Retain Star Performers - Reward Outside the Box

It looks so very easy, don't you think? "Do unto others as you would have them do unto you." The Golden Rule feels so undisputed that it would be a solution for all human relations. Simply behave toward everybody the way you would appreciate being taken care of and all will run perfectly, correct?

Just a second... It seems that something is off...

Would your company's twenty-two year old top gun salesman want the exact same things from their career that your forty-something billing clerk wants? Is your technical staff hoping for the same opportunities and rewards as your receptionist?

Indeed, their needs and wants are quite distinct, though too many business owners use a universal method when commending their key staff. When a large project is finished, everybody is awarded an identical thing, whether you give them a meal or a gas card. Giving an identical reward to the whole team is what's right, isn't it? But is it actually fair to your team's best employees?

Hold On to Your Key People

Startlingly few entrepreneurs know that the Pareto Principle lesson about their team means that only 20% of their team are delivering 80% of your entire team's bottom-line. Further, almost every management book talks about studies which compare the productivity of the best workers to the not so competent (yet still useful) workers. The distinction between the top and bottom have been found to be as broad as 100 to 1. The nearest these ratios ever seem to get to one another is at best 4:1. So now how much more does this extreme variance in value wind up costing?

Assuming that your yearly salary for the least competent staff member is $30k, how much does it cost for your best staff? Since a fair bit of the costs for staff stay the same, they don't go up in relation to base salary. For the intent of this examination, let's use some worst-case figures, $60k. Assuming that your $30k person delivers $30k of value (otherwise you'd let them go, right?). If your best employee is a mere four times more productive than the worst, they deliver far more value for how much more they cost.

If your company pays for more training for your bottom-rung players, costs instantly go up, but without any promise that productivity will likewise go up. Also consider how much of your time is factored into the "cost" of this moderately competent employee? Probably none. Management costs are usually invisible, factored away as overhead. It certainly feels like you're being productive - trying your hardest to bring along the strugglers, hoping that they eventually rise above their shortcomings. Consider how much of your time is spent with either of these employees:

• The self-managing dynamo who, with speed of a bullet train, handles customer complaints, delivers defect-free results, and even cleans up after himself in the break room


• The newbie who has a few interpersonal problems, occasional product defects, difficulty following instructions, and shows up late on Mondays because of the occasional hangover

• Do they want more money?


• Do they want more challenging responsibilities?


• Do they want some time off to appreciate their children?


• Would they like more mentoring?


• Do they simply want to be recognized at a company meeting?


• What rewards have they received in the past that really made them feel appreciated?

Article Source: http://myarticlezine.com

Learn more about: the Pareto Principle, the Peter Principle, and the Hawthorne Effect Daiv Russell is a small business management and marketing consultant with Envision Engineering.

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