How To Motivate Employees – The Power of Incentives

Managing to Core Values

Managing to Core Values nick.leja |October 13, 2023 |Business Managing to Core Values has had a profound impact on my ability to place the right individuals in the right roles within my companies (getting the right people in the right seats). This wasn’t just a minor adjustment; it was a seismic shift in how we construct and nurture our teams, which has led to significant improvements. Before embracing Core Values as a guiding principle, I found myself in a challenging situation. I had team members who clearly didn’t align with our values but were not technically violating any of our handbook policies. It turned into a waiting game with me waiting for them to violate some policy so I could initiate the disciplinary process. This approach resulted in toxic or unproductive team members remaining in the workplace for extended periods, causing harm to the overall team morale. Once I transitioned to managing based on Core Values, the transformation was immediate. Most problematic team members voluntarily left within three months, and high-performing individuals became notably more motivated. Here’s how to do it: Create Core Values The initial step is to work together with your team to craft your Core Values, and it’s advisable to keep them to no more than seven. Ours have evolved over time and currently stand as follows: Honest Reliable Passaionte Open Minded Good Listener Great Work Ethic Positive & Upbeat When I first did this, it felt like a waste of time. Core Values appeared to be mere feel-good words, abstract concepts lacking any tangible benefits. I was wrong. Implement Quarterly People Analyzers On a quarterly basis, we conduct a People Analyzer on everyone in the company (including the leaders… including me). During this analysis, managers should assess each team member against our Core Values using the following ratings: “+” = the team member exhibits this Core Value most of the time “+/-” = the team member exhibits this Core Value some of the time “-” = the team member generally does not exhibit this Core Value It’s important to note that a “+” doesn’t imply they always exhibit the Core Value, and a “-” doesn’t mean they never do. We all have good and bad days. Additionally, the People Analyzer assesses each team member’s suitability for their specific role within the company. This evaluation focuses on three key factors: Get It: Does the team member understand their role? Want It: Is the team member genuinely motivated and committed to their role? Capacity: Does the team member possess the capacity and capability to effectively perform their role? For each of these, the team member is given either a “Yes” or “No.” Here’s a sample People Analyzer for reference: Define “The Bar” No more than three “+/-” ratings for the Core Values. No “-” ratings for the Core Values. All “Yes” ratings for Get It, Want It, and Capacity (GWC). If a team member meets or exceeds The Bar criteria, they are considered a good fit for our company’s culture. Handling Team Members Below “The Bar” When team members fall below The Bar, it signifies that they are either the wrong person, in the wrong seat, or both. If team members are above The Bar concerning Core Values but receive a “No” for GWC (Get It, Want It, Capacity), it suggests that they are indeed the right person for the company but are currently placed in the wrong seat. The ideal approach is to seek a different role or position where they can excel and contribute effectively. However, if they’re below The Bar with respect to Core Values, they are the wrong person for the company. When a team member falls below The Bar, here’s a structured approach to address the situation: 1. One-on-One Meeting: Schedule a one-on-one meeting with the team member to discuss their People Analyzer results. Explain the ratings and provide them with clear feedback. 2. Identify Obstacles: Explore whether there are any factors within the company that might be hindering their performance. Discuss their understanding of their role, expectations, training, tools, and resource needs. If they’re identified as the right person but in the wrong seat, discuss other potential positions they might be interested in. 3. Mutual Game Plan: Collaboratively create a plan to help the team member rise above The Bar. This plan may include actions both the manager and the team member should take to improve the situation. 4. Schedule Follow-Up: Set a follow-up meeting to conduct another People Analyzer in 2-4 weeks. Ensure that this follow-up meeting is scheduled and added to both calendars before ending the meeting. 5. Follow-Up Assessment: In the follow-up meeting, reevaluate the team member’s status against The Bar. If they are now above The Bar, the problem is resolved. If they remain below The Bar, begin the Disciplinary Process and schedule another follow-up meeting in 2-4 weeks. 6. Repeat as Necessary: Keep repeating steps 1-5 until: The team member is above The Bar (the desired goal) The team member voluntarily resigns or is terminated Our Process For our company, our Disciplinary Process involves two written warnings, and if the issues aren’t resolved, termination of employment. If the team member does not improve, the longest the process would take is 3 months: A great benefit of this process is that most team members will quit before getting fired. If someone isn’t a good cultural fit, deep down, they’ll know it. If they’re only at risk of being fired for making mistakes, many will try to hang on, hoping to avoid any further errors (or at least to avoid getting caught). But when the issue is a poor cultural fit, it’s much harder to conceal. This process also focuses on what’s most important: recognizing team members who align well with our Core Values rather than those who make the fewest mistakes. I’d rather have a team member who strongly embodies our Core Values, even if they make occasional mistakes, over a toxic team member who simply plays

Harnessing the Power of Listening

Almost all of us have a deep yearning to be understood. That being said, listening is hard. Sometimes, it can be very hard. The mental strength required to deeply listen is intense. There are times when someone else is talking and every ounce of me wants to interrupt and interject my viewpoint. It takes a lot of effort and patience to listen well. Every time I do it, though, the struggle is worth it. Here are some quick tips on listening that have helped me personally: Let Them Breathe Not feeling understood can feel suffocating, like you lack air and can’t breathe. If your counterpart feels suffocated, she likely won’t pay much attention to what you have to say. If you and I were in a room talking and all of the air suddenly got sucked out, you likely wouldn’t listen to anything I have to say. All your attention would be on finding air to breathe. This is much the same feeling one gets when she feels like she isn’t understood. She doesn’t care what you have to say until she gets some air. View it as your mission to give your counterpart air so she can breathe as quickly as possible. You’ll be surprised how quickly the argument will dissolve and turn into a positive, productive conversation. You can do this by making her feel understood. Rephrase and Label Emotions To show someone we understand her, we should repeat back what she said in our own words, essentially summarizing what she just said. If there are emotions tied to what she said, we should also label those emotions. For example, if someone just got done venting about how much she hates her job because she doesn’t feel challenged and does the same thing over and over, I could say something like, “So it sounds like you are really unhappy at work because you don’t feel like you’re learning or growing. Is that right?” Ask Questions vs Making Statements Conversations are fluid, and it may not always be apparent how you can repeat something back to the other person and label their emotion. When this happens, ask questions such as: Can you explain what you meant when you said ___? Can you tell me more about ___? Why did you feel ___ when that happened? Questions like those invite the other person to sift through their thoughts and expand, helping you, and even themselves, truly understand how they’re feeling. Statements can be confrontational, putting the other person on guard. Questions, on the other hand, are more exploratory and comfortable. Try to Get the Other Person to Say “That’s Right” Whenever someone says “That’s right” to something you’ve said, you have reached clarity and understanding. Keep rephrasing and repeating back what the other person says, label emotions, and ask questions to gain understanding until the other person says, “Yes, that’s right.” Resist the Urge to Defend or Problem-Solve Two types of conversations in which listening is incredibly important are arguments and conversations dealing with problems. Arguments During an argument, your counterpart is likely expressing thoughts that can be perceived as attacks. Our initial instinct is to defend ourselves or share our perspective, but before we do, it is important we make our counterpart feel heard. If some of my team members just got done telling me they feel I prioritize making money over their safety in the workplace, my initial instinct is to immediately defend myself and tell them why they’re wrong. However, first I need to give them air to breathe. Responding like this is much more effective: “To make sure I heard you correctly, it sounds like based on a few decisions I’ve made over the past couple of months, you think I am focused more on making money than the team’s safety, and it’s making you feel unhappy and unsafe at work. Is that right?” Assuming they agree (which is already a huge step towards finding common ground), I’d continue with: “Okay, I understand where you’re coming from, and I’m very sorry I made you all feel that way. I value your safety significantly more than money. Without you as my team, the company wouldn’t exist. If it’s okay with you, I’d like to walk through the examples you shared of decisions I’ve made, explain my point of view on them, and then hear from you how I could’ve acted differently to not make you feel unsafe. Is that all right with you?” After saying something like this, the hostility will likely have dissipated, no one is in a defending posture, and we can talk through the issues on the same side of the table vs opposing sides. Problems During a conversation dealing with problems, most people’s initial reaction is to start problem-solving. Many times, the initial problem identified is a symptom of a deeper root cause, and time spent treating symptoms vs root causes isn’t very effective. For example, someone may express they are unhappy with their job. If I immediately try to solve this problem, I may focus on helping him update his resume and look for a new job. However, if instead I keep reflecting and labeling, the conversation could go something like this: HIM: “I’ve been a funk lately because I’m so miserable at work. Something needs to change.” ME: “I’m sorry to hear that. It sounds like work is making you unhappy, so you want a change like getting a new job?” HIM: “Well, no, I like the company I work for. I was hired to do digital marketing, but I’m spending all my time focusing on internal communications.” ME: “So you’re frustrated you aren’t doing what you were hired to do?” HIM: “Not just that, but I got my degree in digital marketing and that’s my passion.” ME: “Oh, so you want to stay with your current company, but you just aren’t doing work you’re passionate about. Sounds like you need to find a way to switch to the digital

The Shopkeeper’s Journey – A Tale of Incentives

The Shopkeeper’s Journey – A Tale of Incentives nick.leja |February 27, 2023 |BusinessStories a tale of incentives After years of toiling away with manual labor, Cole decided to open a shop in his medieval village of Stonebridge. With a passion for travel, Cole set out to collect unique items such as exotic spices, silks, dyes, precious stones, and other treasures from around the area. He secured a loan from a wealthy merchant and opened his shop in the heart of the village. At first, he relished being in the shop, working from open to close every day. But eventually, he wanted to expand his business. So he hired three helpers. After training them, he slipped on his green tunic, brown boots, and matching belt, and then he ventured off to nearby villages to collect new goods for his shop. The First Challenge Two weeks later, he returned from his travels and was disappointed to see that his standards had slipped. Dust piled up in the corners, his product wasn’t organized. His team also looked bored, which led to poor customer experiences. To remedy this, Cole came up with a checklist for the staff to follow during his next trip to ensure his standards were maintained. After restocking the shelves with all the new goods from his latest trip, Cole set off on another two-week journey. However, when he returned from his second trip, he found that the checklists hadn’t been followed. Frustrated, he hired a supervisor to oversee the team and ensure the checklists were completed properly. But even with a supervisor, Cole found that his team still wasn’t completing everything when he returned from his third trip. This time, Cole decided to pay his employees based on commission. Hopefully this would motivate them to work harder and think more like owners. However, this created a new problem. With the new commission structure, his staff began fighting over who focused on sales. No one wanted to do non-sales tasks like cleaning or merchandising because they paid less. As a result, the shop’s standards dropped even further, and customers complained about feeling pressured to buy things. A New Focus Determined to make his team feel and act like owners, Cole thought deeply about what motivates an owner. He narrowed it down to two things: profits and customer satisfaction. If the store made a lot of profits, but the customers weren’t happy, those profits would soon evaporate. With this in mind, Cole shared his plan with his staff. He promised to put 10% of the store’s profits into a pool to share with the staff every month based on their hours worked and individual performance. In addition, he set up a customer survey card outside the store, asking customers to rate their experience. The staff would only receive their share of the profits if most customer feedback was positive. Cole returned from his next trip to find that his new approach had finally worked. Non-sales tasks such as cleaning, merchandising, and even promoting the store all contributed to the store’s profits, so everyone was willing to help. They even came up with new ideas to help the store grow. Furthermore, with the team’s newfound excitement at sharing in the shop’s success, Cole no longer needed a supervisor to enforce the checklists. As a result, his sales increased and expenses decreased, even after accounting for the profit-sharing. With this successful strategy in place, Cole’s shop became a thriving and happy community hub, where employees and customers alike felt valued and invested in the store’s success. All thanks to the power of incentives. THE END Nick’s Notes Incentives drive results. Other than getting the right team in place, providing the right incentives is the most important thing a leader can do. Incentives should be simple, easy to understand, lucrative, and fully align everyone’s interests. For my current companies, being in retail, I put a percentage of the gross profits (sales – COGs) into a pool and then apply a modifier based on labor. These are all factors the team can control vs something like our monthly rent. At the end of each month, that pool gets split between the supervisors based on hours worked. Then, the manager gets a percentage of the supervisor’s bonus pool, and the District Manager gets a percentage of all the managers’ bonuses. This completely aligns everyone’s interests so everyone’s rowing in the same direction and has led to a substantial increase in our stores’ success. With the right team and the right incentives, little else matters.