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LETS GET DOWN TO BUSINESS.

Question :
Hi everyone, I have just spent the weeks of lockdown rebuilding my business (Day spa). I would like to introduce a banding system/wage structure for my staff to strive towards increase in hourly rate by achieving certain criteria and a level of standard. Does anyone have an idea where to start and what things to include besides increase monthly sales by a % or keeping rebooking of new clients at over 85%Thank you

Question submitted 09/05/20 @ 06:40am
Industry: HR & Talent
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  • Morena – aligning and sharing in success is a great way for everyone to share in the success, and you have it inherently on the right track around being prepared to pay in contract for a base remuneration for having the staff there at work, and then subject to certain outcomes happening then you will bump up – this ‘bump up’ should be looked at as a bonus, because the first part is what you are prepared to pay your team members to do their job. A few things to think about:
    – important that if you are changing their terms and conditions that you first consult with them, be clear with them, give them time to consider, give input and guidance back, you can’t just unilaterally change the terms
    – in communicating with them, you can raise/suggest some of the outcome measures you are looking for, and also ask them for input/guidance on what other measures might help the business success – less is more on these, but also they need to be achievable, not unreachable as that will just lead to struggles with the culture – you want them winning, because if they do, you win as the owner
    – consider the ‘mechanism’ – i am not sure the hourly rate is the right one, you pay them x / hour to do their job, and you are prepared to pay them a bonus if they can achieve certain measures – think about if you can ‘lump sum’ this one.
    – think about ‘team and individual’ goals, it might be that 80% of the bump is for their personal work, and 20% for the team success – that works in my experience, even 50/50 so everyone gets in and works together.

    Good luck and love your mahi to work and share with the team.

    Hi Donna – such good news that you’re in the rebuild phase. Andy has given you some great ideas above. I thought I’d offer an alternative perspective. Incentives can be very powerful to get results, but can also have a dark side. Many organisations are rethinking, or entirely removing, performance based pay systems because they can be bureaucratic to administer, can encourage people to ‘do what it takes’ to reach the goals, rather than ‘do what they should’, and generally are seen to create greater dissatisfaction and disharmony when employees don’t get what they hoped or expected.

    Here is a particularly good clip to give you some food for thought on the Science of Motivation. https://www.youtube.com/watch?v=kAKYX4Y4GQA

    Rather than specifying a set incentive programme, another approach could be that you consciously catch people out doing the right thing for your customers and business, and have a stash of gift cards that you give out for both reward and recognition. There’s also nothing to stop you giving a larger special financial bonus or profit share in the good times, as a surprise – rather than as a calculated expectation.

    I wish you all the best going forward. Many of us will be thrilled to see the day spas opening again! Fiona

    Hi Donna, great that your setting up some incentives. You may want to consider a product sale incentive , up-sell incentive, and/or a team collaboration type award. An employee of the month is a great acknowledgement. I’d recommend including the staff in the process and measurement setting to creat a sense of ownership.
    All the best !
    Anna

    Hi Donna
    I think you have some good advice on here already particularly with the comment on being careful on the dark side of a bonus culture – I have seen some awful behaviours in businesses that were created by aggressive short term bonus cultures. My generic advice in this arena is to commit to what behaviours you wish to create and what the desired outcome of these behaviours are. In short the way you remunerate people is how they eventually behave. Reward short term gains and you get short term results.
    In your particular business I would think about rewarding your staff for a combination of returning customers and amazing service reviews. There is no point you paying a bonus to someone who has sold a high value service to a client unless that client is happy to return again and refer their friends. You want your schedule to encourage your business to grow and for your team to learn what it takes to create repeat business and a customer that is happy to refer your services.
    And finally do involve your team in the decision making. If they feel part of the journey then they are less likely to become disenfranchised.
    Best of luck.
    Cheers
    Ollie

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