NoNews_Body.jpgby Iris Dorbian.


When small business owner Hillary Kelbick co-founded MKP Communications, a financial services marketing-firm based in New York City, 18 years ago, one of her key goals was to treat her employees with dignity and respect. “That’s because previously [my partner and I] worked with someone who was like an abusive parent,” she recalls. “[There was] this notion that if someone was doing well then no one else was doing well. You were only made to feel good at the expense of someone feeling badly.”


Repelled by a work environment that resembled a toxic family, Kelbick seeks to run a business that subscribes to the Golden Rule: Treat others the way you would want to be treated. This means recognizing that employee feedback not only has immense value, but is also critical to the solution of a problem.


“Just because I’m the owner doesn’t mean I know the answers,” says Kelbick, who adds that she usually works with eight or nine salaried employees at a given time (not counting the myriad contractors and consultants hired on a periodic basis).


Case in point: In 2009, at the height of the recession, Kelbick’s business was experiencing, like many others in the country, severe financial straits. “We had a couple of years in which we lost more than we made,” she admits. “There were no secrets: people didn’t have enough to do.”


Seeking to keep her business alive, Kelbick held frank discussions with her staff, asking them for input. “I put forward the idea that everyone could take a temporary salary cut—or not,” she recounts. Her workers agreed and when business improved, their former salaries were reinstated, with bonuses added into the mix.


“I was also honest with letting them know I was getting a bonus, so I could pay them from that if there’s another economic shortfall,” continues Kelbick. By engaging her employees and making them feel they were part of the process, Kelbick not only avoided a business calamity—the closure of her business—she helped maintain positive employee morale and boost loyalty. To prove her point, Kelbick cites an uncommonly low attrition rate among her workers, most of whom she says have been with her company since its inception.


Certainly, being more “transparent” in ones’ employee communications is a solid best practice when it comes to increasing and ensuring company morale. However, some small business owners may be apprehensive about how to implement this “honesty is the best policy” due to bad experiences with past employers. What then are some takeaways that can help guide them in the right direction to secure employee buy-in?


NoNews_PQ.jpgDeliver bad news in person

Because many small business owners often have experience working in larger corporations where distant headquarters may not have regularly passed along important information about the company, some entrepreneurs may instinctively bring that same type of resistance to openness when interacting with staff. Aside from its basic disingenuousness, what makes this management style even more troublesome is that it can also blindside workers in a devastating manner.


Susan Baroncini-Moe, president of Business in Blue Jeans, an Indianapolis marketing consulting firm that frequently works with small businesses, recalls a near disastrous example involving a client’s financial hardships.


“Against my advice, the client kept the financial struggles of her company secret from employees,” recalls Baroncini-Moe “But you can't keep secrets very well in small businesses. Rumors about the company's troubles got started. Employees, assuming the worst, quickly started looking for new jobs and gave notice. Had I not come in and cleaned up the mess, my client might've lost her entire business, simply because she was too afraid to be transparent with her team.”


Keep staff in the loop when it comes to their performance

For many people, there’s nothing more disconcerting than to do a job and not get feedback except at the annual salary review. Avoid turning your business into a communications vacuum. Be proactive and fair when it comes to monitoring and assessing a staffer’s progress. It will not only help them but you as well.


Susan Johnson, owner of the Minneapolis-based Rue 48 Salon, a hair salon, is a passionate proponent of this management practice. Since launching her business three and a half years ago, Johnson likes to meet individually with her 12 stylists every 30 days for a one-on-one evaluation to discuss their performance and future goals. During these sessions, she will refer to reports that show each stylist how much product they sold the previous month as well as their customer retention rate. She says these confabs are highly beneficial to her workers who are paid on commission.


“It all kind of works together,” explains Johnson, a former social worker. “It’s teaching the stylists to take a hold of their own numbers and know what their paycheck will be next time. I explain to them when I set goals, it’s not to set goals for me to make money; it’s to make sure we survive. I don’t want anyone to lose their money.”


Acknowledge efforts of staff

This doesn’t mean you should gush over them nonstop if they’re doing well and forget you’re their supervisor. Rather, let a conscientious worker know that you appreciate his or her work ethic and the quality of their performance. But always be sincere in your language and demeanor and avoid glibness. Making workers feel that they’re important contributors to the fabric of your company and not just cogs in a machine will maintain employee morale even during challenging periods.


Don’t cloister yourself in an office

If you want to invest your transparency efforts with credibility, then you will need to show your workers you follow through on your promises.  An effective way of doing this is to work alongside your staff. Don’t barricade yourself behind closed doors in an office. Remove the silos and your workers will be more amenable to treating you with respect and opening up to you.


Salon owner Johnson agrees wholeheartedly.I will clean the toilets and mop the floors to make sure this place is up and running,” she says. “They see that and respect. It’s a lead-by-doing tactic. “


Semantics also helps. “Nobody has ever said anything about me being a boss,” she notes. “The way I refer to staff is that I never call them my employees. I say they’re my co-workers. They know I take the lead, but I do work alongside with them. I would shampoo one of their clients if need be.”


Whether your business is large or small, being upfront with employees can be an invaluable tactic to maintaining good morale. But it must be backed by sincerity and action. Otherwise no amount of transparency will help you win the loyalty and respect of your workers, no matter how seemingly well meaning you appear.