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Episode 24: 3 Secrets to Make Your Team Productive With Zero Management
In this episode I’m going to give you 3 tips based on this concept to make all future hirings more productive for your company. The effectiveness of these 3 tips will depend on the business model, cost structure, legal issues, and your position to make the calls.
Secret #1: insist on paying a fixed price per project.
I hire a lot from UpWork and Fiverr, and usually, freelancers and contractors love to be paid per hour. What you do is to communicate, in your job posting, that you want to reward efficient freelancers. Because they will be paid the same amount if they finish ahead of time, on time, or behind time, it’s best for them to finish ahead of time, collect the payment, get a 5-star review, and move on. If they insist on hourly pay, agree on the total amount of hours needed, multiply that by the proposed hourly rate to get a fixed rate, and stick to that. Do mention that hourly pay means as an employer you’re paying for the freelancer’s mistake, and you do not have such a culture in your company and neither do you wish to work with people like that. If they still refuse to budge, move on to the next applicant. Sticking with an hourly rate can inflate your costs as much as 5 times over, as has happened to our company. [insert CS story] Insist on paying fixed price.
Secret #2: where possible, give a commission, or performance-based bonus on top of the fixed pay.
This is really an easy way to get the most stubborn hourly employees to agree to fixed pay. Say you have a target, let’s say you have a videographer, and that his KPI to turn around quality video edits within 48 hours. Every week he is able to do that, he is given $100 bonus at the end of the week. Always tie your desired result with an incentive. [insert CS case-study]
Secret #3: where possible, increase the percentage of commission with increased performance.
Think of this like a progressive tax structure - the more you earn, the higher the tax bracket, the larger the percentage of your income you pay in taxes. However, when it comes to commissions, my experience is that a lot of companies do the opposite, especially agencies. [insert agency story - where is the incentive to produce?] What we do is to reward performance and have no limits on the actual bonus. This motivates our team members to max out their productivity. [insert GAM case-study] In the long term, you can expect them to mention that they took charge of their own professional development in that they paid out of their own pockets to attend seminars and courses. As the employer, depending on the return on investment, I think a subsidy of up to 100% is reasonable. Let’s say your media buyer went to attend AWC. He came back and increased your monthly revenue by 100k. If he paid any amount up to 20k to attend the seminar, it would be a no-brainer to subsidise it. Personally, any investment that generates a >5x return is a worthy investment.
If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you’d like me to send you a Google Sheets document I personally use in my company to calculate how to structure commissions, drop me an email with subject line Episode 24 to [email protected].
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By Tyler JordanIn this episode I’m going to give you 3 tips based on this concept to make all future hirings more productive for your company. The effectiveness of these 3 tips will depend on the business model, cost structure, legal issues, and your position to make the calls.
Secret #1: insist on paying a fixed price per project.
I hire a lot from UpWork and Fiverr, and usually, freelancers and contractors love to be paid per hour. What you do is to communicate, in your job posting, that you want to reward efficient freelancers. Because they will be paid the same amount if they finish ahead of time, on time, or behind time, it’s best for them to finish ahead of time, collect the payment, get a 5-star review, and move on. If they insist on hourly pay, agree on the total amount of hours needed, multiply that by the proposed hourly rate to get a fixed rate, and stick to that. Do mention that hourly pay means as an employer you’re paying for the freelancer’s mistake, and you do not have such a culture in your company and neither do you wish to work with people like that. If they still refuse to budge, move on to the next applicant. Sticking with an hourly rate can inflate your costs as much as 5 times over, as has happened to our company. [insert CS story] Insist on paying fixed price.
Secret #2: where possible, give a commission, or performance-based bonus on top of the fixed pay.
This is really an easy way to get the most stubborn hourly employees to agree to fixed pay. Say you have a target, let’s say you have a videographer, and that his KPI to turn around quality video edits within 48 hours. Every week he is able to do that, he is given $100 bonus at the end of the week. Always tie your desired result with an incentive. [insert CS case-study]
Secret #3: where possible, increase the percentage of commission with increased performance.
Think of this like a progressive tax structure - the more you earn, the higher the tax bracket, the larger the percentage of your income you pay in taxes. However, when it comes to commissions, my experience is that a lot of companies do the opposite, especially agencies. [insert agency story - where is the incentive to produce?] What we do is to reward performance and have no limits on the actual bonus. This motivates our team members to max out their productivity. [insert GAM case-study] In the long term, you can expect them to mention that they took charge of their own professional development in that they paid out of their own pockets to attend seminars and courses. As the employer, depending on the return on investment, I think a subsidy of up to 100% is reasonable. Let’s say your media buyer went to attend AWC. He came back and increased your monthly revenue by 100k. If he paid any amount up to 20k to attend the seminar, it would be a no-brainer to subsidise it. Personally, any investment that generates a >5x return is a worthy investment.
If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you’d like me to send you a Google Sheets document I personally use in my company to calculate how to structure commissions, drop me an email with subject line Episode 24 to [email protected].