1998-Rewarding your People

Creating a productive, inclusive shop atmosphere, and rewarding employee initiative. 1998

by Anthony Noel

Acknowledging and rewarding employees' contributions to your company is crucial to building a successful business.

As technological advances make payrolls leaner and meaner, it's important not to confuse lesser numbers of employees with a diminished reliance on them in making our businesses successful. The fact of the matter is that smaller workforces make each individual employee all the more important.

A smaller workforce means that more tasks are being done by each individual. Even if they are getting computer assistance in performing those tasks, that should not diminish what they are doing for our companies - they are getting the job done, and we make light or minimize their importance to our continued success at our peril.

By giving employees a voice in the company and, specifically, by seeking their input on issues involving their areas of expertise, we acknowledge their importance to the company's success. But we must also realize that such acknowledgement should go a lot further than making employees feel good. It can't be some cheap ploy to increase production and the bottom line. And it isn't optional, if you really expect to build a successful business.

The first full-time job I held in woodworking was for a company run by a first-generation German immigrant trained 'in the old country.' I'll call him Helmut.

Though he was a stubborn, almost abrasive man, he recognized the importance of keeping his people happy - up to a point. He set goals for employees and rewarded them when those goals were reached.

Not every employee responded, and it was no coincidence that they were the ones who didn't last too long in woodworking. For them, Helmut's shop was just a weigh-station on their journey to wherever they wound up in the working world.

For others, Helmut's shop was a training ground and motivation for starting one's own woodworking business as soon as possible. You see, while Helmut did reward hard work and dedication, the rewards never quite matched the achievements. Coupled with his abrasive style, that made for huge employee turnover. Of the five people in Helmut's cabinet shop when I started working (the whole operation had 40-plus employees), three of us eventually left to start our own businesses.

What is worse, Helmut knew it was happening, but didn't do anything to address it. I recall a conversation in which he specifically mentioned how so many people had left him to start their own companies. He was clearly bitter about it, but apparently not bitter enough to change his approach, which seemed to be: use people for as long as they'll tolerate being used and 'reward' them with raises, but keep those raises as low as possible.

There was even a standing joke among employees about the poor wages at Helmut's shop. It began shortly after Helmut had instituted a wage review system. Not a bad idea. But the effort became more of a forum for the shop foreman to let people know exactly how they were doing in Helmut's eyes (and that was the first mistake - if you have something to say to an employee, you should say it yourself).

In fact, the review was really nothing more than a chance for a valued employee to be slapped on the back, promised the moon and the stars, and then given an increase - 25 cents an hour.

Since the praise wasn't coming from the generally dour Helmut himself, it was even less believable or meaningful, which helped to fuel that standing joke. As people trudged back to their workbenches after their annual pow-wow, co-workers would ask how things went. Without missing a beat, the latest victim, clearly imitating the owner, would answer: 'You're wonderful!! You're marvelous!! I'll give you a quarter.' If we didn't laugh, we would have cried.

The moral of the story is that, while people want and deserve praise when it's appropriate, consistently good performers will only accept lip service in place of a tangible reward for so long.

Some at Helmut's shop recognized all the empty promises for what they were in a relatively short time. Others took longer. But in the end, everyone caught on - and many took off.

Helmut was shrewd in other ways. There were few individuals who didn't start out in the sanding department. He wanted to see how much menial work someone would tolerate before 'getting promoted' to another area or walking into his office demanding such a promotion. Thus, he learned how much of a disagreeable thing they would tolerate.

Later, he used what he learned about an individual's tolerance level to his best advantage, giving the bare minimum necessary to keep them on as long as possible. When someone finally got fed up, he left. And Helmut would start the process all over again with a new employee.

Helmut's shop recently closed down, with some huge debts to reconcile. Though marginally profitable when times were good, the business never grew into one that could weather the tough times and thrive in the good ones.

I think it is more than coincidence that the number of people who had been with Helmut for over 10 years could be counted on one hand - despite his having been in business since the mid-'60s.

Try this the next time you're out in the shop: Take a good look at each of your employees and ask yourself whether they're getting paid what they should be for the jobs they're doing. If you're still not sure, ask their supervisor. You may not be able to give them what they should be getting overnight, but don't let that stop you form taking the first step and following through later.

It is also important that you don't fall into the trap of only rewarding employees who contribute the most ideas to the betterment of the company or improve the way work is done there. While we'd like everyone to have enough entrepreneurial spirit to throw in his two cents whenever he sees a problem, not everyone is made that way.

You can do certain things to encourage such input, like an occasional suggestion session. But remember that some people will jump in immediately, others will do so more gradually, and others may not ever. Don't let that make them any less valuable in your eyes. There is much to be said for the reliable, nose-to-the-grindstone employee who simply knows how to get the job done and does it. They also contribute to our success.

Anthony Noel writes, consults, and teaches woodworking and journalism, along with doing an occasional custom job in his shop in Macungie, PA.

Have a business related question? Visit WOODWEB's Business Forum. The Business Forum is co-sponsored by ISWonline and is moderated by Anthony Noel. All business topics are welcome, from sales and marketing to dealing with difficult customers.

This article is reprinted by permission of Custom Woodworking Business Magazine.