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At one time or another everyone has known someone with a bad attitude – and these people often are easy to spot. Some of them outwardly grumble, whine and complain while others inject conversations with sarcasm. Many will claim they could run an operation better than the boss, though they rarely take the initiative to do so. As Bob Clements, president, Bob Clements International, Kansas City, Mo., explained, one employee’s lousy attitude can rub off on the rest of a company’s staff.
“Attitude is everything in business, and people who don’t have good attitudes will bring down a company,” Clements said during his presentation “Winning in Business” at the Lawn & Landscape Conference and Trade Show in Atlanta, Ga., March 5. “A bad apple never gets better no matter how many good apples are surrounding it. So, until you get rid of the bad apples at your company you won’t be able to turn the rest of the company around.”
Clements went on to explain that while many business owners are hesitant to fire employees – especially company veterans – it’s a necessary business evil. On the bright side, he noted, “When these people leave you won’t have to replace them because everyone else’s energy will go up.” So, in addition to improving overall employee morale, eliminating bad apples also can increase a company’s productivity.
In fact, employees with progressively bad attitudes often are the least effective people a company can have on staff, according to Clements’ formula for developing an “Overall Effectiveness Rating” (OER). “On average, most companies have an OER of 55 to 57 percent, which means that almost half of the money invested in their employees isn’t being returned,” he explained. On the motivation/competence continuum he developed, Clements created six employee effectiveness categories, each of which produces a different OER.
1. Motivated / Low Competence – OER 50: This category often includes new employees who are motivated and eager to work, but have few if any skills. Companies need to spend a lot to train these employees, but only get a 50-percent return on investment.
2. Motivated / Competent – OER 75: Employees who have been with a company for three to six months usually fall into this category. They still require some management, but are learning the ropes and becoming more productive.
3. Motivated / High Competence – OER 100: Every dollar spent on these ideal employees is returned in full. They require no management, provide input on company operations and are excited to do their jobs.
4. Unmotivated / High Competence – OER 80: These employees may be in a personal or business rut and lose productivity as a result. They probably are still making it to work on time, and require no management, but contribute ideas less frequently or not at all.
5. Unmotivated / Competent – OER 50: Though these employees may have been with the company for some time, they are no more productive than a new employee. Often, these employees work only to collect a paycheck and need more management as their work quality and attitude slip.
6. Unmotivated / Low Competence – OER 20: As scary as it may seem, these employees are essentially stealing from their employers by producing very little but still taking home a paycheck. Not only has their work slipped a great deal, but also their complaints about the company will often be made to other workers rather than to management, effectively bringing down other employees’ attitudes.
Using these categories, Clements showed session attendees how to calculate their own company’s OER in a few simple steps. First, determine the number of employees your company has per category. Then, for each category, multiply the number of employees by that category’s OER. Add up the total OER and divide by the total number of employees to determine the company’s OER.
Category OER x Employees = Total
Motivated / Low Competence 50 _____________ = ______
Motivated / Competent 75 _____________ = ______
Motivated / High Competence 100 _____________ = ______
Unmotivated / High Competence 80 _____________ = ______
Unmotivated / Competent 50 _____________ = ______
Unmotivated / Low Competence 20 _____________ = ______
Total OER = ______
Total OER/Total number of employees = Company OER _________
In terms of financial calculations, multiplying the company’s total annual payroll by the company OER yields the cost to the company’s net profit. For a company with $1 million in payroll, a 70-percent OER means that the company is losing 30 percent or $300,000 of its investment in employees. If that same company makes 5 percent net profit, it would have to create $6 million more in sales to cover the loss.
Though Clements reiterated the importance of terminating employees who bring down the company’s OER and fellow workers, he also noted that hiring the right employees in the first place could guard against attitude problems later on. “For a $5,000 piece of equipment you would research the manufacturer, demo the product, compare prices and find out what other contractors thought about it,” Clements said. “Why wouldn’t you do the same thing when you hire an employee who could be receiving a salary of $30,000 or more? Investing in the right people to begin with helps company’s stay effective and profitable for the long term.”
The author is associate editor of Lawn & Landscape magazine and can be reached at lspiers@lawnandlandscape.com.