The Cost of Poor Management: A Cautionary Tale

I once consulted with a small business owner who complained about her employees’ performance. I suggested that she devote a half hour of her morning to conduct a daily coaching meeting with each of her five employees, to get to know them as individuals, to clarify and assess progress on work assignments, and to resolve any problems. I also suggested that she hold an all-employee meeting at least twice a week, so the employees would know what each other was doing and feel part of a team with a common goal.

She responded that she didn’t have time to do that. I recommended that she consider delegating some of her responsibilities so she had the time, but she didn’t feel that she could that, either. A year later, I learned that the company had closed its doors.

Let’s consider why.

The owner’s decision not to give each employee individual attention left the employees with the feeling that she didn’t care about them, either as employees or as individuals. Her decision not to conduct team meetings left the employees feeling isolated and adrift.

Most people want to do a good job. Her employees were no exception. But to do a good job, employees need:

  • Clarity of work assignments and performance expectations.
  • Communication of company goals and constructive feedback.
  • Coaching to develop and grow their skills and abilities.
  • Consideration of their needs for resources and for recognition.
  • Community to feel they belong and are valued.

Her employees lacked all of this, and so became disengaged and eventually left the company.

There was a financial cost for their low engagement and high turnover. Disengaged employees cost companies $3,400 for every $10,000 they make in salary. When those employees leave, it costs the company over $5000 per employee. It’s not difficult to understand why the company couldn’t survive.

Unfortunately, this business owner’s story is not unique.  Where have you seen this happen in other companies?

#business #management #highturnover #disengagedemployees #peerlearninginstitute

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