Planning Part III: Employee Enhancement
Employee Enhancement
Everybody says, “Our employees are our biggest asset.” But
in the world of distribution the truth is our employees really are our biggest
investment. According to the Profit
Analysis Reports generated by distributor associations, payroll cost
represents somewhere between 60 and 65 percent of our total spending.
We’re not just “whistling Dixie” when we make the claim,
it’s totally true. But sadly, very few
distributors create a real plan for maintaining or improving this investment. If we were talking buildings instead of
people, rust, decay and rundown would be the descriptors in play. Most of us hire top talent, and then we rely
on our hires to keep up with changing times.
Computer skills, inventory management techniques, and sales process are
left pretty much to the individual.
What’s worse; along the way, only a few of us take the time to assist
the employee in their development via a formal review.
According to new research presented in The Challenger
Sale, the performance gap between average and top performer has grown from
30 percent to over 400 percent. So,
moving our customer facing employees along in their development is not a good
investment, it’s a great use of our funds.
My observations point that similar differentials exist in other areas of
our businesses.
Let’s think about how we should go about creating an annual
employee enhancement plan.
Understand Employee Strengths and Weaknesses
Planning season is a good time to analyze (and spell out)
the strengths and weaknesses of your employees.
With just a little bit of thought, one can develop a list which outlines
the specific areas where employees are struggling as well as areas where
employees excel. Ask yourself the
following questions:
·
Is there anyone who is in the wrong position
based on their strengths and weaknesses?
·
Are there any common weaknesses shared by
multiple people in the organization?
·
Does everyone have the tools required to handle
their job properly?
·
Are there people who employees turn to for
guidance in specific areas?
·
Is there anyone who has little hope of improving
their performance in the next year?
Rank your People
During times of economic stress (read that Recession), it
may become important to scale back on your head count. The very thought of this topic makes most of
us uncomfortable, but we must spend some time thinking about the
possibility. Some employees are indispensable
to the business; others are less valuable.
It’s important to rank employees based not only on their performance but
also on their value to your business.
Understanding who falls into which group is important today and critical
is we hit a rocky economy.
Your plan for the coming year should include setting
performance improvement plans for the bottom tier employees. Ask yourself; how long can we afford to hold
onto an employee who does not create value for our organization? Set a time line for improvement. Without a time line, tough decisions can be
postponed indefinitely. We’ll operate
under the assumption that nobody is inherently evil. By keeping them around for the long haul in
spite of performance issues, we diminish our financial success and endanger the
attitudes of our best employees via frustration created by working with
underperforming coworkers.
So many distributors occasionally set up a couple of hours
of “one-size-fits-all” training and believe they have covered their bases. While there may be some topics which impact
such a broad spectrum of their people that companywide training is justified,
generally it’s not that way. The best
training is individual and specific; matched according to the strengths and
weaknesses of the person involved.
And we’re not talking about spending thousands of dollars
for outside trainers. Often, one or
two folks in every organization have strengths which overlap other employee’s
weaknesses. Internally driven training
works, however most distributors fail to invest the time to do it right.
Your plan should include: topics for training, who will
conduct the training, the goal of the training and a defined time frame. And, none of this is difficult if you do the
planning first.
Set Standards for Supply Partner Product Meetings
A few years ago we did a survey of distributors in the
Electrical world on training. The
results were eye-opening. The survey
indicated that less than 50% of the product training sessions conducted by
their supply partners met the mark. One
distributor even commented, “We feel obligated to hold these sessions but when
you calculate the cost of taking our people off the road for one day a month,
they are a complete waste of money.”
It appears as though these folks put very little thought
into what goes into a successful training session. Instead, they take center stage armed with a
factory provided PowerPoint detailing product minutia of questionable
importance. Important points, like
competitive positioning, target customers, selling points and applications are
either ignored or come as an afterthought.
A few parting thoughts
Here are a few other topics that must be included into your
Employee Enhancement Plan:
·
Establish a time for annual reviews – these are
best when not tied to raises.
·
Set improvement deadlines for employees who
struggle.
·
Front line managers are a key to growing your
people – push this information down to everyone who leads a department or group
in your company.
·
Set a time for a ‘360’ review for yourself. We all have room for improvement; don’t leave
“you” out of the equation.
Distributor Planning Made Easy. Check out our Distributors Annual Planning
Workbook:
http://amzn.com/1481196448
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