The Way To Pay - Part Three
The last two months, I have been sharing what I've learned about compensation, bonuses and keeping score. It's all about playing a high-level, honorable game with your team.
Robert Kiyosaki, author of “Rich Dad, Poor Dad,” has created a terrific board game called Cash Flow. Kiyosaki claims that this game will expose each player's decision-making strengths and weaknesses. He maintains that our “play” is representative of how we act in the real world.
He is right on. The game is the thing. People love games. The key to a successful business? Getting your team to play your game.
The purpose is your mission. Your mission is a statement of why you are in business. What do you stand for? Are your goals and intentions clear and compelling? Are you elevating the ordinary to the extraordinary? Are you saving lives, expanding sanity, building fortunes? If the why is compelling enough, the how becomes clear.
The barriers are the rules of the game: your systems, the scorekeeping and your values - what one always must do and never do at your company.
With a purpose and barriers, you are free and clear to play the game. You are free to serve your customers. The game is a beautiful thing.
So far, I've shared my philosophy and strategies for creating a great game at your company. Now it's time for the questions, the challenges, the “Yes, but what if THIS happens …” conversation. Let's dive in!
Scoreless In Seattle“We started keeping score and offering bonuses. After three months, not one of our service plumbers has qualified for a bonus. They are getting frustrated, and so am I. What to do?”
Goal should be based on your budget. And a budget is a guess. I heartily suggest keeping score for one full quarter (90 days) before you kick in your bonus program. This test-drive period offers a few advantages:
- It gives you a chance to check your budget by comparing actual to budgeted numbers and dollars. Run your financial reports weekly to see how you are doing.
- It allows you to see if your team is willing to keep score and hold themselves accountable. Right-stuff people like accountability.
- You can tweak the budget and the goals before you kick in the bonuses.
Have you priced yourself out of the market with a too-high selling price? I doubt it. You may not be offering enough value for the price. Ride along with each plumber. Are they doing the best they can do to be of service to your customers? Could they use some help? Sales training? The right technical training and tools? The best part of the game is figuring out how to add so much value that the price becomes a nonissue.
Close Call In Colorado“One of my best plumbers missed goal by $17. He is miffed because I didn't pay the bonus. Am I being too tough?”
Dear CC in C,
First of all, you are doing the right thing by not paying out the bonus. You shouldn't lower the basket because a player misses a shot. Having said that, don't let this happen again!
Where were you the week before the bonus period ended? Why didn't you know how close he was? Why didn't he? Coaching your team to great performance is an essential component of playing a great game. With fourth down and one yard to go, did you go for it? Or, did you wait until the game was over to check the score?
Hmmm. Just wondering. Does your plumber fill out his scorecard every day? Or, did you relegate the scorecards to someone in the office? STOP. The person who is playing the bonus game keeps his or her own score. This will keep the close-but-not-close-enough problem from recurring.
When you introduce the scorecards, you might get some pushback from the team. No one likes more paperwork. Remember, this is not meaningless red tape. You are playing a fine game! I bet you keep score when you play mini-golf. Persevere until keeping score at your company is as natural as keeping score at mini-golf.
Sinker Swim In Ocean City“How long do I let someone stay on the team if he is not hitting goal?”
The essential questions are: Is this person willing? Is this person capable? And what are you doing to help? When it comes to sales and production, there are behaviors that, if done on a regular basis, will cause sales and production to improve.
For instance, if your call taker answers the phone with a smile and a polite greeting, fewer people will hang up on him. You will have fewer callbacks if your plumbers check to make sure the pilot light is lit after each and every gas water heater installation.
Willingness is demonstrated by an attempt to follow procedure and incorporate training. A willing team member with a sound operations manual and training program can become a goal-hitting performer.
Let's talk about capacity. There are some folks who move fast and some who move slow. A profitable, productive shop operates at a steady clip. Some folks just won't be fast enough. Or bright enough.
You might improve a slow mover by helping him or her to become better organized and take fewer trips to the truck or across the office. You will discover that a super system and sound training will help your team members expand their capacity.
Therein lies the magic, the joy, the raison d'etre for managers playing the game! And, at some point, you'll have to face the tough managerial decision that someone at your company is not capable of winning your game. Better to let him or her go so they can win somewhere else.
So how long is long enough to discover this? There is no pat answer. Sixty days for a service plumber? One day for a call taker? Five days for a dispatcher? While they work for you, give them everything you've got. Keep score, listen to your gut, and make the hard decisions sooner rather than later.
Me Too In Minnetonka“We are having fun keeping score and handing out bonus checks for performance above goal. My plumbers are into it and our customers are delighted with all the tender loving care. My dispatcher, however, is getting cranky. She knows how important her job is to the success of the company and wants to get in on the game. She's suggested that she be eligible for the same bonus the plumbers get. Now what?”
Dear Me Too,
Your dispatcher is suffering from Bonus Envy. Here's my take on who makes the most and why: For the risk and responsibility, the owners should make the most money. Next in line: The people willing and able to handle the revenue-generating positions - without sales, no one has anything to do. Start your bonus program with the plumbers and salespeople at your company. Then, create performance-based bonuses for every position.
You might ask your dispatcher, “Do you aspire to be a service plumber so that you can have that pay structure and bonus opportunity? Let's talk about what it would take for you to earn that position. Or, you can help me craft a bonus program for your position that measures performance above and beyond minimum standards. Let's work this out.”
The goal is budget. Bonus opportunities are found by beating the budget. Either exceed sales or deliver less-than-anticipated expenses. Keep score for 90 days and work out the kinks.
Play the game for 60 days and make it work for you, your employees and your customers. Protect the game with reasonable qualifiers. Ground the game in your values - purpose, barriers and the freedom to play a fun, ethical, high-level game.