Investing In People Pays Big Dividends

Recently a restaurant’s owner in Pittsburgh banned tips, raised the wages of his servers to $35,000, gave each employee 500 shares of stock in the company, provided healthcare coverage, instituted 10 days paid vacation a year, and set up a bonus plan, I’m sure many people thought the owner was crazy.

Several months later that same restaurant owner reports that profits are up 300%, inventory was leaner and both their water bill and their linen bills were cut in half. Not only that, because of their performance, the bonus plan kicked in and salaries will end up over $48,000 a person for the year!

Most restaurant patrons tip whether the service is good or not. If the service isn’t good they just won’t return. By paying real wages and offering real benefits the workers at this restaurant know that the owner believes in them. The owner is being accountable to his people. He wants them to do well and they want him to succeed also.

This owner is an Accountable Leader. You could call it an investment in his people. Many times business owners say, “If we make some money I’ll pay you more.” This particular owner realized that you have to invest before you receive a dividend.

You can’t go to the bank and ask for interest up front. You have to make a deposit, an investment, and then over time you receive your interest, the return on your investment. It’s the same with people. When you invest in people by showing them that you trust them, by finding out what is important to them, by providing training or growth opportunities or even paying a livable wage that competes with other industries, you contribute to a growing relationship. When you invest in people they will naturally want to excel on your behalf as well as theirs.

Business leaders are quick to invest in equipment but sometimes come up short when it comes to people. Investing in people is better than investing in equipment.

The moment you invest in a piece of equipment it starts to depreciate. The moment you invest in people they begin to appreciate. They go up in value as they are positioned to better serve and perform at what they do. They also appreciate the investment you made in them and look for ways to repay that investment.


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