Tag Archives: employee performance

The article reminds me of an old allegory.

4 generations of women are in the kitchen preparing a Thanksgiving meal. The youngest great-granddaughter watches her mother cut the ends off a ham and place it in the pan. “Mother,” she says, “why do you cut the ends off the ham?”. Her mother answers, “That is the way we have always done it. Your grandmother taught me.” The girl goes to her grandmother and asks the same question, and gets the same answer. She was taught by the girl’s great-grandmother. So the girl goes to her great-grandmother who is dozing in a chair by the window. She wakes the old woman and asks why the family cuts the ends off the ham. Her great-grandmother answers, “I do not know why your mother does it, but when I was growing up our pan was too small.”

Great post John…

Face to face communication is essential. It helps to ensure “buy-in” from the team. No one liked to be be given instruction from their parents “because they said so”. Memos or emails can give this impression. Face to face communication gives the team the opportunity to understand the “whys” of the new change and enhance team buy-in.

Nothing, but nothing, replaces face to face communication. Our company engaged in regular appraisals ensuring that it was clearly understood that it was for the benefit of both parties and that salary reviews were not a part of these meetings. At these face to face get together’s both parties had to submit and exchange items for discussion in advance. I used these meetings to update the person with the company plans and aspirations; this not only ensured they were in the loop and felt valued but they in turn passed on to colleagues the correct information. From the outset we would both agree that the meeting was personal and confidential and also what subject(s) could be shared with other our team members. We also held a yearly company meeting at which each director presented a report concerning their sector of responsibility, the past, present and the future. We rarely encountered subsequent misunderstanding – if there was any, we reminded ourselves that the fault always lies with the sender of the message, never the receiver. We also walked the building at least once a day and visited branches once a week.

The whole field of hiring and applying for a job has relegated itself primarily to an electronic process. I think it is very interesting that the “final decision” ultimately requires the “human touch”.

Great article. Now get some sleep!

Amen, “pay for performance” I often cited as a panacea for improving business performance, or worst yet, a “best practice” we all should adopt. It makes me want to throw up! There is no substitute for engaged management, but I do have to admit that “pay for performance” does require management to establish operational metrics and when an owner manager puts his own money on the line, he does tend to be engaged.
Those of us aware of the 1920’s experiment at the Bell Labs Hawthorn plant should recall that the study showed us that productivity improves when management has key metrics to measure output and is engaged with the productivity. Out of this study, we learned (or should have learned) that there is no substitute for management paying attention to positive results – Results have to be measured and it takes metrics to measure results – Amen.
Proponents of the virtues of “pay for performance” often cite numerous success stories of businesses that thrive with a culture using these tools. However, consider, is there causation or a correlation between such performance. In other words, do the businesses that are performing well do so because their compensation formula is some incentive plan, or because the business is among the larger population of strong businesses that have ENGAGED management with METRICS – AMEN.

John, The beauty of this article is its simplicity. Rule #3 is of particular interest to me because I recommend another simple tactic that helps in identifying the priority of actions to improve the generation of profit. I am referring to the 80/20 Pareto Principle that approximates to “80% of your profit comes from 20% of your customers” or “80% of your costs come from 20% of your operations.” This is an oversimplification but applying the thought process across a company does reveal where to apply resources. Richard Koch’s book The 80/20 Principle is the reference work on the subject.
Another comment is more controversial. I like to see business owners measure the value that they are creating in their company and track its change year over year. This is preparation for the day when they will depart, but it is also a check on the health of the company and the industry it is in. The measurement includes a standardized process of a three year forward projection and calculation of the Net Present Value of the cash flow, plus a simple terminal valuation at the end of the third year, discounted to the present. If this valuation is growing, the owner has added comfort in his/her commitment to the company and supports making suitable investments. If it is declining, it is time for a serious look at future plans.