A recurring discussion in the cattle business, particularly the feedyard sector, has been centered on how to hire and keep good employees. According to Ryan Rhodes of Texas A&M – King Ranch Institute for Ranch Management, and Kim McCuistion of Texas A&M University, there are huge financial and production incentives for managers to put together an organized employee plan.
“Turnover and engagement is the biggest problem we see,” says Rhodes. “The things you do from a management standpoint, positive or negative, directly impact employee turnover.”
Employee replacement costs employers 50-150% of the annual salary of the position needing filled to cover loss of productivity and costs associated with finding an employee, says McCuistion, adding that lack of engagement, compensation, training and quality feedback were the main drivers of turnover.
In an employee management study by King Ranch Institute for Ranch Management, 190 employees on 15 ranches in 9 different states were surveyed with their employers to gather a better understanding where each side stood on the quality of management.
The top five components to job satisfaction for employees were ranked as:
- Having the tools and information necessary for the job
- Clearly understating performance expectations
- Challenging and interesting work.
- Knowing and understanding the mission statement
When managers were asked what they thought were the most important aspects for employee satisfaction, their rankings were similar to their employees with the exception of, “Knowing and understanding the mission statement,” being ranked eleventh on the list.
“People want to know why and what they are working for,” says Rhodes.
Three ways to better manage employees
According to Rhodes and McCuistion, there are three main steps to better manage ranch employees:
- Increase understanding of job purpose
- Clarification of how work performance is measured
- Reward performance based on job description
One of the most crucial, and often ignored step is a detailed job description, says Rhodes, with the majority of operations not providing that for their employees.
“This can be used to solve a lot of problems – how they need to be trained; how they need to be rewarded and how they need to be disciplined.”
Once a job description is in place, it can then be used to help the employee grow in their position and to also hold them accountable for their performance.
In a 2011 survey by Gallup Organization, it was found when employees were evaluated on a regular basis, there were 10-15% more productive and there were 20-40% fewer accidents in the workplace. However, when performance reviews are done, it is essential that managers keep a heavy weighted positive feedback to criticism ratio, with positive feedback outweighing negative feedback 5:1.
After job descriptions and performance directions are laid out, it is then time to give employees incentives for going above and beyond their duties with rewarding their work. In the employee management study by King Ranch Institute for Ranch Management, the top three comparative ranking of motivating factors for employees were:
- Bonuses based on personal achievements
- Salary increase
- Increased responsibility and decision making power
According to Rhodes, it is essential an operation does the following in the development of program:
- Have a written plan
- Have rewards tied to employee goals
- Incentivize employees to meet goals
- Make financial award large enough to be an inventive (typically 10-20% of their annual salary).