I was dumbfounded. It’s not often I hear a story in which an owner’s and an employee’s perception of each other and their firm had such a significant impact.
I recently had a conversation with a business owner who was stunned by what he heard in an exit interview with a key employee who had been hired a year and a half ago (as the organization was going through a major transition). It had been facing a shrinking industry, with competitors aggressively recruiting away key employees, and the owner was taking a hard look at himself and his business. He was trying to determine how he and his 40+ year old company needed to change in order to stabilize and begin to turn around.
This particular employee was part of that change. She was dedicated and hardworking, and brought with her a fresh perspective to an aging company. She had a key role in outbound sales, and actively built a strong reputation within the community for herself and the company. When she was hired, she was offered an above average salary, but no commission, in order to attract her to join the firm. As other sales reps were being added to the mix and placed on a sales-plus-commission compensation program, things began to change.
In the exit interview, the owner learned that the employee believed he had lied and was not a man of his word. The owner was confused, but dug deeper to understand. The employee had wanted to be on commission schedule like the rest of the sales reps, and was leaving because she felt she was deceived. She felt she was promised more income, but it never materialized. The owner was stunned because he told her that he brought her in at a much higher base salary, so that she could earn the money she needed until she ramped up her sales.
The owner believed in her, and had been willing to invest in her over the past year. But this is where the break down happened. The owner thought her pay had been adjusted a year ago, but it wasn’t. And the employee had been waiting for her compensation to change. The owner had spoken to the financial manager, who thought the individual’s pay was higher. After some investigation, it was discovered that the pay change never made it into the payroll system.
The employee said she never brought it up because she knew the company was not yet in a “thrive” mode, and she wanted to wait until things were on the upswing. But by then, her perception had changed, and sometimes it’s hard to change it back—thus, she decided to find a new job. When she learned what had happened, she realized that there was no basis for her negative perception of the owner. In fact, the owner thought he was helping her out, and she realized she had painted a poor picture of him.
After much discussion and clearing the air, both individuals landed on solid relationship ground. She would have stayed if this conversation had taken place sooner, and she felt once again that the owner was a good, hard working person instead of the deceitful boss she had created in her mind as a result of this situation. She was trying to be dedicated by not bringing up the issue during a tough time for the company. And the owner felt he was helping her by providing a higher salary until her sales increased. A classic miscommunication—both individuals believing they were trying to do the right thing, but a breakdown in process caused a lot of angst.
The lessons here are numerous. The employee should have mentioned her concern the minute she felt something wasn’t right. The employer should have followed up to make sure everything was done properly. The other items missing from this situation were on-going performance reviews and employee check-ins. If these processes had been in place consistently, this issue most likely would have surfaced in those conversations.
At the end of the day, the relationship has been rebuilt, but the organization lost a good employee. The employee has to start all over with a new company all because of the lack of communication, poor follow-up, and she wasn’t comfortable speaking what was on her mind. Make sure you check-in with your employees on a regular basis and ask the questions that will solicit true and honest feedback. You may be surprised what you learn.
This is another article in a series on Michael’s entrepreneurial story and how being raised in a large family has influenced his career. Michael Gunther is Founder and President of Collaboration LLC, a team of highly skilled business professionals who are dedicated to assisting proactive business owners to build profitable, sustainable businesses through results-oriented education and consulting services.