Two customers call in. One job is routine and quick; but, will be in the lower levels of profit margin. The second job is much more involved, will take a greater level of skill and customer service. However, the profit margin is at the top of your range. In most cases, your best people will be on the second job.
Employees need to know the relational value of each job
The employees do not need or care about the details of profitability. They are not looking for a spreadsheet. They are looking for a heads up on the jobs which are more important to both you and them. The employees of one of the companies I worked for knew certain service lines were less valuable than others. They also knew, in general terms, the levels which each service line fell. One of the ways they knew this was how much they were paid. Those of you who have technical employees may have different pay rates based on what the employee is actually doing. The employees will figure it out quickly from there.
What I have also found is many employees have no clue the value of different jobs. Obviously, this is especially true with new employees. Communicating openly about the value to the employees is very important. A general sense from you is more than enough. One of the benefits of communicating this information is the better employees will see how they can maximize their value to you and themselves.
This is an easy way to identify better employees
The better employees understand the higher level jobs require more revenue, higher profits and will afford higher pay rates. They also understand they will need the appropriate skills and development. This employee thought process will assist in closing your skills gap. The organization will always have the ability to manage what skills they need in different locations.
Many times we had to direct employees into the areas which we needed them. Seldom did we have any blowback. They just wanted to move up and make more money. In the long run these opportunities also helped to further reduce our turnover and increase engagement. The employees felt more like they were part of the organization and not just a number.
I have had many employees express gratitude to the company “looking out for them”.
