How can you make your employees care as much about your company as you do?
The simple answer is: you can’t. No employee will ever care as much about your company as you do. They haven’t stayed up late figuring out how to make budgets. They haven’t put their reputation on the line with every job. They haven’t scrambled to be in 3 places at once to make customers happy.
Having an entrepreneurial mindset doesn’t necessarily mean going all-in. An entrepreneurial mindset means looking for solutions to problems. It means a constant need to improve processes. It’s a dedication to producing results that make the customer say “wow.”
And this attitude is something you can, and should, foster in your company. There are three things you can do to encourage your employees to think like entrepreneurs:
- Create transparency in your company.
- Use objective measurements to evaluate employee performance.
- Line up incentives to give employees a stake in the company’s success.
Create transparency to build a culture of openness.
Communicate your company’s financial targets and actuals. When employees know specifically how the company is doing and how they fit into the overall picture, they can draw a direct line between what they do and how it affects the company. Seeing this impact gives a sense of ownership of performance – and it sets the basis on what “better performance” looks like.
It’s important to walk through the steps too. Explain how you determine revenue targets because then, when you give employees a goal, they won’t see it as an arbitrary number. When discussing new hires or new equipment, employees will better understand the actual expense the company would need to take on and what that might mean for the bigger financial picture.
If you’re not comfortable sharing all of this information with employees, you can use percentages to disguise actual numbers. For example, you might say that employee wages cost 30% of total revenue. Or that equipment maintenance usually takes 5% of total revenue, but some unexpected issues drove that number up to 8%, meaning that there’s less profit, even though the sales remained steady.
Use objective numbers to measure improvement.
For an employee, there are few things more frustrating than putting in extra time and effort and it not being recognized. Or worse, believing that they were working really hard and efficiently only to be told that they need to improve.
When evaluations feel subjective, they feel unfair. And an employee that doesn’t feel like they’re being treated fairly usually starts looking for a new job and starts to half-ass the one they already have.
That’s why it’s so important to have clear and objective goals that are communicated clearly and discussed often. These goals should be measurable and specific, so employees don’t have to wait to learn if they’re on track. And when you do need to address a performance issue, you can use actual data to discuss outcomes instead of relying on observed behaviors.
Evaluations based on metrics don’t have to be overly complicated. For example, crew leads might be evaluated on operational efficiency, measured in revenue per hour generated. They may also be evaluated on customer satisfaction – like requiring a 99% satisfaction rate. Apprentices might be evaluated on skill acquisition – by attending required training and showing proficiency on new equipment or for new tasks. The key is that there is a clear line of whether or not a goal was reached, and everyone involved knows what that goal was.
Check out our webinar on giving valuable feedback!
Line up incentives and give employees a stake in the results.
Think about the standard incentive structure for landscapers. They get paid a standard hourly rate. And they get paid that same rate whether they’re riding in the truck, planting, spreading mulch, or waiting for instructions or equipment.
The only incentive they have to get the work done is “don’t get fired.” And when that’s the only motivation, you get crews that do the bare minimum. Wouldn’t you do the same? Why work harder when you’re paid the same either way? The company’s goal of efficiency to drive profitability doesn’t align with employee incentives, so it’s unlikely the goal will be met.
If incentives are even more misaligned, efficiency becomes the enemy. Say a crew is scheduled to work for 8 hours on a job and they finish it in 6. They created surplus value for the company. Great! But if the result is that they get sent home early, they’re earning less money. This puts the employee incentive in direct competition with the company incentive. Employees want jobs to be easier and take more time, which incentivizes inefficiency.
Encouraging entrepreneurship with bonuses.
Instead, you want to line up employee incentives with company goals. One of the best ways to do this is to incorporate a bonus system that’s based on company revenue and efficiency goals, but also tied to individual performance.
The bonus system has to reflect both of these qualities. If the employee meets the expectation and expects a bonus, but the company didn’t hit profitability goals, you either need to pay them out of pocket or go back on your word. If you fail to deliver on a promised bonus, don’t be surprised if employees start looking for the exit or slide back into inefficient behavior.
If there’s no consideration given to an individual’s performance, high performing employees can start resenting other employees and start feeling like the hard work they’re doing isn’t recognized. With resentment, a toxic culture begins to emerge, cliques start forming, your productivity decreases, and you start having retention problems.
Combining both employee performance and company performance puts everyone on the same team, and has everyone working toward the same goal. The enemy becomes inefficiency and waste, not other teams. Instead of a culture of resentment, you’re building a culture of accountability and giving each employee control over their compensation and the growth of the company.
Check out our webinar on how to implement a successful bonus program!
Learn more about structuring a bonus system, check out our “How to Implement Field Crew Bonuses” webinar!
Working toward a common goal.
While your employees will never care as much about your company as you do, giving them a real stake in the results unlocks the entrepreneurial spirit. When they directly benefit from efficiency, you’ll start to get process improvement suggestions from every level of employee. When there are transparent, number-based goals, talking about pay increases becomes a lot easier because it no longer feels personal. When all employees understand that repairing broken equipment eats into their bonus, they’re incentivized to use it properly and maintain it.
The employee-employer relationship doesn’t have to be antagonistic. When everyone in the company stops competing against each other and starts competing against inefficiency, everyone wins.
