Motivating Employees

Motivating Employees

Small businesses sometimes face special problems in motivating employees. In a large company, a good employee can see an opportunity to advance into management. In a small company, you are the management. One thing you may wish to consider is to give good employees a small share of the profits, either through part ownership or a profit-sharing plan. Someone who has a “share of the action” is going to be more concerned about helping to make a success of the business.

Personnel Training

Personnel Training

A well-selected employee is only a potential asset to your business. Whether or not he or she becomes a real asset depends upon personnel training.


To allow sufficient time for training.

Not to expect too much from the trainee in too short a time.

 To let the employee learn by performing under actual working conditions, with close supervision.

To follow up on your training.

 Check the employee’s performance after he or she has been at work for a time. Re-explain key points and short cuts; bring the employee up to date on new developments and encourage questions. Training is a continuous process which becomes constructive supervision.

Personnel Supervision

Supervision is the third essential of personnel control. Good supervision will reduce the cost of operating your business by cutting down on the number of employee errors. If errors are corrected early, employees will get more satisfaction from their jobs and perform better.

Personnel Selection

Personnel Selection

If your business will be large enough to require outside help, an important responsibility will be personnel selection and training of one or more employees. You may start out with family members or business partners to help you. But if the business grows – as you hope it will – the time will come when you must select and train personnel.


Careful choice of personnel is essential. To select the right employees determine beforehand what you want each one to do.


Then look for applicants to fill these particular needs. In a small business you will need flexible employees who can shift from task to task as required. Include this in the description of the jobs you wish to fill. At the same time, look ahead and plan your hiring to assure an organization of individuals capable of performing every essential function. In a retail store, a salesperson may also do stock keeping or bookkeeping at the outset, but as the business grows you will need sales people, stock keepers and bookkeepers.


Once the job descriptions are written, line up applicants from whom to make a selection. Do not be swayed by customers who may suggest relatives. If the applicant does not succeed, you may lose a customer as well as an employee.


Some sources of possible new employees are:


1. Recommendations by friends, business acquaintances.


2. Employment  agencies.                       


3. Placement bureaus of high schools, business schools, and colleges.


4. Trade and industrial associations.


5. Help-wanted ads in local newspapers.


6. local internet job sites


Your next task is to screen want ad responses and/or application forms sent by employment agencies. Some applicants will be eliminated sight unseen. For each of the others, the application form or letter will serve as a basis for the interview that should be conducted in private. Put the applicant at ease by describing your business in general and the job in particular. Once you have done this, encourage the applicant to talk. Selecting the right person is extremely important. Ask your questions carefully to find out everything about the applicant that is pertinent to the job.


References are a must, and should be checked before making a final decision. Check through a personal visit or a phone call directly to the applicant’s immediate former supervisor, if possible. Verify that the information given you is correct. Consider, with judgment, any negative comments you hear and what is not said.


Checking references can bring to light significant information that may save you money and future inconvenience.


THE PSYCHOLOGY OF SUCCESSFUL CAREER CHOICE and Inner Quest is not something you lean in graduate school, you learn it in living.

“Know thyself” was the motto that Socrates learned from the Oracle atDelphi. It is ancient wisdom, true today as it was in ancientGreece.  At some point in your life, you must make the decision to find your true self. Otherwise, you are destined to live with a false self, interpersonal conflicts, and career dissatisfaction.

 Career reassessment typically comes in mid-life when failures in outer solutions trigger the classic “mid-life, psycho-social crisis.” Almost everyone is challenged to find their purpose in life by the time their days on earth are half numbered. Making this decision initiates a major turning point in the course of your life.

 Traditionally we think only of ministers and doctors as having a “calling” but in reality everyone has a calling. Initially people are scared by the idea of an inward quest and fear they will fail. Self-conflict that appears in the form of external obstacles is the main reason callings are not pursued.

 If your current job bothers you a lot, for example, you may be so irritated that an alternative cannot even occur to you. Many people choose to ignore the quest of their calling, and try to live in a rational material world, using only their goal-oriented left-brain, or they reside in an imaginary emotional world of self-doubt, using only their right-brain.

 A meaningful career choice arises from the resource of your own integrated mind and from nowhere else. All the skills and knowledge necessary to enact your life-purpose are directly and fully possessed within you psychologically. Once a career has been identified from an internal source, it cannot be wrong, discounted by others or pursued half-heartedly.

 Prevailing wisdom about career change sees it exclusively as a logical problem of how to adapt your aptitudes and personality to corporate needs. This approach implies that the economy is rational,and that you are not, unless you conform.

 More traditional approaches to career counseling overlook the psychological and spiritual foundation to career choice and change outlined in this article. Where and how you chose to use your skills and knowledge in life are ultimately and always a question of inner values and your relationship to yourself.


THE PSYCHOLOGY OF SUCCESSFUL CAREER CHOICE & CHANGE starts with SELF-DISCOVERY. Doing work that is not satisfying reflects a basic conflict you have with yourself. You may think your career causes the conflict, and that if you change careers, the conflict will go away. But, you cannot pick the right career for you without first starting to resolve the conflict in your mind. 


The conflict caused you to pick the wrong career to begin with, and now causes work dissatisfaction. The place to begin changing careers is with your self-conflict. If you do not, dissatisfaction will just show up in whatever work you choose next. Then you will have another reason to be upset with yourself.


This basic principle holds true for personal relationships too – – if you just change partners, the same problems are reproduced in the new relationship. The truth is, conflict you have with work is the same conflict you have with family, friends and relatives. Self-conflict takes many forms, but there is only one underlying cause – -how you relate to you in your mind.


Over time self-conflict may also show up as physical symptoms of illness and disease in your body. This is because mental health, physical health and work satisfaction are intertwined. Anyone who believes career dissatisfaction is determined by outside factors, however, will also find

external explanations for health problems and inter-personal misunderstandings.


A conflict with work, therefore, expresses a hidden conflict within yourself.  When we are young, we tend to see our problems as imposed, and solved, by external means. Explanations may range, for example, from environmental (“a bad job market”) to circumstantial (“a bad boss”). To overcome these adversities is the very reason we strive to attain the highest income and best career possible.


But this strategy must inevitably break down, since it locates the reasons for conflict outside yourself. Beneath appearances, there is only one problem, and it is the relationship of you with you. Understanding this principle requires some insight and maturity, techniques that contradict external and superficial points of view.


Individuals do not ordinarily attain a more contemplative attitude toward life before the age of “thirty-something.” Until then, you think your career is created by economic opportunities, influential connections, quality of higher education, family background, good fortune and hard work.



Whether you operate a factory, wholesale outlet, retail store, service shop, or are a contractor, selling will be required for success. No matter how good your product is, no matter what consumers think of it, you must sell to survive.


Direct selling methods are through personal sales efforts, advertising and, for many businesses, display – including the packaging and styling of the product itself – in windows, in the establishment, or both. Establishing a good reputation with the general public through courtesy and special services is an indirect method of selling. While the latter should never be neglected, this brief discussion will be confined to direct selling methods.


To establish your business on a firm footing requires a great deal of aggressive personal selling. You may have established competition to overcome. Or, if your idea is new with little or no competition, you have the extra problem of convincing people of the value of the new idea. Personal selling work is almost always necessary to accomplish this. If you are not a good salesperson, seek an employee or associate who is.


A second way to build sales is by advertising. This may be done through newspapers, shopping papers, the yellow pages section of the telephone directory, and other published periodicals; radio and television; handbills, and direct mail. The media you select, as well as the message and style of presentation, will depend upon the particular customers you wish to reach. Plan and prepare advertising carefully, or it will be ineffective. Most media will be able to describe the characteristics of their audience (readers, listeners, etc.). Since your initial planning described the characteristics of your potential customers, you want to match these characteristics with the media audience. If you are selling expensive jewelry, don’t advertise in high school newspapers. If you repair bicycles, you probably should.


Advertising can be very expensive. It is wise to place a limit upon an amount to spend, then stay within that limit. To help you in determining how much to spend, study the operating ratios of similar businesses. Media advertising salespeople will help you plan and even prepare advertisements for you. Be sure to tell them your budget limitations.


A third method of stimulating sales is effective displays both in your place of business and outside it. If you have had no previous experience in display work, you will want to study the subject or turn the task over to someone else. Observe displays of other businesses and read books, trade magazines, and the literature supplied by equipment manufacturers. It may be wise to hire a display expert for your opening display and special events, or you may obtain the services of one on a part-time basis. Much depends on your type of business and what it requires.


The proper amount and types of selling effort to use vary from business to business and from owner to owner. Some businesses prosper with low-key sales efforts. Others, like the used-car lots, thrive on aggressive, hoop-la promotions. In any event, the importance of effective selling cannot be over-emphasized.


On the other hand, don’t lose sight of your major objective – to make a profit. Anyone can produce a large sales volume selling dollar bills for ninety cents. But that won’t last long. So keep control of your costs, and price your product carefully.



Much of your success in business will depend on how you price your goods and services. If your prices are too low, you will not cover expenses; too high and you will lose sales volume. In both cases, you will not make a profit.


Before opening your business you must decide upon the general price level you expect to maintain. Will you cater to people buying in the high, medium, or low price range? Your choice of location, appearance of your establishment, quality of goods handled, and services to be offered will all depend on the customers you hope to attract, and so will your prices.


After establishing this general price level, you are ready to price individual items. In general, the price of an item must cover the cost of the item, all other costs, plus a profit. Thus, you will have to markup the item by a certain amount to cover costs and earn a profit. In a business that sells few items, total costs can easily be allocated to each item and a markup quickly determined. With a variety of items, allocating costs and determining markup may require an accountant. In retail operations, goods are often marked up by 50 to 100 percent or more just to earn a 5% to 10% profit!


Let us work through a markup example. Suppose your company sells one product, Product A. The supplier sells Product A to you for $5.00 each. You and your accountant determine the costs entailed in selling Product A are $4.00 per item, and you want a $1 per item profit. What is your markup? Well, the selling price is: $5 plus $4 plus $1 or $10; the markup therefore is $5. As a percentage, it is 100% ($5 markup = $5 cost of the item). So you have to markup Product A by 100% to make a 10% profit!


Many small firms are interested in knowing what industry markup norms are for various products. Wholesalers, distributors, trade associations and business research companies publish a huge variety of such ratios and business statistics. They are useful as guidelines. Another ratio (in addition to the markup percentage) important to small firms is the Gross Margin Percentage (GMP).


The GMP is similar to your markup percentage but whereas markup refers to the percent above the cost to you of each item that you must set the selling price in order to cover all other costs and earn profits, the GMP shows the relationship between sales revenues minus the cost of the item, which is your gross margin, and your sales revenues. What the GMP is telling you is that your markup bears a certain relationship to your sales revenues. The markup percentage and the GMP are essentially the same formula, with the markup referring to individual item pricing and GMP referring to the item prices times the number of items sold (volume).


Perhaps an example will clarify the point. Your firm sells Product Z. It costs you $.70 each and you decide to sell it for $1 each to cover costs and profit. Your markup is 43%. Now let up say you sold 10,000 Product Z’s Iast month thus producing $10,000 in revenues. Your cost to purchase Product Z was $7000; your gross margin was $3,000 (revenues minus cost of goods sold). This is also your gross markup for the month’s volume. Your GMP would be 30% . Both of these percentages use the same basic numbers, differing only in division. Both are used to establish a pricing system. And both are published and can be used as guidelines for small firms starting out. Often managers determine what Gross Margin Percentage they will need to earn a profit and simply go to a published Markup Table to find the percentage markup that correlates with that margin requirement.


While this discussion of pricing may appear, in some respects, to be directed only to the pricing of retail merchandise it can be applied to other types of businesses as well. For services the markup must cover selling and administrative costs in addition to the direct cost of performing a particular service. If you are manufacturing a product, the costs of direct labor, materials and supplies, parts purchased from other concerns, special tools and equipment, plant overhead, selling and administrative expenses must be carefully estimated. To compute a cost per unit requires an estimate of the number of units you plan to produce. Before your factory becomes too large it would be wise to consult an accountant about a cost accounting system.


Not all items are marked up by the average markup. Luxury articles will take more, staples less. For instance, increased sales volume from a lower-than-average markup on a certain item – a “loss leader” – may bring a higher gross profit unless the price is lowered too much. Then the resulting increase in sales will not raise the total gross profit enough to compensate for the low price.


Sometimes you may wish to sell a certain item or service at a lower markup in order to increase store traffic with the hope of increasing sales of regularly priced merchandise or generating a large number of new service contracts. Competitors’ prices will also govern your prices. You cannot sell a product if your competitor is greatly underselling you. These and other reasons may cause you to vary your markup among items and services. There is no magic formula that will work on every product or every service all of the time. But you should keep in mind the overall average markup which you need to make a profit.