Improving Employee Productivity on Christmas Eve... Or, An Exciting Christmas Eve at Corporate

It was a Christmas Eve in the mid-1970's. I was a senior IT auditor in the corporate offices of a large publicly-held corporation based in the northwest suburbs of Chicago. It was the typical lazy day before a holiday break, without a whole lot to do on deadline. In fact, I was usually out at a remote divisional location and did not spend much time at headquarters. The workday was particularly dead for me and the 20 or so other staff members who were not taking the day off. It did not appear that there was anyone onsite with a title north of "Manager" and we all were pretty much on our own best behavior. The only background excitement that day was the weather which was a mixture of rain and snow with plummeting temperatures. It was the kind of day where pilots earn their pay. The weather was of particular concern for me. It was a family tradition for my wife and me to jump into the car on Christmas Eve and drive to my parent's home where we would celebrate Christmas. It was a long drive to the south side of Chicago (the East Side of Chicago to be exact which lies in the land between the refineries and the steel mills). My office was still another 30 minutes away. In bad weather it was a particularly testy adventure. And in the dark no less. Lunchtime passed without any particular notice, and everyone began to wonder and comment regarding when "they" would close the headquarters office and let us venture into the wintry mess outside to celebrate the holiday. A few brave souls were even talking about taking matters into their own hands and leaving early. Who would know anyway? My desk was right outside the office of the Corporate Controller. It was still another year before they would give me my own. At about 2:00 PM I turned around to hear a commotion and saw the President rushing up to the Controller's secretary. Before she could turn he demanded: "Where is Jerry?" Ginny slowly turned and told the President that the Controller was in fact on vacation that week, was 1,000 miles away and unavailable by phone. Not liking that answer, the President asked to now speak directly to the Chief Financial Officer. The CFO news was even worse. Ted was 2,000 miles away (rank has its privileges) and was less available than even Jerry. He turned around and left in huff. Ouch! I technically was the senior on-site employee in the finance department that afternoon (that rank had no privilege), and thought that perhaps I was about to be summoned to the 10th floor where I would be required to answer some esoteric accounting or finance question for the Operating Committee or Board of Directors. I was ready. Ginny and I chuckled at the very thought of it, but after about 15 minutes we figured the crisis (and danger) had passed. We never did find out what had caused the stir. Just then who appeared but the Corporate Office Manager carrying an official-looking clipboard with a legal pad. She looked troubled to say the least as she rapidly walked past. Pausing to say hello, she told me (in a tone that anyone within earshot could hear), that the President was upset that the office was open for business on Christmas Eve, and nobody had showed up. So she was sent to take attendance, but was unsure what would be done with her findings. She was to bring the results back to the President's office promptly (I think his secretary was 3,000 miles away that day), and he would handle it. In passing, I asked what would have happened if I had gone to the restroom during her audit (always the wiseass when bullets are flying); she smiled and mumbled something about my career—or lack thereof. A hush fell over the assembled corporate masses, and all thoughts of sneaking out early passed for fear of some unspeakable punishment. Who knows, maybe they would take attendance again? Heads went down and people went back to work doing whatever they were doing before, only looking more sincere. Time passed slowly and the weather worsened significantly. Now it was dark. I called my wife to tell her I would be a bit later than expected. Corporate headquarters closed officially around 5:00 PM, but no one was taking any chances that day. As I recall, the Office Manager once more appeared about that time and told all 20 of us to go home. ("But do not be too far from a phone.") We all saluted and promptly left. From that point on, the evening and holiday was uneventful. The drive was indeed testy, but the visit with my parents and the old neighborhood was very special as always. I miss those visits as the years have passed. Is there a moral to this story? Why, yes indeed! If you are scheduling your employees to work on Christmas Eve, do not tell them the office will close early (let them guess) and then, without warning, take attendance at about 1:00 PM. In my experience they will work real hard until dismissed at quitting time. (And yes, you will probably have to tell them to leave.) Of course, their afternoon's work product will likely be gibberish. But who cares, it's the holidays. But better yet, skip steps two and three and give them (and yourself) Christmas Eve off.

The Cost and Cure for Lack of Civility in the Work Place

I was recently sent an article from the New York Times entitled: Incivility Can Have Costs Beyond Hurt Feelings (Nov 19, 2010). The article generally discusses rude or offensive behavior in both a personal and a business environment. How can such rude behavior be defined? A few examples were mentioned: Ignoring employee or peer requests or outreach for assistance; Not acknowledging a colleague (actually ignoring them) when meeting or passing in the workplace (such as in a hallway); Denigrating an employee or peer behind their back verbally or in writing; or Showing general disrespect for an employee or peer—their person, their opinions or their property. It seems that there is a consensus that this type of rude behavior has been sharply on the rise for the last two generations; although not all quoted in the article seemed to agree. It seems fairly obvious to this frequent walker and long-time operator of a motor vehicle. Research on this subject was also presented in the article. I found three findings of particular interest to the CEO: Many workers have reported to researchers that they have left companies and jobs because of continuing incivility, but rarely report it as the reason for leaving; 60% of disrespectful behavior observed comes from above (organizationally—the boss) while the rest is split equally between peer (the same level) and subordinate (from below); and Half of affected employees said that they had generally decreased their efforts on the job after experiencing ongoing rude behavior—and further have declined putting in any extra effort for the company. In short, bad behavior reduces productivity (and profit) and it seems to be highly controllable from the top of the organization. As with most corrosive situations within an organization, the top executive can either cause it or stop it. Let me suggest five things you can do starting today to avoid or stop it (without writing any new policy statements). Smile and your employees will smile back at you and at other employees. Listen to your employees as a demonstration of their continuing worth and importance to you and the company. Get out of your office and go to where the money is made or lost. Touch each employee and take an interest in their job and lives—at all levels of the company. Drastically limit the use of electronic communications (What!—reverse 2 decades of "progress"). If you have something important to say speak directly to your employees, even if (and particularly if) it is bad news. And if someone in your organization is disrespecting another employee (and particularly a subordinate or another powerless to punish the offender), the top executive must act to stop it—with the same tact and elegance used to put down a coup d'état in Central America. We were thinking about writing a series of articles earlier this year on the subject of leadership. Perhaps the five above actions is our way of starting to speak to the subject. Leaders understand the cost of incivility, do not allow it and know that their employees will follow their example. Are you a leader?

So, Your Sales Bonus Plan Has Not Paid out for Two Years. What to Do in 2011?

I guess the above title line says it all. It has been a tough two years for many companies and their sales forces. During that same period Wilkening & Company has provided ideas and advice on what to do when your sales compensation plan is not working due to lower-than-expected results, or other factors. But many of these steps have been exceptional (or discretionary) in nature and provide little direction on what to do to restart your sales-pay plan (and your sales force) for 2011. Let's look forward today. So why not leave all of your current sales processes in place? Won't the market just recover like always and everything will work again in due time? We do not think so. We believe that it is quite possible that markets and customer needs and requirements, have drastically shifted during this most-recent recessionary cycle (more in every box, faster delivery, hold more inventory, lower cost, better than theirs...). We now see some of this in our business and we would bet you also do in yours. Further, we also believe that there is a greater focus than ever on Big-account marketing, and intense competition to steal your Big accounts from you. This is what we believe you will face as this recession winds down. It sounds like 2011 will be a good time to retool both your sales processes and sales pay systems—under any circumstances. And, you also should take the opportunity to begin to rebuild the confidence of your sellers. What should be done? We suggest a two-step plan—re-plan & pay. First, re-plan your market and accounts. Identify the accounts that you want to own (and we mean own). Generally, these will be the market leaders and current or prospective buyers with the greatest upside opportunity. Decide what you need to do to retain, grow or gain their business. Define such actions in discreet and measurable actions or steps—sell them new Product A, improve delivery performance, double order size, become the specified supplier on their new line of business... Put 2011 annual sales or profit-dollar amounts on each action taken in the above step, and develop a real (we mean achievable and likely uncomfortable) sales forecast for each and all accounts in your portfolio. By doing this, you are breaking the standard-operating-procedure mentality and are zero-basing your sales book. Have each sales representative create their own sales plan (as above), and then commit to do what they have just said. By the way, if everything is scheduled to happen or be completed in the Fourth Quarter, it likely won't happen at all. We have talked about sales planning in the past and we urge you to go back to basics for 2011. Use our approach—or any other approach—but you need a 2011 plan and the commitment of the sales force to execute it. No less is acceptable. Then, let's gently put a wrench and screwdriver to your 2008-10 sales-pay plans. How so? Only make changes in salaries or draws if you believe that they are significantly under the market, are undermining the efforts of your sellers, or risking the loss of key players to competitors; at the first sign of an upturn. If salary changes are needed, there are simple actions that can be taken to fix the problem. But, it will cost some money (but who cares, if we sell more in 2011 than last year and keep our key people in place). Many sales-pay plans primarily compensate based upon annual (or more short-term) sales or profit results. Often these are commission-based or incentives with or without annual goals or objectives affecting the total amounts to be paid. A large portion of the sales-representative's compensation is generally tied up in this type of pay arrangement. Commissions or incentives can account for anywhere from 30% to 200% of annual salary. If you use such a model, and it currently pays out (say) 50% of salary when the sales representative meets company expectations—however defined—cut the incentive amount in half (to say 25% of salary) for 2011. Be calm, we did not just tell you to cut pay; only to redirect it. Read on Take what you have just removed from the traditional annual incentive or commission component of your sales-pay plan and channel it into a series of two or three bonuses for the sales force that are tied directly to their newly-written sales plan. Pay them to achieve the 2011 objectives, goals or events they said they would. A few examples that we have seen used are (of course, ultimately adapted for your metrics and goals): Number of new accounts with over $100,000 in potential acquired by year's end and having active orders; Total number of all accounts with over $100,000 in potential having active orders at year's end; Sales growth from total account portfolio at or exceeds 10% year-over-year; Gross margin (in dollars) at or exceeds $1,500,000 for the year; Sales of product A for the whole account portfolio is at or exceeds 20% of all sales; Average order size is increased by 10% by year's end; and ………… There is no magic in the above listed examples, but they generally represent things that can be done to help the company succeed; whether total sales goals are met or not. This does not diminish the importance of the sales goals, but recognizes the need for the sales force to do a variety of things to succeed in the long term; and compensates them for it. Traditionalists will likely reject our prescription for changing your sales pay for 2011 out of hand, but may fail to recognize that it focuses on paying the sales force for doing the "right" things and gives them a half-dozen ways to be a success in the coming year. While we are recommending this "new" and revised approach for 2011, we are also finding that balanced plans of this type are becoming more common and may represent a path you want to take beyond 2011 as well. If your sales force and its sales-pay plan have been struggling since 2008, consider making the changes of approach we have outlined. You may have little to lose. Or, if you just do not like your sales plan for other reasons, consider this roadmap for shaking up your sales force in the coming year.

Wilkening & Company has designed and implemented over 75 incentive pay plans for the sales force and sales managers. Feel free to call or write as you look at your sales-pay challenges. You can bet we have seen your problem in the past.