Turning Your Staff into a Competitive Advantage
Every company says that its people make the difference. But what company admits to having bad people? The key is developing strategies to motivate associates to excel for the customer. Now come survey results in a recent issue of USA Today entitled “Survey: Pay to rise with a whimper, not a bang” that essentially says that “your difference” (people) are not going to be well compensated over the next 3 years. So, how can you motivate staff to excel when they can barely maintain their standard of living?
The survey states:
• 80% of businesses expect wage growth, adjusted for inflation, to remain subdued in the next 3 years, rising between 0-3% (which is reportedly an improvement from 2011-2013 when wages shrank 0.7% after inflation)
• 40% of respondents said payrolls will grow in the next 6 months
• 75% of companies predict the economy will grow 2-3% in the next 12 months
So, given all this,
• wages for existing employees essentially remain flat. A cost of living adjustment (COLA) is very low and realistically doesn’t cover increases in everyday living, such as utility cost increases, food (especially for fresh produce, meat, chicken, etc.), health insurance, car insurance, education… Get my drift?
• new employees frequently get hired in at a higher rate than existing employees owing to experience, the issue of supply and demand for new talent in key roles, or the competitive market.
• competitors are offering significant packages to steal staff, especially for key roles and salespeople. We’ve heard of some sales packages that are guaranteeing $150-200K, albeit the fine print contains a 1 year guarantee.
… and that distributor gross margins remain compressed, the question becomes how to motivate your staff, retain them and get your them more productive to increase throughput?
Perhaps the answer is to develop compensation strategies that are more performance-oriented. I’m not talking about commission-oriented roles.
Some thoughts:
• Yes, sales roles typically have some portion of the compensation package based on performance, but are you compensating for key criteria that achieve your goals or solely for account retention? Is there an opportunity for activity-based performance objectives?
• For non-sales roles, what are the key performance criteria (typically 3-5) that drive results or actions for customers? Once you identify them, you can determine the appropriate actions to measure and then motivate. Every role has measurable activities.
Your staff will appreciate the opportunity to explicitly understand what drives results … and share in the progress of the company through rewards that enable them to achieve their personal goals. From your perspective, the enhanced performance could allow for a better bottom line, improved productivity, new initiatives to be completed, increased sales, more satisfied customers, and a “better” workplace.
This begs the questions, “Is your company a performance-based company that rewards results and has accountability built into its culture? Do you reward all for results? Could this become an element of your growth engine?”
What are your thoughts on compensation strategies? Will COLA work to retain your staff?
David Gordon is President of Channel Marketing Group. Channel Marketing Group helps manufacturers and distributors in the construction and industrial trades generate ideas to accelerate revenue through strategic planning, marketing planning and coaching and market research initiatives. He can be reached at 919.488.8635.
