Published by Sterling™ 350 West Arden Avenue, Glendale, CA 91203 © 2010 STERLING. All Rights Reserved. No part of this publication may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without written permission of the copyright owner. Quoted material by L. Ron Hubbard: © 1951, 1958, 1963, 1964, 1966, 1968, 1969, 1970, 1973, 1974, 1976, 1978, 1980, 1984, 1989, 2001, 2007. L. Ron Hubbard Library. All Rights Reserved. Grateful acknowledgement is made to the L. Ron Hubbard Library for permission to reproduce selections from the copyrighted works of L. Ron Hubbard. I/A No. 10041401-0040 Printed in United States
Note: L. Ron Hubbard quoted material appears in this booklet in italics. The writings of Kevin Wilson appear in regular type.
L. Ron Hubbard’s administrative principles came from no ivory tower. They are the product of more than thirty years of real-world, hard-won experience.
Few principles of organization and management have been so tried and proven. None have been so widely distributed to employees and business owners alike in 12 encyclopedic volumes and in 15 languages. Today, L. Ron Hubbard’s management principles have reached more than 200,000 companies and corporations in 81 countries.
L. Ron Hubbard is now recognized in the Guinness Book of Records as the most published and translated author in history, with titles in 71 languages.
Through dedicated work, thousands today are finding solutions to productivity and prosperity, solutions which also raise the quality of life and inject a higher degree of sanity into the lives of individuals, communities and businesses the world over.
In reading this book, be very certain you never go past a word you do not fully understand. The only reason a person gives up a study or becomes confused or unable to learn is because he or she has gone past a word that was not understood.
The confusion or inability to grasp or learn comes AFTER a word the person did not have defined and understood. It may not only be the new and unusual words you have to look up. Some commonly used words can often be misdefined and so cause confusion.
This datum about not going past an undefined word is the most important fact in the whole subject of study. Every subject you have taken up and abandoned had its words which you failed to get defined.
Therefore, in studying this book be very, very certain you never go past a word you do not fully understand. If the material becomes confusing or you can’t seem to grasp it, there will be a word just earlier that you have not understood. Don’t go any further, but go back to BEFORE you got into trouble, find the misunderstood word and get it defined.
I have worked with Sterling since 1996. At that time I had no idea what was possible, but I knew I needed the practice operation to improve. Since then, overall volume has grown four times while profitability has increased by six times. The practice achieved this with the same number of staff. Through the application of what I learned at Sterling, my practice is now a highly productive and coordinated group – one that I trust to get the job done. My life has changed rather drastically for the better.
How does one bring about these changes in their practice? While we learn to be technically good in our profession, where do we get the information on how to evaluate and how to choose team members appropriately? And once on board, how do we obtain the best performance and dedication from our group? I certainly did not learn that in school, from an ongoing CPE, or an AICPA course or seminar.
The rigorous application of a few concepts concerning testing, evaluating, working interviews, hiring, motivating and training, and firing, as necessary, has allowed us to build the team we have today. I have learned the incredible value of adhering to this process. Sterling provided the knowledge, training, and application leading to this accomplishment.
The answers begin with the application of the material in this publication. Once one begins applying these simple, practical, concise principles, magic begins to happen! It has for me. I know it can for you. Enjoy the benefi ts!
I wrote this book because I believe the small business owner deserves effective help. I have devoted my energies to doing just that for the last 25 years.
Most small business owners are working too many hours, have little time for their family or other activities, and often do not feel they are rewarded adequately for their hard work. This book aims to change that and put you back in the driver’s seat.
“Small” Business or “Dynamic” Business?
As a consultant for small business owners and a small business owner myself, I know very well that the word “small” is a misnomer when it comes to so-called “small” business owners. A far better name would be, “the dynamic business owners of America.” Why dynamic? The word is derived from the Greek, “dynasthai” which means “to be able or energetic.” And business owners are, in the majority, the most able and energetic people in America.
Small businesses are the woof and warp of our economic fabric. They comprise over half of our total workforce, representing tens of millions of employees. As of 2009, they are responsible for 65% of all new jobs created in the US. They are truly a dynamic force despite no real assistance from the Federal Government.
The “small” business also happens to be the most trusted group in America according to a recent poll conducted by the Pew Research Center. They were trusted by 71% of those surveyed.
In contrast, the majority of those polled believed these groups to be the most distrusted (in descending order): Federal Agencies and Departments, National News Media, Large Corporations, Federal Government, Congress, and last on the list and not to our surprise, Banks and Financial Institutions with a 69% negative response. Though Labor Unions didn’t quite make the above majority negative list, they were trusted by only 34% of those polled with a 49% negative view, thus are worth mentioning.
It is easy to see why these groups scored so badly when you compare what they say with what they do in the real world.
But this book does not concentrate on the negative except to demonstrate by example. It is all about what can be done about the problems facing business owners today in terms of hiring, managing and training of personnel. Other booklets in my series will cover effective marketing, making sales, good public relations, organizing for success, successful finance, optimum delivery, quality control, greater efficiency, and overall management.
I’m proud to introduce you to the most workable principles for today’s dynamic business owner in an easy to understand, easy to apply and thought-provoking format.
You are the backbone of the US economy. You need and deserve support. And this book will give it to you.
Success in today’s world, requires considerably greater management skills than most business owners realize. It takes striving toward perfection in your work, products or services in the most efficient manner. That means effective promotion of those products and services, and delivery of them at the utmost level of quality possible. It also takes a certain volume of business to be successful. It entails proper hiring systems and having the right personnel for the jobs that need to be done. Most importantly, the business owner has to know how to do these things to bring about a prosperous business despite sometimes overwhelming odds against him or her. This booklet on Personnel, which is only the first in a series of booklets on effective management, is aimed at changing those odds in your favor.
I hope you enjoy reading it as much as I have enjoyed writing it!
woof and warp: foundation, base.
It doesn’t take much for someone to accept that staff members who are productive, cooperative and fully trained in their duties are worth their weight in gold. They competently and industriously get the job done despite heavy weather.
It’s a different story when you look at the other side of the coin. Most of the time, it requires an awful lot of convincing to get someone to see how disastrous just one “bad” staff member can be to the whole practice. Take the case of a practice owner who was under tremendous stress and barely able to pay his bills.
“I can’t let Mildred go,” he said. “She’s been with me for over 6 years.”
We handed the practice owner a graph of his production for the last 8 years. Production had been up-trending for the first two years and had declined steadily since he’d hired Mildred as a receptionist. He only let her go when he was shown how production had shot up whenever she took a vacation and promptly crashed back down when she returned. The practice production promptly shot through the roof after her departure and thereafter maintained much higher levels.
That isn’t to say, however, that people should be shown the door because production is down. There are many factors to take into account before making that kind of decision. But I'm merely illustrating a point. I’ve seen practices shoot up over $200K per year in collections because of replacing one “bad hat” with a good one — with no other additional staff hired.
The least I’ve seen one destructive person cost a practice in production/revenue was $100K in one year. It probably averages about $150K in 2009 dollars. Sometimes I’ve seen a practice jump $100-150K in collections without even replacing the person
heavy weather: (slang) adverse or difficult circumstances.
k: (slang) one thousand dollars [origin: from kilo- [thousand.] ]
(no additional staff hired). That may be unbelievable to you but I wouldn’t state it unless we could back it up with the statistics from actual businesses. We have more than a few clients that are happy to tell you their own stories similar to those above.
You are probably asking yourself, “How can one employee cost so much money when you don’t even pay them that much per year in salary?” or “Were they embezzling or something?” After fully reading this publication, ask yourself this question again and decide whether it is possible. But here is a hint: A nonproductive, non-employable person makes extra work for you, and at least two others in your practice. How much is your time and your staff’s time worth?
But there is more to it. How many patients are lost because they were never serviced properly? How much is the lost revenue because the appointment book is not full? It adds up fast. Read on and you’ll discover a big reason why.
It is very apparent that no one likes a tyrant and mean people are despised. So how does one get things done without appearing to be a tyrant, particularly when staffs have to be told what to do (and sometimes over and over), yet we expect each staff member to just do the job expected? Where’s the balance?
First we have to differentiate the various types of personnel.
Per Mr. Hubbard there are three classes of possible personnel:
Classes two and three are nonemployable. Why burden the staff or economics of the practice with them?
The Willing include the overbearing, the meek, the swift, the slow, the efficient, the worried. Threats and punishing regulations do not help them – only hurt the innocent with the guilty. Tight scheduling, insistence, reason, crispness, and understanding help them.
The Unwilling are bait only for the unemployment bureau. Leave a post vacant rather than hire them. You’ll wish you had.
Don’t confuse a clash of personalities, independence and lack of subservience with unwillingness to do. The military does this and look at it! If you only want a staff that won’t talk back, join the army – they punish people for communicating or deserting. Some very high-class bastards can do some high-class jobs.
The Unwilling only do or say “can’t” no matter what solution or task is offered. Usually they don’t talk. Sometimes they are models of meekness. But like a hunting dog that won’t kill chickens, they are no good to you. If they’re out of your practice, you have only the willing left – so why look further in executing than being decent. The man who doesn’t appreciate it isn’t with you anyway. So that leaves only one code of conduct for an executive to follow, the one outlined here. His personnel hat excludes the Mr. No and Miss Can’t and Master Flop. An executive needs as much discipline and anger as he lets the Unwilling in. The first principle of an executive is to accomplish the goals of the practice. He must employ the Willing and maintain understanding. And remember that there is a reality as part of the understanding.
willing: ready to do or grant; having the mind inclined; having the mind favorably disposed; not choosing to refuse; not adverse; consenting.
defiant: unwilling to change one’s view or to agree; noncompliant.
negative: express or implying denial, disagreement or refusal.
shiftless: lacking ambition or motivation; loafer; idler; wastes time.
crispness: marked by clarity, conciseness, to the point, decisive.
1. The willing: This person listens to what you say and does it if they understand you. Beware of staff nodding their heads and telling you they understand. They usually misunderstand you because of the undefined technical terms or because their literacy level is poor. If this is the case, patiently clear up their confusions, show them what to do and they will strive to do a better job the next time, and will do a better job.
One of the ways I know I have a willing staff member is by watching them grow. They get better on the job, making less and less mistakes. Things around them get better. They help you and help the practice. However, they may not be perfect angels. You can expect occasional ups and downs, but it’s not continual or chronic. They’re not routinely being a problem. As time goes on, they are learning their posts, wanting to get trained, and gradually do better and better.
2. The defiant negative: They don’t really ever get better. They appear to improve but continue to make the same mistakes, get into the same old habits or patterns that are not good for the practice and not good for you. At one of my workshops, for instance, I asked a client which of his staff would be best to do a simple daily task that would take less than two minutes per day. I suggested his receptionist. He exclaimed, “Oh, I could never trust her to do that!”
In other words he couldn’t trust his receptionist to do this daily task involving the filing of a report and notifying the right person. He was adamant this person couldn’t be trusted to stay on top of it daily. And this was his receptionist! If true, his receptionist was not employable. This is an all too typical example. Most practices with 4-6 staff have at least one non-employable on their roster.
3. The wholly shiftless: Did you ever have a staff member who only got busy when either you or someone of importance was around? Otherwise they spent time playing games or “texting.” Just because somebody texts their friends or plays on the computer doesn’t automatically mean they are wholly shiftless. If I had a staff member get all their work done and “bought” some leisure time with abundant production, hey, that’s great. Some of my most productive staff work less hours than others and still get more done. They deserve their “breaks.” They’ve earned them. I’m pointing out someone who doesn’t get their work done and stays on their favorite website except when you stand over them. These people are not employable if they cannot or do not change. But beware of them telling you they will change or have changed – it’s what they do that counts. If you find them continuing the same old bad habits, they are probably only after a paycheck and will do as little as they can get away with without being fired. Such people might even appear to “correct” their detrimental behavior for a few days, but then resume their “bad habits.” They usually think you are too soft–hearted to let them go. Just remember they are letting the team down and causing others more work as others try to do their own. Ignoring that just contributes to your “burn-out.” After a while, you end up with an unhappy, stressed-out owner, and a practice that is not fun to be in anymore.
“What I liked best was the information dealing with the understanding of human nature and human relationships, because to me that is the very basis of management. Still, many consultants I talked to didn’t address that. They would tell you about this or that as office procedure, but you have to get more basic than that to be successful. “Part of that was I didn’t realize I didn’t have the right people in place. Sterling taught me you need to be able to select the right people to be successful, and taught me how to select them. The other management consultants I ran across would tell you, ‘This is what you need to do,’ but without the right people, the harder I tried, I still did not go anywhere. All I was getting was a pep talk.
“The truth of it was, we were having severe staffing problems, severe attitude problems. So some months later the prior consultant calls me back, and says, ‘How are things going?’ By this time I was using Sterling, and I told her, ‘I had to replace the non-employable staff in the office; now things are great.’
“Now we have a wonderful staff, the atmosphere is happy, positive, and productive. They want to work. They want to be successful. Before, I felt like I was dragging a big heavy cart. Now I feel like I’m driving a car; I step on the gas and it just goes!”—M.M., Business Owner
This brings us to our next point. What is the prime motivation for your staff, or for that matter, your practice? ■
The weakest motivation is money. People and businesses that are motivated only by money are wobbly people. A primary cause of practice failure is money motivation. The scale of motivation from the highest to the lowest is:
Duty — highest Personal Conviction Personal Gain Money — lowest.
Money is important in the world. But it is the grease on the machinery, not the motors. In a society which has lost its patriotism and pride, money will be found as a primary motivation. True, one is in trouble without money and it is a crime in the eyes of the society to be without money. But one also needs dirt to stand on and yet dirt cannot be said to be the primary motivation for living.
So money is a tool, a gas tank. It is a MEANS of getting something done. It is no valid end in itself. Thus, a practice motivated only by money will eventually fail. For it depends more on the goodwill and personal conviction of staff and the public than it does on cash. Your service is a personal gain that leads to personal conviction. Money therefore flows back in AS A MEANS OF KEEPING THINGS GOING. As you will see on the above scale, money is junior to personal conviction and personal gain and so is dominated by them or vanishes when personal conviction or personal gain are absent. Money flows poorly when motivated only by money. Look at bankers. Ever try to get a loan? And if you did, were you ever sorry you borrowed?
The public understands that your practice must have money to keep the wheels going.
The public even understands your practice needing or having a lot of money only so long as money is used to improve the product or service, spread the word, provide facilities and support the people doing the work. One is usually paid less than he is worth, excepting of course politicians, bankers and thieves and con men. When people are paid more than they are worth, they don’t last long.
There is nothing wrong with having lots of money. There is everything wrong with having no money. But to work only for money is the dreariest thing there is, very short term indeed.
Solvency for the sake of solvency cannot be achieved because one is not paid only because he is solvent. One is paid for strengthening and carrying out the service one is paid FOR.
If you are going to be paid as a practice, it will only be because you are strengthening and serving individual and social motivations, not because the practice wants to be paid.
Some muddle-headed misinterpretation of this is not only possible but probable. If money is a poor motivation, then obviously, someone may say, one should reduce prices or never make any charge at all.
But THAT solution we find is so bad that people who do not contribute money and get free service do not in fact accept it and can’t have it.
Further, the whole service would vanish and cease to exist and that TOTALLY violates motivation on all the dynamics. No, the solution is to charge whatever the traffic will bear because one serves the motivations of personal gain and personal conviction. But in charging for it, DELIVER.
DELIVERY then is really more important than payment to the public.
Thus, a practice must deliver services that definitely serve personal gain and personal conviction.
Given normal promotion of these services and good backup of the promotion, finance ceases to be a vital point. The business makes money, is solvent and well supported.
Give good promotion and service and your price list is taken for granted.
Direct, positive, corrective interest in all service flubs or failures is itself good promotion.
Let’s take up the lowest motivation first, which is Money Motivation. Money motivated employees are usually clock watchers; they leave at closing time on the dot (or earlier) even though you still have patients to serve. They take all their breaks and extend them beyond what is allowed if they think they can get away with it.
They don’t really care about the patients even if they say they do; they put themselves and their concerns first. Again, know them by their actions not by what they state.
They’ll schedule appointments outside of the practice and let you know about it at the last minute, giving you little choice but to let them go to their appointment. They also tend to pick inconvenient vacation times, insist upon them and then your practice suffers the consequences.
When they came to be hired, their questions and concerns mainly had to do with how much they were going to be paid, their health benefits and other money considerations. They ask for raises quite often — sometimes every year — even though they do not do more for the raise they request, i.e., their
production is not rising commensurate to the proposed pay hike. They think they should be paid just for showing up!
If you try to improve things or make them more accountable they will rail against it as they do not want to be held responsible.
They usually “false report,” meaning they will lie about why they were late or why something was done or not done. They will even falsify their statistics if they have any.
Do not confuse “money motivation” with someone striving for deserved bonuses for higher levels of productivity. This is not money motivation, but a natural response to increased production demands.
The truly “only money motivated” person is not employable.
If you spot them in the initial interview, don’t hire them. If they already work for you, let them go once it is determined beyond reasonable doubt they will never be real productive employees.
Personal Gain is something patients want. It is what you provide for them. It is, of course, OK for people to want this. And of course staff should receive personal gain from working in your practice. That is natural.
But an employee who is only looking for personal gain is poorly motivated. You are not in practice to just provide this to your staff. You are there to provide a service to patients. If this is done in enough quantity and with enough quality there is plenty of personal gain to be had by everyone involved.
To illustrate my point, have you ever had an applicant in the hiring interview ask you various questions about your employee benefits? Example: “What is your health insurance plan?” “Do you carry dental insurance or can I receive your services for free or at a discount?” “Do you have a retirement plan?” “How much vacation time do I get?” “Is it paid vacation?” When the applicant is more interested in what they can gain personally from you than their job, this employee is poorly motivated. Hire them and you’ll regret it. This doesn’t mean that everyone is only motivated by personal gain if they question you about these benefits. But it should not be their main intention when it comes to your practice, i.e., their biggest interest. And you can perceive this. Have you ever had a salesman try to sell you something and you can tell they are only interested in your money or in making the sale? Of course you have. Well, it’s that same feeling. Don’t hire them.
If you are in a hiring interview and the applicant makes you feel uncomfortable or defensive about how much your pay scale is or how good your benefi ts are, you are dealing with either a money motivated person or a personal gain person. These are their main motivations for being hired.
They should be more interested in what they can do for you. Their interest should be in your practice and whether they think they can be of benefi t. If you have existing staff who are more concerned with getting better benefi ts than giving better service, you have a personal gain motivated staff.
An example of a person at Personal Conviction: He or she loves or at least likes what they do. They like accounting and your services and are convinced they are doing something beneficial for your clients. They care about the clients and how the practice is doing. They don’t have to be in a mystic daze about giving their service, but you can tell their true intention is to help the client and thus help the practice.
An example of someone motivated by duty would be where the staff member goes about doing his or her job without giving one and all unnecessary responses to requests. You ask an employee not motivated by duty to take out their trash and they respond with, “Why didn’t our cleaning service do it?” “Is that my job now?” Of course it is the duty of every employee to keep their area clean and tidy so as to be presentable to the public and even other staff. A clean office demonstrates someone cares enough about how the offi ce looks. Another example would be where your phone is ringing off the hook and no one is there to answer it. A staff motivated by duty would not hesitate to answer the phone. They know they are there to take care of the patients and to assist the practice even though it might not be in their specifi c job description to do so. Look over your present staff and see if you have someone who fi ts this description, always going the extra mile to ensure all runs smoothly.
You would be very, very fortunate to have at least one employee motivated by duty. We have many practices where the practitioner and the office manager are in this category. Duty motivated staff would keep the practice going despite heavy weather. They would be the pillars of the practice. They would be very willing to do their job and any task that helps the practice. They would also be loyal and trustworthy. They are rare. Help them all you can when you have them. Train them. Do everything in your power to retain them.
If you don’t have one, know that they can be found. It takes the effort to go through many job applications to find one. If you think interviewing only two or three prospective personnel should yield you one duty motivated employee, you dream. You might get lucky, but I’ve seen practitioners go through over a hundred applications to find one. It is much more usual to find a person at Personal Conviction than it is at Duty.
But don’t give up! They are out there in all ranges of age, experience and intelligence. And the funny thing is, the more staff you have motivated by duty or personal conviction, the more you’ll get. In personnel it is true: like attracts like. And it is true the more unwilling or non-employable staff you have, on your usually fairly small roster, the more you’ll attract the non-employable. ■
I recently made a breakthrough in the area of hiring that I want you to know about and apply.
I’ve never seen it fail that when an organization is saying, “We can’t get any staff,” this is due to one of two things: either (a) it’s absolutely impossible for the public to get there, or (b) somebody is actively turning them away. It’s quite remarkable really. It’s one for one. It’s either one of those two things.
People are eager to help. Yet I have found an organization not doing standard hiring actions saying, “We can’t get any staff.”
In one organization that couldn’t get any staff I found they had gone on an active campaign to turn people away. The way this organization was situated, it was impossible for them not to get applicants. But sure enough, they had somebody on the line who was just turning applicants away.
It’s really very simple to solve this. Just go to the point that is approached by the public who want to get on staff. It doesn’t matter whether that’s on a mail line or across a desk. You just trace where the requests to join staff come in or where the people walk in and want to join staff. Do an observation or ask the persons at these points what they tell people. Then straighten them out. Personnel flows will start up at once.
The personnel scene is as simple as this. You simply open the door and let the public walk in.
In another case there was a business which was located in the vicinity of other businesss. It couldn’t be found. They didn’t even have a sign saying that they were there. It was absolutely impossible for people to get there because nobody knew the business was there. The location of this business should have brought in many applicants, but nobody could find it!
Some businesses might consider themselves a sort of club: shunting off any persons trying to approach them from coming into the group. They actually have an impulse in this direction. It seems to be an absolutely dedicated thing when it happens.
There is another point that goes along with this. You sometimes open the “hiring gate” and find that the person doing the hiring will only hire people who are their personality equivalent. For example, you put a druggie-LSD on the gate and he will hire nothing but druggie-LSDs. One business was even found to have had a pervert bum on as its hiring person who was only hiring those persons who were perverted bums.
IIf you run into hiring barriers occurring in your business, do a general campaign. Put up signs and make sure that people know where to find you.
Put a stack of applications on the Reception desk. And brief your Receptionist that he routes staff applicants to the Business Manager or whomever is interested in procuring new people.
Put a couple of well-lettered little signs in the public area that look very posh and simply say: “(Business name) is accepting applications from persons who are knowledgeable in (mention several fields of interest here). Contact (whatever name you wish and whomever you can trust).”
Direct public to a specific person listed to be seen; otherwise you lose your would-be staff simply by misrouting at Reception when people come in to apply.
gate: any means of access or entrance.
And if you’re really on the ball, you can even keep an employment application log with the person’s name, address and where he can be contacted. Place it at Reception, well marked “EMPLOYMENT APPLICATION LOG” where anyone could sign in. That way anyone in the business interested in procuring people can follow up on these applicants.
Who is doing your hiring? Do you want more personnel like them? You should have your best staff on your hiring lines. ■
Place hiring ads or notices where you can reach the best applicants. Your reception area is one possible place. It may also be in the weekly local shopper’s paper, or the local college. Certainly your own staff can be an excellent source for new staff, especially good ones. Get them to refer their friends and family.
The big city newspaper is not always a smart choice and is usually cost prohibitive. Local newspapers do better and are cheaper. But even these are not always an ideal avenue.
Today the internet can be a good channel for applicants, like craigslist.org or some such inexpensive hiring ad site.
We usually do not recommend employment agencies except for temporary staff, and who really wants to hire temps except in extreme emergencies? They usually do not work out for the long run. That’s maybe why they become permanent fixtures for an employment agency! This, of course, is not always the case. We have found, rarely, a good employment agency. Guess what their common denominator is? They have people who are themselves employable as described earlier. Why is it rare? Go into an employment agency and look for yourself.
“Desperation hiring” is certainly taboo and something you want to stay away from no matter the temptation. Usually one hires the first person who appears to be able to talk and walk and could possibly do the job. They even may look nice and present themselves well. They tell you what you want to hear. Desperation hiring, unfortunately is done more often than not. It can be lethal to a practice.
The most common comment I hear is, “You can’t find good people around here.” This just isn’t true. What is really the case is they are not attracting the right candidates, they haven’t placed their ads in the proper places and are violating the concepts outlined in the previous article, “Hiring Breakthrough.” There are many fine people in every city and town in the US. Where are they? According to a report by The Conference Board in January 2010, roughly 55 percent of all working individuals in the US are not satisfied with their jobs. That’s over 50 million people in the US alone who could be a possible prospect for you if you offer a more interesting career. That is exactly what our clients do. They make their workplace such a nice place to be in that employees frequently comment: “I would not ever want to work anywhere else.” Why? A sane place to work in is rare. Such a job is worth having and is worth creating. The same basic concept even applies to possible hi-tech or tech prospects. How many are not satisfied with where they work? There is, then, no shortage of possible employees. If you are not convinced, consider this: Do you have at least one good employee in your business? Do you think you could find at least one more in your city, town or area? Of course there has to be at least one more. And if there can be one more, can there be two more? OK, you get the idea. Holding on to this thought that “you just can’t find good people around here” will actually keep you from finding good people. It is a truism that you get what you think. Have you ever seen this in life? Person says to himself, or herself, “Oh, I could never do that.” Do they then do it? Most usually not. This reminds me of an abbreviated quote I saw when I was fairly young by Henry Ford. It certainly is applicable here. “If you think you can or you think you can’t, you’re right.”
What we do:
Pay and benefits can be overrated in finding and hiring the right people. Look over the four motivations covered earlier and you’ll see why. If you offer nice salaries and lots of benefits in your hiring ads, do you see which of the four types of motivated individuals you will attract? Right. Those looking for personal gain or money, as their main motivation = unemployable. You want your ads to attract the duty and personal conviction type people, right? Well, word them as such. “If you want something, you have to ask for it,” as my father used to say. Word your hiring ads so they state what you want. Highly motivated? Not afraid of hard work in a busy practice? Good communication skills? What do you want? Say it in the ad. It’s at least a starting point!
If they pass the aptitude test, have them take our personnel analysis. This further screens them. Your time is precious and valuable. No need to waste it on someone who will not make it. I half-jokingly tell my clients, “All these tests really do is weed out the crazy ones.” And they always laugh. Note, though, that these tests won’t tell you which ones will definitely make it in your practice. No written test can do that. There is no “magic interview” process either. There are no all-foreseeing questions to ask your applicant. That is a myth.
The real and only test is this: can the person perform what is needed and wanted of him or her? And can they do it in enough quantity and with enough quality to make them valuable to the practice?
The real and only “test” is this: can the person perform what is needed and wanted of him or her? And can they do it in enough quantity and with enough quality to make them valuable to the practice? This is covered in step 6 below.
The “Working Interview” Continued...
If a new person hasn’t gripped it in a week, is still begging for help from all, he’s not employable. Unload. He won’t be any better in ten weeks and the practice will be a lot worse. Such a person can’t be at cause over the job and will only destroy the post (as witness the way you have to do his work as well as your own – dead post). Don’t ever fill a post because it’s empty. Fill it only to get more work done. If more work isn’t done, you are ten times worse off having it filled with a non-employable person than having it empty. You have to have three staff members extra for every non-employable person you have on staff. Why? Because the coin has “efficient” on one side and “destructive” on the other – and it never stands on edge.
Here’s the chance, in the working interview, to see if they continually make the same mistakes.
Here is what Mr. Hubbard has to say about mistakes:
He who cannot be trained will not learn by mistakes.
It isn’t making mistakes that is actionable; it is failing to learn from them and repeating them.
gripped: to take hold of mentally; understand; comprehend. We are not unduly concerned with somebody who is untrained. We are only concerned with people who cannot be trained and these are easiest to detect by observing when they make the same mistakes without correcting themselves. This person is not only dangerous on lines but also frankly can’t be utilized.
Where you have someone who does not learn from his mistakes and cannot be trained, it is better to replace the person rather than just hope.
Here’s the chance to see how willing they are to do what’s expected. But don’t be fooled. Most new employees will act very willing, but the test is whether they can accomplish something worthwhile and in enough quantity to make it worth your while to invest your time into them further. Training a new employee is a big investment; for a business owner, that might be worth hundreds per hour or at least hundreds per week for a General Manager.
Most business owners have the false idea that the reason new employees, who are non-employable do not ever really become productive employees is because you, the business owner, have not properly trained them. This is a bit like saying one can’t train and educate a student to be a professional in your field because you are not skilled in teaching in your field when the student is illiterate and has an IQ of 75.
One can’t spin straw into gold, it’s just not possible except in fairy tales. So the facts are these: One cannot make a non-employable person employable through training. You are not to blame for not being able to achieve this. Once you understand and fully see these facts, you will be far more successful in dealing with personnel. Based upon experience with thousands of business owners, we’ve found the hardest thing for any owner to grasp is distinguishing the difference between a non-employable person and an employable one. If this were achieved, over 50% of any owner’s problems would be solved. Only the true unemployable make it hard on the rest of us. And they are not easy to detect and handle. Otherwise we would all be much more successful. ■
“Since I had also learned how to organize the business and how to manage the staff better, it was an orderly expansion. The staff and I were able to set mutual goals and targets and work together to achieve them. The staff was happier because we were organized and had a shared purpose.”—Dom Cringoli, Business Owner
unduly: excessively.
The most violated management principle in all practices is the handling of personnel as regards their pay, rewards or bonuses. Of course you want to pay your staff well. Every practice owner should want to do this and naturally they don’t want to be thought of as some kind of a miser.
But what about paying a nice salary when they are not productive, or worse, are a bit destructive as covered earlier? Is this fair? Is it right?
Mr. Hubbard covers this subject better than anyone in the following excerpted article. It applies, not only to your practice, but to all of life, especially our present government, and explains the root cause of our problems with the economy today.
The whole decay of Western government is explained in this seemingly obvious law:
If you reward nonproduction you get nonproduction.
When you penalize production you get nonproduction.
The welfare state can be defined as that state which rewards nonproduction at the expense of production. Let us not then be surprised that we all turn up at last slaves in a starved society. Oddly enough one of the best ways to detect a suppressive person is that he or she stamps on up statistics and condones or rewards down statistics. It makes a suppressive person very happy for everyone to starve to death, for the good worker to be shattered and the bad worker patted on the back.
Draw your own conclusions as to whether or not Western governments (or welfare states) became at last suppressives. For they used the law used by suppressives: If you reward nonproduction you get nonproduction. Although all this is very obvious to us, it seems to have been unknown, overlooked or ignored by twentieth-century governments.
In the conduct of our own affairs in all matters of rewards and penalties we pay sharp heed to the basic laws as above and use this policy:
We award production and up statistics and penalize nonproduction and down statistics. Always.
Also we do it all by statistics – not rumor or personality or who knows who. And we make sure everyone has a statistic of some sort.
We promote by statistic only.
We penalize down statistics only.
Thus, when you think of “rewarding Joe with training to make a good manager out of him and get him over his mistakes,” forget it. That rewards a down statistic. Instead, find an employee with an up statistic, reward it with a promotion and make him a manager.
Never promote a down statistic or demote an up statistic.
Never even hold a hearing [having the office manager call him on his mistakes] on someone with an up statistic. Never accept an ethics report on one – just stamp it “Sorry, Up Statistic” and send it back.
But someone with a steadily down statistic, investigate. Accept and convert [change] any ethics report to a hearing. Look for an early replacement. Gruesomely, in my experience I have only seldom raised a chronically down statistic with orders or persuasion or new plans. I have only raised them with changes of personnel.
So don’t even consider someone with a steadily down statistic as part of the team. Investigate, yes. Try, yes. But if it stays down, don’t fool about. The person is drawing pay and position and privilege for not doing his job and that’s too much reward even there.
If you reward nonproduction you get it.
So specialize in production and everybody wins. Reward it.
All I beat the drum for is that the working worker deserves a break and the working manager deserves his pay and the successful company deserves the fruits of its success.
Only when success is bought by enslavement or rewards are given to bums or thieves will you find me objecting.
This is a new look. It is an honest look.
Pay Raises and Year End Bonuses
Routinely, I’m asked the question, “Should I give a raise in pay every year or according to the CPI (Consumer Price Index) and adjust my employees pay scale for inflation?” or, I’ll get asked, “How much bonus should I give my employees at the end of the year?”
The above article on rewards and penalties should answer your question. If it doesn’t, just ask yourself, “Did the employees as a group provide more service or provide more production than the previous year?” or “Did any one individual produce more?” “Am I profi table enough?”
In our company we play a production game for year-end bonuses. The higher the production, the greater the bonuses.
Here’s what Mr. Hubbard has to say on this subject.
BIG BUSINESS- that squirming worm under the government’s thumb— encourages personnel by raising pay regularly. People get addicted to this. They take no responsibility for their pay beyond working at their jobs… Under proportionate pay, raising it is up to staff since the more and better they work the more money they get. I don’t like the unreality of patting people on the head with pay raises and neither will you when you understand it. I’d rather they made their extra greenbacks by making it themselves right on the job. It’s too ingrained this no-responsibility for income. And it’s a slave mechanism.
So don’t expect to stand in good with people by raising their pay. It’s an old moth-eaten dodge. Leadership is required of you as an executive. The way to be popular is by doing your job well and raising the general income thereby.
In another publication we will cover how to formulate the statistics for each position in a business. Without real workable statistics for each employee, how would you know whether they are up statistic or down statistic?
Furthermore, in a later publication, we’ll cover the financing of the bonus system. After all, how can you pay more in bonuses than you have available without cutting into profits? These are subjects which are beyond the scope of a chapter on Personnel. ■
big business: large corporations.
dodge: a trick or tactic to avoid doing something.
In a society that is increasingly taught that one should be entitled to everything, one is hard pressed to fi nd a solution.
You are up against false ideas about life, especially economic, and false values which have no workability in the real world. Couple that with a failing educational system and you can get pretty hopeless about the future generation, much less your practice.
What I see coming through my doors for employment is much worse than it was even 20 years ago. I’m sure it is the same for you. The illiteracy, tattoos and piercings have multiplied. Personal pride has largely vanished. Health has declined.
Luckily, for us, something can be done about it.
In times like these, one has to be that much sharper. One cannot afford to let things slide. Every person on staff needs to know what they are doing and get to doing it in abundance (sufficient quantity) without sacrifi cing quality.
It starts with the basics. And the basics are these truths by Mr. Hubbard:
“There is a term used in business called “fair exchange.”
Let us apply this to an activity engaged in servicing the public.
We could isolate four conditions of exchange.
1. First consider a group which takes in money but does not deliver anything in exchange. This is called rip-off. It is the “exchange” condition of robbers, tax men, governments and other criminal elements.
2. Second is the condition of partial exchange. The group takes in orders or money for goods and then delivers part of it or a corrupted version of what was ordered. This is called short-changing or “running into debt” in that more and more is owed, in service or goods, by the group.
3. The third condition is the exchange known, legally and in business practice, as “fair exchange.” One takes in orders and money and delivers exactly what has been ordered. Most successful businesses and activities work on the basis of “fair exchange.”
4. The fourth condition of exchange is not common but could be called exchange in abundance. Here one does not give two for one or free service but gives something more valuable than money was received for. Example: The group has diamonds for sale; an average diamond is ordered; the group delivers a blue-white diamond above average. Also it delivers it promptly and with courtesy.
Now, believe it or not, practice income and staff pay depend upon which of the above four exchanges is in practice by (a) the group, or (b) the staff member in the group.
If #1 is in vogue, income will dry up with a thoroughness you wouldn’t believe. Although the TV and movies try to tell one that robbery is the only way to get rich, this is not true. Those who engage upon it, whether they be stickup men, corporate con men or governments, are not long for this world. The bigger the group, the longer it takes for it to fall, but fall it assuredly does. And the individual who takes but does not give ends up with a deep-six in many ways quite rapidly.
deep-six: grave; based on the standard depth of a grave. The second condition of partial exchange can only keep a group or individual going just so long. The end result is painfully a demise of status or position and, most certainly, income. Many “third world countries” and even the bigger ones are in this plight right now. They take in but do not really produce or give. This is what inflation is all about. The unemployment ranks are full of such.
The third condition of “fair exchange” gives one a rather level progress. It is considered “honest,” is socially acceptable and very legal under law. It does not, however, guarantee an expansion or improvement of a group or the lot of a person. It is barely comfortable.
The fourth condition is the preferred one. It is the one I try to operate on and have attempted to for ages. Produce in abundance and try to give better than expected quality. Deliver and get paid for it, for sure, but deliver better than was ordered and more. Always try to write a better story than was expected; always try to deliver a better job than was ordered. Always try to—and deliver—a better result than what was hoped for.
This fourth principle above is almost unknown in business or the arts. Yet it is the key to howling success and expansion.
It is true for the practice, it is true for the individual staff member.
Unions and workers in the auto industry elected to follow exchange number 2 above. This brought about the decline you see in auto companies. Had they elected to follow number 3 they would not be in trouble. Had they elected to follow number 4 they would now be in clover for the world today does not really have a truly good, economical, wreck-free car.
Practices we find in trouble have on their staff rosters #1s (criminal exchange staff) and #2s (partial exchange staff). They usually have too many #2s (partial exchange staff), maybe one #1 (criminal exchange) and rarely more than one or two staff members doing #3, fair exchange.
So a staff of 6 may look like this: 1 criminal exchange, 3 partial exchange, 2 fair exchange = 6. Per survey there are less than 2% of the practices we have dealt with that are #4 exchange in abundance. After our consulting and training, a good number of our clients have practices that are at #4 exchange in abundance. We’ve created more than a few hundred. The causes of this problem in exchange are several.
1. Not being able to spot a #1 criminal exchange staff member.
2. Not being able to spot a #2 partial exchange staff member.
3. Not knowing what to do about it once spotted.
4. Fear of doing anything about it.
5. Having lots of #2 partial exchange staff and not knowing how to get them into at least a #3 fair exchange staff through proper motivation or offloaded.
6. Not knowing how to lead the staff so they want to and know how to move up into #3 fair exchange or #4 exchange in abundance.
7. Not being able to face the fact some people are just not employable and justifying it by thinking nothing can really be done about it anyway as that’s just the way things are and will always be.
The worst crime is thinking you can train a #1 criminal exchange staff member or a #2 partial exchange staff member who refuses to move up into a fair exchange or an abundant exchange staff member.
But you’ll never know until you have systems in place to detect them and see if they are truly non-employable or employable.
My story here will illustrate the power of these management principles, showing never to give up on someone until you have applied the principles to them of statistics and rewards and penalties.
Not long ago I spoke to a business owner who was having a difficult time with his two technicians. Both were non-productive, costing him thousands in lost production per month. They were playing on their computers, texting and generally goofing off when they had no customers to service. They did nothing to help promote for new or more business, did not help with ensuring their schedule was full of work to be done and didn’t even recommend needed service or products to their clients on many occasions. They were being paid a high flat salary which worked out to be about 55% of their actual production, i.e. they were being paid 55% of what the business owner received for their work.
After speaking with his consultant, the business owner made the bold move of putting both of them on a strict percentage of their production. He knew they would not like it, but at this point he was willing for them to quit rather than tolerate more of the same. The technicians then told him they were going to make less money under the new system. The business owner kept his cool and explained to them how they could actually make more, but they were, of course, very leery. They hesitantly accepted it (actually they saw they had no choice) and his tech department soared in production. They did their promoting when necessary, made sure their schedule was full of work to be done, recommended services and products whenever needed and generally had as perfect a tech department as one could possibly have. They were never on their computers playing games or texting as they were too busy producing. Believe it or not, they actually started earning more on the new pay system than before and in fairly short order. He paid them less than 30% of their production. The whole business, which was already doing over a million dollars, promptly went up by 15% and in this economy! Imagine that! He was extremely happy as you can also imagine. The real moral of this story? One doesn’t know what he has until the most rudimentary of management basics are applied – which are management by statistics and rewards and penalties! Proper statistics accurately refl ect real production and tell one and all what you really have in all aspects and even in employability!
Here is a quote by Mr. Hubbard I find most useful in handling personnel:
It’s a really good thing, when you find you have a problem, to discover what effort one is trying to avoid.
Ask yourself if there is any effort you are trying to avoid when it comes to personnel issues. You’ll find it much easier to just start facing them and doing something about them. If you avoid a problem, does it get bigger or smaller? Right. Why let it grow when something can be done about it?
If you wanted to learn about a new software program what would you do?
You would find out more and if you liked what you saw and it was going to help your business grow, you would do whatever you had to do to acquire the program. But first you would need to gain more information, more knowledge. ■
rudimentary: initial; consisting of the first principle from which development takes place.
abundant: plentiful.
actionable: giving sufficient reason to take action.
aptitude test: mainly tests the ability of the applicant to duplicate. It is also designed to measure the accident proneness of the applicant.
breakthrough: a sudden important development or success.
commensurate: corresponding in size or degree; in proportion.
conviction: a firmly held belief or opinion; the quality of showing that one is firmly convinced of something.
cost (at what cost): the loss, sacrifice, suffering, or effort involved in doing something.
deep-six: grave; based on the standard depth of a grave, which is six feet.
defiant: unwilling to change one’s view or to agree; noncompliant.
demote: give a lower rank or less senior position to, often as a punishment.
disenchanted: make disillusioned.
dreary (dreariest): dull, bleak, and depressing.
dynamic(s): an urge toward existence in an area of life.
effort: the physical-force manifestation of motion.
ethics report: the report of an error, mistake or flub causing loss to the business.
exchange: give something and receive something else in return. (Concise Oxford English Dictionary)
false report: report something false, or lie about a report.
faring: proceed or get along.
flows: movement with direction.
gripped: to take hold of mentally; understand; comprehend.
hat: the term and idea of “a hat” comes from conductors or locomotive engineers, etc., each of whom wears a distinctive and different type of headgear. A “hat” therefore designates particular status and duties in an organization. heavy weather: (slang) adverse or diffi cult circumstances.
in vogue: the state of being widely popular and fashionable at a particular time.
lot: a person’s destiny, luck, or condition in life.
management: management concerns itself with the accomplishment of goals otherwise determined. In large companies the goals of the group are normally set forth by boards of directors. When this is done, the goals are assigned to the nebulous word policy. In governments, goals, when they are assigned at all, generally stem from less formal sources.
motivate (motivation): stimulate the interest of.
plight: a dangerous, difficult, or otherwise unfortunate situation.
promotion: making something known and well thought of.
qualified: having met the requirements; competent.
rail against it: to denounce, protest against or attack somebody or something in bitter or harsh language.
scale: a graduated range of values forming a standard system for measuring or grading something.
solvency: only that condition where income exceeds outgo.
statistic(s): a number or amount compared to an earlier number or amount of the same thing. Statistics refer to the quantity of work done or the value of it in money. Abbr. stat(s).
subservient (subservience): prepared to obey others unquestioningly.
suppressive person: a person who possesses a distinct set of characteristics and mental attitudes that cause him to suppress other people in his vicinity. This is a person whose behavior is calculated to be disastrous.
welfare state: a system in which the government assumes primary responsibility for the welfare of its citizens in matters of health care, education, employment and social security.
Visit www.sterling.us to learn more about Management by Statistics by video (approx. 20 minutes long).
Visit www.sterling.us to learn more about the tone level of various people and personnel by video (approx. 20 minutes long).
Download two of our personnel analyses, one for new applicants and one for existing staff, at www.resourcetest.com
Come to a regional 2-day workshop: www.sterling.us
Get a free DVD and free business analysis at www.sterling.us
Speak to someone today: call 1-800-933-7538 and ask for any one of our consultants. They would be very willing to help you with the biggest source of stress in any business: Personnel. They can also have you speak to one of our clients.
Next in “Master Your Business” Series:
Management by Statistics
Business Finances and Building Your Wealth
Marketing for New Customers
Job Descriptions and Standards
Additional copies of this booklet may be obtained on Amazon.com or call us or by e-mail.
Sterling, Inc. 350 West ArdenAvenue, Glendale, CA 91203 Phone: 800-933-7538 or 818-241-1144 Website: www.sterling.us E-mail: info@sterling.us
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