Archive | September, 2013

The Pros and Cons of Open Book Management

20 Sep

Open book management is a term that has been around for years, although there is still much confusion around the subject. The term itself is easy enough to understand – open book management is a business philosophy centered on involving a full staff in making a company more successful. Under the theories of open book management, involving more people in decision-making and planning can make a company thrive financially and organizationally. However, actually carrying out an open book management plan can be challenging, making it important to understand the pros and cons of such a program:

Pros of Open Book Management

Increased Transparency
Allowing a staff access into company financials is a powerful way to increase transparency among a workforce. Businesses that keep decisions separated by department or allow only the top executives at a company to have any influence on large decisions may be successful, but at these some companies, staff may feel left in the dark.

Open book management, on the other hand, leaves room for employees to contribute to the way a business is run, while increasing transparency and trust in management. When staff members feel they can trust their supervisors and are fully informed on the inner-workings of a company, they may be more likely to trust for executive decision-makers at a company.

Sense of Community
Sharing ideas can bring staff together and foster an environment in which employees feel open and honest with one another. A sense of community can positively affect a company on numerous levels, as camaraderie and developed relationships enable others to connect on a personal and professional level. This can increase happiness and employee engagement at the office, as well as open dialogue for workers to get to know the way other workers think.

Unique Ideas
By sharing financial and operational information with staff, executives may find more unique and exciting ideas coming from an office. Armed with pertinent information on how a company is working, individuals may be able to give new insights on how to approach a particular problem, or may come up with an idea to streamline operations. Sometimes, it takes a fresh perspective to solve a problem – involving an office in decision-making can provide unique insights and may result in improvements across a company.

Cons of Open Book Management

Information Overload
Too much of a good thing can be a hindrance when it comes to open book management. While some workers may be excited by the prospect of understanding company profits and becoming more financially literate, others may be overwhelmed by the onslaught of information. Some workers are excellent in their current roles because they are focused on the task at hand and do not have to worry about extraneous information.

Involving these staff members in increased decision-making can result in information overload, which can be distracting. If a company is implementing an open book management plan, it would be wise to involve only those who are most enthusiastic about the prospect of more responsibility and fiscal involvement to join in the new initiative.

Increased Worker Demands
Revealing financial and operational information to employees can have some unexpected consequences. According to the Society for Human Resource Management, some employers are nervous to let their employees know how much profit a company makes.This may be for a few reasons – companies that are not performing well may not want their employees to know the ins and outs of a troubled business.

Companies that are beating expectations and bringing in large profits may not want to show their employees this information for a different reason entirely. Some supervisors fear if workers see how well their department is doing, or that the company recently brought in dozens of new clients and has more cash to go around, that employees will be more inclined to ask for raises or become complacent. If a company is worried about this outcome, they may want to take it slow in opening up their management style.

Difficult to Implement
Involving employees in business decisions is a great way to move business forward, but not everyone starts off as a financial expert. Many companies switching to open book management plans offer financial training sessions to acquaint employees with financial operations.

After these training sessions, communication is essential, so weekly meetings and reports are often necessary to keep an open book management plan working. For certain companies, the involved nature of open book plans can prove to be too complicated.

Open book management plans aren’t right for every company, but when they’re used right, they can be the perfect solution for many business needs.

Align Employee Goals With Company Objectives

12 Sep

Creating career development plans and setting out company objectives are often seen as separate events. However, in order for a company to succeed, it is important to recognize the relationship between these two business components and how powerful a company plan can be. Exactly how does a company go about interweaving employee goals with business objectives? Keep reading to find out how:

Plan For Success
Before launching into a new employee management strategy, it’s important for company leaders to identify areas for improvement as well as routes to success. Executives and HR professionals can begin by conducting an honest and objective company overview.

Executives should ask themselves how sales are adding up, if company morale is low, if a company is efficient, and how each of these answers stack up against mission statements and objectives. Leaders should measure the difference between company realities and goals set forth in a mission statement.

However, as companies should always be striving to move forward, mission statements and company objectives need to be evaluated and revised. Perhaps in order to compete an increasingly digital world, a company needs to focus more on using smart technology like HR software and mobile devices. Others may need to factor in changing markets and adjust goals accordingly.

Communicate With Staff
Once an organization has identified new objectives and areas of growth, it’s time to share the results with staff. It is valuable to tell employees their performance matters not only for short-term goals, but for long-term organizational success.

During a presentation, an executive can show employees the difference between current company practices and goals the business should be striving for. It’s vital for success that company leaders communicate honestly with staff about future changes and new plans that will help them thrive.

Set Challenging Goals
Establishing new goals for employees is essential to tying individual goals to overall company objectives. One of the best ways to ensure positive outcomes is to include each staff member in their own planning session.

Certain employees’ sales numbers may be lagging because they are not being challenged – these same workers may be perfect for leadership roles and can help drive a company forward to new heights. HR representatives can sit down with employees and map out new ways for them to succeed. For example, if a company needs to improve new hire performance, an HR professional can set up a new program in which company veterans work with new employees to get them up to speed quickly and efficiently.

Or, if sales numbers are not where they should be, a company can challenge employees to achieve greater sales numbers each month. The main thing to remember here is that goals need to be both challenging and attainable. Lofty goals that are impossible to reach will not encourage workers to thrive – rather, they may discourage staff and make them feel they cannot succeed in their current roles.

Consider Compensation Plans
Sometimes, employees need more than encouragement to help get a company on track to meet business objectives. This is where compensation plans come in. These programs are especially important in sales-based organizations, where individual performance adds up to company profits on a daily basis.

A company can bring about higher sales by tying achievements – such as a 10 percent increase in sales over a quarter – to financial incentives. Bonuses and commission rates will motivate employees to perform better, and along the way they will be guiding a company toward achieving its main objectives.

Track Success
It’s not enough to implement a strong plan to align personal performance with company objectives – progress also needs to be monitored on a regular basis. After a plan has been put in place, HR professionals need to set aside time to track a plan’s success to ensure high return on employee investment.

Company leaders can request regular meetings with employees to talk to them about their performance, make adjustments to individual plans, and to receive honest feedback from staff. These meetings will give insight into how an employee can most benefit from a plan, and how an employee can simultaneously benefit the company as a whole with their success.

Another way to track program success is by using customer surveys. Whether a company works with businesses as clients or directly with consumers, surveys can be invaluable to monitoring performance. If a company has an overarching objective to improve the level of customer service, it can ask clients and customers about their experience with salespeople, or ask about their opinions of the brand as a whole.

Every company should always be striving forward to achieve more and better their business practices. It is always important to remember that employee performance directly affects company behavior, which is why HR professionals should guide staff toward the kind of performance that will improve a company overall.