How to Make Employees Work for You!

So, yes I hope it is a funny title and that would help you click on this article.  But this is a serious topic as most companies spend about 70% of their Operating Expenses directly related to headcount.  That means getting the most out of your employees is an utmost priority for businesses.  To that end, people expend a lot of time thinking about leadership, morale, and retention.  The one thing that they don't articulate is:  "How do I know if an employee is successful?"

To be very specific here, I am talking about objective measures of performance.  This is well-known within at least one area, and that is Sales.  Salespeople either meet their quota or they don't.  The productivity of a Salesperson is determined by at least that result.  There are other measures that can be applied like Gross Margin or Product Mix.  All of these measures are designed to make the Business obtain their goals.  If everyone in Sales meets quota, then the company should meet its Business Plan.  If it does not, this is a failure of Planning not a failure of the employees.

The problem comes in for non-Sales employees.  Most people have a much more subjective way of judging employee performance.  They judge people that fit in with the company culture and do not cause issues.  What they don't do is think through how the work of any given employee relates to the bottom line.  I felt that pain myself when I was the CTO at AFC.  I was asked to show how my work related to the finances of the company.  I spent the vast bulk of my time in those days working on Corporate and Technology Planning.  I found it really hard to create that set of metrics.  We eventually came up with 3 "metrics":  Return on New Product Development, Cost Per Port Analysis, and Number of Speaking Engagements.

Of those 3, the Return on New Product Development was the most challenging to measure.  Some things were done to maintain a large customer with little direct revenue.  The thing is that even then, there is a need to minimize upfront costs in those examples.  If you are not going to sell many of the items, then Development Cost ends up being more important than Product Cost.  As these activities get added in with everything else, it is just part of an ongoing average.  Even a long-term planner can demonstrate a direct financial impact.

Have a great day!

Jim Sackman

Focal Point Business Coaching

Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business - Change Your Life!