.
Make their job unbearable if necessary; simply give them lots of work that they hate and micro-manage them. They’ll soon leave if you do it right. You’re in business to make a profit, and you don’t owe them anything.
4. Learn to Delegate.
The best program I ever attended to learn about management was the Dale Carnegie Management Course. I learned a lot of valuable information about delegation, and I highly recommend it. Most “managers” have no idea how to manage, motivate, or discipline people. Your people need to set their own goals, report to you how they’re doing and how they will improve, and be accountable for their commitments. No excuses acceptable.
5. Understand Joint Ventures.
In my business, everyone I deal with is a JV partners. I run my company with no employees, no risk, no cost, no overhead and little time. So I make a lot more profit and I don’t have to deal with losers and users. Lean and mean. Learn how JV’s work.
6. Don’t hire socialists, smokers, or people who don’t need a job.
If you need an explanation for this one, you have a problem.
7. Reward innovation, honesty, loyalty, and ambition.
These qualities are hard to find. Look after your champions and lock them in with residual commissions and long-term incentives.
8. Familiarity breeds contempt.
Don’t be their “buddy”, maintain your distance, be strict, hold people accountable, and lead by example.
9. Set up a “Dress and Grooming Code”.
When people look good, they feel good, and they do better work. Set and maintain high standards in every area of your business.
10. Train them, train them, train them.
Especially in the Joint Venture mindset.
