This final question may really hit hard for some small business owners. But it’s an important one to honestly answer if you ever want to maximize your profits and enjoy the freedom, fulfillment, and lifestyle you want. Here’s question #5:

Is compensation truly “results based” or are we paying people based on “time-in-class”?

If you don’t have a structured system for employee selection, management, and motivation it’s very likely that you’re reinforcing the wrong behaviors with your team. As a busy business owner I know how easy it can be for months to quickly fly by, and all of a sudden one employee or another is due for raise. Or are they?

How can you tell what you’re really basing employee raises on?

If the main criteria for giving an employee a raise is the fact that it’s been six months or a year since their last raise, it’s likely you’re paying them an inappropriate amount. In some cases you might be shortchanging yourself. And in other cases you may be holding back or de motivating a high-performing employee who deserves more.

Without clearly defined expectations, responsibilities, and benchmarks for rewards, the majority of employees will gravitate towards the easiest measuring stick — and that will always be “time-in-class.” With performance expectations and clearly delineated benchmarks for rewards your employees will always know the next step they need to take in order to qualify for increased compensation.

Dealing with team building issues as a busy small business owner

I know it’s difficult for busy small-business owner to keep track of all the ups and downs for each employee when some days feel like a fight for your very survival. But it’s really much easier than it sounds. Many of our business coaching clients who’ve gone through this process of developing a policies, procedures, and rewards manual are surprised at how intuitive it really was.

Yes… it does take some time and dedication up front. But with a little coaching and guidance you can get it done painlessly. And the good news is — once you have a system and review schedule based on a solid policies, procedures, and rewards manual — it takes very little time and effort to stick with it.

Your good employees will rise to the top and thrive in this environment. Your mediocre employees will often be pulled upward by your top performing employees. And any employees who have been trying to “just get by” will weed themselves out in this type of system. What you’re left with is a high-performing small business that gets more done, exceeds the net profit average for companies in your industry, and does it all with fewer people.

John-Paul Micek
The Click-and-Mortar Business Coach
Business Owners Coaching Club

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