4. ORGANIZING YOUR MANAGEMENT FOR BUSINESS EXPANSION

SET EMPLOYEES' RESPONSIBILITIES BY PREPARING JOB DESCRIPTIONS | DELEGATE AUTHORITY TO HANDLE RESPONSIBILITY | COMPENSATE FAIRLY | EVALUATE EMPLOYEE PROGRESS | SELECT AND TRAIN EMPLOYEES CAREFULLY.

Organizing an efficient management can turn a one-man business into a large scale business. Without an organization, there are distinct and rigid limitations on how far one man can go in his business. It always takes employees to grow. The difference be­tween a local store grossing $1,000 a week and a super-market grossing $8,000 a week is often attributed to their organization. The merchant who personally unpacks shipments, stacks goods on shelves, wraps packages and acts as cashier has that much less time per day for waiting on customers. But one manager, plus an organization, can handle thousands of transactions daily. Hiring help is only part of an efficient business. They must be welded into a unified firm.

PREPARE JOB DESCRIPTIONS

Having employees is not the same as having an organization. The first step in converting a relatively unorganized group of employees into a real organization is to discover what they are currently doing. The next step is to define and align their duties and responsibilities by making a job description of each employee function. When these descriptions have been written down and examined, you can assign duties on a more efficient, more logical and more equitable basis.

DELEGATE AUTHORITY

After redefining job functions, authority sufficient to dis­charge the duties should be delegated. Assigning responsibilities without delegating the powers which go with them is unfair and impractical. The supervisor who has no right to hire, fire or discipline does not have authority in keeping with his respon­sibility.

When defining jobs and delegating authority, avoid or elim­inate overlapping. A delegation is effective only if it is clear-cut and if its scope and definition are known to others in the organi­zation. Limiting authority is as important as giving it. An execu­tive should know how far he can go without trespassing on another's territory.

Businessmen often make two errors in this field: (1) they prefer to imply rather than state authority; (2) they do not re­spect the boundaries they themselves have laid down. They "cut across channels" and sometimes so hurt an organization by caus­ing resignations, frustrations, and resentment on the part of executives so treated.

COMPENSATE FAIRLY

The salary paid to a specific executive should approximate those paid for comparable jobs in the company, in the area and elsewhere in the industry. It must also fairly reflect his responsi­bilities. A salary is significant not only in terms of the purchasing power and living standards, but also as a measure of the execu­tive's importance and prestige.

His salary should be sufficiently larger than that of his best paid subordinate to reflect substantially the difference in their ranks. It is a mistake, for example, except under abnormal condi­tions, for a company to pay supervisors less than the workers under them receive because of shift differentials and overtime. A supervisor's status can be badly undermined as a result.

No employee or executive should have his responsibilities in­creased without receiving a comparable increase in  pay. Set a range for every job, from the minimum or starting wage to the maximum for that position, including length-of-service increases, within the range set for the particular job.

Of course, once a maximum is set for a particular position, the question arises about what to do with the employee who reaches that maximum? You cannot go on increasing the maxi­mum; this would not only upset and confuse the compensation schedule, but would also lessen the employee's incentive to take on additional or higher responsibilities. The way to meet this difficulty is by promoting individuals to higher jobs and training them to move ahead.

In more important positions, the value of salary increases as incentives has been greatly impaired by income taxes. Com­panies have partially overcome this condition by granting special privileges to executives in lieu of substantially higher pay, such as by providing—

Retirement pay plans which can help to lessen taxes and provide future security.

Fringe benefits, such as vacation pay, hospitalization, group life insurance, and health insurance.

EVALUATE EMPLOYEE PROGRESS

Reviews should be carried out periodically to include not only the progress of individual employees, but also of depart­ments and the company as a unit. Your business should grow, on the average, 20 percent a year. One way to keep growing is to encourage your employees and executives. If their progress is regularly checked and recognized, your organization is thereby kept "on its toes" and the benefits of your growth are passed down the line.

SELECT AND TRAIN EMPLOYEES

Training should have long-term objectives and not be con­fined to learning an immediate job. Moreover, no employee is fully trained for a given position until he is able to supervise others in doing the work, so that employees who show any promise at all should be instructed early in the art of super­vising.

Training also calls for indoctrination in the company's policies and procedures, a knowledge of company products and the position of the company in the industry and the community. This can be provided by an employee manual, a copy of which sould be given each new employee.

Are You Ready To Move Onto The Next Lesson? Click Here….