How can we create an atmosphere of enthusiasm among ouremployees? There are five major areas:

1. Effective communication and smooth operatingprocesses
2. Team building
3. Compensation systems
4. Goal setting
5. Evaluations.

1. Effective communication and smooth operatingprocesses

Disciplined processes and good communication are important fromthe standpoint of efficiency and improving client relationships,but there is a secondary result that can be of significantimportance in managing your agency.

When you're paying attention to smoothing out the internalprocesses involved in new business, renewals, billing, claims andaccounting, the entire workflow system improves and clientsatisfaction improves along with it. That, in turn, infuses anatmosphere of competence and capability throughout the agency,which has the natural result of creating enthusiastic employees.People take pride in the work and the workplace and becomeenthusiastic about being a part of it.

Related: Read another column by Philip Lieberman“How Agencies Can Best Measure Client Satisfaction.”

When communication with clients and underwriters becomes clear,professional and caring, misunderstandings and conflicts arereduced. When internal communication improves, tasks get done moreefficiently, unnecessary quarrels are reduced and enthusiasmovertakes discord as the pervasive tone throughout theoffice.

2. Team building

Take an honest look at your overall operations and criticallydecide if a team model seems right for your agency. It's really notunlike departmentalization, but the difference is in the underlyingphilosophy: command and control versus empowerment.

A command-and-control methodology has several disadvantages, notonly for the employees, but for the boss as well. Employees nolonger think for themselves; they follow rules and regulations witha robot-like approach. Intimidation can be a debilitating factorwhen managers react to transgressions with verbal castigation,which is especially demeaning when done publicly. In such anenvironment, even though there are varied gradations of suchbehavior, the opposite of enthusiasm results.

Although the boss may get a psychic reward from being in totalcontrol, micromanaging can result in burnout. Juggling many ballsin the air at one time may be fun at the beginning, but it iswearing and inevitably becomes distracting and inefficient.

Empowerment, on the other hand, benefits bothemployees and management. Workers receive satisfaction frombrainstorming ideas within their teams and seeing those ideas putinto practice. Encouraging staff to think outside of the box anddevelop solutions to seemingly intractable problems raises employeemorale. Managers can oversee the process and guide the direction ofeffort, but they also will benefit from being relieved ofmicromanaging.

Manage the transition to the team model. Some employees,especially those who have functioned in a command-and-controlsetting for years, may find it difficult to cope with a lessstructured environment, with its responsibility and accountability.The change in morale will astound you once it developsmomentum.

Related: Read the article “Energize ClientRelationnships” by Philip Lieberman.

Every team member should become involved in the process of teambuilding: setting goals, establishing the team's overall missionstatement and determining the necessary tasks. It is nothing shortof amazing how buy-in gets created when the rules of the game areset by the players themselves. Yes, there are some techniquesinvolved in the initial and ongoing process of developing teams,but don't let that deter you from getting started. There are a lotof resources available to lean on along the way.

3. Compensation systems

This is one of the most parochial and inflexible areas in agencyoperations. We continue to pay staff the way we always have withoutcritically looking at how enthusiasm can be dampened by outmodedprotocols. Use these ideas to stimulate changes within youragency:

• Commission schedules for producers should reflect yourphilosophy. A typical schedule is one that pays a producer 40percent for new business and 25 percent for renewal. That's basedon a belief that the producer should make a lesser percentage forrenewals than what is paid for new accounts because much of therenewal work is done by internal staff. There's a certain logic tothat thought process, but if the agency puts a high value onretention and encourages its producers to play an active role inthe renewal process, then a 35 percent new and renewal schedulemakes more sense. On the other hand, if the agency feels that itslifeblood comes from new account development and assigns virtuallythe entire renewal process to an account manager or CSR, then a 50percent new and 15 to 20 percent renewal schedule might be a betterfit.
• Agents typically establish pay increases for non-producersusing a percentage matrix. A mediocre employee might receive a 2percent raise while a real star might get 5 or 6 percent. But let'slook at how that plays out. If two CSRs are making $40,000annually, the mediocre performer will get an increase of $16 perweek before taxes, probably $10 per week after taxes. The starperformer will receive a $48 weekly increase, about or $32 extra inher weekly paycheck. So the difference between the star performerand the mediocre one is a big $22 per week—hardly an effectivemotivational tool for anyone, and somewhat unfair toboot.
• Nine or 10 years ago, there was a trend toward variable pay fornon-producers. Under this concept, additional incentives related tobusiness results and individual and/or team objectives supplementbase salaries. Nothing is taken away, but future increases aremostly variable. Attainment of pre-set goals, whether agencywide,teamwide or individual, provides a more tangible and effectiveincentive for employees, including supervisors, and helpsde-emphasize the small salary differentials between the average andthe star performer. It's a better motivational tool and keepspeople focused on what constitutes success in theirjobs.

4. Goal setting

Whether or not you use a variable pay system, setting goals foremployees is a must for a well-run agency. If individuals don'tknow what is expected of them, how can we hold them accountable fornot meeting our expectations? Goals can encompass variousoperational areas, but in setting them up, keep in mind theseimportant aspects:

• They should be aligned with overall agency goals.
• They must be stated in measurable terms; concepts andgeneralized goals don't work. As we've said before, you can'tmanage what you can't measure.
• They have to be attainable, but not too easy to reach. Settingimpossible goals only serves to dampen enthusiasm, not encourageit.
• Design the goals with the team, creating buy-in. They shoulddiscuss important ingredients for success and create achievementstandards based on those factors.
• The rewards should be frequent, not annual. A “rewards bank”can provide a mechanism for quarterly payouts during the year witha final adjustment at year-end.

5. Evaluations

Managers should take the time to have informal and periodicprivate conversations with their employees to discover whatproblems they are having and let them know about improvements theyshould make. That way, by the time the annual performanceevaluation is done, there shouldn't be any surprises.

Related; Read another Lieberman column “Non-clientCommunication.”

Use a standard evaluation form throughout the agency,distributed to all in advance so everyone knows the factors thatare important to management. At each employee's annual review, goover the results so any areas of misunderstanding can be examinedand resolved. Some firms have the employee do their own assessmenton the same form and then compare them with their managers'assessments during the discussion. Either way, the individualshould acknowledge receipt of his or her evaluation inwriting.

If possible, defer any conversation about pay raises for anothertime. When they are done together, many employees will be focusedon the amount of their increase and won't hear or activelyparticipate in the performance discussion. A possible way toarrange this is to have the pay discussion at year-end and theevaluation discussion on the anniversary date of the employee'shiring, thus spreading out the task over the year. This also givesthe employee time to improve his or her performance before itbecomes time to discuss a pay increase.

There's a lot of room to try creative ideas to improve themorale and enthusiasm of staff. What could be more important thatthat?