Manage your resources

Connecting employee performance to the bottom line

By Chad V. Sorenson, SPHR

Performance management. Strategic plans. Employee retention. Terms oftenassociated with large companies. Do they really matter to the small business owner?

Absolutely! When a company wants to improve its bottom line, it often spends its time focused on the number of hours an employee works rather than looking at the effectiveness of the employee as a way to save money. In the long run— that might not be the best plan.

While controlling wages and hours worked is important, identifying what employees are doing and how effective they are can be just as crucial. But, where do you begin?

Hire the right employee

Before you look at hiring your next employee, you need to clearly identify the expectations of the position and the qualities that will make a person successful in that role. These expectations or responsibilities are usually found in a job description. If you don’t have one, start by making a list of the duties this position will need to accomplish.

Don’t forget to include what you expect in terms of customer service, quality of work, and quantity of work. Customer service isn’t just for your sales force. Whether you are a plumber, computer technician, or accountant, great customer service is key in obtaining and retaining clients. Lack of focus on this aspect can cost your company a great client— negatively impacting your bottom line.

Interview your candidates with a purpose. What are you looking for exactly? Yes, they need to be proficient in the basic skills of the job, but a more important attribute is often their attitude. Do they like to learn? What do they say about their last job? Do they have a willingness to work with your other employees? Are they focused on serving customers, both external and internal.

Hire their attitude and train their skills. Even the most technically proficient employee can have a bad attitude. Who do you want around your clients and other employees?

Set the expectation

What does the first day on the job look like at your company? Do they spend half their day filling out paperwork? Are they shuffled from one warm body to another? Or, do they get to sit with the new boss and spend their day getting to know the company and their new co-workers?

Spending a couple hours with the boss will help the new employee learn what is expected of them. Reviewing a job description can lay out the responsibilities of the new role, but actually sitting down and talking will help the new employee understand what will make them a success in the company.

Most companies have an accountant bookkeeper, however, each company may expect different reports to be done or tasks to be completed in a different way. Unless you have that initial conversation and set the expectation, not only can the employee feel out of touch in the new role, but the manager may grow frustrated with their performance and begin to second guess the decision to hire that new employee.

Setting the initial expectations in a clear and concise manner will also give you something to measure the performance of the new employee. Employees want to know how they are doing. Their goal is to please the new boss, and without constructive feedback, many employees are left second guessing their work. Too often they will be more focused on how they are doing rather than looking for ways to please the client.

Engage them in the process

Employees who are engaged in their day-to-day activities are more likely to become your top performers. If they are playing an active role in their own performance development, they will be continually looking for ways to improve their skills. On the other side, workers who are disengaged often don’t care about learning new skills or pleasing your clients.

When managers actively involve employees in the decision-making process, the employees are more likely to buy-into the process because they have some skin in the game. Frequently, they will look for ways not only to achieve the goals, but identify ways to go above and beyond.

Don’t overdo it

A recent survey by MetLife indicated that while companies of all sizes have seen productivity gains in the past year, it may have come at the expense of employee loyalty. According to the survey, only 47% of employees felt a strong sense of loyalty to their company, which is down 12% from three years ago. In addition, more than one-third of workers are looking to change jobs within the next year.

Stress and doing more with less are key contributors to employee dissatisfaction. While companies can improve the bottom line in the short-term by increasing employee productivity, employee satisfaction and morale can begin to suffer if pushed too far. Managers need to stay connected with their employees to identify downward trends in morale before it reaches a tipping point.

As the economy grows stronger and opportunities increase for your company, so will the opportunities for your top performers. Companies run the risk of losing their strongest players if they don’t monitor and balance their workloads, productivity, and employee satisfaction.

A matter of prevention

So what can a company do to prevent their employees from leaving? Include them in the process. Help employees grow their skill set and create a plan to increase their value to your company. Nearly all employees want to develop their career and learn new things. Most will do so. Your decision is whether you will help them do that in your company, or watch as they take their next step up the career ladder by joining your competitor.

Employees who are engaged in their own performance development can increase a company’s bottom line by always looking for ways to improve their own performance and the company’s results. The opposite is also true. Workers who don’t care are probably doing just enough to get by and couldn’t care less about their impact on your customers. The decision is yours.

Chad V. Sorenson, SPHR, is the president of Adaptive HR Solutions and vice president of Talent Development Inc. His primary focus is helping small and mid-sized employers navigate employment law and get the most out of their employees. He can be reached at 904-716-4846,, or through

Leave a Reply