30 August 2011
30—38% of revenue is a good rule of thumb for payroll according to Don Todrin, a specialist in solving business debt problems; as it climbs toward 50% the businesses are always in trouble. How well are your payroll dollars working for you? No less than six situations have come to my attention in the past few weeks dealing with issues of non-productive people. We waste money when we do not help people be their best.
Documentation is the common thread with all six cases; two have nothing, two are factually written and two praised the people as exceptional, even though they are not. Productive payroll begins with engaged people who feel like part of the team and know their role. It is supported with clear expectations, regular check-ins and documented feedback; this includes not being bullied into saying nice things. Trying to reset performance expectations with a person who believes they are great ( and have the documentation confirming it ) is a most difficult task and not for the faint-of-heart. But it must be done. Remember, the conversation is what is important and the documentation a record that it occurred. Make sure you are always talking with your people.
Everyone gets hurt in the long-run when we let people be less than their best and not part of the team.
Be well and keep adding value,
If your business is ready for its annual physical check-up, BizDrCheckUp
E-BITS …thoughts of increasing value
The MUDA of non-productive payroll