Today's workplace is different, diverse and constantly changing. The typical employer-employee relationship of old has been turned upside down. The combination of almost limitless job opportunities and limited rewards for employee loyalty has created an environment in which the business needs its employees more than the employees need the business

- especially in the rental industry.

The winners of today's business economy are managers who can create a work environment that attracts, keeps and motivates the workforce.

Today's mobile employees jump ship for as little as a $1-per-hour raise. Because it is so difficult to find help, the first issue to address these days is not finding new employees, but keeping the workforce you already have.

A turnover problem is a serious financial problem. On the average, it costs anywhere from $2,000 to $6,000 to recruit, hire and train a new entry-level employee. It costs even more to replace a manager. Those who maximize the potential, the creative abilities and the talents of the entire workforce will have less turnover and a greater competitive advantage.

To navigate a sea of change, today's workplace must place a high priority on human resources. The most successful businesses are those that provide motivating environments. A work environment that attracts, keeps and motivates its workforce is one that gives workers a sense of pride and purpose in what they do.

Managers have the sole responsibility for creating this work environment. It is up to them to provide the leadership and set the tone for the rest of the organization. (Columnist Roxanne Emmerich takes quite the opposite view, however, on page 30 -Ed.)

Managers can improve their leadership position and motivate individuals within their organizations by following these three keys of success.

1. Provide a positive, encouraging working environment.

2. Recognize, reinforce and reward the right behavior.

3. Involve everyone in the process.

Now let's look at these three key issues a little closer.

1 Provide a positive, encouraging working environment. One of the most important factors is the work environment itself - how employees feel about the company. Employees who like who they work with and have supervisors who are supportive are going to be happier, more content and more productive. The motivated worker is more committed to the job and to the customer.

Keeping employees satisfied today takes an approach that's entirely different from what it was six years ago. Indeed, one-third of the executives surveyed by Robert Half International now say that the work environment is the most critical factor in keeping an employee satisfied in today's business world. In 1993, only 9 percent said that the work environment was an important factor in keeping employees satisfied.

The management consulting firm Kepner-Tregoe conducted a survey in late 1998 of 749 hourly workers and 541 supervisors at U.S. corporations. The response, according to the K-T study, is that top management had done a lot to improve the work environment, but still had not done the most important things that impact the life of the workforce. In the groups they polled, more than two-thirds said their top management had made salaries and financial awards more competitive, yes. But workers and middle managers alike said there were other things to be considered. It wasn't all a matter of money.

Fifty percent of the supervisors and 56 percent of the workers said they didn't have enough resources, such as equipment, time or people to do the jobs they needed to do.

Forty percent of the supervisors and 59 percent of the workers said they didn't get recognition when they did a job well.

Forty-seven percent of the supervisors and 69 percent of the workers said that compensation was not tied to performance.

And compensation is not just cash. Don't discount the power of incentives, perks and a comprehensive employee-benefit program to motivate people. For older workers, benefits have become just as important as the pay they receive. But for entry-level workers, wage, salary and work environment issues are more important than a benefits package.

An informal survey conducted with several rental stores shows that stores that pay better than average are the ones with better retention.

The key is that each individual is different and management is going to have to customize benefit packages, perks and salaries based on individual needs.

A "take it or leave it" approach is no longer a viable position for management; people expect you to care about them, and if you don't, they will find someone who does.

One large rental business has several excellent incentives for its 200-plus employees. Any employee who has perfect attendance during the year receives $300, a limo ride to a restaurant for a free dinner with his/her spouse and a gift certificate worth $100. This employer also reimburses employees up to 50 percent for continuing education, up to a cap of $2,000. Employees who don't take vacation during busy seasons get two extra vacation days.

You can help create a positive work environment by:

• Explaining the company's "big picture" and how this influences growth, and therefore employment.
• Providing feedback on the employee's performance. Be specific; mention a particular situation or activity. (See the May 1999 Rental Management for a full treatment of this issue.)
• Making sure they understand the company's expectations.
• Involving the employee in the decision-making process whenever possible.
• Listening attentively to employees' ideas and suggestions, not just paying them lip service.
• Giving them room to do the job without unnecessary restrictions.
• Offering reimbursement or providing classes for employees to learn new skills or improve old ones.
• Assigning them a coach or mentor to help them with their development.
• Challenging them with lots of responsibility.

2 Recognize, reinforce and reward the right behavior. Mark Twain said, "I can live for two months on a good compliment." Money may attract people to the front door, but something else has to keep them from going out the back. Employees may say they are quitting because of financial reasons, but statistics show that the No. 1 reason people quit their jobs is a lack of recognition and praise.

Reward and recognition is not just a nice thing to do - it's a critical element in the management tool kit. People have a basic human need to feel appreciated, and recognition programs help meet that need.

Management must create consequences for the behavior that is important for the success of the business. A good store is one that develops systems and processes to reward and recognize those behaviors. A "behavior" could be showing up for work on time, having perfect attendance or going over and beyond the call of duty for customers - or any other behavior that creates a successful rental business. Reward and recognition programs help generate and sustain that important behavior.

One example of a reward-and-recognition tool is "peer recognition." In a peer-recognition environment, employees have the power to reward each other for doing a good job. Peer recognition works because employees themselves know who works hard and deserves recognition. Managers can't be everywhere all the time. Therefore, the employees are in the best position to catch people doing the right things. Also, workers usually value each other's influence more than their supervisor's - it's the positive version of peer pressure. And it is one of the easiest and most effective programs to set up.

I worked with one store that developed a program called "My Shining Star!" Workers had access to an unlimited supply of "My Shining Star!" forms to hand-write a little note about the good job their co-workers were doing. On the back of the form, the store listed the behaviors that management wanted to recognize, such as:

• Demonstrates friendly, caring service.
• Shows flexibility.
• Demonstrates teamwork.
• Helps us save money.

When the employee writes up a co-worker, the form goes to the main office to be posted on a central bulletin board for all employees to see.

In addition, the store formally recognizes the employee who received the highest number of forms at the end of each month. That person receives a special gift from the store manager. Then all the forms given out during the month are put into a basket and names are randomly drawn for additional prizes. The forms are read aloud and recognition is given to both the awardee and the person submitting the form.

Mike Frost of Aztec Rental in Douglasville, Ga., has several recognition programs he started at his company. Mike writes notes of encouragement and recognition to his employees in their paycheck envelopes.

Another program involves a ceremonial coin that is passed around from co-worker to co-worker - a form of peer-recognition. Each person decides whom he or she wants to award by passing on the coin. Mike has a special memory of a day when one of his workers gave him the coin and told him how much he appreciated what Frost did.

No matter who we are, we all need to feel appreciated - even the boss.

Building a motivating peer reward and recognition program follows the FAST-FUN formula:

F - Focus on the behavior you want to reward.

A - Avoid bureaucratic judging and committees.

S - Simplicity: do not make your program too complicated or formal.

T - Team ownership: let the employees run it and own it.

FUN - Make it fun, entertaining and as spontaneous as possible.

3 Involve everyone in the process. Rental stores should go beyond merely employing employees' hands and also involve their minds, their ideas and their hearts. One rental store owner advises, "Be willing to share all the information about the business to everyone in the company." Studies show that having workers involved at all levels has a major impact on improving morale and motivation and retention.

Think your employees won't all understand the financial information? The competitive environment? Business strategies? Well, here's a great opportunity to explain things to them so they will. They'll be grateful and better informed, and your business will be more profitable and better served.

Tom Fouts, owner of Bledsoe's Equipment, Lee's Summit, Mo., and chairman of the A.R.A. General Tool and Equipment Services Special Interest Group, has done a lot to involve his managers and his hourly workers in making important decisions. Fouts' philosophy is, "More heads are better than one." His employees help decide what items of equipment Fouts should buy. Plus, he allows them to use any rental equipment they want for their personal use.

Paying people better helps attract and keep a higher-caliber workforce. In order to improve his benefit package, Fouts just started using a company called Simplified Employee Services. SES has taken over the administrative management of his employees. He leases them back from SES and now he's able to provide excellent benefits, including an affordable insurance program that before would have been impossible.

It doesn't take a tremendous amount of money and fancy benefits to provide a positive and attractive work environment. TD Industries in Dallas has a unique way of making its employees feel valued and involved. One wall has photographs of all employees who have been with the company more than five years.

A dealership in Louisville, Ky., has almost eliminated turnover and created a great place to work. Employees enjoy a profit-sharing plan that could mean as much as several hundred thousand dollars upon retirement. They are eligible to participate after one year and become fully vested after six years. The owner hasn't lost anyone after he/she became vested.

Other incentives that are included:

• Family members receive 100 percent of the health insurance coverage after the spouse is on the job for five years.
• Every year employees get a cake to celebrate their anniversary with the company - along with $100 for each year of service.
• Twice a year, employees' children get a $50 savings bond if they bring in an "all A's" report card.
• Employees' safety records are recognized under the "Safety Bonus Program." Each employee's driving record is screened twice a year. Any-one who has a citation during the year is removed from the program.
• At the end of the year, the ones who remain get to split $2,000.
• To minimize the "us-them" syndrome, employees rotate jobs for one hour every Friday. The person in the parts department gets to be a service technician and vice versa. This builds a stronger team and improves communication within the company.

I worked with one store that wanted to design a more customer-focused and bottom-up, employee-driven store where everyone could take ownership. The end result was a task force consisting of supervisors, managers and front-line employees who worked together and designed a pocket card with the "20 Commandments of Customer Service." Now all managers and employees carry this card with them at all times. The store is enjoying improved employee attitudes, reduced turnover and a rising level of customer service in the store.

Winston Churchill said, "America always does the right thing, after they try everything else first." But organizations don't have to try everything before learning how to improve the workplace. Transforming workers to winners isn't about magic, and it certainly isn't only about money. A motivated worker will contribute vitality and energy to the organization, infusing it with tremendous productivity and a competitive edge - as well as providing value to customers and contributing to your success.

It is about creating a work environment in which people enjoy what they do, feel like they have a purpose and believe they are reaching their potential. That requires more time, more skills and managers who care and are willing to try something different. It requires true leadership.

Copyright © 2000 American Rental Association. All rights reserved.