And in good times or bad, employees determine profitability. The question is, are yours good enough? And if the numbers are not where they should be, what can you do?



The first step is a close examination of your business model and infrastructure. Is it viable and how does it look in the next one to five years? The next step is to look at your people. Can do they do the job? Can they provide customer value and specifically what value do they bring to your company?

Look at what form of company structure and organization will be necessary to meet your future needs. Specifically focus on what will your future customer want? What kinds of employees will be needed to service your future customer?

Make an employee list and rate each employee's value to your company. Keep it simple. One method is to use the ABC rating: A for keepers, B for those with 'maybe' or 'twilight zone' and C for those that clearly need to be cycled out.

Failure to do this puts your company's equity on a spinning roulette wheel, meaning your company must rely on outside miracles -- like a rapid turnaround in the national economy -- for your profit and loss statements to improve. Las Vegas, anyone?

Another key to determining an employee's value is is to rate them on measurable productivity tasks, such as how many units they produce an hour or their monthly sales total.

It is important to remember you can measure almost anything such as customer satisfaction or number of hours of service billed. Make certain you measure what is important to driving customer value and your company's profitability which should be the same thing.

Also think about employee intangibles: are they a team player, do they help company morale, do they get along with co-workers, and are they a fit with the company culture? If an employee is disruptive or not a team player how can they be a productive team member?

By looking at these 'soft' skills you will get a more complete picture of your employee's true contribution.

You may be surprised at which employees may not have a spot in your future company. That's because the employee of today may not be appropriate tomorrow.

Once you have determined you have inappropriate employees, you will have to recruit new ones. If you are not willing to recruit and replace, how can you improve?

This isn't rocket science. The corrective actions you take depend on your company's specific circumstances. But from a strategic standpoint, you can either maintain the status quo including poor results, or change. The real problem is the amount of hard work required to make positive change happen.

The temptation to go back to the 'bad numbers' comfort zone is so strong, only the most driven owners will be willing to pay the price required to get the numbers to work. That is why most businesses aren't successful. It takes real effort to get out of the comfort zone and to get real improvement.

If you are not up to the challenge then it's time to look at your exit strategy and move on. Owners that neglect their businesses or see it as something they would rather not do simply end up paying themselves with their assets or what they have already earned.

From a cash flow stand point, mediocre employees and minimal performance is just not worth the effort. Better to get a job with someone else, no?

If your employees are not good enough the odds are your competition will find a way to beat you with better employees. With most businesses today, regardless of horizontal or vertical markets, employees are the competitive edge.

Stay consistent and always keep asking yourself "are our people good enough"?