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If you pay them well YOU will be rewarded!

By May 31, 2012July 23rd, 2018Uncategorized

Ever heard of Gabor Varszegi? He is a former rock musician turned millionaire business man in Hungary. At a time when most of Eastern Europe was still emerging from the oppression of Communism, he was driving a Mercedes and working out of an expensive office decorated with rare art.

Among the business philosophies that brought him success: hire young people with no Communist work experience (no bad habits to break) and pay them four times the going rate.  By doing so, he launched a very profitable chain of one-hour film developing sites, among other business ventures.

Mr. Varszegi has been praised for his business sense. Google’s Chief Economist, Hal Varian, says “If there were only a small penalty to being fired, there would be great temptation to slack off.” The noteworthy compensation offered by Mr. Varszegi made it less likely that his employees would dare do anything that might get them fired.

In a recent Harvard Business Review article, Zeynep Ton commended successful retail chains including QuikTrip convenience stores, Trader Joe’s supermarkets and Costco wholesale clubs for investing heavily in their store employees.  These chains also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors. Ton says, “They have demonstrated that, even in the lowest-price segment of retail, bad jobs are not a cost-driven necessity but a choice. And they have proven that the key to breaking the trade-off is a combination of investment in the workforce and operational practices that benefit employees, customers, and the company.”

And it’s not just retail chains that have discovered the benefits of taking good care of employees. Last year, Inc. Magazine announced the winners of its annual Top Small Company Workplaces competition. The 50 companies selected include manufacturers, software developers, direct sales, consulting and design firms, communications services, a company that offers summer camps for kids, and a fresh fruit delivery service. Some of the common denominators: values-based leadership, progressive employee practices, and nearly all of them not only share financial information with employees but offer some form of profit-sharing.

According to Inc. Magazine, “The leaders of these companies don’t view jobs as prizes doled out to lucky applicants. Rather, they figure the people they have chosen have chosen them as well . . . So they treat workers fairly, often generously; respect their personal lives; provide opportunities for development; and endow their jobs with meaning and fun.” Now here’s the best part. “In return, those employees bestow their best ideas and efforts on the business. They pull together through change and hard times.”

These employers aren’t treating their employees well because they want to be voted “nicest employer”. They are doing it because it’s turning profits for their companies!

Software giant SAS’s profits have climbed every year since it’s foundation in 1976. Impressive to say the least. No surprise that this company puts its money where its mouth is when it comes to employee engagement. “SAS offers a comprehensive benefits package to its employees, not only because it’s the right thing to do but also because of the measurable bottom-line benefit for the company,” said Jennifer Mann, Vice President of Human Resources at SAS. “The benefits we offer generate employee loyalty and foster long-term customer relationships.” At SAS, the voluntary turnover is 4% or less in an average industry of 22%. They estimate the company is saving hundreds of millions thanks to such admirable retention.

SAS’s founder, Jim Goodnight, calls employees “creative capital”. He says “Innovation is the key to success in this business, and creativity fuels innovation. Creativity is especially important to SAS because software is a product of the mind. As such, 95 percent of my assets drive out the gate every evening. It’s my job to maintain a work environment that keeps those people coming back every morning. The creativity they bring to SAS is a competitive advantage for us.”

Among the benefits offered to employees and retirees: personal and financial counseling services; adoption consultation and mentoring; eldercare support and resources; on-site child care; on-site fitness and recreation center (complete with personal trainers); fitness incentive programs; on-site wellness center offering haircuts, massages, and manicures; even a free book exchange area. And to help employees manage personal errands, while they work they can have their cars detailed, their dry cleaning done, and make use of a self-service UPS shipping center.

“Well, that’s great for them,” you say. “But we are a small company and we can’t afford all that.” Then consider some of these low-to-no-cost ideas that other small companies have implemented:

  • “No Meeting Fridays” – Make it a rule that Fridays will be meeting-free (unless absolutely necessary). This will allow employees to get caught up before the weekend.
  • “Bring a pet to work” – Not all employers can manage this one. But if you can, employee stress levels go down and co-worker relationships improve.
  • “Bring your baby to work” – A credit union in Sacramento, CA has very successfully allowed employees to bring newborns to work (up to six-months old). The distractions are minimal and the company avoids expenses related to hiring and training of temps.
  • “Free Breakfast Wednesdays” – one day a week, cater a breakfast or offer free food in the cafeteria.
  • “Commuter Relief”—Help your commuters out by providing subsidized bus tokens, free parking or partial reimbursements for tolls.
  • “Coffee breaks are on us” – Keep the coffee brewing along with grab-n-go granola bars, fruit or candy.
  • “Gainsharing” – This goes beyond profit sharing. It can be tailored to different areas of your company to reward team members for the factors that they have most control over, like productivity, sales and customer service.
  • “Do your volunteer thing” – Offering paid volunteer time off encourages community involvement and shows employees that you care about what they care about.
  • “Weight-loss bucks” – Reimbursements for programs like Weight Watchers or Nutrisystem . . . just one more health incentive to reward employees whose personal disciplines may be lowering your insurance costs!

Want some more ideas for cool benefits that will keep your employees motivated and engaged? Try asking your employees.