Profits Aren't Everything, They're the Only Thing by George Cloutier

Author:George Cloutier
Language: eng
Format: epub
Publisher: HarperCollins
Published: 2009-03-20T16:00:00+00:00

Let employees know the plan and hold them accountable to it. Give them financial incentives to exceed expectations for budgets and timelines.

Clear up the muddy math and expose your profit leaks.

PROFIT RULE 8

Pay for Performance

NO MORE PAY RAISES. Freeze your salaries now. Pay for performance is an absolute necessity for small and midsized businesses to achieve real profitability, and big money for the owner. It is so important to determining the success or failure of your business that if you don’t install pay for performance today, you should fire yourself.

We hear plenty of talk about pay for performance in large corporations, and the term is widely used to describe small, incremental bonuses. Typically, in their version of pay for performance if someone makes, say, $30,000 a year, they can make another $3,000 in bonus pay.

But, in my view, that’s nowhere near enough to create performance incentive. We believe that anywhere from 30 percent to 100 percent of an employee’s compensation should be based on performance, both good and bad, and that amount should be against the goals set for employees by the owner.

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