As a leader in your company you are the foundation of the company culture. Like many business leaders, you may be struggling with how to build a sense of fiscal responsibility within your team. It’s a challenging thing to try to get entry-level employees to care as much about the bottom line as you do. The number one way to get employees on board with penny-pinching?
Set the example.
Spending money is a responsibility. And it is public, whether you want to believe it or not. When you spend the company’s money, employees make mental notes. If you are spending money frivolously, employees will get the impression that the company is rolling in dough. And when they see company leaders spending money left and right on non-essentials, they usually believe it’s okay for them to do the same.
I’ve seen CEO’s spend thousands on employee outings, perks for management, personal trips and entertainment, gadgets, etc. Not only do employees see this as a sign of prosperity and therefore excess, but also they see it as selfishness and favoritism. Giving certain employees (like yourself) valuable perks and excluding others is favoritism and a huge demotivator for the rest, which equates to less work effort overall.
By not controlling your company spending you are sending two very bad messages to employees:
- Spend money carelessly because I do.
- Only special employees get perks…and you aren’t one of them.
Double whammy on your bottom line.
The good news is that setting a good fiscal example is pretty easy. All it takes is discipline and prudence. Here are three easy tips for controlling your spending:
- Set an annual client entertainment budget. When it runs out, that’s it.
- Set an annual employee recognition budget. This could be spent on things like an Employee of the Month program and/or annual team party. Again, when it’s gone it’s gone until the next fiscal year.
- Instead of handing out individual perks to management or “favorite” employees without context, hold some kind of internal performance contest and reward the winners. Prizes should come out of the employee recognition budget.
- Never pay for personal perks or entertainment out of company coffers. As the company founder/leader you many feel entitled to reward yourself, but resist it because the message this sends is: “I worked hard and deserve a personal perk on the company dime.” You don’t want your employees thinking that way, do you?
Have you ever rewarded yourself on the company dime?
About the Author
Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please visit his website at activategroupinc.com or contact Howard Shore at (305) 722-7216 or email him.