If you have a one-person business, you are chief cook and bottle washer. You get to make all the decisions, right or wrong, and do all the mental and physical work. When it grows to the point of needing help to conduct business, you must embrace the reality of companies that have more than one person involved.

One of those realities is your employees are actually your partners since they must conduct their duties in the best interest of your business for it to succeed. If they don’t conduct themselves with integrity, dignity, consideration of consumer needs and excellence in performance, you and your business lose. 

Also, your employees are often the only people in your business who interact with your clientele. That alone proves they are your partners even though they are not directly responsible for paying business expenses. They are indirectly paying because losses affect the reward they can receive from your business. It’s that simple. 

Therefore, it is imperative that you properly vet candidates for employment before hiring them. If they pass the scrutiny of your vetting process and you hire them, it is incumbent on you to constantly evaluate their performance and results.

Have regularly scheduled one-on-one conversations with employees — praise what they do right and show them how to improve on those issues that are harmful to your business. 

Whether answering phone calls from consumers or installing, diagnosing, repairing and replacing plumbing heating or cooling materials, equipment or systems, your employees, like a good medical doctor, must have a bedside manner demonstrating to consumers they are there to address their requests in an excellent fashion. 

You and your employees are a team. And teams win or lose together. Winning should be rewarded commensurate with the contribution each team member makes to the team. Losing should be addressed and remedied. And, if a team member who does something harmful to your business doesn’t fix the way he or she functions and those actions cause losses for your business, that member should be cut from the team. 

It’s an excellent reason for evaluating employee performance and results. 

Employee compensation

How much compensation should you pay your technicians/employees? At the risk of answering a question with a question, how much do you want to earn as a technician if you worked for someone else? When you answer that question, you will have your answer. 

But before answering, ask yourself some questions. The following two questions are excerpts from my book, "Solutions Management Theories and Methods for the Contracting Business": 

• Do I want to just survive, be comfortable or be content? 

“Survival is when you live from paycheck to paycheck; you don't save any money; you own an old car that should be replaced; you rent your home; and you can't afford to go out for dinner, etc. 

“Comfort is when you are able to save a little money; your car is in a good state of repair and is not an old clunker; you own your home (albeit mortgaged); and you can go out to dinner once a week. 

“Content is when you can do everything those who are comfortable can do and then some. 

• How much am I worth to my employer? 

“Contractors who are ‘just people in business’ are usually bad employers. They usually use the worst business operational methods possible. One of their shortcomings is not knowing the worth of an employee. Their hiring practices are at best suspect. Many of their employees are not even worth considering for employment. This is further exacerbated by all the other mistakes they make in running their businesses. 

“Good employers are those ‘business people’ who manage their businesses correctly and hire the good people who can be trained, are loyal and have integrity. 

“Good employees, who have many different capabilities and are able to perform varied tasks, in the employ of good employers have only one job — to please their employer. When they fulfill that obligation and their employer is managing the business correctly, they will reap their just rewards. 

“Many technicians become contractors because their former employers did not run the business properly and did not recognize their talents. These technicians decided to take their chances in their own businesses. If they were any good, content and worked for a good employer, they would probably still be in the employ of that business. 

“Don't make the same mistake! The answer is that a good technician should be paid minimally that which will keep him comfortable with the hope of becoming content. If the technician isn't good, you don't need him/her. 

“Compensation paid to your technicians comes with many other expenses. Be certain to include all your costs. List all the technician salary expenses which go along with the salary.” 

This strategy works for all employees. After all, they want to be compensated fairly and commensurate to their contribution to your business as well as enjoy the stability of continued employment in a pleasant atmosphere.

Incentivize

You may be thinking that if you pay your workers well and business slows down, you may not be able to afford to keep them employed. It’s a valid point. You can pay them an hourly salary that puts them in the aforementioned survival category of compensation. 

Then, spice up the compensation. Use bonuses that reflect the flow of work your business has and the reward they deserve for recovering your business expenses and giving your business the opportunity to earn a profit above your costs incurred. Hence, another reason for evaluating performance. 

These bonuses can be done initially in a simplistic mode where everyone gets the same bonus. Then, as you become comfortable with using a bonus structure, you can employ a more intense mode where each employee receives a different bonus based on the individual contribution to your business team.

Keeping your employees content requires you to properly identify and calculate your true costs; choose and apply a properly profitable margin to your true costs; and charge properly profitable selling prices for the services your business provides to consumers. If you don’t, you will lose good employees. 

In turn, you will hear yourself stating, “I can’t get good help.” That statement is only true because you don’t know how to vet candidates for employment and keep good employees with proper compensation. 

If you need help setting up an incentive program or any other business matter, give me a call.