The more our people earn the more I like it!


The more our people earn the more I like it!

Jurek Leon - Tuesday, March 04, 2008

by Jurek Leon

Can you imagine the grossly overpaid chief executives at many of our underperforming large institutions saying “the more our people earn the more I like it”?

It seems that the more they can screw their workers, cut jobs and put in faceless call centres and other cost cutting ‘services’ the fatter the pay rise they are able to award themselves.

They mouth platitudes such as “our people are our greatest asset” and “customers are our number one priority” but their actions tell a different story.

I try to imagine how different it would be if John Timpson was the managing director.

John who?

John Timpson is Chairman of Timpson Ltd, a company that celebrated its 100th anniversary a few years ago, and his son James is managing director.

Timpson’s practises what John calls ‘Upside Down Management’.  And it must be working because on the four occasions they have taken part in the prestigious Sunday Times best companies to work for in the UK they have made the top ten.

Timpson are not part of the dot com revolution and John Timpson is no Richard Branson type entrepreneur.  Timpson’s 550 outlets in England, Scotland, Wales and Ireland offer shoe repair, key cutting, engraving and watch repair services. 

“We manage our business in an unusual way...I call it upside-down management because the people who serve our customers run the business, everyone else is there to help”, says John Timpson.

“I don’t believe in equality, the best people should be paid more than the worst...we want to encourage everyone to be involved in our success.

“For years our shop staff  have been motivated by the Timpson bonus.  It works because it is simple to understand and paid out weekly.  We distribute 15% on all sales over the turnover target.  The target isn’t set by a faceless executive but by the wage bill.  The week’s wages are multiplied by 4.5 to set the target for every shop for every week.  If someone is sick their wages are excluded from the calculation, those left to do the work get the extra bonus they deserve.

“This weekly scheme has been in operation for 25 years.  We tweak the calculation occasionally but only after consultation and a full trial and always in a way that increases the bonus.  There is no limit to earnings.  Recently, Dean Tugman in St.Albans got an order for 2,500 keys, he cut them all in a week, produced a record shop turnover of £7,385 and collected a personal bonus of £912.

“There is no point in capping a bonus scheme, the more our people earn the more I like it.

“Occasionally, employees suggest we should scrap the bonus and have a bigger basic wage.  I disagree.  The bonus is not always fair but it’s the best we have found.

“Better pay is not the only way to amaze employees, we should also promote praise rather than criticism.  Congratulate them for initiative rather than criticise them for not toeing the line.  ‘Professional’ managers, who run companies into the ground by a series of cost cutting and redundancies, see people as a cost centre they can manipulate.  In the process they ignore their greatest asset.  Employees are the best source of ideas.  They are the people who have their ear to the ground, not the market researchers or the consultants.  Why ask outsiders what to do when there are plenty of insiders who know the score?  Too often people are not involved in the running of their own business.  Managers not only fail to ask them for advice, they starve them of information...I believe in telling our employees everything.  That puts them in a better position to help me run the business.”

John Timpson is a man who practices what he preaches.  If you are hungry to tap into his observations and insights you can purchase his wonderful, down-to-earth book “The Complete Guide To Upside Down Management” at his company’s website www.timpson.com.

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Jurek Leon is a speaker, trainer and consultant. To subscribe to Jurek's FREE monthly email newsletter go to the Free Articles section of his website www.terrifictrading.com and type in your name and email address. It's simple and easy. Alternatively, email Jurek Leon at info@terrifictrading.com

Jurek Leon is a storyteller, trainer and coach who presents courses and addresses seminars on word of mouth marketing, motivation, customer focussed selling and managing the customer experience. Subscribe to Jurek's FREE monthly ‘Terrific Tips’ e-newsletter at www.terrifictrading.com. Alternatively, email info@terrifictrading.com.

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Jurek Leon is a storyteller, speaker and trainer. Subscribe to Jurek's FREE monthly 'Terrific Tips' e-newsletter at http://www.terrifictrading.com/terrific-newsletter/. Alternatively, email info@terrifictrading.com.