Management | Ali Ghaemi Online

Employee Retention – Why Employees Stay And Why They leave

Mar 132016

These pages have often featured articles on why employees choose to stay with an employer and why they may choose to depart to other companies.

Here are a few past posts:

Most managers and employees agree that ‘bad’ bosses are the main reason employees quit. The anecdotal evidence and conventional wisdom only add to my own observation from both sides of the divide.

Here comes the Harvard Business Review with a new study which claims, “employees leave both good and bad bosses at almost comparable rates.” The researchers reached their conclusion by studying and interview 700 employees in the IT sector. The conclusions being counterintuitive it is possible that the study confused its cause and effect. In other words, better employees left and were also the same ones who ‘kept their chin up’ and remained positive in the face of bad bosses or other reasons that motivate employees to decamp. Above average employees are likely to have a passion for and be deserving of more senior jobs and better pay, which are already identified as employee incentives. The key is whether it would be at their present job or elsewhere. This is where companies need to be diligent and retain talent.

The study itself believes that the silver lining in this is that employees leaving good managers become better ambassadors and alumni. Even so, the finding is at odds with what has been this writer’s personal and professional experience. Still, the conflicting findings are not a reason to exclude writing about them or to immediately assign a false value to them.

If – and this should not be construed as a leading sentence – the article is mistaken it could be due to it being one sample studying one industry, although it is doubtful to me personally that employee retention fundamentals are that different from industry to industry.

What do you think?

*Things That Need To Go Away: Companies Without A Growth Plan For Employees Who want It.

Year Over Year Compensation Increases And Variables

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Feb 152016

Sometimes it is a wonder how easily a percentage of sales management professionals forget or never learnt the fundamentals of sales compensation and motivation.

This is not a knock against the vital and, if the job is being done correctly, difficult sales management position. However, for different reasons sales managers act counterproductively to the desired outcome when it comes time to set goals and define compensation plans.

Reasons may include:

Sales managers forget what being in a sales (individual contributor) position was like.
Sales manager was never in a direct sales position.
Sales manager is junior and has not found his or her rationale or voice. This person would go with flow and not make waves.
The sales compensation model is of course derived from the company’s strategic plan for the year and is handed down from the office of the Chief Financial Officer and, by extension, board of directors. The sales chain of command was unable to wholly or partly contribute to the puzzle.

Here are examples of what I term counterproductive sales compensation modelling. Before doing that though let us remember that we are not dealing in absolutes. This is not a black and white edict. A compensation plan could very well lie on a spectrum between ‘good’ and the ‘bad.’

Sales professionals are often vocal, and correctly so, with sales compensations when:

The numbers are not what the company has in fact budgeted. By the time the sales manager has adds his 5%, the director had added her 10% and the vice-president has tacked on a discretionary 5% the number has ballooned by 20% and is demotivating the sales team. With the team finding the number out of reach sales people react in several ways. They check out when concluding that the target is not realistic. Worse, they become resentful believing the cards are stacked against them. Moreover, when facing a tough market and competitive landscape sales comes to fret a lack of friendly cover. You might be thinking how would the team know (that the numbers have been altered)? It is not the absolute number that poses a challenge, but the delta between numbers and the path to achieving it.
Sales numbers are based on one-offs or special circumstances. If a salesperson who happened to walk into a large sale or had a major sale based on a special circumstance that is not repeatable finds the new quota follow the (FY -1 Special Circumstance * FY0 Uplift%) formula he is likely to balk at the number calling it irrational along the way.
Similarly, salespersons with spectacular achievements are given congruently higher quota than counterparts based on last year’s success. The message is ‘Thou Shalt Be Punished For Thine Hard Work.’ Looked at conversely weaker salespeople were rewarded.
Under adverse circumstances, salespeople hold back – it even has its own term ‘sand bag’ – possible sales from one quarter to the next or worse from fiscal year to the next. Forget helping salespersons over-achieve; under such circumstances sales is actively not achieving.

It is important to not create sales compensation in isolation from the very salespeople who are tasked to execute it. It is also critical that salespersons do not be handed a disincentive and be demotivated by sales management and their compensation plans. Most importantly, managers must examine the compensation plan to eliminate any perceived or actual unfairness. Operating in an environment that is not a level playing field will have the opposite of the intended effect and lead to charges of favouritism or unprofessionalism.

Keep the numbers above board, uniformly applied and view the sales team as mature allies.

*Things That Need To Go Away: not soliciting the sales team’s feedback on the sales compensation model or, worse, soliciting and subsequently ignoring it.

“Bad Boss” – Why Half Of Employees Quit

Articles, Management Add Comments »

Oct 242015

A 2015 Gallup study called Employees Want A Lot More From Their Managers addresses the fundamental employer and employee question. It confirms what many have either already known or impulsively sensed. Employees do not leave companies. Employees leave people. In other words, for employees, the manager is the company.

These pages have addressed the issue of the relationship between employee and employers before. The study adds more evidence to the assertion that employees leave due to bad managers.

What Matters To Employees

What Matters To Employees 2015

Keeping Your Employees Happy

Why Employees Stay

An Interview with Beverly Kaye Of Career Systems International Co-Author of Love ‘Em Or Lose ‘Em: Getting Good People To Stay

The Gallup study of 7,272 adults revealed that “one in two had left their job to get away from their manager to improve their overall life at some point in their career.”

Gallup found that employees want engagement, communication and responsiveness. According to the study, employees unhappy with their managers find annual reviews forced and superficial. Pertinently, employees who are unhappy do not plan or think about the future of the company simply because “they are not even sure what tomorrow will throw at them.”

Managers, are you reading and understanding this?

Are relevant personnel at different companies picking the correct managers and removing mistaken management persons and their respective choices?

Note: this is a US Study.

*Things That Need To Go Away: managers who make life difficult for their employees.

What Matters To Employees (Update 2015)

Articles, Management, Negotiating Add Comments »

Aug 122015

It is not the first time that I write about What Matters To Employees.

See the older iterations here and here.

Here is an update from 2015, which depicts the top 3 priority ‘wants’ of the employees as

1- Pay

2- Location

3- Flexible hours.

To speculate, the ‘top 3’ are likely not as cut and dry as it seems upon first glance. For example, ‘pay’ could mean base pay or variable or signing bonus, etc. ‘Flexible hours’ could mean number of hours worked or vacation days. Moreover, as always, negotiations and wants and needs are not win-lose. For example, a person might mean ‘signing bonus’ and not just ‘salary’ when discussing ‘pay.’ Similarly, an employee might mean ‘office hours’ when discussing ‘flexible hours,’ which may even be in sync with employer needs as they need people in different shifts.

For another perspective, which is different from the results of this survey, read my interview with author Beverly Kaye.

*Things That Need To Go Away: employers pretending the above are not priorities.

Why Employees Stay

Articles, Management 1 Comment »

Jul 132015

I wish I could say this graphic is mine. Alas, it is not, but I like it a lot.

In fact, since it was sent in, if anyone knows where the source is please tell me for appropriate credit.

The point is what these pages have talked about before here, here and here. Employees are precious and finding good ones is difficult. Keeping good ones is as difficult. More pertinently, however, is the question on how to keep employees.

Many theories float out there, but the notion is that one solution does not fit all. While managers and human resource teams talk and practice team meetings, casual Friday days, commission structures so on and so forth any of these schemes is probably missing the mark the majority of the time.

Employees are humans. Humans are a diverse group. It remains the job of the manager, executive and human resources to understand each individual and work with (motivate) that person (employee) individually.

*Things That Need To Go Away: making employees happy through actions and activities that make managers pleased.

Hiring A Sales Manager From Within – The Internal Promotion Conundrum

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Dec 192014

When it comes time to choose a new sales manager one of the topics most discussed and considered is whether to hire internally or go outside.

On the one hand, companies need to provide a career path for their employees. Most companies have team leaders or salespeople who aspire to leading and managing teams of their own. Addressing those motivations and maintaining seniority or meritocracy are valid considerations. On the other hand, companies often feel the need to hire from outside to acquire a certain skillset and experience that is not immediately available within.

The most heated discussion happens when a successful salesperson aspires to or is about to be promoted into management. There is plenty of literature out there warning against hiring the best salesperson into a leadership role – and let’s be frank many do not do it simply because they do not want to lose the wins the salesperson brings in. There are also plenty of reasons (like career paths, motivation, respect, keeping knowledge and expertise from walking out of the door) to promote the person from within.

Personally, I have both been promoted from within and been hired into an organization as a manager. At times it was a difficult transition, but it worked out at the end. Having said that, hindsight is 20/20.

Salespeople, very successful ones anyway, are tireless, motivated, single-minded, hungry and do not give up. Not every salesperson on every team answers perfectly to that description. As I have written often a decent manager is flexible, sees and understand diversity and gives plenty of room to making the circle whole by responding to different direct reports’ needs and aspirations.

Will a single-minded salesperson make that transition into a successful sales manager? Maybe and maybe not. Then again, it is hardly guaranteed that an outside person would be a successful hire. Rule of thumb remains: hire a good proportion from within and supplement it at all times with fresh blood to allow the latest and greatest seep into the department from outside.

Back to the internal promotion however. This new manager may be operating at two extremes with his or her new team. At the one end is choking the team with micromanagement and pressure. Experience (correctly) tells the new manager that hard work and intensity pay off. The manager demands to see that from the team. At the other end, the manager gives the team too much leeway and operates too often on faith. After all, the salesperson was self-motivated and went out there and made things happen. It would not be strange to expect that the sales team would act in the same way.

Again and again, we come back to keeping an open mind, understanding people and being flexible in approaching different people on the team in unique and personalized manners. That is the reality of sales teams and the material any manager must work with.

By the way, there is no other way. The sales team is now responsible for selling. The manager will be consulted and brought in. The manager will inspect and advise. The manager will become an escalation point and shoulder to cry on, but at the end of the day the manager cannot be the one doing the selling and must let go of the act of leading the sale to customers. It is obviously imperative that the manager quickly figure out what the motley of characters and personalities on the team need to make it happen.

*Things That Need To Go Away: not helping by putting them in the wrong position.

The Ten Bullet Points Of Sales Coaching (As Part Of Sales Management)

Articles, Management 2 Comments »

Mar 202014

Whether your organization is sophisticated enough to have systematic sales training and learning for its salespeople or budget for occasional education inevitably, routinely and necessarily the sales manager has a role in coaching the sales team.

Sales managers are tasked with running the department and ensuring sales success. There is a core numbers and revenue aspect to the role. However, earnest and forward looking managers give attention to the team’s sales coaching.

This is easier said than done. Time is always an issue. There is not ever enough time in the day. There are multiple priorities. The numbers need attention, reports need to be created, understood and presented. Someone else could do it. It can wait, so on and so forth. And it is all true.

Nevertheless, sales managers need to make time for training. Here are ten bullet points on coaching in sales:

1- Allocating time to sales coaching is not neglecting the numbers. Coaching salespeople is elevating the numbers.

2- Coaching is not conducted in one way. It includes listening, asking questions, listening to answers and explanations, offering praise and understanding.

3- Coaching is better when conducted in progressive steps. If it is new or has been omitted for a while it is best that the ‘first’ time is dedicated purely to listening and open-minded learning. Only on second and third appointments the sales manager/coach may venture into offering feedback and actual training. The velocity and progression depends on the salesperson.

4- Attach coaching points to numbers and objective goals.

5- Create a schedule and stick to it. This is a matter of discipline and necessity. More importantly, it creates a non-confrontational atmosphere where coaching is part of the process and the job and not tied to any potential or recent missteps or weak achievements.

6- Allocate time for an exchange right after the side-by-side, conference call, meeting or customer visit. The points are fresh and one is not relying merely on notes and memory. Feedback and coaching happens here. Be as detailed as possible.

7- Different salespersons have different perspectives, strengths and weaknesses. Acknowledge them by stating them and working with them.

9- What is the plan now? There has to be actionable items between now and the next scheduled session. Have it in writing and share with the salesperson. A review of this should also be the starting point of the next scheduled coaching opportunity.

10- Commit to coaching and do not shortchange the time or process.

Do not miss:

Sales training is also motivational: http://www.alighaemi.com/wp/?p=459

One size does not fit all: http://www.alighaemi.com/wp/?p=266

Hunter Or Farmer – which Am I To choose?

Articles, Management Add Comments »

Jul 262013

The existence of hunter-type and farmer-type salespersons is an old understanding in sales circles. Hunters are after market share and winning new prizes (deals or customers). Farmers are maintaining existing accounts, maximizing profits, cross-selling (adding products to what the customer has already purchased) and ensuring a consistent and predictable stream of revenue.

Famously, most salespersons are not able to juggle both dispositions. Perhaps it is the duality of the roles or perhaps it is the difference in skillsets. Most companies do not have the recruiting capability or the talent pool to bring onboard both types of salespeople.

What is more, most companies should not try. Unless a company has the size and payroll capability of a Blackberry, Apotex or Sony organizations need to articulate either a growth and market share or maximizing profit and retention strategy. Again, most sales managers and business owners reading this will immediately balk at the choice opting (in other words hoping) for both, but with the wish being unrealistic a choice needs to be made.

So be it if your shareholders and investors are making the choice for you. Otherwise, articulate a strategy and hire for the part.

Is your business needing to grow fast and garner market share (perhaps additional cross-sell opportunities are in the product pipeline a year or two down the road) or is your business in the mood to maintain the customer base by providing a higher level of service than a poaching competitor could offer) and ensure the profitability of the business is not in jeopardy? Then hire accordingly.

*Things That Need To Go Away: hiring generically for a ‘sales’ position.

Statement Positioning

Articles, Management, Selling, Selling More Add Comments »

Jun 052013

How a decision is presented is detrimental in how the choices are perceived and considered. This is not anything new. Here is something more specific. According to an article in The Boston Globe people respond more favourably to a request if it is framed as securing a gain and not avoiding a loss. In sales it is more effective to keep a success in sales maintained and not as not having someone lose a job. The example given is of a charity. It is better to present a request to donate blood as a way to “prevent someone from dying” rather than as a way to “save someone’s life.”

Belief

Articles, Management, Marketing, Negotiating, Prospecting, Selling, Selling More Add Comments »

Jun 052012

I firmly ‘believe’ that having belief is one of the keys to success. This is not some spiritual intangible. It is an imperative. Wayne Gretzky, a Canadian hockey player, is often quoted as saying, “You miss 100% of the shots you never take.” It is as simple as that. Believing is about doing. Time and time again when a salespersons is convinced that an effort is futile it becomes a self-fulfilling prophecy. Successful salespeople know that when all hope is lost the worst possible thing to (not) do is to give up. One last e-mail beseeching customers, one more call exploring alternatives, one strategic question to a prospect may turn things around.

One needs belief however. The belief that something may happen. Ironically, it is the more experienced and tenured salespeople that often fall victim to a lack of belief. They internalize the mistakes, failures and objections and project them into various current situations. It should be the opposite. The more pertinent question invoking belief is ‘have I sold before?” or ‘have I interviewed for such a job successfully before?’ or ‘Did I win in a similar situation in the last year?’… then why not again?

Your believing not only determines what you do, but it also determines that you do it. Moreover, it is the duty of the management and company to give, instill and maintain that belief. Salespeople are humans. They need support as much as anybody.

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