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The Art of Delegation – Trust is Key

Many small business owners attempt to do everything, leaving little to delegate until they become so over worked and exhausted that they have no where left to turn.delegation Often times they hire the first competent person (hopefully) that they can find and immediately hand over the keys. In the end, they find that the person that they hired, isn’t as competent as they thought or maybe isn’t quite ready to drive.

In the book Entreleadership, Dave Ramsey explains that effective delegation is analogous to lengthening the rope of trust. When you properly manage your culture, hire and keep the right people, build unity, provide recognition, and creatively compensate your employees you’ll find that delegation opens doors to success like you’ve never imagined.

Two Types of Delegation

According to Steven Covey, there are two types of delegation: gopher and stewardship.

Gopher Delegation-the gopher delegation method is similar to micromanaging. It involves providing the employee with step-by-step instructions on exactly how to do the task and then verifying that the work was complete to your specifications. The gopher position is generally good for entry level job functions that are repetitive and don’t require a lot of thought.

Stewardship-the stewardship delegation method is management-level delegation. It focuses on the outcome rather than detailed instructions on how to get it done. Stewardship delegation requires trust because you are granting that person authority to act on your behalf and then responsibility to carry out the major project or task. Trust must be earned.

Earning Trust

Before you delegate important tasks it’s important to know that you can trust your employees. The process of developing trust takes time, but it will save you a lot of heart ache and drama if you approach it with intention.

There are two attributes that trust worthy people have in common. They are integrity and competency. Wise business owners trust employees with important tasks to the extent that they’ve spent time with them, observed their behaviors, and believe that the employee has both integrity and competency.

Integrity

Integrity is the quality of being honest and having strong moral principles. You should spend absolutely no time trying to work with employees who have no integrity. If they steal from you, cheat on their spouse, or lack moral character, do you think they’ll do an outstanding job for you?  Probably not. Instead, hire someone who has talent, and then work with them letting out the rope bit by bit.

Competency

Competency is the ability to do something successfully or efficiently. You can’t assess competency without observation. Competency is more than the ability to complete the task. It involves the process of completing the task as well. Were the team members treated with respect? Did the project get completed within budget?  These are just a few of the questions you should ask to assess competency.

Once you begin to delegate with authority and responsibility, you’ll display your trust to your entire team. Ronald Regan once said, “Surround yourself with the best people you can find, delegate authority, and don’t interfere.” What type of delegation do you relate to?  Let me know in the comments below.

Intentional Compensation for Small Businesses

Intentional compensation is key to running a successful business and It’s more than just numbers on a check.

Intentional Compensation

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Intentional compensation may include profit sharing, commissions, bonuses, health and medical benefits, paid time off, company functions, prizes, giveaways and more.

As the economy improves, more and more small businesses need to consider how they’re paying employees and the messages that they’re sending based on their compensation structure.

Intentional Compensation

You can still fail as a business if you don’t say thank you in your employee’s paycheck even if you do all of the right things in terms of leadership, culture, and communication. When you implement intentional compensation, your message clearly conveys that winning is rewarded and losing isn’t. What are your actions telling you? Are you compensating the people who you value accordingly? Your actions speak louder than words. You can say you value productivity and innovation, but when you don’t demonstrate that in your compensation system, you simply aren’t being truthful.

Reward What You Want Duplicated

Know what you value and reward only what you want duplicated. Employees will naturally gravitate to actions that increase their pay. Always be intentional when considering the three compensation structures I outline below:

Salary—Fixed salary positions reward employees for showing up. They’re great for attracting talent , but they don’t necessarily motivate them to go beyond minimal requirements. In fact, they do just the opposite with very rare exceptions. These rare gems are the employees with fixed salary positions who bear the brunt of the entire team’s workload. While team members chat, go for breaks or long lunches, these workers produce and bring extraordinary value to the company. Unfortunately, I’ve never seen one stay long. They often get frustrated or burn out because often we reward our most productive employees with more work instead of more pay. No wonder they run for the doors!

Profit Sharing—Profit sharing provides a certain percentage of the company’s profits as a bonus to employees monthly, quarterly, or annually. The key to this type of compensation is to ensure that employees know how they specifically contribute to the revenue by either increasing profits or decreasing expenses. This bonus is not something that employees should expect to receive, but rather something that they earn based upon their contributions to the company’s revenue.

Commission—There are many different commission structures that you can implement. Salary plus commissions deliver a small guaranteed salary and a percentage of every sale. Most commission plans are set up this way. Draw plus commissions provides a set amount of money each pay period. It’s very much like a loan since commissions aren’t received until the draw is repaid. The downfall of the draw plus commissions plan is during the launch of a new product. Because the product isn’t proven, sales reps might feel discouraged if the draw balance rises significantly. In that scenario, it’s a good idea to evaluate whether you want to allow for a reduction in the draw balance to allow the employee to receive commissions. Both the salary and draw plans pay for performance and work well when implemented with intention.

Changing Compensation

It’s never a good idea to reduce the pay of your employees. It’s demotivating and often leads to reduced productivity. If performance is poor, then work with the employee to improve upon it or let them go. You’ll see a better return on your dollar if you pay for a superstar rather than get a great deal on mediocrity.

What kind of commission structure do you offer your employees? Let me know in the comments and be sure to include your company’s name if you’re hiring!

Win the Hearts of Your Employees Through Recognition

In order to gain an increasing share of the market place you must win customers. Before you can win customers, you must first win the hearts of your employees.

Win Your Employees Hearts

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Unfortunately, we’ve done a poor job of this in America and the data is clear. According to Gallup’s State of the American Workplace report, an alarming 70 percent of full-time employees are not engaged in work or they are actively disengaged. This disengagement leads to a host of unproductive activity, high turnover, and costs businesses millions.

Win the Hearts of Your Employees

Creating a recognition program doesn’t have to be expensive or time consuming. You can take simple steps today that will win the hearts of your employees and save your business. Here are a few ideas:

  • Write a thank you note
  • Gather an audience
  • Incorporate a challenge
  • Acknowledge a special event

Thank You Cards

The first time I received a handwritten thank you note was from a director that I worked with in a Fortune 500 company. I was into my second decade of working in corporate America and I had received many cash awards and recognitions for my work, but I had never received a hand written thank you card.  There’s just something special about the written word because it indicates that the sender put time and thought into the task. The small token of appreciation that was inside of it was nice, but I treasured that card and proudly displayed it on the wall of my cubicle for almost a year.

Gather an Audience

Recognition is powerful when it’s done in front of peers. Recognizing your highest sales employee in front of the IT staff does nothing to motivate other sales employees to work harder. However, recognizing that same employee in front of the sales team motivates the entire team to perform. This type of recognition can also be done in email form. Simply send out the recognition and watch as everyone rallies by replying to the list and confirming just how great that employee truly is.

Incorporate a Challenge

Men and women will fight hard for the opportunity to win. The prize doesn’t have to be expensive. It can be a cheap as a t-shirt or as expensive as a vacation. The size of the prize really doesn’t matter. People will compete to win whatever prize or challenge you lay before them.

Acknowledge an Event

Acknowledging an event in an employee’s life demonstrates that you care. Place special events, such as birthdays, anniversaries, baby showers, and weddings on your calendar so that you are reminded to acknowledge those events. You’ll be amazed at just how far that goes to not only win the heart of your employees, but their families as well.

Employees need recognition, and there are many different ways that you can satisfy that need and create a more engaged employee. Remember to recognize only the behaviors that you want others to model. Recognition doesn’t have to be expensive; it’s your actions that demonstrate that you care.

What are innovative ways of recognition that you’ve implemented in your business?