New England has been watching a family feud better than any “reality” show could dream up; after years of in-fighting, Arthur T. DeMoulas was fired in June as CEO of Market Basket, a grocery store chain with 71 stores and 25,000 employees, by his cousin-led board of directors. What has happened since then will be the subject of management classes for years. Here is a sampling:
- Employees have held rallies at company headquarters, the latest with estimates of between 6,000 and 15,000 attending, protesting “Artie T”’s firing and demanding his reinstatement. Customers have joined the rallies wholeheartedly.
- Some store managers have signed a petition stating that they would resign if their boss was not reinstated or if the company was sold to an outside buyer.
- As I write this, the Save Market Basket Facebook page, in support of Arthur T., has almost 76,000 Likes. The Page started on July 12, 2013.
- Warehouses are full, as warehouse employees have refused to show up for work.
- Store parking lots are virtually empty, as loyal customers support the employees and Artie T.
As I listen to the ongoing saga every day and listen to the impact on virtually every grocery store customer in New England, I wonder about a boss so well-loved that employees across all levels, departments, and locations would walk away from their job.
- Arthur T. was known for treating employees, who are not unionized, very well, with good benefits, above-average pay and an employee retirement fund. Well, there are other companies who pay their employees well.
- One protesting employee remarked about Artie T’s business skills and said that profits doubled during his eight-year tenure as CEO. Again, there are many companies who have grown profits.
- Artie T. created a vision for the company: The customer comes first. Market Basket is known for fresh products, low prices and high levels of customer service, fulfilling that vision in every store. Thankfully, there are examples of fabulous customer service in virtually every industry so again, I ask, what would make employees walk away from their job, some held for decades, to support an ousted CEO?
The answer, it seems to me, is something every single business owner has the opportunity to give and to be: employees repeatedly say that Artie T cares. He remembers family member names, he asks how the kids are doing in school (and he remembers the school names, too); he attends employees’ family weddings and funerals; he congratulates team members for their accomplishments, able to cite specifics; he celebrates in store openings, talking with employees and customers and shaking hands, seemingly more happy to be in a store rather than an office. Employees mention their former CEO’s integrity, approachability, and generosity.
Arthur T. has shown employees how he wants customers treated by the way he has treated employees – with care.
Last week, Comcast won the award for worst customer service. The recording of a Comcast customer trying to cancel his service – only to be harassed for over 8 minutes by a Comcast agent – went viral, and needless to say Comcast has experienced a pretty tough week. While at first it seemed like an agent gone bad, Comcast has since confirmed that agents are financially incented to retain customers. While this agent certainly didn’t show much compassion, he was trying to do what his company rewarded him to do.
In my corporate days, I probably prepared more than 50 incentive plans, and while that doesn’t make me an expert, it certainly provides me with some lessons. This Comcast snafu reminded me of the most important lesson I learned from creating, then adjusting, scrapping, re-creating incentive plans:
Whenever you incent a person to do something, you are also dis-incenting them to do something else.
Here are a couple examples from my experience:
- A newly launched product was moving more slowly than we wanted. We created a short-term high-impact incentive to encourage our sales team to sell that new product. While sales of the new product increased, the sales team lost focus on the company’s bread-and-butter products and sales dropped drastically.
- Another incentive encouraged our team to sell longer-term service contracts over shorter-term contracts. Seemed logical. What we didn’t plan on was a longer approval cycle which delayed any service contract revenue coming in – short or long term.
As you can see, I most often stumbled by incenting sales of one product or service, or even a product line, at a different rate than others. If a sales rep knows they will earn $25 every time they sell product A, and $50 every time they sell product B, they will try for product B every time. Who wouldn’t? If any of your staff’s pay is performance-based, here are some pointers:
- The decision to award an incentive payment upon the sale or upon collection is often debated, and rightly so. Define your sales team’s role clearly; sales only? Do they have credit granting authority? Or, are they responsible all the way through collection?
- Be careful that your incentive structure does not put one employee against another. Having a maximum incentive pool can cause this; define the split to guard against too much competition.
- The most important question to ask with every incentive payment is this, and you must ask it every time: By encouraging a particular behavior by my employees, what might I discourage them from doing? You must think like an employee on this one or you will be caught off-guard again and again (trust me, I learned that the hard way).
I love incentive and performance pay, but just be sure that you are comfortable with not only what you are encouraging your staff to do, but also with the behavior you are discouraging. If you don’t believe me, just ask Comcast.
“How do I get my staff to finish the loose ends on a job so I don’t have to?”
“How do I get my team to remember all the steps they need to take on a procedure?”
“How do I get my staff to put all the tools and boxes away at the end of a day?”
These are all questions I’ve heard from small business owners over the past few weeks.
The answer is simple:
Stop doing it for them.
I said simple, not easy.
Chances are that if you’re reading this, you’re a business with protocols and checklists, or at least someone who wants that level of consistent quality in their business. When it doesn’t happen, it’s frustrating and just grates on your nerves. I hear “why don’t they care enough to do the job well?” We sometimes take it personally, or think that our employees don’t care. As with so many things, though, it comes back to us: we pick up the pieces at the end of the day, we tie up the loose ends, so why would our employees think that it’s their responsibility? Yep, you created the practice and you need to dismantle it if you want your staff to work independently without constant reminders and reinforcement.
To change a protocol, wanted or unwanted, you start with communication. If you want your staff to do something differently, don’t assume that they can read your mind (sound familiar?); you need to tell them what needs to change and how it will change. Think of it as if you’re playing a board game and you want to change the rules; you’d have to tell everyone what the new rules are, right? Same is true in the workplace. New rules, new protocols, new responsibilities. Be culpable, recognize to your staff that you let this happen, and that you take responsibility for how things have been done in the past. Finally, remember that habits are tough to change and it may take time. Your staff is not deliberately ignoring your request (if they are, that’s another conversation we need to have!), they have just developed a habit and it may take time to adopt a new habit. Be patient and keep the communication going as your team’s behavior (and your own) slowly changes.
By the way, the solution works for another age-old question, one I heard just this morning: “How do I get my kids to pick up their laundry?” Stop doing it for them. Like I said, simple, but not easy.
Understanding what employees want in benefits can seem like shooting at a moving target; there are more studies and surveys than there are potential employee benefits. These studies have a lot of great information in them but there’s a catch: they didn’t ask your employees. The only way to find out what is most important to your employees is to ask.
SurveyMonkey.com is simple and anonymous for employees to use. The free version allows you to ask up to ten questions with a variety of question formats. If you have few employees, try having an open dialog with employees to prompt in-depth answers; consider asking employees to give you their thoughts in a more free-flowing format. This style is best for discovering benefits that don’t come off the shelf.
Stop and think about what employees really want, with or without a survey; it comes down to the basic wants that all humans desire – control, to make an impact, and appreciation.
- Control. Employees want to be in control of their schedule, when they work, where they work, and how and when they can take time off. Open communication allows you to both achieve what you want.
Employees also want to be in control of their approach. This can be a tough one for entrepreneurs to swallow since there is a control-freak lurking somewhere in us. If you hire up (Read more about hiring up: http://avisionofyourown.com/tag/managing-employees-small-business/page/3/), you have hired an expert, someone more skilled at their job than you could be. Why would you try to control how this hired expert completes their tasks? If you’re still skeptical, create a safety net by asking for drafts, agreeing on a timeline, or having the employee explain their approach first. Do this a couple of times, then let them do the job you hired them for.
- To make an impact. Humans like to contribute, to give, to know that they make a difference. While we generally think of this in philanthropic terms, it’s true in all aspects of our lives including our working lives. Allow your employees to contribute, to use their talents, to feel valuable.
- Appreciation. Let your team know that you appreciate them; be specific, timely, and usually, do it in public. It can be as simple as a heartfelt thank-you or a handwritten note with tickets to a show or dinner. If you ever received a handwritten note from a boss, I bet you saved it for a long time and may even still have it. Give that same gift to a well-deserving staff member.
Talk to your employees about what is most important to them through a survey, an impromptu conversation, or a scheduled quarterly/semi-annual review. Incorporate these basic human wants – (control, to make an impact, and appreciation) into your organization – and not only will your employees notice, but they will appreciate you more and be motivated to work harder. Happy employees means happy customers, an attractive bottom line, and a less stressful personal life.
44% of employers offer health insurance to employees, first and foremost, because they feel morally obligated to do so (eHealth, Inc., March 2013)
If you don’t fall under the government’s definition of ‘small business’ (meaning 50 or fewer employees), then you need to pay attention to the health care changes as these changes will have a significant impact on your company! Starting in 2014, ‘large groups’ or business with more than 50 employees will have three options for health care coverage. They are:
- Offer health coverage: either ASO or fully insured
- Offer partial coverage: This option is only available (without penalty) in 2014)
- Stop offering coverage: let employees buy individually and risk paying the employer penalty
If you want to learn more about the upcoming changes, plans, and options, you can visit the sites below. I encourage you to get more information straight from the source such as the IRS, and state department of insurance, rather than a third party. With that said, here are some links to more information: