The Cost of an "average"Manager

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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 other supervisors.

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 earned?

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 data.
  • 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 easier.
  • 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.

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