Telling the truth about SME life today

My staff have enjoyed some decent bonuses over the years but I’m worried that some employees have started to depend on them as part of their income. There won’t be any bonuses this year – how can I break the bad news” Bonus schemes designed to motivate a team can, in difficult times, create a massive drop in morale. The macho book of management requires that you stick to the letter of every bonus deal but you could, in the process, be destroying your greatest asset.

It’s not clever to simply tell your team to share in the bad times as well as the good, and then drive off in your Range Rover.

Your colleagues’ loyalty is even more valuable when times are tricky so, if possible, pay at least half last year’s bonus. Offer an explanation such as: “Although there should be no bonus this year, we’re making this payout because we appreciate how much everyone has done in a difficult market.”

If that’s too expensive, look after your superstars. Send a cheque with a handwritten letter to their home thanking them and explaining why they deserve special recognition.

If you’re so strapped for cash that you’re close to breaking a bank covenant, tell everyone face-to-face and find out if anyone needs a hand with a serious money problem such as car finance arrears.

Never stop investing in your people. During the next 12 months, you’ll need their support more than ever before.

Nobody in my finance department seems to have worked in a recession before. What’s the best way to get them all absolutely focused on cash”The finance department doesn’t run your business – you do. So make sure you get the figures you want.

Ask them to produce a monthly, weekly and daily cash forecast. They’ll get to use all the things they love (sales budgets, average price and, their favourite, KPIs), but it’s the cash that really matters.

Get them to compare the actual bank balance with their forecast and, most important, show the bank balance against the same day last year. FDs can befuddle you with budgets but last year’s comparison nearly always reveals the truth. During this period of uncertainty, you can’t afford to waste money. Insist that every overhead department keeps costs below last year. Once everyone knows you’re taking funding so seriously, they’ll give cash flow the priority it deserves.

For the next two years, or as long as it takes for the economy to recover, the only KPI that matters is cash.

I’d like to have a fancy dress theme at our Easter office party but my HR director says it may alienate the more retiring members of staff. I want to see all the girls in their skimpy bunny outfits. How can I weasel out of being politically correct?

You’re losing the plot. Office dos are for the benefit of the workforce not for management.

Mixing drink and mini-skirts is a recipe for disaster so don’t even think of organising your office party. In fact, with your attitude, it’s best if you don’t even turn up.

Find someone else to look after your social scene – but not the HR director, who’ll be so concerned with politically correct decency and health and safety that no-one will have fun.

We give the job to Bill, our “people person”, who knows how to find out what everyone wants. Treat your colleagues to an event of their choosing, whether it be a barbecue, karaoke night, a visit to the bowling alley or the dog track.

Whatever the event, it should be designed for their pleasure, not for yours.

Picture: source



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