March 29, 2024

You’re the Boss Blog: Do You Listen to Your Employees?

Creating Value

Are you getting the most out of your business?

When I had my vending business, one of the things we constantly told employees was the following statement: “You are the expert at your job.” It took several years for some of our people to actually believe it.

But I’ve used this mantra in my business life ever since. The key is that, when you make this change, you stop telling people what to do and you start asking them their opinion about the best way to get something done. This can produce all sorts of benefits — if the employees believe your change in approach is sincere.

For that to be the case, you really do need to stop telling people what to do and start asking questions. Asking what was the best way to deal with an issue allowed me to learn about a situation before expressing an opinion or issuing an order. It’s amazing what you can find out when you ask questions instead of making assumptions.

It helps if you can learn to let employees make mistakes and learn from them. This was tough for me. I spent my first seven or eight years in business believing that mistakes were a bad thing. Eventually, I figured out that as long as we learned from the mistakes we had the opportunity to make our company better. Instead of thinking of mistakes as problems, we started thinking of them as learning opportunities.

I see too many companies where the owners assume their employees have little interest in doing good work. It becomes a self-fulfilling prophecy, and you can almost always spot these companies when you encounter them. They are the ones where you don’t feel valued as a customer.

On the other hand, if you expect your employees to do a great job — and make that expectation clear — I believe they generally will do just that. The behavior of your employees comes from the expectations you set and the way you communicate those expectations.

it is important to encourage employees to take responsibility and not point fingers. This was hard at our company. When mistakes were not allowed, blaming was one of our favorite activities. It took years for the culture to change.

I knew we had turned the corner when I was walking through our food-production facility one day and noticed that the food being made was below our standards. I asked the person who was making the food if she would want to eat what she had made. Her answer was no. I then asked her why she had made it that way.

Initially, her eyes were focused on my shoes and her answer assigned responsibility to her manager, her co-workers and ultimately me. After the fourth time I asked her who was responsible, her body language changed dramatically. Her head came up, she put her shoulders back, and she looked me in the eye and said it was her responsibility.

This was a major moment for her. She stopped being a victim and realized she could control what happened in her workplace. She recognized that she was an expert at her job, and she turned into a different person. Eventually, she became the manager in our food production operation.

The reason it took us years to make this change is that we had some people in management who preferred to tell rather than ask. We had to break old habits. We had to learn to trust our employees and to let them make mistakes. We would take one step forward and two steps back. Then we would take three steps forward and one step back. After several years we learned that we really did trust our people to do the right thing. That was when everything changed.

It takes time. But one day you walk into your company, and you notice that things really are different. It happened with us and it made us a much better company. One of the side benefits was that we were able to reduce our training time for route drivers from eight weeks to two weeks. We also increased the skill levels for new drivers along with our driver-retention rates.

What happens when someone makes a mistake at your company?

Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on creating personal and business value.

Article source: http://boss.blogs.nytimes.com/2013/03/07/do-you-listen-to-your-employees/?partner=rss&emc=rss

Bucks: Behavior Gap Book Excerpt: What Skis Taught Me About Money

Carl Richards

Carl Richards is a certified financial planner in Park City, Utah. His new book, “The Behavior Gap,” was published this week, and we’ll be running excerpts all week long. Meanwhile, his sketches are archived here on the Bucks blog.

I live in Park City, Utah, where some of us take skiing pretty seriously. One morning some years back, a friend swung by my house to pick me up to go backcountry skiing.

I ran into the garage to grab my skis. I stood there for a second looking at my four different pairs of skis, each designed for particular conditions, and suddenly, I was paralyzed. I just couldn’t choose.

My friend sat in the car honking the horn — Let’s go, Carl! Move it! The sun’s coming up! The snow’s getting soft! — while I stared at those skis. It was ridiculous. I’d spent all that money and time and energy collecting these skis so I would be ready to deal with any situation — and now I just felt powerless.

That day was a turning point for me. I got rid of three pairs of skis, and kept my favorite pair: the ones that would let me do what I really care about doing, which is to move light and fast through the backcountry.

Patricia Wall/The New York Times

The skis I kept aren’t perfect in every condition. They’re actually a pretty bad solution in heavy snow or in really steep terrain. So what? They’re a decent compromise in most situations, and they work beautifully in the conditions I like best.

Now I don’t have to think about which skis to bring on a trip. I just grab the ones I have and go. I trust my experience and my instincts and my luck to make it through situations when my equipment isn’t perfect.

Lots of people think that to make good money decisions you need to have a plan for every situation. You need insurance for every possible setback and investments for every market condition. All of your assumptions about the future need to be refined to perfection, so that you will never be surprised. You need to know and understand everything about the financial markets, and you need to budget your spending to the last dime.

But that kind of thinking is based on fear.

We fear (naturally enough) life’s uncertainty, its ups and downs. And so we make plans that we hope will give us the power to control our future. If I do this, that will not happen; if I sell now, I will avoid the coming downturn; if I pick the right investments, I will be financially safe; if I worry enough, I will be ready when bad news comes.

Trouble is, the real world is complicated. We don’t know what’s going to happen.

That means that most of our plans are useless. When I had four pairs of skis, I was always choosing the wrong ones anyway!

The point is, no plan will cover every situation — and that’s O.K. You don’t have to choose the perfect investment or save exactly the right amount or predict your rate of return or spend hours watching television shows about the stock market or surfing the Internet for stock picks.

You don’t need a plan for every contingency.

Excerpted from The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money. Published by Portfolio/Penguin. Copyright Carl Richards, 2012.

Article source: http://feeds.nytimes.com/click.phdo?i=8efa6d45c01e056a3945fb83f9b93ecc

Economix Blog: Casey B. Mulligan: The Biggest Cut in Unemployment Benefits

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Casey B. Mulligan is an economics professor at the University of Chicago.

While Congress has been debating whether to cut the duration of unemployment benefits, perhaps the largest unemployment benefit cut occurred when the stimulus law expired.

Today’s Economist

Perspectives from expert contributors.

Unemployment insurance offers funds, for a limited eligibility period, to people who lost their jobs and have not fyet been able to find and start a new job. In 2008, “emergency unemployment” legislation, plus automatic triggers in the unemployment insurance rules, extended the eligibility period to up to 99 weeks from 26 weeks.

Several times since then, and as recently as last week, new legislation has prevented the eligibility period from returning to 26 weeks.

The length of the eligibility period has received much attention; it affects how much the program spends and how much unemployed people receive. For example, if the weekly benefit were $275, and an unemployed person were unemployed for a year, then the average weekly benefit he would receive under the 26-week rule would be about $138 ($275 for half the year, and zero for the other half).

By extending the eligibility period to more than 52 weeks, this person would see his average weekly benefit increase to $275 from $138.

The green line in the chart below shows the average weekly benefit received by unemployed people over time, assuming that:

(a) they were receiving $275 a week until their benefits were exhausted
(b) about half of the aggregate time unemployed occurs in the first 26 weeks
(c) essentially all unemployment spells end in less than 99 weeks

These assumptions are a close approximation to the unemployment spells experienced by people 25 to 64 during 2010. For the reasons explained above, the line jumps to $275 from $138 in mid-2008, and then is constant thereafter.

However, the eligibility period is not the only part of the unemployment insurance rules that have changed since the recession began. The American Reinvestment and Recovery Act (the “stimulus law”) made a number of additional changes.

It increased the weekly benefit by $25 a week (and guaranteed that the $25 increase would not cause anyone to lose Medicaid coverage); federally funded 100 percent of extended benefits; exempted the first $2,400 of unemployment insurance received in 2009 from federal income tax; and paid 65 percent of an unemployed person’s health insurance premiums.

The act also paid states about $7 billion to allow more of the unemployed to qualify for benefits.

The federal financng of extended benefits meant that employers would not be liable for the extended benefits received by their former employees, which makes it less profitable for them to contest unemployment claims made by their former employees.

A $25 weekly benefit bonus was clearly worth $25 a week for as long as it lasted (until mid-2010). At a marginal federal income tax rate of 21 percent, the exemption from federal income tax on the first $2,400 of unemployment insurance received in 2009 is worth about another $10 a week.

Perhaps the most valuable added benefit was the health insurance subsidy. For unemployed people who, through the Cobra program, continued to participate in the health insurance plan they had with their former employer, the federal government would pay 65 percent of the premium. For such people, this subsidy is estimated to be worth about $170 weekly. This benefit ended in mid-2010.

The red line in the chart shows the combined unemployment benefits for an unemployed person participating in the Cobra program, excluding any benefits received from other safety-net programs such as food stamps or Medicaid.

The weekly benefit peaks in 2009 at $455. The increase in early 2009 when the stimulus law passed is even greater than the increase in mid-2008 from the lengthening of the eligibility period.

It is not yet known how many unemployed people received the Cobra health insurance subsidy, but many who did not had their health insurance covered by another federal program, Medicaid.

Moreover, a $455 weekly benefit is not small change; it is much more than someone would earn on a full-time job that paid minimum wage. Among the 106 million working-age heads of households and their spouses lucky enough to be working in 2009, about 25 million of them were earning less than $455 a week.

Even though Congress has not yet let emergency unemployment benefits expire, the largest unemployment benefit cut may have already occurred in 2010 when the stimulus law expired.

Article source: http://feeds.nytimes.com/click.phdo?i=72a45d6b308aa15dd9c036900e14dd57