The Cost of an "average"ManagerDeciding when it's time to make a staffing change
By R.K. Kliebenstein
When is it time to bear the pain and consequences of a staff change? The
human, compassionate side of our brain is often in conflict with the pragmatic
and logical business side. When is it time to re-evaluate? This is part one of a
two-part series in dealing with staffing changes. For supervisors and owners,
this is an opportunity to evaluate your present situation and decide if a change
is the answer. For employees, this article will allow you to do some
self-examination and determine if the answer to the problem is you ... and what
you can do to change.
In recent months, I have had the opportunity to work with several
owner/operators facing a dilemma. Their properties do not seem to be keeping up
with last year's occupancies. Fortunately, through rent increases, the net
operating income (profits) is actually ahead of previous years, but the
occupancy levels have dropped 3 percent to 5 percent. After careful review of
the markets, it was determined that some of the decline is due to the emergence
of new competitors, and some to population shifts, but the bottom line is that
the staff is really not making the extra effort to keep ahead of the game. Let's
begin the discussion of staffing changes with a self-examination for owners and
Never Make a Change for the Sake of Change
I would never, ever advocate making a change unless you have made the efforts
necessary to get a wayward employee back on track. If there is cause for
termination--i.e., fraud, theft, or flagrant violation of policies or
rules--then the decision is easy. However, there may be a temptation to make a
change in order to "shake things up." Most often, a change for the
sake of change is a recipe for disaster. It sends the wrong message to other
staff members, and is simply not fair to your organization or--more
importantly--to the employee in question.
What Should You Do Before Making a Change?
To "save" your employee before making a change, make sure you do at
least the following:
- Understand, in quantifiable terms, why you think you need to make the
change. Look at the facts. Where are revenues or occupancy levels compared
with a same period last year? What trends are developing? What are the
results of these changes to the bottom line?
- Look for other factors that have caused a negative trend. Is the employee
really the cause? Is this a market-driven or external problem? What is
happening in the market that could have caused the decline? Have there been
internal changes that may have caused a change in operations? Has another
staff member left?
- What has the employee done to reverse the trend? Has the employee
initiated efforts to fix the problem? Have you resisted changes in
the way the store operates? Have you really listened to the employee when he
has tried to discuss problems? Have you been able to distinguish
"complaining" from discussion about relevant problems and
solutions? Has the employee altered his normal course of action to attempt
to solve the problem?
- Have you counseled with the employee? Does he know you are concerned that
he may be the cause of a decline or negative trend? Have you really, really
talked about the issue, the possible solutions and the role played by the
employee in the problem or the solution? Do you know if there are external
factors in the employee's personal life that are distracting him or causing
his inability to deal with the problem?
- Have you considered that you may be the cause of the problem? Have
you spent less time at the store than usual? Is your attention
diverted away from the facility? Have you been ignoring the problem because
you do not want to deal with conflict? Have you declined to delegate over
the years, and the employee is waiting for direction from you to make a
change? Do you share information about the performance of the facility so
the employee knows a negative trend is developing?
- Have you communicated your concern? Does the staff know you are not
satisfied, or are concerned? Have you discussed the trends in detail, and
possible solutions? Do they know you are examining internal and external
factors to determine what is happening? Have you perhaps communicated that
"things are great," or "things are fine," when they are
not? Have you given raises or bonuses because they are expected and not
If you give an employee a raise or bonus, you have sent a message that he is
being rewarded for his performance--unless it has been clearly communicated that
the raise is simply a cost-of-living adjustment. If you gave the employee a
raise during the time of the negative trend, it will be a shock to him when you
communicate you are dissatisfied with his performance. Have you sat down with
the employee, away from the office, and discussed your concern? Most
importantly, have you listened to and evaluated his perspective?
- Have you communicated an action plan? Whether it is a plan you devise, one
the employee devises, or one from an outside source, have you discussed the
issue and set a corrective course of action? Does the employee know you
expect him to make a change to correct the problem or address the concern?
- Have you sought outside counsel to assess the problem? Have you talked
(not gossiped) with colleagues about the trend or concern? Do they have
similar problems? Have you talked with other people in the organization
about the problem? When talking with the employee's peer group or
subordinates, discuss only the issue, not the employee himself.
- Have you asked the employee for an action plan? He may be waiting for an
opportunity to discuss the issue, but you may not have been approachable.
Did you communicate, either overtly or subtly, what your expectations are?
You might even find the employee is already involved an action plan.
Some Other Things to Consider
If a change in staff seems to be the unavoidable solution, here are some
other things to consider:
- Look at the cost of making a change--the human cost and the financial
cost. Weigh the odds. Often, the decision will become clear when put into
- Look at the short-term discomfort vs. the long-term benefits. Is
"pain for gain" really needed to sustain your business objectives?
Or is this a decision you have put off for too long?
- Measure the short-term challenge against your long-term goals. If you are
preparing the facility for sale in the next few years, can you afford these
mistakes? Keep in mind that every dollar saved adds $10 to the facility's
overall value. When owners consider that at each $1,000 the business makes
equates to $10,000 in their pocket when they sell, the decision may be
- Determine the impact on the employee. Is this actually better for his
long-term employment? Is a change now what is needed to help the employee
have a more secure future?
- Make certain you do not have hidden agendas. If an owner discharges an
employee to avoid payment of a bonus, what message does that send to other
employees? Be sure your motives are pure.
- Determine what unemployment benefits are due the employee. Make certain if
severance is appropriate, it adequately reflects your intentions.
Perhaps these questions and answers are too uncomfortable for you to answer
independently. It may be necessary for some outside intervention. Making use of
a consulting firm can shift the emphasis from you, the decision-maker, to an
objective third party. It will take time for the consultant to get up to speed.
He will need to assess you, the environment and the employee. The expense of a
third-party expert could be miniscule to the cost of an unnecessary change and
the loss of a treasured asset.
Part two of this series will address the employee's side of the challenge.
This evaluation involves the same types of questions. The series will conclude
with some strategies for both parties to consider.
R.K. Kliebenstein is a regular contributor to Inside Self-Storage. He is
the founder of Coast-To-Coast Storage, which offers management consulting as a
part of its full range of services. From feasibility studies to exit strategies,
Coast-To-Coast Storage is the owner/operator's one-stop shop. Mr. Kliebenstein
can be reached toll-free at (877) 622-5508.