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by Eric V. Holtzclaw

Pay bonuses based on your company's overall financial success, and get your employees pulling in the same direction.


As a business owner or manager, one of the most difficult things to oversee is compensation and expectations at employee review time.


Initially we at User Insight did the same thing most companies do: a review after an employee's first six months, with annual reviews every year after that. Along with the review usually came some type of bump in an employees' base pay. But as a consultancy, we have the added complexity of ebbs and flows in the amount of work we are servicing. Inevitably, employee review times would be fall during the slowest periods of the year.


This caused several issues. As a business owner, it's difficult to increase overhead at times when business is slow. Even if you know you're just in the down part of a regular business cycle, it still makes your judgment more conservative. So, we found once a raise was in place, business would inevitably heat up, and an employee wouldn't experience a financial impact that was in sync with his harder-working performance. He didn't directly feel a reward for his work. In fact, I often heard groans when we signed a big round of new business.


To resolve these problems, we sought to tie a large portion of our employees' compensation to the performance of the company. Our operations manager at the time, Rachel Walsh, proposed how it would work.


Here's how:


1. We now conduct quarterly reviews.


2. As a company, we set a revenue target each quarter.


3. We take part of the money we had budgeted for raises and instead pay it out on a quarterly basis tied to company performance.


4. Each employee is given a goal that is a percentage (about 10%) of his or her salary.


5. As the company achieves the quarterly goal, each employee can achieve the equal percentage of his or her individual target.


6. We allow the achievable percentage to rotate above 100% if the company outperforms expectations for a given quarter.


Though these tactics were hard to adjust to at first–not having a known dollar "number" was frightening–we put the program in place. And it has been very successful. Conversations about compensation are now rare at User Insight, and only when an employee takes on a substantial new level of responsibility.


We've had times when bonuses have been paid out at more than 150% of expectation, but that worked because the company was doing well and employees had stepped up to deliver the work that was needed. Likewise, when the company is not mapping to goal, we save money on overhead.


The quarterly reviews have also been very helpful. The results allow us to look at the organization overall on a more frequent basis, determine what's going well, and discover ways to improve. We have a better understanding of how we're doing as a company. We regularly release the percentage of revenue target we have achieved, so employees know right away if we are ahead or behind.


The best thing that changed: Now everyone cheers when we sign a new deal.


Article provided by ©Inc.

QAadamrobinson_Body.jpgby Heather Chaet.              


Your employees—whether you have five or 500—are likely your business’s biggest investment. With the success of your company at stake, your hiring mojo needs to be in top form. Helping individuals, small businesses, and Fortune 1000 managers across the country make better hiring decisions is Adam Robinson, CEO and co-founder Hireology, a web-based application that has “helped take the guesswork out of hiring.” Business writer Heather Chaet chatted with Robinson to find out the key tools and tips every small business owner needs to know to hire the best person for the job.


HC: You have been involved in the hiring sphere for a while. What drew you to this business?

AR: I [had worked with] mostly technology start-ups in my career. As a manager of a large technology team in early 2000s, I realized a couple of things. One, I had never been trained in interviewing and selection. No one had ever told me the right way to do it. So, I largely had to figure it out on my own. And two, the HR team at my company had never been trained on it either! Here we were hiring 200 people a year, and there was no system or structure in place to be sure we were doing that [correctly].


The single largest investment our company made every year was in its people, it was the biggest line item, and there was no oversight managing the process of how we put people on the payroll other than “I like this person! Let’s give them a chance.” We got it right about half the time, and it just struck me—there is this massive ROI available to us if we would figure this out. I felt compelled by it and, when the timing was right, I exited that opportunity and started my first business, which was an outsource recruiting provider to solve that very problem.


HC: How did Hireology come about?

AR: So, in 2004, I launched the outsource recruiting provider business and focused on companies that hired 50 or more people a year, with [an emphasis on] project-driven hiring, mainly for technology and professional services firms. The problem was my customers did not know how to conduct interviews, and they internally had no structure in place to handle this massive influx of prescreened candidates that we would follow on a pretty strict methodology.


In short, it became hard to make money because we were, effectively, unpaid consultants teaching our customers how to build a hiring process from scratch. We decided that we needed to build a system that our customers can use and [that is what we did.] We built a hiring system that was largely paper-based. For example, when a customer would need to hire account executives at eight locations across the Midwest, we would send candidates in—along with interview guides, so our customers knew what to ask, and they could make a decision that wasn’t based on their gut.


After a couple of years, customers started calling, saying they loved the interview system and asked to buy it. My answer was no. It was what made us different. Well, then 2009 came, and the world stopped hiring people for about eight months. I moved on from that recruiting business, moved that book of business to a staffing company, and I set out to commercialize the hiring concepts we had implemented—that is where Hireology came from.


HC: So, with your knowledge and research, tell us—what are the top things small business owners should look at when hiring employees?

AR: Based on the thousands of interviews we have scored over the years, we know what is going to make someone successful across various job categories. The data we have collected tell us there are four things that are critical and predict the percentage chance of success, no matter what the job is.


First is a documented record of success and prior-related roles—that’s the resume. What has this person done and how did they do it. That is what everyone knows to do—look at the resume. But, at the end of the day, a resume is just a marketing document. A candidate is not going to say to you, “I just achieved 60 percent of my goals, and, every other Friday, I took off at 2:00 to go home.”


Second is attitude. There are research studies that show that people with a positive attitude are much more likely to be top performers at work no matter what the job is. This research indicates that attitude is, more likely than not, an inherent trait—it is not something you can learn or change. Your general level of being positive or negative at work tends to remain stable. How do you detect that? Simply listen for the language. If you hear a candidate talking ill about a boss, talking ill about the company, generally showing a negative attitude toward peers, a boss, the market, that is a [red flag].


Third is the locus of control. That’s the degree to which someone attributes the things that they accomplish or outcomes to their own doing versus external factors. Someone with internal locus of control would use a phrase like “I should have done a better job understanding what you wanted from me on this project” or “I should have asked better questions.” An external locus of control would be a statement such as “You didn’t tell me you wanted that.” It is attributing the outcome—good or bad—to other factors. It is easy to listen for these. Those with an internal locus of control are more likely to be successful at work.


The fourth one is culture fit—simply the degree to which the candidate shares the norms and attitudes and beliefs of the company and has a genuine interest in the job.


QAadamrobinson_PQ.jpgHC: What tips do you have for an employer sitting across the table, in the middle of interviewing a candidate, to really get a sense of those four things?

AR: First rule of thumb is don’t talk. Let the candidate do the talking. In a one-hour interview, the manager should talk maybe 10 minutes. But, small business owners tend to get so excited about their company. What usually happens is a candidate walks in, introduces himself or herself, and the manager or business owner launches into a 45-minute monologue about what an awesome company it is, how great the opportunity is, how business is going to triple this year—and the candidate sits there and nods. Then 45 minutes later, he or she walks out of the door, and the owner walks into his partner’s office and says, “I love that guy!” That is not an interview.


Ask open-ended questions, and [avoid asking] leading ones. Here’s what I mean: a manager will ask, “Have you ever worked with Salesforce CRM?” and the candidate will say, “Yes, I have!” because it is obvious the manager is looking for someone who has worked with Salesforce CRM. Or an owner will ask, “This job requires lots of deadline-driven writing. Is that something you can handle?” What candidate will say no? Better questions are ones like “Tell me about the last manager you worked for?” or “Why do you think they decided to hire you?” or “On a scale of one to 10, what do you think your boss would have rated you?” After those kinds of questions, you will know everything you need to know.


If you don’t feel like you get a good answer, all you need to say is, “Tell me more about that.” The good information comes when you have dug two or three layers deep.


HC: What are the biggest mistakes small business owners make when in the hiring process?

AR: Talking too much is one of them, but not having an interview script is another. If you are interviewing five people and you ask five completely different sets of questions for the same job, there is no way to get a consistent read on your candidates. Follow a script and have the questions you are going to ask everybody.


HC: Do you advise folks to Google possible candidates?

AR: I would call this impression management, and there is a gray area here for employers as to whether or not it is legal to deny hiring somebody because of something you find online that may or may not be true. So, the law is still catching up. That said, almost everyone does it. I would say the best thing you can possibly do is to make sure you verify what your candidates tells you by doing two things—skills testing and order a background check. There is no better way to know. That includes having their former employment and education credentials verified by a third party and a criminal background check. In most cases, it will cost you less than $50. It is a $50 insurance policy. You have to do it.


HC: Let’s talk about when you have made a hiring mistake—do owners tend to wait too long to let someone go?

AR: The best possible result you can hope for is to get it right 80 percent of the time. Take some comfort that the best in the business are between 75 to 80 percent successful. In sales, that number is between 50 to 60 percent. What you should do is hire slow and fire fast, that is the cliché, but people do the opposite. It is not unlike the analogy for buying stocks—you tend to sell your winners too early and hold onto your losers hoping they will make a comeback. We do the same thing with people.


I like to quote Jim Collins here: “The moment you feel the need to tightly manage somebody, you have made a hiring mistake.” The moment you lose confidence that this person is not the person you thought you hired, you have probably made a mistake. When you confirm a pattern that is not working, have a structured conversation and have a performance conversation. Document it. That is step one in getting somebody out of the door in a humane and legally compliant fashion. What tends to happen in small businesses is it becomes very emotional. The business owner goes home frustrated, talks about it to everyone but the employee, and then one day, way too late, decides to let that person go, when really, he knew in 30 days it wasn’t a good fit.


HC: Working with 500 employees is very different than working with five people. What key advice do you have for a small business owner who is hiring for a smaller office or even the first few employees?

AR: It is often said that the first five hires define whether or not your company will succeed or fail. Those first hires? I call them “the utility players.” They can do just about anything cheerfully and be successful. Later, as you grow, you get into specialist skills. Hiring a specialist early on is not the way to go. Hire utility players with a good, “get it done” attitude.


You are going to spend more time with these employees than your spouse or your children. You spend most of your waking day with these folks. If nothing else, you have to like one another. This is where the culture fit comes in—it doesn’t matter if this person is the best on the planet at something if they are hard to work with. It just is not worth it. Ask yourself the question: “Would I fire the top performer if they are not a culture fit?” If the answer is no, at least you know that, but it is not ideal. If it is your first hire, and you are having disagreements and verbal confrontations that are not professional, move on.

by Steve Cody

Let's face it: A healthy company is a productive company. And mine needed a boost. Here's how I created a friendly competition to get everyone thinking about fitness.


I'm one of those entrepreneurs who subscribes to a work-hard-play-hard ethos.


I push myself, and my firm, to relentlessly pursue strategy, creativity and innovation. But, I also know how critical it is to maintain a balanced life.

So, in addition to the usual sorts of physical fitness pursuits such as running and cycling, I do Kangoo, practice boxing, and climb mountains.


Each of these physical activities challenges me in new and unique ways, and leaves me refreshed, recharged, and reinvigorated. I think achieving that clear-headed state leaves me in a better, healthier place. And that helps me accomplish all I need to in running my company.


I must admit, though, that I'd become increasingly worried by the unbalanced lives among many of my 100-or-so co-workers. Sure, there were a few who made my fitness regimen seem like a stroll in the park, but there were many more whose dietary habits and sedentary ways looked like they could use some,


Knowing how important corporate wellness is to productivity and bottom-line success, I'd suggested several options over the years, but none took hold.


That was, until I began boxing with Eric Daniels.


The Inspiration Behind a Wellness Program

Eric told me about his six-week wellness program for companies like mine. It combines nutritional counseling, personal exercise instruction, and group workouts. It was the latter feature that got my attention.


Peppercomm employees are incredibly team-focused and do a lot of bonding outside the confines of the office (so, I knew they were already hard-wired to do things in packs). Secondly, I'd just read an article in about the benefits of group exercise. In the piece, Lynne Vaughn, chief innovation officer of the national YMCA, said, "Working out in a group provides support, accountability and structure. People don't want to let their buddy or group down, which is terrific in terms of adherence to an exercise routine."


I felt she was describing my firm's work culture. And, that's when I decided to introduce Peppercomm to Eric Daniels.


Creating a Tailored Plan

I spoke to Eric, and arranged for him to meet with Elysa Torres, our human resources manager and Sara Jane Whitman Ramos, our chief culture czar. Together, they formulated a six-week program specifically tailored to our business (i.e. our people don't work a traditional 9-to-5 workday and they travel a great deal).


Now all we needed were the participants.


I sent an agency-wide e-mail telling our troops I'd cover 50 percent of the $200 per-person program cost for the first four people to volunteer. That did the trick. Soon enough, we had eight employees enrolled in the program.


Their competitive juices immediately kicked in and the "great eight" formed two teams of four employees each. The goal: to see which team could adhere to a new diet and exercise regimen that Eric would design for them, shed the most combined weight, and trim the most inches off their bodies by the end of the six-week period.


The Real Results

I'll let our employees tell you about the results:


Nicole Hall said that she is now "…more aware of the need to increase my activity level and watch what I eat."


Maggie O'Neill said the group dynamic was key to her success. "The group workouts were a great motivator," she said. "They got me out of the office and into the gym on days I ordinarily wouldn't have. Plus, I think the eight of us really bonded over our common goal."


Mari Abe said she was excited to have the opportunity to learn from a personal trainer. "I'd never even considered a personal trainer before because it's so expensive. So, the opportunity to have both individual attention and workout with my peers was huge. I've learned so much about my diet and exercise needs as a result."


The initial group has become our best brand ambassadors for a fitter and healthier Peppercomm. We've already announced a second, six-week program with Eric and are setting up the teams.


Wellness & Your Bottom Line

The bottom line here is the bottom line. As a result of what Daniels calls The Corporate Wellness Challenge, employees can afford a personal trainer and learn how to begin living a healthier life. At the same time, the organization's health improves thanks to reduced stress, increased productivity, and better morale. We're the better for it, and we're not going back!

Article provided by ©Inc.

by Vanessa Merit Nornberg

When it comes to sourcing the right interview candidates, I've never been keen to use recruiters. But I recently changed my mind.


Recruiter_Body.jpgMy company, Metal Mafia, has an excellent candidate screening process, a super training program, and a very successful team of employees to show for it.


But hiring has always been a difficult task for me because each time I get ready to hire, it takes me forever to find the right type of candidates to even get the screening process started.


Despite the fact that I carefully consider where to advertise for candidates--I try to maximize the search dollars and get a good mix of potential applicants--it always takes me a long time to find people suited well to the company, and therefore, even worth interviewing.


I've tried everything from placing ads on large job boards like, to smaller specialized job boards that cater to sales hires or fashion jobs, to local university boards where I can post for free (or close to it). Each time, I experience the same slow crawl toward finally finding the right person. It has taken me up to five months to find the right kind of hire in the past. So in November when I decided I needed to think about hiring for the new year, I was not optimistic.


Recruiter_PQ.jpgFor me, recruiters have traditionally been out of the question because I figured they would be a waste of time and never be as good at sending me the right people for the job as I would be in reviewing resumes myself. They're also too expensive for my small budget. But as I got ready to place my job ads again, one of my senior staff members came to me and offered me the name of a fashion recruiter she knew and thought could help. I was skeptical, but I called her anyway, figuring listening would cost me nothing.


The recruiter convinced me she would do a thorough job, but I still hesitated because of the price. I do not have large sums of money to devote to the hiring process, and by my calculations, when all was said and done, using the recruiter was going to cost me three times as much as my usual techniques. On the other hand, the recruiter would only charge me if she found someone I decided to hire, which meant I was risking nothing, and could always come back to my original methods. I bit the bullet and signed up, reminding myself "nothing ventured, nothing gained."


The recruiter sent me the resumes of 10 entry-level candidates. I screened six by phone, met three in person, and found the right hire--all in a month. The cost suddenly became much less, because I saved so much time in the process, and because I got a pool of applicants who were decidedly better to choose from than in the past. Even more interesting, perhaps, was an insight the right candidate shared with me during the interview process. When I asked why she had chosen to work with a recruiter rather than post on job boards, she said "because recruiters make sure your resume gets seen, while submitting via the Internet is like sending your resume into oblivion."


If most people these days are thinking like my new hire, the recruiters will clearly have the best selection of candidates every time. Looks like I've got an essential new hiring strategy.


Article provided by ©Inc.

by Samuel Wagreich


A new survey reveals the best oddball questions that your interviewee has never heard before.


A good interview question can give you insight into a potential hire's critical thinking process, communication skills, and ability to think and execute on their feet.


But with the the amount of prep they do these days, there's a good chance that your candidate has probably already heard just about every question you're about to ask them during their job interview. recently compiled a list of the top 25 oddball questions that big businesses, including Amazon and Trader Joes, ask during their hiring interviews.


Here are 10 that will put your interviewee on their toes and hopefully give you a chance to see if they can think outside the box.


1. "If you were to get rid of one state in the U.S., which would it be and why?"  Asked at Forrester.

2. "What song best describes your work ethic?" Asked at Dell.

3. "Jess Bezos [or, our CEO] walks into your office and says you can have a million dollars to launch your best entrepreneurial idea.  What is it?"  Asked at Amazon.

4. "Name 3 previous Nobel Prize Winners."  Asked at benefitsCONNECT.

5. "If we came to your house for dinner, what would you prepare for us?" Asked at Trader Joe's.

6. "My wife and I are going on vacation, where would you recommend?" Asked at PricewaterhouseCoopers.

7. "Calculate the angle of two clock pointer when the time is 11:50." Asked at Bank of America.

8. "Have you ever stolen a pen from work?" Asked at Jiffy Software.

9. "If you had turned your cell phone to silent, and it rang really loudly despite it being on silent, what would you tell me?" Asked at Kimberly-Clark.

10. "On a scale from one to ten, rate me as an interviewer." Asked at Kraft Foods.

Article provided by ©Inc.

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