Geri Stengel

 
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Surprise! Respect for Employees and Fair Pay Are Profitable for Small Businesses ... and It's Not That Hard.

Small businesses that win awards for being great places to work range from hardware stores to nursing care, from car washes to tech support; in some respects, they have nothing in common.

But in other ways, they have much in common, including thriving even during tough times, treating employees as assets, paying them fairly, and listening to them.

great places to work, human resources, human resources policies, small businessesEvery company profiled in the 2009 Winning Workplaces Awards, a collaboration with the The Wall Street Journal, and in 2010, with Inc., is successful. So, too, are those included on the Great Place to Work list. Some are very successful, even in the face of the economic downturn.

And that success comes, in large part, from their Human Resource policies: They seem to take that phrase very seriously: your employees are a valuable resource!

Chief among the common policies are:

  • Soliciting ideas from employees about everything, from product design to recession survival.
  • It's a team or a family. In other words, everyone counts and everyone is taken care of.
  • Giving all employees a financial stake in the success of the company through profit-sharing, bonuses-for-all programs or rewards for good ideas.
  • Equal pain when times are bad, equal gain when times are good.
  • Employee involvement in management decisions, such as hiring and cost cutting.
  • Recognition that employees have families and lives outside of work.
  • Employee training, both for the job within the company and tuition reimbursement for outside education
  • Promotion from within.
  • Building relationships among departments and generations.
  • Minimizing the distinction and the distance between "upper" level managers and "lower" level workers.
  • Health benefits, vacation, and personal time off for emergencies.

Some companies go far beyond the basics. Analytical Graphics, Inc. (263 employees) solicits input from employees regarding perks they'd like. Each quarter, employees participate in Town Hall meetings and every Friday is "all staff" lunch, which includes "Storytime" during which different departments talk about their projects.

From the employee suggestions came washers and dryers for those who can't find time for chores after work as well as an in-house cafeteria. The storytime lets the sales department understand and feel part of the NASA projects the engineers are working on.

Anthony Wilder Design/Build Inc. (30 employees) trained all its employees to understand financial reports and discuss them at monthly meetings. Instead of individual performance bonuses, the company gave each employee a set portion of quarterly profits.

Cost-cutting became everyone's concern and ideas – cutting text messaging on company phones, for example – came from employees. When the downturn hit, it hit the remodeling industry particularly hard. Employees took 20-30 percent pay cuts but the owners took a 50 percent cut. Transparency kept the team together.

And by April 2009, the company repaid the back pay withheld.

Barfield, Murphy, Shank & Smith, PC is dedicated to balance between work and life. Its 100+ employees are allowed to set schedules, to telecommute if a spouse takes a job in a new location, and are encouraged to attend family events including those that take place during work hours. The result has been a low turnover rate, which translates into money saved on training.

Mike's Car Wash, Inc. has more than 300 part-time employees as well as 260 full-time. The company helps with tuition costs for part-timers and gives out "gains-shares" to all employees, who work harder and smarter to earn those shares.

The downside is, of course, that money is spent on employees that could go into the pockets of the founders and head honchos: If you don't pay that tuition, you can buy yourself a yacht maybe. Or if you don't lay people off, you may have to cut your bonus.

But the upside is:

  • Less turnover, which translates into lower training costs;
  • A much larger pool of ideas from which new products/services can be developed or problems solved, leading to more profit in the long run.
  • Employees whose investment in the success of the company translates into better customer service, which means better and longer-lasting relationships with clients.
  • A flexible, trained staff that can respond to crises efficiently.

And when the bottom line is finally tallied, there's more money and satisfaction for everyone, including the people at the top.That yacht may still be possible!

I know, I know: That sounds like idealistic drivel ... but it's not. Small businesses with good employment policies reap the benefits of loyalty, dedication, and creativity from their staffs and, besides, it's a no-brainer that people work better when they are well-rested; not stressed about medical bills or child-care; and not resentful that their work is unappreciated and under-rewarded.

What company would you nominate for a "Good Employer" award? Have you seen benefits from good Human Resource policies? What policies would you like to implement in your company? What is stopping you?