According to Alex Alonso from the Society of Human Resource Management, the number one reason people leave their jobs is for more money. I personally have lost two employees in the last two months. Both loved working here and had been here a long time, but they left for a noticeable increase in pay.
If you are paying your people based on performance with a fair and competitive plan and treating them fairly with respect, you can likely skip this month’s article.
Those of you who do not have a strong pay for performance program for employees likely need to read on.
What is a shame is that when you lose a quality salaried employee who isn’t on pay for performance, you will likely have to pay more to get a replacement, plus your training costs. I don’t know any large progressive operators who aren’t paying for performance, but I am sure some are lagging in this 20+ year old trend.
The sad part is that if you are paying for performance, your employees are making more than those of your competitors, but you are getting significantly more production, so your unit cost is likely lower than your competitors. There really is no reason not to put in pay for performance if you have not already done so.
Of course, pay for performance does not change the fact that you still must be kind, respectful and an effective leader. You still have to offer lots of training, and competitive benefits for all your staff.
There is a lot of information out there on how to do pay for performance, so immerse yourself in understanding it, and then pull the trigger. You will be amazed at the increased sales with lower costs you will get if you do pay for performance properly.
Covid has accelerated issues for most of us, and it will never be the same again, but those who are paying attention are doing the best they ever have.
Remember, only you can make BUSINESS GREAT!
This article was provided by autosalvageconsultant.com, which was formed in 2001 by recyclers for recyclers, to help them improve their businesses.
Published in the May 2022 Edition
