by D. Kevin Berchelmann | Jun 28, 2008 | Brazen Leader, Executive Improvement, Human Resources, Kevin Berchelmann, Organizational Effectiveness
Most managers hear “retention plan,” they immediately think “stay bonus.” And to be sure, those bonuses could very well be a real part of most retention plans.
A well-thought retention plan, however, is much more than simply “money.”
Retention plans can be necessary for critical continuity during turbulent, transitional, or heavy-change times. When necessary, and well-thought, retention plans create real, measurable value to an organization when it needs it most. The key, of course, is the “well-thought” part.
During the sorts of times mentioned above – the times that drive the thinking behind retention plans – it’s easy to look to those who have done so much up to now, and convince yourself that a reward is in order. Maybe it is, and maybe it isn’t, but a retention plan isn’t the way to go about it.
A retention plan should never be used to reward prior performance; its sole purpose should be to ensure retention of those employees critical for the future success of the organization, both during and after the retention period.
So, what exactly is a retention plan? Think 3 things:
1. Communications,
2. Employee Development, and
3. Bonus Compensation.
All three of these are necessary for effective retention, and for emerging mostly unscathed after an organization’s transition.
For Communications, think open, relevant, and frequent.
Employee Development is part of the future promise of “things to come,” that will provide future leverage.
Bonus Compensation is just that – a cash “carrot” paid out in such a manner as to be worthwhile to both the employee and the organization.
Retention plans can be critical for future success – but they aren’t simply a promise of payment to a large group of people. Think through carefully what you need, and implement a plan accordingly.
by D. Kevin Berchelmann | Jun 23, 2008 | Executive Improvement, Kevin Berchelmann
I was recently involved (as a participant) in a strategic planning event; the facilitator, Alan Pue, was discussing many of the ways that planning — and its subsequent implementation — can go wrong.
In part of that commentary, he mentioned as an example a firm’s inability to adapt to a necessary change in the market, and how that inability adversely affected their performance. Alan wasn’t sympathetic to their plight, nor even empathetic. In fact, he made it clear that the problem was their own doing, and the resultant pain was of their own creation. They did it to themselves, have no one else to blame, and these lessons — though valuable — can be painful.
I agree.
When we act so dumb in business that we can’t get out of our own way, the resultant pain is our own doing. Sort of like touching a hot stove, we hopefully learn that we shouldn’t do that again.
Stupid should hurt.
by D. Kevin Berchelmann | May 28, 2008 | Brazen Leader, Human Resources, Kevin Berchelmann, Organizational Effectiveness
For my money, a well-thought, well-implemented gainsharing effort is the holy grail of productivity and efficiency incentives: Paying for performance with money you never would have had anyway, without the improved performance. An incentive plan that funds itself.
For the unenlightened, “Gainsharing” is an incentive plan that, using etsablished, historical threshholds of performance, pays incentives for “gains” based on that thresshold. Usually defined in some fashio of a “split,” such as 50% for the company, 50% for employee incentives.
An example: Company has historically spent $2.00 for every widget it produces. Under a gainsharing plan (oversimplified here for clarity), if the employee effort resulted in making widgets at $1.50 per, then the $0.50 savings, or “Gains,” would be shared equally between the company and employees.
Their are keys to an effective Gainsharing effort:
1. Get it right. Determine the critical lever(s) involved that the gainsharing will apply. These are likely the final productivity measure, e.g., cost per lb., hours per process, waste, rework, etc. Do not use simple payroll dollars. And use a recent trend data point (1 yr, 3 yrs), not some arbitrary “goal.”
2. Keep it simple. If you can’t explain it to the lowest level impacted worker in less than 5 minutes — so they really understand — it’s too complicated.
3. Communicate. You cannot overcommunicate with a gainsharing effort. You must be open and free with sensitive financial data — if you feel you cannot, don’t use gainsharing.
4. Educate. Participants must be able to “connect the dots” between today and “better,” and they need new knowledge tools to do that. Financials, process, etc.
5. Reward. Timely payouts are a must. Monthly for typical blue-collar, perhaps quarterly for more sophisticated workers. You may have to prime the pump at first.
Gainsharing is not a “template” compensation scheme where you can take someone else’s and fill in the blanks. Things like holdback/reconcile, thresholds, buy-downs, etc. all need to be determined, to say nothing of the original pland design.
If done correctly, however, there is nothing better.
But that’s just me…
by D. Kevin Berchelmann | May 28, 2008 | Executive Improvement, Kevin Berchelmann
So, I’ve got this client (lots of my stories start this way)…
Well-run construction company, with a pretty darn solid management and executive staff. Recently, we promoted a mid-level manager to an executive level.
Big shift, major change.
I had worked with this new executive in the past; he was a participant in one of our leadership development efforts, and though he brought a lot to the table, I like to think those development efforts played some part in his promotion (a little shameless self-promotion there). Back to the story…
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by D. Kevin Berchelmann | Apr 23, 2008 | Executive Improvement, Kevin Berchelmann
Finally, someone gets it.
Delta Airline’s CEO, Richard Anderson, announced to reporters that airlines needed to raise fares as much as 20% just to offset increased fuel costs.
Wow… ya think!?!?
The bigger question, of course, is which Airline bigwigs have the intestinal fortitude to be the first to bring such an increase to bear.
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by Triangle Performance Staff | Apr 15, 2008 | Kevin Berchelmann, Organizational Effectiveness
Not to be left out of the “Let Me Show How Stupid I Am” competition (described in earlier blog post below), Continental Pilots take a preemptive strike against the hint of a potential merger:
…unionized pilots from United and Continental said they would not permit a merger of the carriers unless the pilots support the terms of any proposal. “The management teams of United and Continental must understand one hard fact,” the union leaders said. “The pilots of our respective airlines will not allow any merger unless management meets or exceeds our demands to be treated fairly and equitably. “Our concerns will be addressed before we ever agree to allow our airlines to merge.”
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