Among all the challenges you face as a business owner, few things are more difficult to approach than employee compensation. Between establishing base wages and salaries, distributing bonuses, and giving out raises, you’re bound to get a headache or two managing it all. That said, these issues cannot be ignored. Your people might like working for you and your business, but they won’t stick around if they don’t feel fairly compensated, especially if they can find a better paying job elsewhere.
Employees expect their pay to be fair from the beginning and increase over time (beyond just keeping up with inflation). Indeed, without delivering this expectation to new hires, businesses would have a hard time getting anyone on board, and developing leadership talent would be impossible. The hard part for you is figuring out how to broach this subject, how to decide who gets a raise (and when and why), and how to keep your people from turning on each other in favor of the almighty dollar.
So, if you’re hiring new team members, here are five important decisions to make before giving raises.
What to Do Before Giving a Raise
1. Create a Compensation Structure
As your business grows and you hire more people, you need to establish a system of compensation that works best for you. Some companies keep things simple with a one-size-fits-all solution that delivers the same percentage pay increase to every employee on a regular basis (usually annually). While this approach is equitable and easy to manage, it can negatively impact productivity and employee morale, as there is no clear correlation between performance and pay.
Other businesses might decide that performance and compensation management go hand in hand. These companies conduct regular performance reviews for each employee and give out raises based on how well they’ve done. All employees might receive raises, but the best performers will get a higher pay bump. This method can help motivate individuals to work harder and remain engaged, but it can also create tension between employees, splintering unity.
Both approaches have their merits, and you may decide to create a system that falls somewhere in between. Just make sure that your compensation structure benefits your employees and business as a whole.
2. Match the Market
No business exists in a vacuum. You must pay attention to what your competitors are doing if you plan on thriving in your industry and retaining your top talent. Companies that offer the best compensation packages tend to have a competitive edge. You may need to work with a business coach to give you a broad perspective of your industry’s outlook on compensation so you can match or exceed those expectations. This will allow you to attract and retain the best people.
3. It’s All About Value
When budgets are tight, giving out raises might seem like a burden. Indeed, doing so might result in short-term losses. However, you have to think long term and focus on building your business’ value over time. Your people bring value to your company, after all, and without them, you wouldn’t be able to grow or thrive. By reciprocating and delivering value to your employees, you’re creating a feedback loop that will propel your enterprise forward. In this way, compensating your people accordingly is a major component in talent management and succession planning. If you want your organization to be its very best and last for years to come, you need to invest in your people.
4. Exercise Care With Pay Compression
As you calculate wages for new hires and percentages for raises, be mindful of pay compression. This phenomenon occurs when newcomers make the same amount as those who have been with the company for a long time. Not only might this offend long-standing employees, it may actually devalue their position, as the newcomer’s wage accounts for inflation while theirs does not. In other words, a dollar is worth less today than it was a year ago, and even less so than 10 years ago, and so on.
Pay compression can toxify your workplace culture in more ways than one. Therefore, it’s important to adjust all salaries for inflation and always factor in longevity so senior employees are rewarded for their commitment and experience.
5. Be Upfront About Pay When Hiring
When seeking employment, people appreciate transparency. Companies that clearly outline their compensation packages and potential for growth often entice the best people. So, if you’re looking for top talent, don’t shy away from discussions around pay. This includes mentioning how, why, and when raises are dished out. The more open you are about these matters, the better, as it establishes expectations and minimizes confusion.
There’s nothing easy about raises. But if you take your time and think in the long term, you can develop a compensation system that attracts top talent, keeps your best people from leaving, improves your culture, and ultimately adds value to your business.
At Leadership Resources, our purpose is making the impossible possible through people. We aim to do so by helping individuals develop patterns of success that will decrease stress levels and maximize productivity. Contact us here to learn more about what we do and how it can help your business succeed and grow.
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We’re at a critical turning point in our global economy. New forces are shaking up our world and most companies are being forced to change how they operate.
What if your company could continue to grow and thrive despite these challenging circumstances? What if it could emerge on the other side of the COVID-19 pandemic stronger than ever?
How Business Coaches Help Growth
Business Coaches: The Ultimate Team Players
With the help of a business coach, a good company becomes a great company – no matter what’s happening in the world. That’s because a coach helps your employees stay flexible, introspective, and motivated, day after day.
A coach gives a giant dose of perspective when things feel overwhelming. They help people adapt to change and view it as an opportunity rather than a threat, reenergizing them to stay productive at work.
Jaye Stentz, a coach and leadership development specialist at Leadership Resources, explains that coaching provides an emotional outlet for employees who might not usually feel comfortable expressing themselves.
“We help them ‘peel back the layers of the onion,’ in coach terms,” Stentz explains. “It’s a metaphor for having a comfortable environment to sort of peel back those layers and get real – to be authentic about what’s difficult for you as an individual, in terms of change.”
Flexibility Fuels Growth
When a company’s employees are more open to the idea of change, they’re more open to other things that help a company succeed: teamwork, productivity, innovation, accountability. Suddenly, they’re devising new ways to burst through roadblocks that seemed impossible before.
Katie Maschmann, also a coach and leadership development specialist at Leadership Resources, says coaching helps people gain new insights and build flexibility in their thinking.
“We see the world not necessarily as it is, but as who we are,” Maschmann says. “A coach can help an individual see the world and situations from different perspectives and help them better identify issues that might have been hard to see from their perspective.”
How to Learn More About Coaching
Stentz, Maschmann, and other Leadership Resources experts share key insights about business coaching in our new whitepaper, 7 Ways a Coach Helps You Grow Your Company and Win. In the whitepaper, you’ll learn about the power of coaching and how it addresses the human side of business growth.
Explore topics like:
- How a coach calls a timeout and huddles with your employees
- Why coaching is important during and after a pandemic
- Coaching ourselves, then coaching others
- The importance of accountability
- Boosting sales and profitability
- Improving recruitment through coaching
- Common red flags and coaching tips
Download the Whitepaper: 7 Ways a Coach Helps You Grow Your Company and Win
For more information about business coaches and helping your employees succeed, connect with Leadership Resources. We provide coaching, strategic planning, EOS® implementation, leadership development, and proprietary technology called Accelerate. With our help, your company can achieve its larger vision.
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A successful coach isn’t always a game-winning coach. I’ve seen evidence of this up-close in all of my experience coaching youth sports, where our team might lose but each individual child comes out of the game with more experience, focus, and positivity.
As a youth sports coach, this was always my goal: help each child feel like a winner, no matter what the scoreboard says. Over the course of my lifetime, I’ve played twelve sports, coached eight sports, and officiated nine sports. I’ve also been a spectator and a parent of a youth player.
My diverse sports background has taught me the importance of helping people find the untapped potential within themselves. I’ve also discovered the power of communicating in a clear, simple way that resonates with a wide variety of people: children, parents, youth coaches, spectators, and referees.
Just like in youth sports, business professionals appreciate having complex concepts boiled down into basic terms. When I was a youth coach, I created something called: The MODEL Coach Concept which I now see how applicable it is to business and aligns with EOS®
How Coaching Sports and Business Overlap
The MODEL Coach Concept
This concept has five main elements:
Mentally Prepares
Organizes
Develops Every Player
Encourages
Leads by Example
As you understand more about what each part of this concept means, you’ll see many parallels for business.
First, a coach must mentally prepare, which means they must have the right mentality for every game, every day, and every winning moment. The same goes for every leader. Successful leaders apply the EOS Five Leadership Abilities to help them mentally prepare: Simplify, Delegate (and Elevate), Predict, Systemize, and Structure.
They must also have the organization it takes to get the most out of every coaching moment with the team. The overall EOS Process provides a variety of organization benefits through mastery of the EOS Toolbox Tools with a space learning approach. My favorite tool is the Issues Solving Track — a simplified approach to continuous improvement.
A great coach is focused on the development of every player, despite the fact that players develop and mature at various rates. The same goes for leaders living the EOS Process. It is hard to predict which team member has the most undeveloped talent. Work on clarifying expectations and challenging all team members to develop their natural talents, nurturing and coaching them along their journey.
A big dose of encouragement goes a long way too. Coaches must find ways to encourage and acknowledge players in a positive and productive way. Strong leaders apply the 24-hour rule when observing both desired and undesired behaviors with their team members. The observations are expressed within 24-hours of them occurring. This especially comes into play for the Core Values that warrant ongoing attention and appropriate reinforcement.
Finally, and perhaps most importantly, there’s leadership by example. A coach sets the tone for everything that happens and this requires a huge amount of leadership, consistency, and follow-through on your promises. This is a direct correlation to the EOS tool, LMA (Leadership, Management, and Accountability), which also ties in nicely with the Five Leadership Abilities mentioned previously.
Envision Success and Focus on Small Things
Whether you’re gearing up for the big game or preparing for a business project, take some time to envision the future. Instead of just focusing on the win, focus on the things that are within your control – what you’ll win, even if you’re on the losing side. There can be periods of time a business is failing or struggling to hit its goals. Within the EOS Process, the Vision/Traction Organizer does a spectacular job simplifying the vision and goals of a business. This provides all team members with an opportunity to discover how they contribute to the success of the business, even in challenging times.
Now I know this sounds odd. Why would we focus on what we can control even while we’re losing?
When I coached football, I taught the players to envision scoring a touchdown. As they practiced the plays and made the movements on the field toward the end zone, they could focus on the amazing feeling of reaching it.
This is a way of building the muscle memory it takes to accomplish a goal. If you build a clear mental vision of what it takes to succeed, your mind and body are primed to get there. That’s so much more productive than simply listening to a coach drown on and on or watching other players run down the field. It’s also much more productive than always focusing on winning the big game.
Just like working as a team toward business goals, when muscle memory is built, everyone is more apt to attain goals for themselves and the collective organization as a whole. The second page of the Vision/Traction Organizer (Traction page), focuses on the shorter-term goals for the year, priorities for the current quarter, and sets aside certain issues for future consideration in the Issues List. It is just as important to know what is to be focused on, as well as what is not to focus on!
The EOS® Connection
In business, if you’re a leader and you don’t know what success looks like for your team, you won’t get there. You won’t know what you want from your team and they won’t know what you want from them.
Learn more about Dan’s work and the Entrepreneurial Operating System now!
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By: Dan Sedor, Strategic Growth Advisor & Certified EOS Implementer® at Leadership Resources
Right now it seems that everybody is focused on COVID-19 and the negative impact it’s having on their businesses. Instead, I think we need to treat this pandemic like we’re coaching a youth sports team. Let’s make a game out of it.
I’m not suggesting we literally treat the current situation like a game. Businesses are struggling, family members are sick, and people are worried about their jobs.
Here’s what I mean, instead: when business owners and employees get so bogged down by negativity, the business is at greater and greater risk of being destroyed by the current crisis.The reality is, before this pandemic, there were always unforeseen issues that could cause a company to stumble. We always lost key people at key moments. We always had high expectations for projects and processes that didn’t pan out.
And let’s remember that our competitors have always done things to wear us down, distract us, push us to make things too complex, and cause us to lose market share. The point I’m trying to make here is that it might be a “novel coronavirus,” but it’s not a novel situation. We’ve always had extremely tough barriers to success.
How Coaching Sports Helps Handle Crisis
1. Focus on What You Control & Your Desired Outcomes
In my personal experience as a football coach of a team of nine and ten-year-olds, my job is to focus on what’s within my team’s control and help the kids focus on what’s within their control individually. The competition is always there to beat you and the environment in which you’re playing may at times feel unfair.
What can you personally do about it?
Ultimately, we’ve always made a game out of it. And while everyone wants to win, what’s most important is the path you take to get there. Each individual must stay absolutely focused on what’s within your control and what can be changed in order to reach the desired outcome.
For example, think about the opposing team on the football field. You can’t control any individual opponent and you can’t control exactly how the ball is going to go down the field on every play. As the game progresses, you don’t know if the other team is going to blitz on one side of the defensive line or another.
What’s within your control is making sound decisions and quickly adapting to whatever happens.
2. Build Systems of Flexibility
Just as in youth sports, this pandemic is going to cause us to lose some yardage on one play and gain some yardage on others. Some weeks are going to be extremely tough and discouraging.
But it’s our job to stay flexible and outfox the situation as much as possible.
Now is not the time to give up! So let’s make a game out of this. The pandemic is merely exposing gaps in our business processes, marketing strategies, and within our teams. Let’s think like youth sports coaches and find new ways to stay nimble and positive as we pursue advantageous solutions.
Some of my clients using EOS® are having record quarters right now. They even feel guilty about it because the pandemic is affecting so many people so harshly, yet their company is flourishing.
I also have clients who have lost 60% of their revenue from major sources. What a huge blow. But I’m happy to say that these companies are taking steps to learn from all this and come out on the other side better, stronger, and more prepared for whatever is to come in the future.
3. Simplify, Simplify, Simplify
We owe it to our teams to simplify things for them during a time of panic and confusion. They need us to boil things down to simple business concepts that will allow them to maintain their focus. During this pandemic, take a moment to marvel at how complicated your company’s goals have become and take the opportunity to hone your messages into simpler concepts your team can grasp right now.
Coach, your team is feeling overwhelmed. So what’s truly important?
Look to your company’s core values and focus on values that fit into categories such as teamwork, determination, collaboration, and positivity. Allow those core values to bolster your confidence during this time of global crisis.
Let’s make a game out of it. We can win by taking this pandemic one play at a time and showing some good sportsmanship. Now’s the time to tap into your competitive side, play a strong game, and refuse to be broken no matter what the scoreboard says.
About Dan Sedor
Dan Sedor is a Strategic Growth Advisor and Certified EOS Implementer™, as well as a founding partner at Leadership Resources. Dan is also the author of the book, “Model Coach” available on Amazon and utilizes the Entrepreneurial Operating System (EOS®) and customized strategic planning to help clients gain traction and grow their business. Dan is active in the community and enjoys coaching youth sports, attending country music festivals, and spending time with family.
Learn more about Dan’s work and the Entrepreneurial Operating System now!
Read More Among all the challenges you face as a business owner, few things are more difficult to approach than employee compensation. Between establishing base wages and salaries, distributing bonuses, and giving out raises, you’re bound to get a headache or two managing it all. That said, these issues cannot be ignored. Your people might like working for you and your business, but they won’t stick around if they don’t feel fairly compensated, especially if they can find a better paying job elsewhere.
Employees expect their pay to be fair from the beginning and increase over time (beyond just keeping up with inflation). Indeed, without delivering this expectation to new hires, businesses would have a hard time getting anyone on board, and developing leadership talent would be impossible. The hard part for you is figuring out how to broach this subject, how to decide who gets a raise (and when and why), and how to keep your people from turning on each other in favor of the almighty dollar.
So, if you’re hiring in Omaha, Nebraska, here are five important decisions to make before giving raises.
What to Do Before Giving a Raise
1. Create a Compensation Structure
As your business grows and you hire more people, you need to establish a system of compensation that works best for you. Some companies keep things simple with a one-size-fits-all solution that delivers the same percentage pay increase to every employee on a regular basis (usually annually). While this approach is equitable and easy to manage, it can negatively impact productivity and employee morale, as there is no clear correlation between performance and pay.
Other businesses might decide that performance and compensation management go hand in hand. These companies conduct regular performance reviews for each employee and give out raises based on how well they’ve done. All employees might receive raises, but the best performers will get a higher pay bump. This method can help motivate individuals to work harder and remain engaged, but it can also create tension between employees, splintering unity.
Both approaches have their merits, and you may decide to create a system that falls somewhere in between. Just make sure that your compensation structure benefits your employees and business as a whole.
2. Match the Market
No business exists in a vacuum. You must pay attention to what your competitors are doing if you plan on thriving in your industry and retaining your top talent. Companies that offer the best compensation packages tend to have a competitive edge. You may need to work with a business coach to give you a broad perspective of your industry’s outlook on compensation so you can match or exceed those expectations. This will allow you to attract and retain the best people.
3. It’s All About Value
When budgets are tight, giving out raises might seem like a burden. Indeed, doing so might result in short-term losses. However, you have to think long term and focus on building your business’ value over time. Your people bring value to your company, after all, and without them, you wouldn’t be able to grow or thrive. By reciprocating and delivering value to your employees, you’re creating a feedback loop that will propel your enterprise forward. In this way, compensating your people accordingly is a major component in talent management and succession planning. If you want your organization to be its very best and last for years to come, you need to invest in your people.
4. Exercise Care With Pay Compression
As you calculate wages for new hires and percentages for raises, be mindful of pay compression. This phenomenon occurs when newcomers make the same amount as those who have been with the company for a long time. Not only might this offend long-standing employees, it may actually devalue their position, as the newcomer’s wage accounts for inflation while theirs does not. In other words, a dollar is worth less today than it was a year ago, and even less so than 10 years ago, and so on.
Pay compression can toxify your workplace culture in more ways than one. Therefore, it’s important to adjust all salaries for inflation and always factor in longevity so senior employees are rewarded for their commitment and experience.
5. Be Upfront About Pay When Hiring
When seeking employment, people appreciate transparency. Companies that clearly outline their compensation packages and potential for growth often entice the best people. So, if you’re looking for top talent, don’t shy away from discussions around pay. This includes mentioning how, why, and when raises are dished out. The more open you are about these matters, the better, as it establishes expectations and minimizes confusion.
There’s nothing easy about raises. But if you take your time and think in the long term, you can develop a compensation system that attracts top talent, keeps your best people from leaving, improves your culture, and ultimately adds value to your business.
At Leadership Resources, our purpose is making the impossible possible through people. We aim to do so by helping individuals develop patterns of success that will decrease stress levels and maximize productivity. Contact us here to learn more about what we do and how it can help your business succeed and grow.
Read MoreLeadership Resources is pleased to announce Kari Foote has joined their team as a Leadership Development Specialist. Working directly with clients, Foote will develop high-performing leaders and create a culture of accountability. Through individualized coaching, facilitation of development processes, goal setting, and accountability, Foote will create customized development plans that align with the organization’s vision.
Foote has over 18 years of experience in a variety of fields in the public sector, including law enforcement and emergency management, banking and finance, and human services. The past two-and-half years, she served as the Human Resource Manager for the City of Lincoln and Lancaster County. She led strategic operations in the areas of employee relations, training and development, and talent acquisition, where she served over 3,000 employees across a variety of departments and divisions. Prior to that role, she spent over fifteen years working for the State of Nebraska in a variety of Human Resource roles, including the HR Field Operations Administrator for the Department of Health and Human Services where she supported over 5,000 employees statewide.
A graduate of the University of Nebraska-Lincoln’s College of Business Administration, Foote brings a wealth of knowledge and experience to the Leadership Resources team. In 2014, she became a certified executive coach and a member of the International Coach Federation.
“We are excited to welcome Kari to our team. She is a great match to our core values and brings tremendous attitude and experience which will enhance the lives of our clients ,” said Boyd Ober, President and CEO of Leadership Resources and Accelerate.
Foote can be reached at (402) 423-5152. For more information about Leadership Resources and our services, visit our website at www.LRsuccess.com.
You may know Boyd Ober as CEO and President at Leadership Resources, but this year he has taken on an additional role. Boyd is the 2016 Chairman of the Lincoln chapter for Real Men Wear Pink. Real Men Wear Pink is a national breast cancer fundraising and awareness campaign.
“There are a lot of women that go through breast cancer or any other cancer and don’t have that support network,” says Ober, so he and his team wear pink everyday as sign of their commitment to raise money and awareness to fight breast cancer.
Read the full article from The Daily Nebraskan to learn more about Boyd’s personal connection to the disease and the Real Men Wear Pink Campaign.
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