December 22, 2014

Business Brief

Business BriefSigns Your Employees Are Motivated By Fear
April 11, 2011 by Bob Hill

Are you guilty of creating a workplace where employees’ prime motivation is fear? In the past, we’ve discussed the negative impact fear-based leadership can have on staff. Today we offer these five classic signs employees operate out of a sense of fear … fear of consequences, fear of harsh (and often unnecessary) criticism, fear of micromanagement, fear of losing their jobs:

  1. They keep long hours. Do a lot of employees make it a point to get into the office before you and work until well after you leave? This may be due to the fact they feel more “focused” without you looking over their shoulders. Workplaces tend to be more relaxed in the early morning and late evening hours. In cases where employees feel they’re being micromanaged, these hours are perfect for getting things done without feeling like someone is constantly watching their every move.
  2. You’re always the last to know. If you’re the last to know when employees are quitting, unhappy or there’s something wrong, it’s a clear sign they view you as an outsider (aka “not one of them”). Managers who are well respected often have inside sources who share info with them. In fact, employees who respect their managers generally make it a point to meet with them before sharing work-related news with anyone else in the office.
  3. There are rules everywhere. While it’s good to have clear policies in place for employees to follow, managers who try to dictate how everything should be done do so at their own peril. This type of behavior makes employees feel like indentured servants with no sense of ownership over their department (or pride in their work). The result is a rigid workplace where no one dares to draw outside the lines — a situation that severely limits creativity and motivation.
  4. The most respected employees never stay long. Fear-based managers often feel threatened by employees with strong potential. As a result, these employees are often passed over for promotion by weaker candidates who the manager doesn’t perceive to be a risk. This type of philosophy only weakens the department over time, resulting in a lack of respect for both the manager and those who immediately report to him/her.
  5. Everything is a secret. Employees have no access to numbers, important files and other pertinent info. The manager keeps everything under lock and key and requires that employees request it directly, as well as explain their reasons for doing so. While some info is meant to be confidential, keeping the bulk of data locked away slows productivity, limits potential, and results in a department that moves at a snail’s pace. In addition, once an employee feels intimidated about requesting data, he/she will more than likely not do so again unless it’s completely necessary.

Based in part on “Ten Signs of a Fear-Based Workplace,” by Liz Ryan, Bloomberg Businessweek, 7/9/10.

Business Brief

Business BriefThe No. 1 Reason Customers Leave
April 12, 2011 by Bob Hill

A new study reveals the most common reason customers stop doing business with a company; and it’s not about price.

The 2011 Net Promoter Industry Benchmarking study, conducted by Satmetrix, found that 22% of customers have stopped doing business with a company due to a bad customer experience.

The top three types of negative experiences were:

  1. An interaction with a rude employee
  2. Unexpected charges or fees
  3. Poor quality of products or services

The study also revealed more than 80% of customers trust recommendations from friends, colleagues or family over brand advertising or direct marketing. More than 20% claimed they research online product reviews and buyer opinions prior to making a buying decision. That, of course, means social media plays a major role in today’s buying decisions.

The bottom line: Reinforce the notion of treating every customer like royalty. There are far too many stories of minor disagreements going viral on the internet. In the digital age, every negative experience has the potential to negatively impact the company.

Source: “Study Reveals: Shift Spend to Improving the Buyer Experience,” by Tony Zambito, The Customer Collective.

Business Brief

How Much Will The Average Raise Be This Year?
March 25, 2011 by Bob Hill

A new study reveals how much the average company will be offering in terms of pay hikes (and other incentives). The Towers Watson study, which included nearly 400 U.S. companies across a broad range of industries, found the average merit raise in 2011 will be approximately 3% (compared with 2.7% in 2010).

That represents the largest annual increase in merit raises since the financial crisis began back in 2008. Back in those days, companies averaged 3.5-4% merit raises a year, according to a recent CFOZone post.

What’s more: Companies are planning to hire, providing some much-needed relief to long-time employees, who’ve been forced to take on more responsibilities over the past few years.

Among the expected hiring trends:

  • 42 percent of companies are planning to hire workers for positions that require critical skills
  • 40 percent plan to add professional and technical workers, and
  • 25 percent plan to hire sales professionals and hourly workers this year.

Despite all the optimistic forecasts, more than a third of companies claim they’re still having trouble when it comes to recruiting top performers, many of whom have been able to maintain their employment throughout the crisis.

Source: “Merit raises are coming back,” by Stephen Taub, CFOZone, 3/1/11.

Business Brief

NLRB Ruling Warns Against Disciplining Employees Who Gripe
March 16, 2011 by Jim Giuliano

Suppose a disruptive employee comes to you and makes wild accusations and complaints over pay or benefits. Be careful how you respond.

In the case of Parexel International, LLC, the company fired the employee; and ran afoul of the National Labor Relations Board, which ruled that the company violated labor laws.

The NLRB already grants all employees, unionized or not, the right to engage in protected “concerted activity” and prohibits employers from discriminating against or disciplining employees who engage in such activity. Included in “concerted activity” is the right for employees to talk with one another about their wages, hours and working conditions and that an employer may not discipline or discriminate against employees who engage in such discussions.

In the Parexel case, an employee was fired after complaining to her supervisor about a perceived wage disparity. Even though she never discussed the issue with other employees, she complained that the firing went against the concerted-activity principle. In a 2-1 vote, the NLRB upheld the complaint and ruled the employer had unjustly fired the employee.

How is it possible?

Why? Here’s the board’s explanation from the ruling:

It is beyond dispute that an employer violates Section 8(a)(1) by threatening to terminate an employee in order to prevent her from exercising her … rights, for example, by discussing wages with co-workers. It follows that an employer similarly violates Section 8(a)(1) by simply terminating the employee in order to be certain that she does not exercise her … rights. Indeed, the Board has often held that an employer violates the Act when it acts to prevent future protected activity.

The dissenting member of the board described the majority’s finding as “unprecedented” and stated that he had “serious reservations” about the “potential breadth of its application in future cases.”

The lesson from the ruling: Be careful about disciplining or firing employees who complain to a supervisor about pay or working conditions. Such action on the part of an employer could leave the company open to a lawsuit or adverse ruling from the NLRB.

Check out the NLRB’s full ruling.

Business Brief

Lawmakers Look At Bias Against The Unemployed
March 2, 2011 by Bob Hill

A highly discouraging trend reveals a lot of employers have little or no interest on easing the burden for unemployed workers. And some legislators aren’t happy about it.

While there are no specific statistics or studies that have tracked the percentage of current employers who refuse to hire unemployed applicants, recent articles by The Huffington Post, as well as several other local and national papers, explore this dynamic.

In some cases, employers are afraid to hire someone for a high-level position whose skills may have grown dull or rusty over the past few years – years during which the marketplace has changed dramatically, as have the way customers do business and the modes companies use to communicate, manufacture and produce.

According to the Dept. of Labor, there are 5.5 unemployed workers available for every available job (on average). In that type of job market, employers are going out of their way to disqualify candidates they no have very little chance of getting hired.

Rather than have their recruiting people get inundated with hundreds of applications, or waste time interviewing candidates who should’ve never gotten through the door, HR execs have become much more proactive.

One recent article cites an employer in Buckhead, GA, whose job posting bluntly reads: “NO UNEMPLOYED CANDIDATES WILL BE CONSIDERED AT ALL.”

Another employer in Georgia posted an ad for a hands-on, manual labor position that read: “If you have not worked since 2009, do not apply!”
Restaurants, accounting firms, and financial service firms are all posting the same type of ads.

Apparently, “Unemployed” is the new “Prior Experience required.”

While there’s currently no law on the books that forbids companies from disqualifying applicants based on employment status, the current job market is forcing legislators to review labor laws and consider whether tighter regs might be necessary.

Employers, on the other hand, claim they’re just doing their best not to waste their time or the applicants’. Certain positions require top-of-the-line applicants who are on top of their game, according to their argument. If a company knows what it’s looking for, why should it waste valuable time and resources looking elsewhere?

Business Brief

States Take Up Major Change To OT Law
February 28, 2011 by Jim Giuliano

Giving employers the option of substituting comp time for overtime compensation is one of the business-friendly ideas that has been kicking around Washington. Now, some of the state legislatures are giving the idea a close look, too.

The latest to take up the cause is Ohio. A state House committee there sent a bill to the full House allowing small businesses to offer compensatory time instead of overtime pay. The bill would affect companies with annual sales of less than $500,000. Supporters say it would give smaller employers the same wage flexibility available to larger businesses. State and federal laws now bar companies of all sizes from substituting comp time for OT pay; typically one-and-a-half times base hourly pay, for nonexempt employees.

The Ohio bill would give employees the option of accepting comp time or OT pay.

Opponents of the bill say it’s basically a repeal of overtime pay, and that it leaves employees open to retaliation if they say no when the boss offers comp time instead of extra pay for hours worked over 40.

Similar proposals have been floating around Washington, including a letter from the HR Policy Association to the Secretary of Labor suggesting comp time and other changes to long-standing labor laws.

Business Brief

Dale Carnegie’s 9 Secrets To Success
February 7, 2011 by Bob Hill

Dale Carnegie’s How to Win Friends and Influence People is one of the most popular business books of all time, thanks to these business tips:

  1. Become a friendlier person. Fair but firm is the modern-day equivalent of this approach, which hinges on empowering peers by taking a genuine interest in them and providing sincere praise whenever possible. Ask good questions, spend more time listening than speaking, and inspire people to achieve more.
  2. Win people to your way of thinking. Dwight D. Eisenhower once said that “leadership is the ability to decide what is to be done, and then get others to do it.” Carnegie’s approach is a tad more diplomatic. He suggests never telling employees they are wrong, giving them an opportunity to explain the thinking behind their ideas, and getting others in the habit of saying “yes” early and often. He also suggests challenging employees to strive for a higher standard … for their own benefit, not yours.
  3. Be a leader. Point out mistakes indirectly. Praise in public, criticize in private. Point out your own flaws as a way of making people less conscious about their own. Ask questions that lead people to suggest the answer you’re looking for.
  4. Overcome worry. Consider what the possible consequences are, then confront the problem and improve your circumstances. Resolve small issues before they evolve into larger problems.
  5. Gather as much information as possible. Knowledge is power, and the more intelligence and research you can gather about a specific project or situation, the more informed your eventual course of action will be.
  6. Don’t be complacent. Avoid stagnant, idle periods that result in unnecessary worry or concern. Keep moving forward. Evolve.
  7. Maintain a positive mental attitude. Don’t focus on revenge or retribution. The best revenge is success. Keep your thoughts focused on the matter at hand and look for the positive takeaways from your negative experiences. Count your blessings, not your problems.
  8. Accept honest criticism. Everybody’s a critic, and a good leader knows how to separate constructive criticism from jealousy and negativity. Work on improving your faults and solicit opinions that can help make you more effective.
  9. Find a balance between business and pleasure. Make sure you get ample rest and provide time for yourself. Stay organized and make your work area a reflection of your positive attitude.

Adapted from the book Dale Carnegie’s Secrets to Success.

Business Brief

Smaller Firms More Vulnerable To In-House Larceny
June 5, 2009 by Jim Giuliano

In an economic downturn, small firms find themselves hit by more incidents of in-house larceny. Here’s why, and what to do about it.

First, the statistics. The Association of Certified Fraud Examiners looked at 959 cases of in-house fraud and embezzlement, and came up with the following conclusions:

  • The median loss in this study was $175,000.
  • The typical period between the time of the first act of fraud and the time someone was caught was two years. In other words, most of the instances of theft went undetected for long periods.
  • Most of the thefts were committed by first-time offenders – people who appeared squeaky-clean prior to getting caught. Only 7% of fraud perpetrators in the study had prior convictions, and only 12% had been previously terminated by an employer for fraud-related conduct.
  • Most of the perpetrators were caught as a result of tips from employees or others, rather than by audits (more on that below).
  • Most of the victims were small businesses – who thought their size was an advantage for keeping track of cash and the people who handle it.

To make matters worse, in-house fraud and embezzlement tend to worsen as the economy worsens, for at least two reasons:

  1. Cash-strapped employees get desperate and are more likely to scheme against their employers.
  2. Layoffs tend to leave holes in the usual controls designed to prevent fraud.

The ACFE study examined what might have been done to prevent fraud in the 959 cases:

  • Look for it in the obvious places. Fact is, fraud and embezzlement usually take place exactly where you’d expect: your accounting department that handles the money. There are variations of fraud and embezzlement – some in billing, some in accounts payable and so on. But no matter the variation, the problem usually exists in the accounting department.
  • Use checks and balances as much as possible. As mentioned above, many instances of fraud were uncovered as a result of tips: one employee’s noting misdeeds by another. (In a minority of cases, the tips came from customers, vendors and others.) One suggestion: Use cross-training and job rotation, so that one employee isn’t solely responsible for one area all the time.
  • Use surprise internal audits. Big, planned audits or those conducted by outsiders are effective and have their place, but the surprise internal audit remains the most effective deterrent and means of detection.

You can download the full 68-page report in PDF at www.acfe.com.

Business Brief

3 Keys When Promoting Someone Into Management
February 7, 2011 by Bob Hill

You’ve seen it: A good employee becomes a bad manager. Here’s how to change that.

“Organizations that create multiple, flexible pathways to success will keep their best people, keep them engaged, and keep them longer.”

So says Harvard Business Review’s Susan David.

As Co-Director for the Harvard Institute of Coaching, David’s gained a great deal of expertise regarding how to train and develop employees into senior positions.

In a recent interview with one of the Harvard Business Review’s bloggers, David shared these three tips for determining which employees should be promoted into management, and which ones are better left right where they are (we’ve provided our own commentary along with each one):

  1. Gather feedback from multiple sources: You may believe a specific employee has true leadership potential. But it’s not you that person will be responsible for leading. That’s why it’s essential to gather honest feedback from key staffers regarding your potential candidate. If it’s clear most employees won’t accept (or respect) that person’s leadership, you may need to reconsider your choice.
  2. Seek out candidates who WANT to take on more: Some employees would prefer to simply go about their business without any need for promotions or other distractions. Take note of which employees are constantly volunteering to take on more, as well as who’s least likely to put up a fight whenever it becomes necessary to implement change.
  3. Make sure the candidate endorses the company’s mission and values: Seek out employees who not only share the company’s vision, but yours as well. The last thing you want is a subversive manager who’s undermining your authority at every turn. Avoid promoting top perfomers unless they have the ability and desire to move into management. Otherwise, you could wind up losing some of your best employees shortly after you’ve promoted them into management.

Source: “When to Reward Employees with More Responsibility & Money,” by Amy Gallo, Harvard Business Review Blog.

Business Brief

Why Good Customers Stop Buying – And What Starts Them Up Again
January 31, 2011 by Ken Dooley

Some customers just fade away. They don’t complain. They don’t tell you they’ve found a new supplier. They still take your calls. But over time, they buy less and less.

Some people stop buying for one of three reasons:

  1. Something unrelated happened in their life or business that caused them to lose touch with the salesperson or company. They may not have intended to stop buying, but they did.
  2. They had a problem or an unsatisfying buying experience. They probably never complained, but stopped buying anyway.
  3. Their situation changed so they no longer benefit from the product or service.

The No. 1 Reason They Leave

Research suggests that the main reason they stop buying is lack of contact.

About half of all lapsed buyers were reasonably satisfied and might have kept buying. But the research found that the sales rep didn’t do enough to keep in touch. Once buyers stop dealing regularly with a company, they tend to forget about it – no matter how good the product or service is. They’re perfectly willing to give their business to whoever’s next in line.

Winning ’Em Back

Lapsed buyers won’t come looking for you. Inertia – or even embarrassment – will keep them away. But when you initiate the contact, you greatly increase the chances that they’ll buy again.

The good news: When they do return, they tend to become more frequent, loyal and satisfied buyers. They may need some special handling to get them buying again:

  1. Approach them sincerely and humbly. One of the most disarming ways to get the ball rolling again is to lay all your cards on the table. There’s little to lose and much to gain by a sincere, non-confrontational effort to find out why sales have eroded. For example, you can ask, “Is anything wrong? Have we done something wrong?”
  2. Accept responsibility. Show the customer that you’re prepared to do what it takes to win them back. That tends to neutralize any anger or hostility the customer is feeling.
  3. If there’s a problem, ask how to fix it. Often, customers don’t want all that much. Sometimes it’s simply an apology.
  4. Do something now. It’s better to make amends on the spot than to come back later with a solution.
  5. Look for a memorable gesture. Follow up by doing something noble and special to show your appreciation for the customer’s frankness and willingness to give you another chance.

These efforts won’t reactivate every lapsed customer, of course. But even so, they’re seldom wasted. Even if you don’t get the buyers back on the active list, they can be a good source of referrals and testimonials. And their feedback can tip you off to problems that your other customers might be facing right now.

Adapted from “Getting Everything You Can Out of All You’ve Got” by Joy Abraham.