Incentivize Your Payroll & Motivate Staff

Many employers face the fact of high payroll. There are many ways you can scale back on payroll by cutting back on labor surplus, giving a larger workload to existing employees, or even laying off employees. These are ways that will sometimes cause more damage than good. So there is another option as far as scaling back on payroll –percentage wise.

If you are paying an employee $100,000, for example, and it comes time to give that person a raise, take a different approach, rather than just raising their paycheck by $X, incentivize their paycheck. Set par levels and requirements that the employee has to achieve to earn an X amount of dollars. If they go beyond have another X amount they can potentially earn. By having an incentive, their growth is basically in their hands. This will help control your payroll because you are setting minimums so if your bottom line goes up a certain percent; their bottom line goes up as well. Now if you implement this payroll style throughout your business, think of the bottom line. Instead of blowing a fixed payroll, you are only blowing payroll on a percent of the profits. It is a better way to get employees motivated for work and not have to check up on them as often as you would need to by committing a fixed salary.

The payroll model might not work for all businesses, but there are alterations that can be done to make it fit. If you are running a quick service restaurant, for example, you are probably not paying anyone over 5-figures annually, so you can incentivize on a smaller level. Give away bonuses for most burgers sold or hold smaller competitions between employees. This will give motivation to all the employees looking to earn a few extra dollars, while still helping you boost your bottom line.

Saving My Business From Heading South

Right now, everyone will agree that the economic slowdown is forcing a lot of businesses to close their doors for good. So, being a business owner, what steps can you take to save your business from heading south?

-Analyze Payroll. - Most businesses blow a little extra payroll here and there, during a well balanced economy, you may not notice the extra savings of scaling back on a few hours here or there on scheduling, but in a bad economy, you will definitely see some sort of savings by putting some extra hours in as the owner and minimizing the employees' hours.

-Check With Your Suppliers Before Ordering. - This could mean the difference of a dollar or a hundred dollars. You should check with your suppliers, no matter what kind of business you are in, to see which supplier has the cheaper product. Saving a few pennies even, will help control inventory costs.

-Control Utility Costs. - If you have more of a corporate setting, See where you can saving energy costs by turning the lights off at night or look into shutting down some computers, if you can. Retail locations can also save by watching the amount of energy wasted during non-business hours.

-Perhaps You Should Consider Scaling Back on Advertisement and Marketing Costs. - You may want to consider putting the advertising dollars to a minimum or maybe even on hold. Everyone in the slow economy is hurting, but advertising doesn't necessarily mean you will be immune from the slow down. In good days, most smaller businesses will not analyze ad campaigns in-depth, but in slow days, you definitely should.

-Watch Wastage. - This goes to say for retail food businesses, Try to watch how much wastage of product is done. Tell your employees to be careful when they are handling materials to avoid dropping/having to waste product. If you are running a food business, also let your employees and check yourself, that everyone is watching the portions while preparing products.

Every little step is a great start to help the savings add up and potentially save a business from closing.


* These are just guidelines to think about. You should always make your own decisions before following any of the information. Even if you follow these guidelines, it does not mean there is a guarantee that your business will not close. For additional terms visit the disclaimer. I am not liable for any damage/loss/financial loss as a result of any actions taken off of the content of this website.

Being Asked For A Raise

In the corporate world, people are given reviews after 3 months, 6 months, 1 year, etc. of work. So what is the right thing to do, as a boss or company operator, when people ask for a raise in their salary or it is time for their review?

Lets face it, business owners hate to give raises because it means less profit in their pockets. On the other hand some employees don't deserve raises and you need to justify giving someone a raise. In a tough economy it is crucial for businesses to watch their payroll because it can be a leading factor in why a company goes under.

First off, you should analyze the individual employee being assessed. There is no "universal rule" that companies have regarding raises, sure many companies have established charts and tables to assist in the salary ranking process, but it always depends on the employee.

Things to look for:

1. How is the employee's work performance?
A few key points:
-Do they meet expectations?
-Are they following through on their work without constant monitoring by their superior?
-Do they keep on task and stay focused?

2. On a scale between all of the employee's in your company, where does one stand?
-Is this employee one you would like to hold on to?
-Tough to replace?

3. How much have you invested in this employee? Is it worth giving a significant raise after many dollars were put into training one, or can you save by training a replacement and keeping the salary the same?

4. Is the employee a potential loss for the company in general, if they were to go to a competitor?
-Many times, companies lose employee's to competitors, who are willing to pay more and give better benefits, causing the competition to gain an edge and come out with better products, that your company might have came out with had you kept the employee's that shifted companies. This would lead to revenue loss which can make up for the employee's salary in the long run.

Also, you should think about disbursing more responsibilities to one along with a salary hike.
-You can compensate for a higher salary, but assigning more duties to one. This would hold the employee up to new standards, so you may potentially save money by having existing employees pick up some extra slack that you would pay someone else to do.

To conclude, always remember, your company is just as good as the people running it. Without manpower you cannot be successful, therefore you should balance between letting people go due to the inability of raising salaries or benefits and actually keeping people and having a higher payroll.

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