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Big Changes Require Training and Communication

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A few weeks ago I had a friend call me to say he is leaving the company he has been with for 23 years. He was a service manager for a fairly large HVAC and Plumbing residential service business in a neighboring state and he said he was just fed up with the new management and the new pricing methods. After all of those years with the same business, he left to go work for the nearest competitor.

I asked what was going on and he explained that the new general manager implemented a menu-based pricing system, converted to a pay for performance pay structure that basically paid a flat fee per service call with additional pay based on how much you earned per call. Previously, pricing had been based on time and material. He believed all the company cared about was bringing in the most money possible with no concern for customers, quality, or employees.

I tried to point out to him that most successful residential service businesses operate with a flat rate or upfront type of pricing system and even I recommended this change to his company. He tells me this probably isn’t the same thing. So I wished him luck, told him to keep in touch, and I decided to do some research.

After several emails, phone messages, and missed calls, I finally got in touch with the business owner. He did say they changed pricing methods to more of a menu based system, they did convert to commission based pay, but did not know that people had resigned. This confused me because he was the business owner and wasn’t aware of what was going on in his business? I did not realize that he basically has been absent for several months and turned over operations to his general manager and assumed everything was running smoothly and based on what he saw in the financials, things kept looking better each week. Unfortunately he was not totally aware of what was really going on.

After some research and a few site visits I realized that employees were given no training, not allowed an option for feedback, not involved in planning, nor were they given any sufficient notice of changes to come in the future. Basically, they were told with one week’s notice that the pay structure was changing, the pricing methods were changing, and that if they could not adapt, they should look for employment elsewhere. Seemed like a real team leader approach to making change, isn’t it?

I did get back with the business owner and now I’m trying to fix everything that has been handled so poorly. Making changes in employee pay structure is not something you throw at people and say “Take it or leave.” Communication is very essential in getting buy-in from everyone in the business. Had this general manager taken the time to properly communicate the changes, spent time training employees on how to properly communicate using the new pricing system and explained the benefits, all of the problems created would not have been there. The fact that the owner did not make an effort to be around to communicate this information was also very troubling to me. Want to get everyone to hate you in your business? Disappear when there are major changes and don’t return phone calls.

When major changes come about in an organization that wants to keep the current team of people engaged, it is essential that they are part of the change process, this will help in the implementation and buy-in of the program. Also, when you want employees to do something different that results in the way they get paid, getting them involved is a priority.

The last thing you want is to have your highest performing people disappear and take their customers with them. This could have all been avoided with communication.

Frank Besednjak

Posted In: Management

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