Small and medium size businesses, if they want to achieve significant profit goals, need to do a more effective job of providing reasons for employees to perform better.
Most employees have some pretty basic questions that need answering in order for them to excel on their job.
Successful managers need to achieve some type of behavior change among employees to achieve positive maximum results, according to Ed Rinker. His company advises large corporations and small companies on employee incentive programs.
Says Rinker, if addressed properly, such changes will result in employees previously working in a "have to" mind set switching them to a "want to mindset". To make this happen, Rinker believes there are four employee questions that need to be answered by small business management:
- Tell me what you what me to do,
- How do you want me to do it,
- How am I doing, and
- What's in it for me.
By providing answers, small company managers can get better results from their staff and positively impact the bottom line.
"Answering these questions and in particular making known expectations is fundamental to successful people management," he said. "By making people understand what is expected of them, they will perform best. Sadly, this is often lost on many small company entrepreneurs," he added. Besides answering these questions, small to medium size businesses need to provide employee incentive and recognition programs to sustain such objectives as reduced turnover, increased morale, and increased productivity. When properly developed, programs developed by Rinker and others will most often provide a positive ROI back to management.
Strategic Approach Needed Providing incentives to employees will make them work harder. Getting them to work smarter is a little bit more difficult. In Rinker's experience, it's not uncommon to see managers approach employee incentives from a tactical perspective.
A tactical approach looks at employee incentives with the question of "what should we give our employees". A gift certificate, a plaque, an employee parking space, a watch, or some other gift vehicle are common tactical approaches. To Rinker, small companies in particular need to look at this approach as a broader communications task. Communications is a strategic approach that promotes buy-in by the staff.
Though important to the success of a well-designed employee incentive and recognition program, the communication plan must precede the "gifting" mindset prevalent in today's business environment. "Gifting mindset" is industry terminology referring to corporations giving gifts and awards to employees randomly without any plan of action, strategy, purpose, or targeted business objective.
From a strategic perspective, there are generally three reasons why employees under perform. Those reasons are:
1) unclear expectations from the employer, 2) lack of feedback on job performance, and 3) inappropriate reinforcement. If a program communication plan can address these three reasons why employees under perform, management will see a significant improvement in not only employee performance, but a positive ROI to the corporate bottom line. By clearly communicating expectations and following through with positive, tangible reinforcement, a win-win scenario is created. Employees benefit because there is a pay off for them.
Management benefits because of the "incremental" level of performance by employees within the organization. (reference chart 1A). As an employees' behavior changes over time (reduced turnover, fewer accidents, increased productivity), the "want to" zone is entered which results in a true Performance Improvement Program.
(1A) Have to" Performance vs. "Want-to" Performance
(This is a series of articles on incentive programs for small and medium size businesses. Next we will be reviewing the benefits of online Programs and why they are ideal tools for today's growing small and medium size businesses.)
Ed Rinker is the founder of Brand Marketing Services, Inc. (www.brand-mktg.com). Brand Marketing provides tools to manage online incentive programs. Clients include a significant number of both small and mid size companies.