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When Not To Pay Employees

February 28th, 2017

“This recent storm resulted in a loss of power at the shop so I closed early. I need to know whether or not I have to pay employees for the full day when it wasn’t my fault they couldn’t work.”

Harassment is a BIG deal and can land you in very hot water!

September 30th, 2016

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Do your sales incentives help or hurt your organization?

September 29th, 2016

https://hbr.org/2016/09/wells-fargo-and-the-slippery-slope-of-sales-incentives

Reprint from the above….

Wells Fargo and the Slippery Slope of Sales Incentives

Andris A. Zoltners, PK Sinha, Sally E. Lorimer

SEPTEMBER 20, 2016
In early September Wells Fargo agreed to pay a $185 million fine and return $5 million in fees wrongly charged to customers. The settlement stems from the bank’s employees allegedly opening more than 2 million bank and credit card accounts without customers’ permission. The CEO of Wells Fargo, John Stumpf, apologized in front of a congressional panel Tuesday, saying in a statement, “I accept full responsibility for all unethical sales practices.”

That speaks to why they did this in the first place: To meet sales quotas and earn incentives.

This is certainly not the first time that a high-profile sales scandal like this has hit the press. In the early 1990s Sears sought to restore its reputation with $46 million in coupons because some employees of its automotive repair division (who were paid a commission on sales of parts and services) had allegedly enticed customers into authorizing and paying for needless repairs. In 2005 the world’s largest insurance broker, Marsh Inc., paid $850 million in fines in the aftermath of accusations that it had received kickbacks from insurance companies for steering business their way — a scheme at odds with Marsh’s commitment to finding the best deal for customers.

Beyond the fines, Wells Fargo has fired at least 5,300 employees for “inappropriate sales conduct,” and the bank is making changes to its quota system. Stumpf said in an earlier statement: “We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers.” Politicians, predictably, have railed against the leadership at Wells Fargo and have called for Stumpf’s resignation. One of the intriguing facts to come to light is that the fraudulent account openings continued even after the bank was aware of it and had fired employees for it starting in 2011.

That suggests that firing employees was not enough to curb the actions. Will eliminating sales goals do it? Before answering this question, it is useful to understand why and how such sales practices begin and spread within an organization.

In these and many other similar (but often less high-profile) cases, much of the blame gets placed on the sales goals and incentives. Salespeople are offered a large monetary reward linked to the achievement of sales goals — goals that employees perceive as excessively high. Sales managers, too, are rewarded for goal achievement, so they put pressure on salespeople to deliver. Salespeople are enticed by the promise of the large reward, or perhaps they are fearful of losing their jobs. Either way, they do whatever it takes to make sales goals.

But large rewards tied to challenging sales goals do not have to be a deadly combination. Many companies have great success using incentives and stretch goals to motivate the sales force and drive revenue. The culture in such sales forces may be sales-oriented and even competitive, yet salespeople still behave ethically and remain focused on meeting customers’ needs.

What differentiates sales teams that play by the rules from those that break them?

Large-scale unethical sales practices often begin with minor ethical compromises. Things escalate and spread from there. Consider the following sequence:

A bank account manager, under pressure to make a sales goal, pushes a customer to add a credit card, even though the account manager knows it’s not in the customer’s interest
Still short of the goal, the account manager asks his friends and family to open accounts. (The accounts are to be closed shortly thereafter.)
With the goal still not achieved, the account manager opens accounts without asking customers and transfers a small amount of money. (The accounts are closed shortly thereafter and the money is transferred back.)
As soon as the account manager gets away with the first unethical act, it’s not a big step to the fraudulent ones. The justification moves from “it’s legal” to “no one is harmed” to “no one will notice.” When such practices are tolerated, they escalate in severity and spread throughout the organization.

To prevent that, the sales culture has to stop the first level of compromise, because the slippery slope begins there. As Wells Fargo has discovered in the last five years, even a strong compliance function — one that began firing people in 2011 — can’t counteract a compromised culture. When things escalate to such a scale, the problems won’t stop with salespeople. Managers and leaders may be looking the other way, or aiding and abetting the behaviors.
What’s most insidious is that managers and leaders may be engaging in similar behaviors in their spheres and domains — in how they deal with other people inside the company, with partners, and with suppliers. Often, bringing about change requires going right to the top of the sales organization and bringing in a new leader who isn’t connected to the history of what’s happened. This individual can build a new culture based on appropriate values and the right workstyle.

Though not a question for customers and regulators, companies such as Wells Fargo have to ask how they can succeed in a sales world without heavy reliance on goals and incentives.

In 2011, about the same time that Wells Fargo began firing employees for questionable sales practices, we wrote a piece for HBR.org addressing that very issue. We called it “Is Your Sales Force Addicted to Incentives?” As we wrote back then, the key to success will be a new culture built around a more balanced approach to managing sales. This new approach will require using tools other than incentives — for example, interesting work, enhanced processes for selecting salespeople and managers, training and coaching, information sharing, empowerment, teamwork, manager assistance and supervision, and improved performance management systems — to motivate salespeople and guide and control sales behaviors.

If the bank is successful in transforming to this balanced sales culture, then perhaps the money it once used for employee incentives can instead go to customer incentives — for example, a no-fee credit card or a better interest rate for opening a new high-balance account. Other companies would be wise to take the time to examine their own sales culture and ask whether incentives might be clouding otherwise good judgment.

Andris A. Zoltners is a professor emeritus at Northwestern University’s Kellogg School of Management in Evanston, Illinois. He is also a cofounder of ZS Associates, a global business consulting firm headquartered in Evanston, and a coauthor of The Power of Sales Analytics.

PK Sinha is a founder and cochairman of ZS Associates, a global business consulting firm, and a coauthor of The Power of Sales Analytics.

Sally E. Lorimer is a marketing and sales consultant and a business writer based in Northville, Michigan. She is a coauthor of three books on sales force management.

Protected: “Every career move—even the ones that don’t work out—will teach you something about who you are and what you want.”

September 21st, 2016

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Doing the Right Thing in an Irrational Economy

July 16th, 2016

How do we reflect and encourage a commitment to “do the right thing” despite daily pressures make regaining or sustaining profitability our top priority?

A leader can start by admitting mistakes and encouraging other to do the same. Hiding findings or blaming others very often comes from a very natural need to protect ourselves from harm. The best companies understand this and work hard to foster open communication and avoid the tendency to make issues more complex than they are. Very often all it takes is a “gut check.” Put more simply: doing good, feels good.

Sometimes a commitment to values comes at a high short-term cost (admitting mistakes and fixing them is almost never without cost to the client or stakeholders.) But living by a set of values that focus on doing good by employees and customers creates a stronger company over the long haul.

Developing–and living with–a set of principles that guide decision making throughout an organization is no simple task. It involves the kind of soul-searching that not all people are prepared to engage in, especially in difficult economic times.

The value of doing good
I feel fortunate to be in a business where we can do well by doing good. As a staffing firm, the work we do impacts the lives of the people we touch in a powerful way. We must be ever vigilant and mindful of this impact. What impact do you have on the lives of others? I suspect it’s more than you realize. If you are a manager, do your employees understand your values and commitment to doing the right thing? As an employee, do you feel empowered to do what’s right, and admit mistakes along the way? Or is your first thought about how to mitigate the cost before understanding the impact on the lives of others?

Balancing work and life

“Quality of life” issues, such as balancing one’s work and personal lives, are still thorny issues at many firms. Thirty years ago, if you’d talked about these issues, management would question your commitment, or even your sanity. But most people are trying to balance their business lives with their personal lives, their professional needs with their health, social, and spiritual needs.

In these difficult times, there is a lot of pressure to work harder and longer, for the very real fear of losing ones job. Good business leaders know, however, that squeezing as much out of workers as possible, may increase productivity for the short-term, but is not sustainable for the long-term. Long-term profitability is sustained when employees are motivated and committed out of a sense of loyalty.

Managing for the short term as well as the long
As much as leaders understand that we must manage for the long term and keep employees happy, we must be realists and manage for the short term, as well–and that’s tough in the current economic environment. Just as people must manage their personal and work responsibilities, so, too, must companies balance their priorities –all companies must manage for the short term to some degree. We all need to understand the tradeoffs.

Of course, we would all love to work for a company that only manages for the long term, but that is not a reality today. Cash reserves have dwindled, and funding sources have tightened or disappeared altogether. Many of us are simply trying to keep the wolves at bay, and must ask more of ourselves, our colleagues and our employees. But we must not let our fears cause us to lose sight of our values and our commitments to do the right thing!

Shannon Erdell is the President of TLC Staffing and author of “Temporary Sanity: Managing Today’s Flexible Workforce”, SOCAA Publishing 1995. Headquartered in San Diego, with offices in Southern California and North Carolina, TLC Staffing is a 24 year old, multi-disciplined temporary and permanent placement firm. Their specialty divisions include: Business Services, Accounting and Finance, Legal, Human Resources, Engineering and IT. www.tlcstaffing.com 858-569-6260

5 Tips for Keeping Stress at Work in Check

September 24th, 2013

Stress in the workplace, whether triggered by significant workloads or pressing deadlines, can sidetrack employees and prevent them from doing their best. The following simple steps for managers and employees can help reduce the pressure and increase team performance and productivity:

• Avoid Setting Unrealistic Goals. Setting achievable goals with reasonable timelines helps your sense of accomplishment grow while your stress level declines.

• Step-Out Complicated Projects. Dividing a complex project into phases provides specific direction, helps maintain a calm environment, and motivates the team. Daily or weekly to-do lists can also help prioritize tasks.

• Make Time for Meetings and Completing Tasks. Blocking out the time necessary to complete a task on your calendar is just as important as scheduling time for meetings.

• Communicate Regularly. Recognizing employee achievements can increase confidence, as well as reduce stress related to workloads. Employees may also be able to help identify new ways that they can contribute.

• Schedule Time for Exercise. A regular exercise routine can help lower stress and recharge your batteries for the challenges ahead.

Remember that laughter can be one of the best stress relievers of all–when things start to get too intense, it could be time for a little humor to lighten the load.

Critical thinking . . .

June 11th, 2012

Speaking with colleagues and clients, it seems that many of us are still fire-fighting and have lost our edge as it regards to strategic and critical thinking. Although a bit simplistic, I found this artical interesting and a good starting point for getting back to leading versus reaction.  Some of the reader comments are very thought-provoking as well.

What kind of “what if” thinking have you practiced lately?

http://www.forbes.com/sites/work-in-progress/2012/03/27/how-to-develop-5-critical-thinking-types/

“Rewrite” your interview script

March 15th, 2012

During your interview you are telling a story about yourself. Michael Kinsman offers some valid thoughts as to show and tell why you would be the right person for the job.

http://www.sandiegoreader.com/news/2012/mar/15/jobs-rewrite-your-interview-script/

National Cost-per-Hire Standard

June 17th, 2011

http://hrstandardsworkspace.shrm.org/apps/group_public/document.php?document_id=3311&wg_abbrev=swpt06
 

 Many of you  may have seen this already – but in case not, I thought I’d post the attached recommended standard for your review 

I’m still pondering a question in my mind related to a piece that seems missing when evaluating recruitment costs. The question relates to if, and how, this national standard for cost-per-hire should be related to retention. How does one account for very low cost-per-hire but very high attrition rates, or vice versa?  

All the best,

Shannon Erdell, President

 

 
 

 
 
 

 

10 Employee Training Tips

February 8th, 2011

Well-trained employees are the key to your small business success. Studies have shown that the most successful, productive employees are those who have received extensive training. They’re the cream of the crop, and often have the strongest stake in the company’s future.

In an ideal world, you would be able to hire people who already possess the exact skills your business needs. But in today’s competitive labor market, demand for skilled workers far exceeds supply.

That’s where training comes in. Not only does instruction arm your employees with needed professional or technical skills, but it also shows that you are invested in them and interested in bringing them with you into the company’s future. This helps keep workers motivated and involved.

To successfully launch an employee-training program in your own company, follow these 10 helpful tips:

  1. Stress training as investment.
    The reason training is often considered optional at many companies is because it is thought of as an expense rather than an investment. While it’s true that training can be costly up front, it’s a long-term investment in the growth and development of your human resources.
  2. Determine your needs.
    As you probably don’t have unlimited time or funds to execute an employee training program, you should decide early on what the focus of your training program should be. Determine what skills are most pertinent to address current or future company needs or ones that will provide the biggest payback. Ask yourself, “How will this training eventually prove beneficial to the company?” Repeat this process as your business needs change.
  3. Promote a culture of learning.
    In today’s fast-paced economy, if a business isn’t learning, it’s going to fall behind. A business learns as its people learn. Communicate your expectations that all employees should take the necessary steps to hone their skills and stay on top of their professions or fields of work. Make sure you support those efforts by providing the resources needed to accomplish this goal.
  4. Get management on board.
    Once you have developed a prioritized list of training topics that address key needs within your company, you need to convince management to rally behind the initiative.
  5. Start out small.
    Before rolling out your training program to the masses, rehearse with a small group of users and gather their feedback. This sort of informal benchmarking exposes weaknesses in your training plans and helps you fine-tune the training process.
  6. Choose quality instructors and materials.
    Who you select to conduct the training will make a major difference in the success of your efforts, whether it’s a professional educator or simply a knowledgeable staff member. Having the right training materials is also important — after the training is over, these materials become valuable resources for trainees.
  7. Find the right space.
    Select a training location that’s conducive to learning. Choose an environment that’s quiet and roomy enough to spread out materials. Make sure the space is equipped with a computer and projector, so you can present a visually stimulating training session.
  8. Clarify connections.
    Some employees may feel that the training they’re receiving isn’t relevant to their job. It’s important to help them understand the connection early on, so they don’t view the training sessions as a waste of valuable time. Employees should see the training as an important addition to their professional portfolios. Award people with completion certificates at the end of the program.
  9. Make it ongoing.
    Don’t limit training solely to new employees. Organized, ongoing training programs will maintain all employees’ skill levels, and continually motivate them to grow and improve professionally.
  10. Measure results.
    Without measurable results, it’s almost impossible to view training as anything but an expense. Decide how you’re going to obtain an acceptable rate of return on your investment. Determine what kind of growth or other measure is a reasonable result of the training you provide. You’ll have an easier time budgeting funds for future training if you can demonstrate concrete results.

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