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Jack Mitchell: 3 Rules: Pick Right, Pay Right, and Prosper

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Money isn’t everything but if you don’t pay well enough, everything else you do to inspire your staff will count for naught.

 If people are nice, trusted, proud and included, then the recognition will certainly follow. And that doesn’t mean strictly dollars and cents. 
 
Our strong feeling is that money is not the main reason people choose where they work for life. After all, money can’t compensate for your boss ignoring you and it surely can’t cancel out having to work beside ill-mannered colleagues. That’s why people say of an offensive boss, “I wouldn’t work with him for a million bucks.” 
 
At the same time, if the money and fringe benefits are not commensurate with the job performance, and then some, in the context of the local market and the living standards in the community, then associates feel “used” and that the owners are “chintzy” and just raking in the bucks for themselves. 
 
We believe that if you don’t pay people enough, it negates everything else — all the other four principles. So money is a wild card. I insist that I don’t work only for the money, yet if I were not rewarded fairly, I wouldn’t have the passion that I have to do what I do. 
 
When people go home to their families at the end of the day they want to arrive with a smile and a wallet that is filled with enough to make them believe that the investment they have made of their time, energy, and talent has been fully recognized. Especially when the associates can see the business — in our case the stores — is doing well. 
 
My philosophy has always been simple. I like to pay our people very well — extremely well. Of course, you have to be realistic and stay within the financial parameters and playing field of your business and industry. The expectations have to be set accordingly. I believe all associates should feel they have the opportunity to earn more if they hit their goals and the stores hit their goals, and if they are constantly raising the bar and becoming better. 
 
Most of the time we pay new associates more than they were earning elsewhere. That immediately makes them feel great. Since we have fewer employees than our competitors — but great people — they produce more, and that enables us to pay them more each year. So far this has worked well. 
 
We find when all of our associates “work for the customer,” they work with one another better. It’s fabulous because it creates a situation where everybody wins when the store wins, not just the sellers. I call it a company-wide associate and customer-centric hugging culture. 
 
This magic does pay off. In a study of more than 2,000 businesses, the Gallup Organization found that sales were 3.4 times higher when engaged associates sold to engaged customers. 
 
One other interesting way to recognize people is to have the associates do some of the recognizing. I’ve heard of an engineering consultancy where any associate who thinks a colleague has performed exceptionally can award a $50 bonus to the individual right on the spot, without higher approval. Hey, you can bet you’re going to like the guy in the next cubicle even better if he puts some extra cash in your pocket! 
 
What’s most meaningful is when you find the thing that means the most to each associate, and then recognize them by offering them that. If someone is a stickler about their nails, give them weekly manicures for a month. It’s all about recognition, and recognizing what makes people tick. 
 
Buy the book at www.hugyourpeople.com 
 

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