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By Richard Morgan

Because excellent sales experiences and high satisfac-tion levels are the basis for customer retention, it makes sense to hire, train and retain outstanding

employees who deliver on your promises. One sure way to overcome competition is to retain

employees who are properly motivated to help you gain and keep customers. It pays to take particular care with employees, beginning with the hiring process.

Employee turnover is a very visible measure of whether or not your existing personnel policies are efective. Plus there are some signifcant costs related to turnover, such as:

•Lossofsomecustomerrelationshipsandretention•Severancepay•Advertisingandhiringfees•Orientationandtrainingexpenses•Lowerinitialproductivityofanewemployee•Riskoflitigationforwrongfuldischarge•Diversionofmanagementtimeandatention

Tere are three essential elements that help strengthen employee relationships:

1. A detailed job description Before hiring an individual, you need to determine what

you want that person to do. Te description of the job, prior to interviewing prospects, provides an objective basis for examining the ft between the job itself and any applicant. Conversely, the applicant needs to know what your job entails to check the ft with his or her skills and objectives.

A good job description should include the following elements:

•Jobtitleandsupervisor:Jobtitlescanbeimportantinatracting the right applicant with the desired skill set. You could atract a quality tire salesperson with a job title of tire specialist or commercial feet representative, whereas the title of “sales” might net less qualifed applicants.

Including the title of the supervisor places the job properly within the organization. •Specifcdutiesandresponsibilitiesoftheposition:

A position will have several specifc duties and they all should be clearly stated. Tis is how an applicant will determine what is expected. For example, a commercial feet representative would be responsible for gaining and retaining feet tire and retreading business. Te representa-

tive might also be responsible for terminal tire inspections, selling wheels and alignment services, developing monthly feet reports, casing acquisition, and assisting with credit and collections.•Accountability(performancemeasures):Management

spells out how performance will be measured. Tere may be four to six diferent objective measures that, together, indicate the extent to which a person’s overall performance meets expectations. •Timeutilizationpercentagemodel:Itishelpfulto

indicate how the person’s work time is best allocated. Te ideal time model is based on prior company experience with similar jobs, or by best estimate.

2. Individual performance appraisals Used correctly, performance appraisals establish mutu-

ally acceptable goals, based on the job description and accountabilities. Regular reports, available to both the management and the employee, allow each individual to know where he or she stands at all times.

Here are some helpful guidelines for seting up a positive performance appraisal process:

•Attheminimum,dothemonceayear.Temanagerand employee mutually establish annual goals prior to the start of the new year. Te goals refect each individual situation. Goal levels vary between individuals with the

Business insight

Happy employees mean happy customersIt pays of to invest time and money in good workers

Employees are the face of your company. Keeping them happy will translate into happy customers. Set agreed upon goal levels based on individual circumstances and reward accom-plishments tailored to overall company strategies.

MTD November 2014

Business insight

same job title, based on opportunities available, length of time in the position, degree of training, etc. It is vital that the employee agrees with the goals and ex-pectations, rather than receiving some form of arbitrary quota from the manager without discussion or consent.

•Donottieappraisal(s)tosalaryaction.Separating appraisals from raises helps maintain everyone’s objectivity.

Te use of individual performance ap-praisals is somewhat controversial. Some academics and psychologists advise against using periodic, writen appraisals. Tey claim that coaching and feedback must be an ongoing activity. Tey believe that management misuses individual appraisals to chastise employees and create fear.

My years of sales and management experience takes me in a diferent direction. Having received and given many individual appraisals, I strongly recommend them.

Te diference in perspectives seems to come from disparate experiences. I will stipulate that some companies and managers probably use performance appraisals in an abusive manner. Tere is no shortage of incompetent managers.

Te lack of an appraisal system, however, invites litigation. Terminations may be contested at serious cost to the company when the employee claims wrongful dis-charge due to reasons other than poor job performance. •Don’tlettheappraisaltaketheplace

of regular coaching. It is important to celebrate the victories and reinforce right actions. •Efectiveappraisalsrequireadvance

goal seting, agreement on achievable goals, and objective measurements that are available to both the employee and the manager. Objective measures help avoid favoritism.•Makeroomontheappraisalforthe

employee’s signature and date of the review, including any comments the employee wishes to make. Signing the review does not necessarily indicate that the employee entirely agrees with the appraisal.

3. Compensation plansTe third essential element for strong

employee relationships is the manner and level of compensation. Generally, employees will focus on doing the things they get paid to do. Companies need to establish compensation plans that reward

based on the levels of accomplishment, tied to proftability and company strategies.

•Compensateforeachdutyareaofjob description. Ofen, there is a discon-nect between the duties shown in a job description and the manner of actual compensation. For example, a commer-cial feet representative’s primary duty is the generation of revenue from tire and retread sales. Other duties include terminal tire inspections, wheel sales, credit and collection support, etc. When the compensation plan simply pays based on tire and retread sales, the additional duties may receive litle or no atention. It is folly to expect efort in fve areas while paying based on only one or two.

Happy employees help atract long-term, happy customers. Employees are the “face of the company.” It pays to invest both time and dollars in your employees and, together, set high expectations for customer retention and proftability. ■

Dick Morgan is a certifed management consultant. He founded Morgan Marketing Solutions Inc. in early 1989. Morgan has more than 40 years of tire and retread indus-try experience, working with manufacturers, retreaders and tire dealers. He is the author of Marketing Facets, Te Market-Focused Guide to Company Analysis, a practical resource for those involved in determin-ing the current health of a company and gauging its future prospects. He also speaks on marketing and management topics at industry conferences and for business organizations. See more on this subject at www.moderntiredealer.com. Contact him at rpmorgan@morganmarketingsolutions.com or (972) 931-7993.

It is folly to expect efort in fve areas while paying your employees

based on only one or two.

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