Ten ways to assure that they’re not!
Copyright © 2008 by Ethan A. Winning
The Other American Dream: Other than owning your own home with a white picket fence that you could impale yourself on when you fell off your bike, the other perhaps even older American dream is to own your own business. Only trouble is that most businesses call for hiring employees and outside resources. After all, you can't do it all by yourself. What we'll show you is how to limit if not eliminate the problem employee and the headaches they cause, as well as truly managing the other factors that cause sleepless nights.
Dreams and Nightmares: You, the entrepreneur, you opened a business ten years ago with high hopes for independence, power, recognition, and if necessary the growth that might be necessary to realize your dream. You even did what you thought was due diligence. You had a business plan, not that you wanted one, but it was required. You hired another employee, not because you wanted to but because you found out that you really can't do it all on your own. And so it began.
You don't have power. Politicians have power. This isn't at all like the game, "Careers," when you chose fame, fortune, or power. And even if it was, there's always a tradeoff. If you want paparazzi, then you're nuts, and you may end up with a stalker and now you need analysis. If you have fortune, there are always people who want a piece of your pie. If you have power, there are those who want to ride your coat tails. My god, maybe it is easier to be a bum.
Not only are you not independent, every one of your clients and maybe your customers are your bosses.
Probably didn't quite work out the way it was supposed to, and now you're afraid to come into work, or if not afraid, you just don't enjoy coming to work. Your income is stagnant, and the global economy is killing you because it created competition that few could have guessed just a few years ago. The city wants to expand the commercial district, but in order to do that, they're raising your rent or taxes so that they can get the Tiffany's and Crate and Barrels and Starbucks into the area. Or the building owner is building on to your site, and you didn't read the lease with your attorney. Why should you? You can remember the days when a handshake was good enough (in which case, you're over 70).
But the real reason for your apprehension in getting out of bed in the morning is that you don't know what your most trusted manager, Al Fresco, is going to do to make your life difficult today, or how good old (whoops, you can't mention the "o" word) Cynthia or Gomer are going to interact with and tick off other employees. I know from personal experience. I know from client experiences. In the thirty years in business and forty years in management consulting the biggest reason for the loss of sleep usually has something to do with employees. What you want to try to ensure is that your employees don't become your boss! It's not just akin to the inmates running the asylum: I have been called in in about half the cases to help owners (and managers) regain - if they every had it - control. It's only with a modicum of control that you get a modicum of sleep and peace of mind. But today, it's more a matter of people wanting a piece of you. You can run, but you can't hide. IF you're lucky enough to get a vacation, sooner or later, you have to come back. I sometimes wonder about all those disappearances from cruise ships and fishing boats. The Mary Celeste is a historical mystery, but I have a hunch the captain didn't want to go back to his day job.
A Changed Environment: Several elements of managing a business and employee relations have changed over the years which are more or less in the business' favor. On the plus side, most businesses don't have to worry about threats of existing unions, or employees wanting to unionize. Unions have caved, and few represent the interests of their membership. When it comes to the rank and file, no one has been more screwed than the union member. Airline pilots and flight attendants come to mind. The United Auto Workers has acceded to almost every demand by every manufacturer still with unions. And if you only have ten employees, unlike the heydays of the 60s, 70s, and early 80s, the unions no longer want to come after you. It's not "profitable."
Employees have lost many of their rights especially when it comes to termination after long-term employment. Prior to December 31, 1989, there were gaggles of lawyers making tons of money on wrongful discharge. Today, while there are a few employees who would qualify for such a claim, the specialist lawyers have all gone away and now the employee has to hope to find a starving employee or a law firm that makes its money from class action lawsuits. They're easily found. Just look up into the branches of trees over a troubled employer.
The federal courts have become more employer than employee oriented. Witness the fact that of the last sixteen cases before the U.S. Supreme Court against big business, fourteen were won by big business. (See U.S. Chamber of Commerce for stats.)
Changes for Worse and Worser: But wait. You're not a big business. You've got six or thirty or forty-nine employees, and you've got some managers who can't manage. For that matter, some of your managers - those who are paying attention - are as apprehensive about coming into work in the morning for the same reasons you are. Since management training stopped fifteen years ago in almost all companies, maybe none know how to resolve problems with employees ... or each other. Or perhaps you and they are of an age where the "touchy-feely" (and not in a good way) management styles were being taught instead of the management practices that would keep you out of trouble.
Federal circuit courts - even one as liberal as the 9th - have been finding for the employee about half the time. Witness last month's decision that Starbucks owes its employees $100 million in back wages. There are many times when a business owner can't help but think that state courts are run by Berkeley or NYU law school graduates. Unfortunately, it has also been my experience that arbiters have also leaned toward employees, quite a radical change from twenty years ago when there was some balance and fairness in arbitration.
But forget about arbitration. Binding arbitration, while not entirely illegal in California and a few other states, requires more than a signature page in a handbook. Minor? Perhaps, but you may find that your lawyer would like to write a document that allows for arbitration, and you have to know that that document may be considered an employment contract which some of my past clients dismissed out of hand because attorneys always know more than pragmatic consultants.
Experienced HR managers will tell you that they remember the days when an employee filed a complaint against the company, the employee and employer would have a hearing before the Department of Labor. If either lost, an appeal could be made before a slightly higher level Administrative law Judge still within the DOL. Recently, much to my and my client's chagrin, California changed the rules. Any appeal must go to superior court, and superior court means getting attorneys. My client and I figured it out: the claim was for $14,000 for vacation pay as well as rest and meal periods. My client won on the vacation pay but, having no time sheets and only the testimony of other employees, lost on the rest and meal periods. He had to pay $4,400 by month's end or appeal. Attorneys fees would have been approximately $12,600 so he wisely paid the $4,400. This not the time - nor may never have ever been the time - to pay good money just to prove you're right.
What is appalling is that the state has dictated that they're cutting out the lower level appeal, and it definitely smacked of the Bar Association getting its way with the state legislature.
There are many more examples of change, but you probably want to know how to stem the tide, correct the internal system, or to learn how to stop worrying and get a good night's sleep.
What's a Person to Do to Control the Mind Field and Realize the Dream? I could be trite and tell you point blank to hire Winning Associates or subscribe to the tools that are locked away in the subscriber's section, or I could tell you to read the most popular articles over the last 15 years that give hints to managing a business, but I assume you want something more substantial and preferably free. Too bad because I'm going to tell you to hire us for minefield guidance. Subscribe abnd get the tools that could set you free.
But I'll start you out with some principles. As elementary as these may seem, if you follow this advice, you could save a small fortune and sleep better for it.
The Simple Steps to Making Sure That Your Employees Don't Manage You:
- Know what will please you.
- Know what your employees do.
- Know what your managers do!
- Hire based on rational criteria.
- Have structure.
- Have a fairness doctrine backed up by history and actions.
- Have discipline and complaint procedures.
- Terminate based upon documented behavior or lack of behavior.
- Do not become socially close to your managers or employees.
- Do diligence
You're going to hate this, but if you are a business owner, you owe it to yourself to know something about how HR is supposed to be an asset, and then make sure that, if you have an HR department, it is an asset, that is, it makes your job easier.
As a very slight aside, let me advise you to never fully trust a vendor in HR (or darn near anything else for that matter). Do periodic "audits" of what your insurance broker, your outside payroll service, your accountant is doing for you ... or to you. So, you need to know what your internal and external resources do. What do you expect? Are you getting what you expected?
So the very first step is to know what you want to accomplish. You have to please customers or clients; you don't have to please employees. You have to keep them motivated, but as I have often said, you do not have to make them happy. You'll never succeed. Set some personal goals, and try to make them attainable. Otherwise, you might as well be setting New Year's resolutions. If you don't know what is going to please you, then perhaps you're not ready to work for yourself or become a manager. Perhaps this is just an escape from something that you're doing now that doesn't please you. As so many managers have found out, you may very well be going from the fire to the frying pan.
Next, to know what your employees and managers do, you need job descriptions, periodically updated, no matter how informally drawn up. If any of you want to tell me that that's so 70s, you haven't been sued or had a complaint filed against you. Common sense also should tell you that knowing what your employees do is the only way to understand the internal human factors in profitability. Payroll is either your first or second biggest expense. You'd better be getting your money's worth.
The job description and job specifications rationally drawn will help you in having the best chance for hiring the best candidates. And would you all please forget about MBA degrees except where it is absolutely essential (and you'll have difficulty defining that). You want to hire a marketing director? Find someone with experience in marketing, and don't for a minute think that an MBA gives anyone more than a leg up over someone with a B.A. You're no longer trying to separate the wheat from the chaff as we used to. Now you're trying to find the most capable, and I'll tell you that the most capable marketing manager I know is one who can write whole paragraphs, express himself orally and in proposals, and adapts well to various situations. His degree is in English literature. But HR and many company presidents have a bug in their ears about MBA's and have yet to explain why.
You want someone with experience and/or know how - two very different things - and that means doing background checks. Difficult? Well, it used to be, but now just wait until another manager leaves a briefcase full of employees' histories in a taxi, and you're all set. If you need someone with a license, then be certain that there is a license or certification, and try to find out if they were at the top or bottom of their class. I'd like to know that that freeway bridge was designed by an engineer who wasn't driving a train.
Have structure. That means policies and procedures. But leave yourself some leeway. There is such a thing as too much structure. You need to be able to move people vertically, laterally, and downward. This ain't no manager left behind program! Once in a while, you're going to hurt someone's feelings. If a manager's subordinate knows more than the manager, fine! If the manager is holding a subordinate back and takes credit for the subordinate's ideas - which seems to be epidemic today - get rid of the manager. That subordinate can do you a great deal of harm, even more than the manager.
Every organization, by the very definition of organization, with more than one person has a structure. Notice I didn't say a "ladder." Corporate ladders are for climbing, and too many businesses - even large businesses - have given up on succession and career path planning for managers and employees.
What I've just addressed is actually putting the cart before the horse. The problem with managers who don't know how to manage is more procedural. First you need written policies. A list of the basics can be found in The Bulletproof Employee Handbook's outline. Additional policies are provided to subscribers at the bottom of the member's index page. Policies include discipline, employee grievances, and performance evaluation. Procedures include the documentation of (especially) these three areas. Getting managers to conduct performance appraisals has always been like pulling teeth. And too often managers copy previous reviews onto the new form. That helps neither the employee nor the company. And nothing will kill you in a hearing more than an "outstanding" review for someone you fire shortly thereafter. (There's a catch 22 here in that no review is never better than a bad review and vice versa.)
The number one factor in losing sleep: In another article, I mentioned that not terminating an employee soon enough was the second greatest pitfall in employee relations in any company. The greatest pitfall was not having documented the behavior or lack thereof that led to you wanting to fire the individual. It isn't firing the employee that is the factor in losing sleep. No, what's causing you to lose sleep is that you're afraid to fire an individual even when everything and everybody tells you to. Maybe it's because you didn't document or have no proof, but in 95 percent of the cases I've dealt with, it's because business owners, HR managers, and really good managers are or try to be "nice guys."
That's really where I come in. No, I don't make you a not-so-nice guy. After a discovery process in which we (there are two of us) look at the pros and cons and costs, I persuade you that that is what you have to do, and I tell you what might happen under different scenarios. There are always three choices in every scenario: live with it, fight it, or ignore it. Two of the three rarely work...
An employee with a bad attitude can make your business a daily hell, and no one wants to come to work. One of the greatest pleasures that we get is when a client calls and says they finally fired the troublemaker, and now everyone is smiling and has become productive once more.
Friends Forever, Not! Last in the list was to not become close to your employees, at least not that close. It's good to know something about them personally. It's better to know what they do for you. And it's best to know if they actually do it. But whoever said "Familiarity breeds contempt" knew what he was talking about. In this case, familiarity breeds a situation in which you can't or don't want to discipline someone who is wreaking havoc with a function or other employees. And when you don't fire the individual, everyone else either looks upon this as favoritism or wants to be treated the same. I'm tempted to say, never hire friends or relatives, but I'll just think it instead.
In "Babysitting Your Employees" I said that employees are like kids. Now that I have a two-year old granddaughter, I remember how skilled they (and employees) are at turning a system or a business on its head. I also just found out that two-year olds can lie through their gums, and with all the skill of politicians! Love your grand kids and kids, but keep more than an arm's length from employees. The military must have known something when it said, NO fraternization.
Do Diligence: The only way to prepare is to know the consequences of various actions well before you have to take action. That's easy for me to say, and easy for me to advise. I've had almost forty years of successes with clients and sufficient personal failures to know whereof I speak. I hired an employee based upon her degree. In fact, I did that twice! I hired at least five employees without checking backgrounds, and one turned out to be not only without the stated degrees, he had fewer ethics.
I got lazy and let our insurance broker to get lazy. I almost took in a good friend as a partner. (Now, we're neither.) I hired an HR manager who had a degree in law. Couldn't understand a thing she wrote, and her presentations were like sitting through a really bad episode of "Law and Disorder." She even used Latin a few times. And then I hired lawyers who stole business from me.
There are times when you can't be "diligent." There's nothing in your background to tell you what to look for. That's where your managers and outside sources come in. This is my fourth recession. We've weathered them because we remember them and what the indicators were. We've learned from our mistakes and those of others.
I do not mean the following statement to be political. It's managerial. We got into trouble with the S&L's in the 80s because of a lack of oversight. We're in a mortgage crisis now because of a lack of regulation though we have plenty of regulatory bodies. So my last piece of advice is, don't ever run your business the way the government is run. And how is that, you might ask?
I'll tell you. I thought I might want to get into oversight and onto a Civil Grand Jury. I called and was sent an application form along with the eligibility requirements. The third on the list is the following: "Possess ordinary intelligence, sound judgment, and fair character." Imagine if you hired people with the same qualifications, all "C" students with just a touch of unethical behavior. The sound judgment must be for not getting caught.