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Quid Pro Quo

Here's a rule that managers and employees must learn, regardless which department they belong to:

The amount of a manager's time (and the company's money) that any employee is entitled to is directly proportional to the amount of revenue that that employee creates or the amount of spend that that employee saves.

Simple, clear, appropriate. Notice that I do not use the word 'fair'. Fair is a fuzzy term; its definition depends upon who is speaking, and never the twain shall meet. But 'appropriate' is something that we can agree on, even if neither side particularly likes it.

Take a look at how your Customer Service and Business Development teams are comped. If your organization is like most, the first is too low and the second is much too high. And I know that the next words out of your mouth are these: "How can we compete for BD reps if we pay below the going rate?"

First, half the reason that you need BD reps is that you lose Customers because they don't receive Customer for Life service. Fix that - maybe by increasing retention among your CS reps and comping them for hitting Customer retention goals - and half of your BD needs go away.

Second, you are not looking for BD divas; you want BD reps who consistently hit 100% of goal (not above or below that) and who take the long view that taking care of Customers up front leads to more and better referrals which leads to higher revenue which leads to more money.

When you comp by value, there is less jealousy and distraction from doing work, because the math is there for all to see: Produce more or save more = get more.

You can't fulfill the American dream any simpler than that.

Co-op Advertising

Something you'll hear me say over and over again is that every part of your organization must be monetized. From Accounting through Warehousing and beyond, every department has to make money on its own - enough to absorb its own costs of operation and staffing and still have something left over. Co-op advertising is a perfect example.

The idea behind co-op advertising is that you purchase advertising space - typically in an expensive media outlet or catalog (perhaps even your own catalog) - and resell part of that space to Customers or Vendors who otherwise couldn't afford to advertise in that outlet.

If your Vendors produce physical goods, you might let them buy ad space in your catalog in return for a certain volume of their products. This is cheaper for the Vendor - their cost to produce that good is nowhere near what they're asking you to agree it's worth in credit. And if your cash flow is tight, getting product in exchange for space in a catalog that you've already paid for can seem like a good deal.

The real goal in selling co-op space is to turn a profit on those sales. If you buy a full page ad in a given magazine, for example, charge your Vendors or Resellers at least 20% more for the space than you paid. If you've picked the right outlet, your Vendors / Resellers want to get in on it, but the monetary divide is too wide. But they may be able to afford an 8th of your space in exchange for what a 6th would cost.

Tip 2: Don't expect Salespeople to sell co-op space if you don't spiff them for it. It's not going to happen. You know why? Because it's a distraction from selling your goods and / or services, and they know it. Better to hire someone who is brought in specifically to sell co-op and reward them when they do.

If a Vendor agrees to be in your publication or media outlet, make sure they follow your guidelines for submission. Don't let them push you around; there's not a PR fellow around that hasn't had to deal with such guidelines, and yours are likely to be far more reasonable than many.

Expensive Reports

Does your organization issue corporate credit cards to execs and Salespeople, then pay their bills for them? How's that working out for you? Getting those expense reports on a timely basis, are you? With all of the receipts included, and with your form filled out correctly? No?

Of course you're not. Know why? Because you're doing it wrong! Do this, instead:

• Issue corporate credit cards, just like before, only have the bills go to the employee's home address.
• Set the account up in such a way that the employee has to pay each bill themselves, out of their own pocket.
• Ensure that - once you have received a properly filled out expense report with all necessary receipts attached - you reimburse the employee no later than the end of that week.

Here's what this does for you:

• Because they are personally liable for all charges, you don't have to chase employees for reports or receipts any more. If they don't provide them, you don't reimburse, and they still have to pay the credit card company.
• Any interest charges they incur are theirs to pay - not yours or the company's. As long as you reimburse promptly, it's not your fault if they pay their bill late. It's their bill, after all, not yours.
• If they don't have a receipt, you don't reimburse for that item. No slipping in slush money, no losing receipts. Everything must be documented and included, or the money lost is theirs.
• Because the grace period for many credit cards is now 20 days or even less, after a month or two, the first thing a Salesperson will do after returning from the road is to complete and turn in their expense report. As long as they do that, they will never have to actually pay for anything out of their own pocket - they will pay each bill almost as soon as the expenses are incurred (providing they don't wait to make payment once they receive their reimbursement - again, not your problem).
• That fellow who used to lose all of his receipts? He quit. Good riddance!

Ass Kisser of the Month

You know what's wrong with Employee of the Month awards? Their existence. In nearly every organization on the planet, it's an excuse for management to perk someone they like. The problem with this sort of popularity contest is that it does nothing but cause resentment among employees, who see it for exactly what it is: Another way for management to reward their buddies for being their buddies. Bear in mind, this comes from a guy who's won these types of awards many time before, and who's been in management for a long time.

If you have any illusions that your organization is a business and not a club, don't ever utter the words "employee of the month".

Okay, having said that, I'm going to say exactly the opposite, and you're going to agree with me that both answers can coexist in the same space-time continuum without causing the annihilation of this universe, okay? Here's how it works if you really want to do Employee of the Month properly:

• Management has no say in who is nominated or who wins. Let's face it, management gets to choose winners and losers in everything else; they have no business here. Every nomination must come from someone who is not a manager, and only non-managers get to vote. 
• As part of the process, each person who nominates a colleague must explain in their nomination why they believe the other employee is a lifesaver. None of this, "So-and-so is always so nice" or "Treats Customers well". They should be doing that all the time. Never reward someone for fulfilling their job description; it sends the wrong message. The nomination must be for something that was above and beyond the call of duty. 
• If no one nominates anyone in a given month, there is no Employee of the Month. Period. The moment you jigger this, you're back to belonging to a club, and not running a business. 
• Make the prize something of value to the recipient. And by value I don't mean something that costs the company a bundle. You know what most non-managers want? More time off. So award the winner an additional paid day off of their choice. Screw what HR says; the winner will truly appreciate it - it feels just like playing hooky - and their friends will want it, too, which generates more above and beyond behavior. 
• Record it in some lasting way. A plaque that you add names to, if you're old school, or a permanent page on your blog, intranet, and / or FaceBook page. Something that the recipient can look at when they're having a bad day. Something that others can see is part of your organization's commitment to recognizing and rewarding extra effort (not popularity). 

I throw these pearls out there so you can add them to your strands and shine. But it's up to you to pick them up, and to share what you've found on that beach with us, too. Got anything shiny?