HackerToday’s post deviates a bit from the norm, but Techsnoop believes that small business owners should learn from the mistakes of large business.  Small business owners have thin margins for error so it pays to keep an eye on and learn from, Big Biz.

During the late 80s and early 90s, many employees explored flexible work options with employers to assist in balancing their work and family responsibilities.  One option was job sharing where 2 employees would share one full-time job.  Another was the ability to complete work tasks from home.  The work from home option required a solid plan on the part of employees where they could demonstrate responsibility and capability to actually be productive outside the office.

Once it was proven that employees working from home were actually more productive than those in the office, employers embraced this option on a larger scale.  Not only was it good for productivity, it allowed businesses to increase staff while keeping square footage overhead low.  A true win-win policy, work from home allows employees to accept smaller monetary compensation due to lower commute, lunch and wardrobe costs.  In a flat financial economy, both business and staff are able to reduce costs and exist on lower margins.

Fast forward to 2013

As more start-ups and small businesses use work from home policies to recruit top staff and keep overhead low, Yahoo bucks the trend and decides to eliminate this valuable policy.  The official word is that the productivity of some work from homers is low.  However, this “toss the baby with the bathwater” management approach has been proven to be unsuccessful.

When a business has under performing employees, managers need to directly meet with offenders armed with an objective list of actions that are not meeting standards.  A discussion then needs to outline the expected corrections, acceptable outcomes and results of meeting or not meeting the targets.  The manager then sets the target date for the improvements to be reached.

Should the targets not be met, the employee is let go.  Period.

When a company tries to correct individual behavior by imposing changes on an entire group, the employees who are not abusing the policy become upset and their productivity drops.

Those employees who in good faith, took a work from home position and are meeting and exceeding productivity levels, are being punished.  Even the most faithful will suffer from a morale drop and a feeling that they are being cheated or unfairly punished.  When employees feel they are not being equitably compensated, they will try to level the playing field by reducing productivity or other behavior.

No one likes to be group punished for the errors of others.  Yahoo, take note; this is a dangerous path.  Your superstar workers will be disgruntled and start looking to move to the competition.  Additionally, this move does not address the actual problem; low productivity of some workers.  Just being in the office does not raise productivity.  What actually will happen (Techsnoop predicts) is that the slackers will find ways to make their problems seem to be someone else’s fault.  Dissention will grow in the ranks and a toxic environment will ensue.

Lessons Learned

One way small businesses can keep their costs low is to use independent contractors whenever possible.  These freelancers require no benefits, pay their own taxes and are highly motivated to complete projects timely and professionally.  But if you are successful, at some point you will need an actual employee.  An employee is one whose schedule and duties are directed by the company and/or manager.

The ability to work from home, at least some of the time, can be a big selling point for a job with a company that has fewer benefits and lower payroll capability.  This nets you higher quality workers for lower wages.  Technology has made work from home jobs a great option for workers and employers.  Employers who choose to go backwards with options reveal a culture that will drive away the talented and creative workers needed to be successful.

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