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Guest blog: Recruitment as the Most Important Aspect of Human Resource Management

Human Resource Management theories focus on methods of recruitment and selection and highlight the advantages of interviews, general assessment and psychometric testing as employee selection processes. The recruitment process could be internal or external or could also be online and involves the stages of recruitment policies, advertising, job description, job application process, interviews, assessment, decision making, legislation selection and training (Korsten 2003, Jones et al, 2006).

Examples of recruitment policies within healthcare sector and business or industrial sectors could provide insights on how recruitment policies are set and managerial objectives are defined. Successful recruitment methods include a thorough analysis of the job and the labor market conditions and interviews as well as psychometric tests to determine the potentialities of applicants. Small and medium sized enterprises (SMEs) also focus on interviews and assessment with emphasis on job analysis, emotional intelligence in new or inexperienced applicants and corporate social responsibility (CSR). Other techniques of selection that have been described include various types of interviews, in tray exercise, role play, group activity, etc.

Recruitment is almost central to any management process and failure in recruitment can create difficulties for any company including an adverse effect on its profitability and inappropriate levels of staffing or skills. Inadequate recruitment can lead to labor shortages, or problems in management decision making and the recruitment process could itself be improved by following management theories. The recruitment process could be improved in sophistication with Rodgers seven point plan, Munro-Frasers five-fold grading system, psychological tests, personal interviews, etc. Recommendations for specific and differentiated selection systems for different professions and specializations have been given. A new national selection system for psychiatrists, anesthetists and dental surgeons has been proposed within the UK health sector.

Recruitment is however not just a simple selection process and requires management decision making and extensive planning to employ the most suitable manpower. Competition among business organisations for recruiting the best potential has increased focus on innovation, and management decision making and the selectors aim to recruit only the best candidates who would suit the corporate culture, ethics and climate specific to the organisation (Terpstra, 1994). This would mean that the management would specifically look for potential candidates capable of team work as being a team player would be crucial in any junior management position.

Human Management resource approaches within any business organisation are focused on meeting corporate objectives and realization of strategic plans through training of personnel to ultimately improve company performance and profits (Korsten, 2003). The process of recruitment does not however end with application and selection of the right people but involves maintaining and retaining the employees chosen. Despite a well drawn plan on recruitment and selection and involvement of qualified management team, recruitment processes followed by companies can face significant obstacles in implementation. Theories of HRM may provide insights on the best approaches to recruitment although companies will have to use their in house management skills to apply generic theories within specific organizational contexts.


Jones, David A.; Shultz, Jonas W.; Chapman, Derek S. (2006) Recruiting Through Job Advertisements: The Effects of Cognitive Elaboration on Decision Making International Journal of Selection and Assessment, Volume 14, Number 2, pp. 167-179(13)

Korsten A.D. (2003) Developing a training plan to ensure employees keep up with the dynamics of facility management Journal of Facilities Management, Volume 1, Number 4, pp. 365-379(15)

Papers For You (2006) “P/HR/254. HRM: methods of recruitment and selection”, Available from [22/06/2006]

Papers For You (2006) “E/HR/21. Using relevant frameworks and theories critically evaluate the recruitment and selection appraisal processes used by an organisation with which you are familiar contribute. How does it contribute to the performance of the organisation?”, Available from [21/06/2006]

Shipton, Helen; Fay, Doris; West, Michael; Patterson, Malcolm; Birdi, Kamal (2005) Managing People to Promote Innovation Creativity and Innovation Management, Volume 14, Number 2, pp. 118-128(11)

Terpstra D.E. (1994) HRM: A Key to Competitiveness Management Decision, Volume 32, Number 9, pp. 10-14(5)

Source by Verena Veneeva

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Guest blog: The Importance of Proper Sales Techniques

The success of any business can be directly related to the quality of its staff and the ability to meet any consumer demand. When your business struggles in this regard it helps to identify the areas of inconsistency which can result in the loss of consumers due to employee negligence. To avoid this unfortunate turn of events with your own company, it is necessary to identify the many factors influencing the importance of pursuing proper sales techniques.

Factor I: Building Consumer Relationships

One of the greatest mistakes amateur sales associates make is focusing on the drive to make a single sale form a single individual. This short sighted strategy may help in improving sales numbers in the short run but will provide no value with developing future success. The first factor influencing the importance of sales management skills is found with building consumer relationships overtime. Whether you run a store or an online website, pursuing a relationship with your client will help to secure greater sales as well as develop the best form of marketing, positive word of mouth.

Factor II: Enhancing Selling Ability

If you were to provide any employee with the opportunity to work with a consumer eager to invest in a product you will develop a high level of sales success. The true skill or value of an associate is to have the ability to work with consumers who may not have this interest yet still make a purchase after working with your employee. The selling skills of an employee staff often represents the financial success the company has displaying this factor of importance with enhancing selling ability.

Factor III: Problem Solving

When a customer discovers a problem with a good or service it is often easy to lose their business to a competitor in a short period of time. If a customer contacts your company with a problem it creates the possibility of salvaging your relationship by resolving the problem and enhancing consumer satisfaction. When your sales staff can utilize the sales management skills of problem solving it will boost your business success, marking the importance of this factor in relation to proper selling techniques.

Factor IV: Revenue Development

The final factor of importance identifying the need for proper selling skills is seen with the value of revenue development. Every business relies on the resources of revenue development so the elements of building consumer relationships, enhancing selling ability and efficient problem solving will all help in keeping consumers and meeting this high demand factor.

Source by Peter McKeon

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Guest blog: Restaurant Back Door Security – Protecting People and Profits

They watched from the shadows as the employee propped open the back door to take his nightly run to the trash corral. He did not deviate from the routine the last two nights. It was 1:35 AM, right on schedule. As the young man returned with his empty cart, they pulled the ski masks down over their chin and jumped out with guns drawn. They pushed the employee into the restaurant. Upon entering the office area, the two robbers sprung into frenzied action. One robber grabbed the manager, pointed his gun at her, and screamed for her to open the safe, while the other forced the other closing employees to lie down on the cold tile floor of the kitchen. The employees’ lives are changed forever as they experience the terror of peering at the edge of life – and death.

Unfortunately, this scene plays out somewhere each night in the world of fast food. A world serving the public, late at night with predators lurking, waiting and plotting to take advantage of every opportunity to forcibly rob others hard earned cash. Crime prevention solutions cost virtually nothing other than implementing changes in policy, routines and discipline.

Opening of the back door exposes the business to cash and product losses and the employees to serious crime, including homicide. Opening it at night greatly increases the chances of bad things happening. Yet it is one of the most serious breaches and most often violated of all security policies. It is a virtual weak link that can be turned into one of the strongest bonds in creating a safer and more secure environment for customers and employees when executed properly.

This particular scene is avoidable with simple policy and procedures on limiting these dangerous exposures to crime and theft. Most importantly, the procedures must be engrained in the training and routines of employees in the restaurant and violations met with appropriate discipline. Not only is control of the door essential in keeping employees safe and secure, but is a major component in preventing theft and inadvertent losses.


Effective policies regarding the back door include prohibited opening times such as night time and possibly peak rush times when every employee should be focused on serving the customer. Sound loss control programs insure the door is locked at all times and monitored by a member of management whenever it is opened. The keys to the door lock and alarm do not leave the possession of the management team or be readily available to non-management personnel. Trash runs made after dark should be made through the lobby doors while the restaurant is open for business and never made after the doors are locked at closing.


When opened, the door should not be propped open. During a trash run, all the trash is placed outside the door, then closed and locked unless the open door will be monitored by a member of management. Clear trash bags are to be used and all cardboard boxes broken down. No one is allowed to enter through the back door. Any request to enter or open the back door is to be made at the front counter. Audits should be routinely conducted for adherence to company policies pertaining to opening of the door, key control, testing of alarms, and procedures regarding the removal of trash.


The back door should be equipped with an audible, push bar alarm with a key that cannot be removed while the alarm is in the “off” position, a peep hole or small (less than 4″) covered window and anti-pry plates at the lock. Outside lighting illuminates the back door and trash corral areas. If the restaurant is equipped with a perimeter alarm system, the back door is to be included. A sign in applicable languages on the door stating the rules of authorized openings assists in communicating clear expectations.


Apply simple technologies to audit compliance and report the unauthorized openings that jeopardize the lives of employees and the profitability of the company. Effective digital camera systems include monitoring of the door’s activity. Audible enunciators and/or strobe lights near the manager’s office notify when the door is opened. Exception reports can be generated by connecting alarm contacts with a restaurants camera system. The reports can be transmitted to supervisors and/or security representatives with attached video of opened door activity. Additional combined video and audio technology is able to interact with store personnel and/or customers causing problems from an off-site monitoring station.

The back door to every restaurant is essential in maintaining effective operations from trash removal to the receiving of inventory. Sound loss control principles involve the control of when the door is opened. Old habits of maintenance or stockroom employees having possession of door keys, keys hanging on a hook or indiscriminate loaning of management keys are difficult to change. Maintaining control is often considered an inconvenience by management. The costs of implementing new policies, procedures and disciplines in the use of the back door are inexpensive. When the door is uncontrolled, the chance for bad things happening increases dramatically, as depicted in the opening passage above. When “nothing bad has ever happened here” and “if it ain’t broke, why fix it!” are the responses to not having proactive loss prevention procedures in place, the ultimate price may be extremely high.

Source by Libby Libhart

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Guest blog: Role Play – The Two Words That Strike Fear Into People's Hearts

The two words all participants fear … Have you ever heard a trainer say the dreaded phrase, "In a moment, we're going to do a role play …"?

For many people, those are the last words they hear, because they go into a form of shock and lose the power to communicate. Role plays can be an excellent way to practice skills or to rehearse ways of dealing with specific situations or people. However, the term "role play" strikes fear into people's hearts. They need to be handled carefully.

Here are some suggestions for making role plays less traumatic for all involved.

Tip 1. Try to avoid using the expression "role play" at all, use the term "skills practice" or something similar. That's what it is, after all.

Tip 2. Try to avoid having people play roles if you can, ie pretend to be someone else. It's more effective if people can just be themselves practicing a skill. Of course, this means that you need other people who will role play. These could be trainers or professional role players (ie players). I work with a lot of actors who do this and they are excellent, but of course they tend to ask for payment (the idea that actors just do it for the applause is apparently incorrect). The problem with the trainers doing the role play is that participants sometimes do not take it as seriously as they do with outsiders. If you can not get actors, can you ask other people in your organization to come along and take part?

Tip 3. Try to reduce the stress on people, which often comes from feeling exposed in front of a group. Let people role play (sorry, practice their skills) in pairs or groups of three with one being an observer rather than in front of everyone. Alternately, try a group activity where everyone can chip in. For example, let's say it's a customer service course. The trainer could play the customer and have the whole group representative one person. Someone could start off by speaking to the "customer" then someone else take over until everyone had a turn.

Tip 4. Make the exercise as realistic as possible. One objection to these activities is that they are not real so people do not take them seriously. Make sure the activity is based on real situations people will face. Using external people also helps, as I've stated.

Tip 5. Give very clear instructions and also give written briefs for the exercise. Make sure that any visiting role players are clear about the purpose of the exercise and what is expected of them. In particular, make sure you stress the benefits of the exercise to everyone involved so they can see exactly why you're putting them through it.

Tip 6. If some people are really hostile to the idea of ​​a role play or extremely angry (and some people actually are) then do not force them to do it. The exercise will not be successful and any possible benefits will be outweighed by the impact on your relationship with the person involved.

Role plays can be invaluable. They can also be a dreadful torment and waste of time. How you set them up and handle them can often make the difference.

Source by Alan Matthews

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Guest blog: Examples of Good Customer Service

How examples of good Customer Service lead to exceptional service

The number one rule to remember in running a successful business is to develop a culture of providing exceptional customer service or you will over time struggle in a competitive market. The best process to find out how service is to learn can be provided is to learn from both your own experiences and other peoples examples.

Earning a reputation for excellence

To help your business obtain a reputation for providing excellent customer service there are a number of essential trade secrets that need to be followed. One scheme many businesses use these days is to arrange brain storming sessions during staff meetings and training programmes to discuss the type of service delivered by other successful companies. By discussing examples with staff it helps your own organization to deliver quality superior customer service. Also by recognizing the positive contribution staff make for the business morale and team spirit is boosted. This can be done through bonus or incentive payment schemes or introducing for example a ‘salesman of the month’ award.

The following are some questions that may identify whether your business is providing just basic or excellent examples of good customer service.

Background knowledge. Is the employee trained to know the core business and can effectively supply the customer’s with what they require?

Image. Is the employee friendly and project a good image and manner to the customer?

Difficult customers. Does the employee deal with difficult customers with courtesy and respect?

Helpfulness. Is the employee helpful and ensures customer requirements are met?

Going the extra mile. Does the employee regularly exceed standards by going the extra mile to provide outstanding customer service?

8 Examples of Good Customer Service

Friendly staff
Ensure employees who are hired to deal with customers on a daily basis especially at first point-of-contact or in reception areas have a friendly, positive and helpful personality. Employees should have a good knowledge of the business. Engaging employees who already have customer service credentials is an advantage as it indicates they already have the skills and a commitment to customer service.

Appreciating employees
A happy employee will feel valued and provide customers with good service. A salary that offers staff discounts and other incentives will appeal to employees and indicates the company cares about them. Providing opportunities for staff development through training programmes encourages and motivates staff.

Modern technology
Customers can become annoyed and frustrated when put on hold and left waiting by automated phone systems. The overuse of this type of technology can sometimes be counter productive and cause losses to the business bottom line.

Customer issues
Complaints need to be dealt with swiftly. By delaying dealing with customer issues can lead to your business losing a valued customer. By sorting problems out can unlock the door to sales and help your business gain an edge over the competition..

Improving service
Always treat your customers with respect and courtesy. When dealing with issues find out as much as you can about the problem as it could help you to refine and improve existing services.

Thanking the customer
Always thank your customers for dealing with your business. Most customers’ appreciate being valued and will remember the helpful service your business provided that will result in customer loyalty and repeat business.

Going the extra mile
Some customer’s may be in a hurry so ensure they are dealt with promptly as it could be the difference between selling and not selling a product. Consumers appreciate businesses going the extra mile by taking care of their needs and can result in repeat business.

Customer feedback
Look at canvassing your customer’s through online satisfaction surveys to determine whether your existing services are working. By asking customer’s for feedback about your business you will be able to measure and improve your internal systems and services.

Source by Brandon Walker

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Guest blog: Restaurant Training Manual – Waiter Job Description

Main Purpose of the Job:

The Waiter / Waitress under the guidance of the Captain and according to Company policies and procedures will carry out his / her duties based on the following fundamentals:

– Maintains the highest standard of professional ethics

– Emphasizes and projects a high image for the hotel

– Is concerned with the operating objectives of the hotel

– Operates with maximum transparency thereby projecting the truth about general observations

Key Function:

He / she is in charge and responsible for the control of several tables in a service station, maximizing the prompt efficiency of food & beverage service and ensuring guest satisfaction according to the Organization standards.

Key Result Area: Guest Satisfaction

Main Duties responsibilities

– Assures achievement of daily planning through list of activities received.

– Follows up on trained elements and tasks, on a daily basis.

– Ensures service for tables assigned.

– Takes food and beverage orders as per Hotel standard.

– Delivers food from kitchen and beverages from dispense bars.

– Assists Busboy /girl in clearing tables if necessary.

– Follows sequences of work during set-up time and service time.

– Has to know in details food and beverage items present in menu.

– Handles guest request in a courteous manner repeating their request to make sure that guest’s message was properly understood.

– Reports immediately to Superior any misunderstanding, problem or accident with guest or staff.

– Communicates constructively with guests to assess their satisfaction. If not satisfied, follow up with an immediate action.

– Receives a training and focus carefully on various elements and tasks taught on a daily basis.

Key Result Area: Employee satisfaction

Main Duties responsibilities

– Signs in and out of duty as soon as reaching or leaving outlet.

– Attends pre-meal briefings, listen carefully to instructions given by Superiors concerning today’s service achievements.

– Is well, tidy, groomed, disciplined and honest at all times.

– Reports immediately to his supervisor any misunderstanding, problem or accident with a guest or the staff.

Key Result Area: Financial Performance

Main Duties responsibilities

– Follows up opening and closing procedures.

– Informs Superior on damages immediately after noticing them.

– Presents checks and ensuring smooth co-operation with cashiers.

– Is aware of any activities/ events operating within the hotel in order to promote and maximize sales.

– Suggests ways of reducing costs without effecting the quality and standard of the hotel.

– Ensures energy and water saving.

Key Result Area: Environmental Awareness

Main Duties responsibilities

– Informs superior if Housekeeping cleaning plans were followed.

– Operates all equipment as per the operating guidelines.

– Has full knowledge of the hotel safety and emergency procedures.

– Complies with statutory and legal requirements for fire, health and safety, hygiene, licensing and employment.

– Is aware of all local customs.

Fundamental attitude factors:

– May be called upon a times to perform other duties which are not included in this job description.

– The ultimate objective of the Waiter / Waitress performance is the achievement of total customer satisfaction.

– A key responsibility for the Waiter / Waitress is to establish and maintain a good relationship with superiors, colleagues and subordinates at all times.

Source by Ehab Rashwan

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Guest blog: How to Provide Excellent Customer Service – 4 Tips For Employers to Improve Customer Service

Whether your business is an online store or a storefront downtown, providing excellent customer service will determine if you succeed in the long run. In today's economy, the businesses that will survive and thrive will be those that give each and every customer a better shopping experience than the competition. Win that battle. Grow your sales and your business by fine-tuning your store's customer service and by following these four key points.

Commit to High Standards and Communicate Them to Employees

  • Commit to and communicate company standards to improve employee performance.

Adam Williams *, a longtime human resources consultant, specializes in retraining business staff who have low levels of customer service. "Customer service starts at the very top," Williams says. "Set your standards high, and let your employees know they are non-negotiable." Williams adds that customer service requires a commitment from the employer as well as the employees, and notes it is the employer's responsibility to make everyone aware of these policies.

Cathy Ward, an online retailer, agreements. "Communicating standards is critical," Ward says. "I inform employees upon hiring the conduct that is expected. I monitor employee phone calls and watch them work. If they are not meeting our standards I explain to them why and correct the issue."

Show your company's commitment to customer service with the following tips:

  1. Post a written copy of your customer service policy where every employee can see it.
  2. Routinely review your customer service standards.
  3. Hold monthly quality meetings and training seminars.
  4. Create an incentive program that rewards great performance.
  5. Tape notes by the phone with appropriate phrases and service messages.

Making these a part of your operations will help keep everyone on the same page and ensure consistency.

Maintain Proper Employee Attitude

  • Train employees to keep their personal and professional lives separate to improve their attitudes and win customers.

Maintaining the right employee attitude is key. Your employees are your frontline to winning customers and their attitude is conveyed in everything they do. It's in their body language when face-to-face with a customer, in their tone of voice when answering the phone, and in their word choices when responding to an email.

This is why Williams describes all workers as actors on a stage, "Your customers are your audience. That means personal problems, gossip, and private matters must be left at home. Williams adds, "If you are miserable for whatever reason, it can not show at work."

Attitude is especially critical when you or an employee has to tell a customer what they do not want to hear. "The ability to be brutally honest and direct without being perceived as cold or uncaring is important," says Bob Bryant, a merchant services provider. "Service reps that can patiently resolve issues with a disgruntled customer, while winning that customer as an ally, are few and far between."

Here's an activity that will get employees thinking about the right attitude:

  1. Ask them to describe a specific time when they received great customer service and to explain what made the experience special.
  2. Ask them to describe a time when they received poor customer service and identify what they disliked about the experience.
  3. Have your employees share their experiences as a group and list key points from each experience.

This exercise is a great reminder that while many of us are not experienced at providing good customer service, we are all experienced customers. Training your employees to see the mindset of their customers will help them improve their level of service.

Keep Your Level of Customer Service Consistent

  • Maintain consistent levels of customer service to gain customer trust and repeat business.

A positive attitude will gain your business little if your customer service is inconsistent. "The reason people go back to just about any business is because of the way they were treated when they were there the last time," Williams says. One bad experience is often all it takes to turn a customer away from a business forever.

"You have to make an effort with every customer," Ward says. "You may get three difficult customer calls in a row, but you can never take that out on the fourth person who calls."

A frustrated employee who is curt with a customer may lose that customer in addition to others who will hear about the experience. Being consistent with every customer lets them know what to expect when they interact with your company, gives them reasons to come back, and can bring in new business.

Use Teamwork to Implement Your Customer Service Policy

  • Use teamwork to keep customer service levels consistent and to motivate employees.

Teamwork is essential to bring everything together. Cutthroat work environments will hamper productivity, increase turnover, and will sabotage your customer service efforts. Employees need to feel that by working together everyone benefits and that promoting their company is a shared responsibility.

When employers and employees work together, the result is a seamless experience for the customer. There is no conflict between what one employee says and another, policies are upheld, and customers gain trust in your business.

Excellent Customer Service Can Grow Your Business

If you and your employees can commit to work together to consistently create a positive performance that meets and exceeds the expectations of your customers, you will win the battle to grow your business. "Everyone wins," Williams says. "Your employees are happy, your customers are happy, and they will reward you with repeat business and new word-of-mouth customers."

* Name changed due to confidential requirements of employment.

Source by Brian Cross

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Guest blog: Building a Kingdom – Case Study of Kingdom Financial Holdings Limited

This article presents a case study of sustained entrepreneurial growth of Kingdom Financial Holdings. It is one of the entrepreneurial banks that survived the financial crisis that started in Zimbabwe in 2003. The bank was established in 1994 by four entrepreneurial young bankers. It has grown substantively over the years. The case examines the origins, growth and expansion of the bank. It concludes by summarizing lessons or principles that can be derived from this case that maybe applicable to entrepreneurs.

Profile of an Entrepreneur: Nigel Chanakira

Nigel Chanakira was raised in the Highfield suburb of Harare in an entrepreneurial family. His father and uncle operated a public transport company Modern Express and later diversified into retail shops. Nigel's father later exited the family business. He bought out one of the shops and expanded it. During school holidays young Nigel, as the first born, would work in the shops. His parents, particularly his mother, insured that he acquire an education first.

On completion of high school, Nigel failed to enter dental or medical school, which was his first passions. In fact his grades could only qualify him for the Bachelor of Arts degree program at the University of Zimbabwe. However, he "sweet-talked his way into a transfer" to the Bachelor in Economics degree program. Academically he worked hard, exploiting his strong competitive character that was developed during his sporting days. Nigel rigorously applied himself to his academic pursuits and passed his studies with excellent grades, which opened the door to employment as an economist with the Reserve Bank of Zimbabwe (RBZ).

During his stint with the Reserve Bank, his economic mindset indicated to him that wealth creation was happening in the banking sector there before he determined to understand banking and financial markets. While employed at RBZ, he read for a Master's degree in Financial Economics and Financial Markets as preparation for his debt into banking. At the Reserve Bank under Dr Moyana, he was part of the research team that put together the policy framework for the liberalization of the financial services within the Economic Structural Adjustment Program. Being at the right place at the right time, he became aware of the opportunities that were opening up. Nigel exploited his position to identify the most profitable banking institution to work for as preparation for his future. He headed to Bard Discount House and worked for five years under Charles Gurney.

A short while later the two black executives at Bard, Nick Vingirayi and Gibson Muringai, left to form Intermarket Discount House. Their departure inspired the young Nigel. If these two could establish a banking institution of their own so could, given time. The departure also created an opportunity for him to rise to fill the vacancy. This save the aspiring banker critical managerial experience. Subsequently he became a director for Bard Investment Services where he gained critical experience in portfolio management, client relations and dealing within the dealing department. While there he met Franky Kufa, a young trader who was making waves, who would later become a key co-entrepreneur with him.

His professional business engagement his father dominated Nigel in the Barclays Bank "Start Your Own Business" Program. However what really made an impact on the young entrepreneur was the Empretec Entrepreneur Training program (May 1994), to which he was introduced by Mrs Tsitsi Masiyiwa. The course demonstrated that he had the requisite entrepreneurial competences.

Nigel talked Charles Gurney into an attempted management buy-out of Bard from Anglo-American. This failed and the increasingly frustrated appellant entrepreneur considered employment opportunities with Nick Vingirai's Intermarket and Never Mhlanga's National Discount House which was on the verge of being formed – hoping to join as a shareholder since he was acquainted with the promoters. He was denied this opportunity.

Being frustrated at Bard and having been denied entry into the club by pioneers, he resigned in October 1994 with the encouragement of Mrs Masiyiwa to pursue his entrepreneurial dream.

The Dream

Inspired by the messages of his pastor, Rev. Tom Deuschle, and frustrated at his inability to participate in the church's massive building project, Nigel bought a way of generating huge financial resources. During a time of prayer he claims that he had a divine encounter where he obtained a mandate from God to start Kingdom Bank. He visited his pastor and told him of this encounter and the consequent desire to start a bank. The godly pastor was amazed at the 26 year old with "big spectacles and wearing tennis shoes" who wanted to start a bank. The pastor prayed before counsel the young man. Having been convinced of the genuineness of Nigel's dream, the pastor did something unusual. He asked him to give a testimony to the congregation of how God was leading him to start a bank. Although timid, the young man complied. That experience was a powerful vote of confidence from the godly pastor. It demonstrates the power of mentors to build a protégé.

Nigel teamed up with young Franky Kufa. Nigel Chanakira left Bard at the position of Chief Economist. They would build their own entrepreneurial venture. Their idea was to identify players who had specific competencies and would each be able to generate financial resources from his activity. Their vision was to create a one – stop financial institution offering a discount house, an asset management company and a merchant bank. Nigel used his Empretec model to develop a business plan for their venture. They headhunted Solomon Mugavazi, a stockbroker from Edwards and Company and BR Purohit, a corporate banker from Stanbic. Kufa would provide money market expertise while Nigel provided income from government bond dealings as well as overall supervision of the team.

Each of the budding partners bought in an equal portion of the Z $ 120,000 as start-up capital. Nigel talked to his wife and they sold their recently acquired Eastlea home and vehicles to raise the equivalent of US $ 17,000 as their initial capital. Nigel, his wife and three kids headed back to Highfield to live in with his parents. The partners established Garmony Investments which started trading as an unregistered financial institution. The entrepreneurs agreed not to draw a salary in their first year of operations as a bootstrapping strategy.

Mugavazi introduced and recommended Lysias Sibanda, a chartered accountant, to join the team. Nigel was initially a receiver as each person had to bring in an awareness capacity and it was not clear how an accountant would generate revenue at start up in a financial institution. Nigel initially retained a 26% share which secured him a blocking vote as well as giving him the position of controlling shareholder.

Nigel credits the Success Motivation Institute (SMI) course "The Dynamics of Successful Management" as the lethal weapon that enabled him to acquire managerial competences. Initially he identified that all his key executives undertake this training program.

Birth of the Kingdom

Kingdom Securities P / L scheduled operations in November 1994 as a wholly owned subsidiary of Garmony Investments (Pvt) Ltd. It traded as a broker on both money and stock markets.

On 24th February 1995 Kingdom Securities Holding was born with the following affiliates: Kingdom Securities Ltd, Kingdom Stockbrokers (Pvt) Ltd and Kingdom Asset Managers (Pvt) Ltd. The flag Kingdom Securities Ltd was registered as a Discount House under Banking Act Chapter 188 on 25th July 1995. Kingdom Stockbrokers was registered with the Zimbabwe Stock Exchange under ZSE Chapter 195 on 1st August 1995. The pre-licensing trading had generated good revenue but they still had a 20% deficit of the required capital. Most institutional investors turned them down as they were a greenfield company promoted by people perceived to be "too young". At this stage National Merchant Bank, Intermarket and others were on the market raising equity and these were run by seasoned and mature promoters. However Rachel Kupara, then MD for Zimnat, believed in the young entrepreneurs and took up the first equity portion for Zimnat at 5%.

Norman Sachikonye, ​​then Financial Director and Investments Manager at First Mutual follow suit, taking up an equity share of 15%. These two institutional investors were inducted as shareholders of Kingdom Securities Holdings on 1st August 1995. Garmony Investments ceased operations and reversed itself Into Kingdom Securities on 31st July 1995, thereby becoming an 80% shareholder.

The first year of operations was marked by intense competition as well as discrimination against new financial institutions by public organizations. All the other operating units performed well except for the corporate finance department with Kingdom Securities, led by Purohit. This monetary loss, varying spiritual and ethical values ​​led to the forced departure of Purohit as an executive director and shareholder on 31st December 1995. From then the Kingdom started to grow exponentially.

Structural Growth

Nigel and his team pursed an aggressive growth strategy with the intention of increasing market share, profitability, and geographic spread while developing a strong brand. The growth strategy was built around a business philosophy of simplifying financial services and making them easily accessible to the general public. An IT strategy that created a low cost delivery channel exploiting ATMs and POS while providing a platform that was ready for Internet and web based applications, was espoused.

On 1st April 1997, Kingdom Financial Services was licensed as an accepting house focusing on trading and distributing foreign currency, treasury activities, corporate finance, investment banking and advisory services. It was formed under the leadership of Victor Chando with the intent of becoming the merchant banking arm of the Group. In 1998, Kingdom Merchant Bank (KMB) was licensed and it took over the assets and liabilities of Kingdom Securities Limited. Its main focus was treasury related products, off-balance sheet finance, foreign currency and trade finance. Kingdom Research Institute was established as a support service to the other units.

The entrepreneurial banks, cognisant of their limitations, thought to achieve critical mass quickly by actively seeking capital injection from equity investors. The aim was to broad ownership while lending strategic support in areas of mutual interest. An attempt at equity uptake from Global Emerging Markets from London failed. However in 1997 the efforts of the bankers were rewarded when the following organizations took up some equity, reducing the shareholding of executive directors as shown below: ïEUR Ipcorn 0.7%, ïEUR Zambezi Fund Mauritius P / L 1.1%, ïEUR Zambezi Fund P / L 0.7%. ïEUR Kingdom Employee Share Trust 5%, ïEUR Southern Africa Enterprise Development Fund – 8% redeemable preference shares amount to US $ 1.5m as the first investee company in Southern Africa from the US Fund initiated by US President Bill Clinton, ïEUR Weiland Investments, a company belonging to Mr Richard Muirimi, a long standing friend of Nigel and associate in the fund management business took up 1.7%, Garmony Investments 71.7% -executive managers. ïEUR After a rights issue Zimnat fell to 4.8% while FML went down to 14.3%.

In 1998, Kingdom launched four Unit Trusts which proved very popular with the market. Initially these products were focused at individual clients of the discount house as well as private ports of Kingdom Stockbroking. Aggressive marketing and awareness campaigns established the Kingdom Unit Trust as the most popular retail brand of the group. The Kingdom brand was that born.

Acquisition of Discount Company of Zimbabwe (DCZ)

After a spurt of organic growth, the Kingdom entrepreneurs decided to hasten the growth rate synergistically. They set out to acquire the oldest discount house in the country and the world, The Discount Company of Zimbabwe, which was a listed entity. With this acquisition Kingdom would acquire critical competences as well as realize the much coveted ZSE listing inexpensively through a reverse listing. Initial efforts at a negotiated merger with DCZ were rebuffed by its executives who could not countenance a forty year old institution being stolen up by a four year old business. The entrepreneurs were not deterred. Nigel approached his friend Greg Brackenridge at Stanbic to finance and effect the acquisition of the sixty percent shares which were in the hands of about ten shareholders, on behalf of Kingdom Financial Holdings but to be placed in the ownership of Stanbic Nominees. This strategy masked the identity of the acquirer. Claud Chonzi, the National Social Security Authority (NSSA) GM and a friend to Lysias Sibanda (a Kingdom executive director), agreed to act as a front in the negotiations with the DCZ shareholders. NSSA is a well known institutional investor and hence these shareholders may have believed that they were dealing with an institutional investor. Once Kingdom controlled 60% of DCZ, it took over the company and reversed listed itself onto the Stock Exchange as Kingdom Financial Holdings Limited (KFHL). Because of the negative real interest rates, Kingdom successfully used debt finance to structure the acquisition. This acquisition and the consequent listing brave the once despised young entrepreneurs confidence and credibility on the market.

Other Strategic Acquisitions

Within the same year Kingdom Merchant Bank acquired a strategic stake in CFX Bureau de Change owned by Sean Maloney as well as another stake in a greenfield microlending franchise, Pfihwa P / L. CFX was changed into KFX and used in most foreign currency trading activities. KFHL set as a strategic intention the acquisition of an additional 24.9% stake in CFX Holdings to safeguard the initial investment and ensure management control. This did not work out. Instead, Sean Maloney opted out and took over the failed Universal Merchant Bank license to form CFX Merchant Bank. Although Kingdom executives contend that the alliance failed due to the abolition of bureau de change by government, it appears that Sean Maloney refused to give up control of the extra shareholding thought by Kingdom. It there would be reasonable that once Kingdom could not control KFX, a fall out ensued. The liquidation of this investment in 2002 asserted in a loss of Z $ 403 million on that investment. However this was manageable in light of the strong group profitability.

Pfihwa P / L funded the informal sector as a form of corporate social responsibility. However when the hyperinflationary environment and stringent regulatory environment encroached on the liability of the project, it was wound up in early 2004. Kingdom pursued its funding of the informal sector through MicroKing, which was established with international assistance. By 2002 MicroKing had eight branches located in the mid-of, or near, micro-enterprise clusters.

In 2000, due to increased activity on the foreign currency front within the banking sector, Kingdom opened a private banking facility through the discount house to exploit revenue streams from this market. Following market trends, it engaged the insurance company AIG to enter the bancassurance market in 2003.

Meikles Strategic Alliance

In 1999 the entrepreneurial Chanakira on advice from his executives and the legendary corporate finance team from Barclays bank led by the affable Hugh Van Hoffen entered into a strategic alliance with Meikles Africa wheree it injected some Z $ 322 million into Kingdom for an equity shareholding of 25% . Interestingly, the deal nearly collapsed on pricing as Meikles only wanted to pay $ 250 million whilst KFHL valued themselves at Z $ 322 million which in real terms was the largest private sector deal made between an indigenous bank and a listed corporation. Nigel testifies that it was a walk through the incomplete Celebration Church site on the Saturday preceding the signing of the Meikles deal that led him to sign the deal which he saw as a means for him to sow a whooping seed into the church to boost the building Fund. God was faithful! Kingdom's share price shot up dramatically from $ 2,15 at the time he made the commitment to the Pastor all the way to $ 112,00 by the following October!

In return Kingdom acquired a powerful cash-rich shareholder that allowed it entrance into retail banking through an innovative in-store banking strategy. Meikles Africa opened its retail branches, namely TM Supermarkets, Clicks, Barbours, Medix Pharmaceuticals and Greatermans, as distribution channels for Kingdom commercial bank or as account holders providing deposits and requiring banking services. This was a cheaper way of entering retail banking. It proved useful during the 2003 cash crisis because Meikles with its massive cash resources within its business units assisted Kingdom Bank, thus cushioning it from a liquidity crisis. The alliance also raised the reputation and credibility of Kingdom Bank and created an opportunity for Kingdom to finance Meikles Africa's customers through the jointly owned Meikles Financial Services. Kingdom provided the funding for all lease and hire purchases from Meikles' subsidiaries, thus driving sales for Meikles while providing easy lending opportunities for Kingdom. Meikles managed the relationship with the client.

Meikles Africa as a strategic shareholder assured Kingdom of success when recapitalization was required and has enhanced Kingdom's brand image. This strategic relationship has created strong synergies for mutual benefit.

Commercial Banking

Exploiting the opportunities arising from the strategic relationship with Meikles Africa, Kingdom made its debut into retail banking in January 2001 with in-store branches at High Glen and Chitungwiza TM supermarkets. The target was primarily the mass market. This rode on the strong brand Kingdom had created through the Unit Trusts. In-store banking offered low cost delivery channels with minimal investment in brick and mortar. By the end of 2001, thirteen branches were operational across the country. This followed a deliberate strategy for aggressive roll-out of the branches with two flaganship branches ïEURïEUR one in Bulawayo and the other in Harare. There was a huge emphasis on an IT driven strategy with significant cross-selling between the commercial bank and other SBUs.

However, it was further discovered that there was a market for the upmarket clients and hence Crown banking outlets were established to diversify the target market. In 2004, after closing three in-store branches in a rationalization exercise, there were 16 in-store branches and 9 Crown banking outlets.

The entry into commercial banking was probably held at the wrong time, considering the imminent changes in the banking industry. Commercial banking does provide cheap deposits, although at the price of huge staff costs and human resource management complications. Nigel admits that, with hindsight, this could have been delayed or done at a slower pace. However, the need for increased market share in a fiercely competitive industry necessitated this. Another reason for persisting with the commercial banking project was that of prior agreements with Meikles Africa. It is possible that Meikles Africa had been sold on the equity take-up deal on the back of promises to engage in in-store banking, which would increase revenue for its affiliates.

Innovative Products and Services

KFHL continued its aggressive pursuit of product innovation. After the failure of the KFX project, CurrencyKing was established to continue the work. However this was abolished in November 2002 by government ministerial intervention when bureau de change were prohibited in an effort to stamp out parallel market foreign currency trading.

Sadly this governmental decision was misguided for not only did it fail to banish foreign currency parallel trading but it drve underground, made it more lucrative and subsequently the government lost all control of the management of the exchange rate.

In October 2002, KFHL established Kingdom Leasing after being granted a finance house license. Its mandate was to exploit opportunities to trade in financial leases, lease hire and short term financial products.

Regional Expansion

Around 2000 it became evident that the domestic market was highly competitive, with limited prospects of future growth. A decision was made to diversify revenue streams and reduce country risk through penetration into the regional markets. This strategy would exploit the proven competences in securities trading, asset management and corporate advisory services from a small capital base. Therefore the entrance had low risk in terms of capital injection. Considering the foreign exchange control limitations and shortage of foreign currency in Zimbabwe, this was a prudent strategy but not without its downside, as will be seen in the Botswana venture.

In 2001, KFHL acquired a 25.1% stake in a greenfield banking enterprise in Malawi, First Discount House Ltd. To safeguard its investment and ensure administrative control, an executive director and dealer were seconded to the Malawi venture while Nigel Chanakira headed the Board. This investment has continued to grow and yield positive returns. As of July 2006 Kingdom had finally managed to up its stake from 25.1% to 40% in this investment and may extremely control it to the point of seeking a conversion of the license to a commercial bank.

KFHL also took up a 25% equity stake in Investrust Merchant Bank Zambia. Franky Kufa was seconded to it as an executive director while Nigel took a seat on the Board.

KFHL had been promised an option to gain a controlling stake. However when the bank stabilized, the Zambian shareholders entered into some questionable transactions and were not prepared to allow KFHL to up it's stake and so KFHL decided to pull out as relationships turned frosty. The Zambian Central Bank intervened with a promise to grant KFHL its own banking license. This did not materialize as the Zambian Central Bank exploited the banking crisis in Zimbabwe to deny KHFL a license. A reasonable premium of Z $ 2.5 billion was obtained at disinvestment.

In Botswana, a subsidiary called Kingdom Bank Africa Ltd (KBAL) was established as an offshore bank in the International Finance Center. KBAL was intended to spearhead and manage regional initiatives for Kingdom. It was headed by Mrs Irene Chamney, seconded by Lysias Sibanda with the concurrence of Nigel after administrative challenges in Zimbabwe. Two other senior executives were seconded there. She successfully set up the KBAL's banking infrastructure and had good relations with the Botswana authorities.

However, the business model chosen of an offshore bank ahead of a domestic Botswana merchant bank license turned out to be the Achilles heel of the bank more so when the Zimbabwe banking crisis set in between 2003 and 2005. There were fundamental differences in how Mrs Chamney and Chanakira saw the bank surviving and going forward.

Ultimately, it was deemed prudent for Mrs. Chamney to leave the bank in 2005. In 2001 KFHL acquired the mandate as the sole distributor of the American Express card in the whole of Africa except for RSA. This was handled through KBAL. Kingdom Private Bank was transferred from the discount house to become a subsidiary of KBAL due to the prevailing regulatory environment in Zimbabwe.

In 2004 KBAL was temporarily placed under curatorship due to undercapitalisation. At this stage the parent company had regulatory constitutions that preceded foreign currency capital injection.

A solution was found in the sourcing of local partners and the transfer of US $ 1 million previously realized from the proceeds of the Investrust liquidation to Botswana. Nigel Chanakira took a more active management role in KBAL because of its huge strategic significance to the future of KFHL. Currently efforts are underway to acquire a local commercial bank license in Botswana as well. Once this is acquainted there are two possible scenarios, sometimes maintaining both licenses or giving up the offshore license.

The interviewees were divided in their opinion on this. However in my view, judging from the stakeholder power involved, KFHL is likely to give up the offshore banking license and use the local Kingdom Bank Botswana (Pula Bank) license for regional and domestic expansion.

Human Resources

The staff complement grew from the initial 23 in 1995 to more than 947 by 2003. The growth was consistent with the growing institution. It exploded, especially during the launch and expansion of the commercial bank. Kingdom fromception had a strong human resourcing strategy which entailed significant training both internally and externally. Before the foreign currency crisis, employees were sent for training in such countries as RSA, Sweden, India and the USA. In the person of Faith Ntabeni Bhebhe, Kingdom had an energetic HR driver who created powerful HR systems for the emerging behemoth.

As a sign of its commitment to building the human resource capacity, in 1998 Kingdom Financial Services entered a management agreement with Holland based AMSCO for the provision of seasoned bankers. Throughout this strategic alliance Kingdom strengthened its skills base and increased opportunities for skills transfer to locals. This helped the entrepreneurial bankers create a solid managerial system for the bank while the seasoned bankers from Holland compensated for the youthfulness of the emerging bankers. What a foresight!

In-house self-paced interactive learning, team building exercises and mentoring were all part of the learning menu targeted at developing the human resource capacity of the group. Work and job profiling was introduced to best match employees to suitable posts. Career path and success planning were embraced. Kingdom was the first entrepreneurial bank to have smoothforced CEO transitions. The founding CEO passed on the baton to Lysias Sibanda in 1999 as he stepped into the role of Group CEO and board deputy chair. His role was now to pursue and spearhead global and regional niche financial markets. A few years later there was another change of the guard as

Franky Kufa stepped in as Group CEO to replace Sibanda, who resigned on medical grounds. One could argue that these smooth transitions were due to the fact that the baton was passing to founding directors.

With the explosive growth in staff complement due to the commercial bank project, culture issues emerged. Consequently, KFHL engaged in an enculturation program resulting in a culture revolution dubbed "Team Kingdom". This culture had to be reinforced due to dilutions through significant mergers and acquisitions, significant staff turnover due to increased competition, emigration to gener pastures and the age profile of the staff increased the risk of high mobility and fraudulent activities in collusion with members of the public . Culture changes are difficult to effect and their effectiveness even harder to assess.

In 2004, with a high staff turnover of around 14%, a compensation strategy that ring fenced critical skills like IT and treasury was implemented. Due to the low margins and the financial stress experienced in 2004, KFHL lost more than 341 staff members due to retrenchment, natural attrition and emigration. This was acceptable as profitability fell while staff costs soared. At this stage, staff costs accounted for 58% of all expenses.

Despite the impressive growth, the financial performance when inflation adjusted was mediocre. Actually a loss position was reported in 2004. This growth was severely compromised by the hyperinflationary conditions and the restrictive regulatory environment.


This article shows the determination of entrepreneurs to push through to the realization of their dreams specifically significant odds. In a subsection article we will tackle the challenges faced by Nigel Chanakira in solidifying his investments.

Source by Dr Tawafadza A. Makoni

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Guest blog: Employee Recognition Programs

Employee recognition is vital for performance-oriented companies that look for mobilizing all employees and stoppers, prominently dealers and distributors, in the direction of clear business objectives ascertained by sales, profits, customer satisfaction, and productivity. Such performance driven companies need to regularly communicate and strengthen their dynamic aims. Neverheless, recognition for such organizations goes beyond the conventional character of service awards. In spite of the fact that recognition and incentive seem interchangeable, the two terms should not be confused with one another. While the recognition includes all the means that draw attention to employees who perform, the incentives usually employ discerning means to persuade people to accomplish a particular objective like increasing sales. Recognition can be impromptu, indeed to the level that there is no ceremonial announcement that the organization has a recognition program, while the incentives are well known so as to build enthusiasm through material reward. The true beauty of the recognition programs based on performance is their nature of surprise that is in contrast to service-award programs that make necessary ceremonies holding on a routine basis. In this way the employees would be much more interested in performing better rather than just focusing on the reward.

Employee recognition domain has become to gain recognition among organizations as they begin to judge the impact of downsizing on long-term productivity, profits, and the quality of products and services. Previously, employee recognition opportunity service awards, wherein recognition of their service years in a company people got an intensifying series of awards accompanying a mention in the employee newsletter, while staying until retirement, they might get a gold watch. From time to time, companies expanded these programs to combine recognition for divers actions like superlative customer service; suddenheless often these were limited to rewarding nature.

In the present era, no one just simply depends on the incentives and reward system, rather in a downsized company; employees would ridicule a service award if there were one. Thus, with more understanding of the employees' needs, companies are becoming more proactive when it comes to the employee recognition. While the effective recognition include activities like day-to-day, informal, and formal. For example, consent is an illustration of day-to-day recognition that costs nothing and can be given by any person, to anyone anytime. While the form of informal recognition can take a diversity of forms, it has certain limitations and oftentimes containing a low-cost, material beckoning of appreciation or congratulations, the formal recognition includes awards for achievements, service, etc., and the celebration episodes at which all contributing employees take part and get recognition. However, a formal recognition typically has inevitable policy and legal requirements.

In "1001 Ways to Reward Employees" and the "1001 Ways to Energize Employees", Bob Nelson and suggests the significance of rewards and recognition and the reason that they are essential tool of employee motivation, team building and productivity. According to Nelson, the American organizations did not always identify or accept this, as for a long long time corporate America thought that high salies, cash bonuses and good employee benefits were all that was needed to motivate their employees. While these factors do in an effective way provide a form of short-term motivation, however, much research finding points out that money is not an effective long-term motivational tool. Before 1954, what termed corporate motivation was the formula of Frederick W. Taylor that encapsulates that money was the primary motivator for all performance. Contrary to this scientific management formula, in the Hierarchy of Needs Abraham Maslow in 1950's denied this scientific management and originated that individuals were not machines as they in truth have various levels of motivational contentment that need to be appeared to a certain degree. Form this theory it becomes apparent that contentment on top of that degree could be better consummated by using other less expensive and increasingly effective forms of reward.

In the 1995 issue of "Employee Relations Today," Professor Kenneth Kovach reported that his most recent research proved the two most cited to factors of motivation by employees were not salary and benefits, but more or less, an interesting job and recognition for doing that job well. Frederick Herzberg also identified this importance of recognition by the employer in his finding that employee accomplishment and recognition are two motivating factors inherent to the job environment. Furthermore, he asserted that the job satisfaction is contingent on these factors over and above anything. Thus a well planned recognition program can, lessen turnover, assist in retaining competent people and elevate pride and loyalty in the company, which not only improves performance but also brings about positive attitudes and raise a productive and perpetual work environment.

The programs that are meant to serve the purpose of recognizing employees 'efforts must be designed in a manner that not just satisfies the importance of employees' recognition, but also take into consideration the work diversity. Another thing is the involvement of the employees in this program downright the grassroots level. Once designed, it is the responsibility of the management to evaluate the existing program and make changes whenever and wherever feasible. Giving lapel pins or corporate logo jewelry where the employees already possess them would not create much of the sensation or motivation. Kovach (1995) accentuates that there is certainly a gap that exists between employee needs and employer's understanding of those needs. This gap is widened as the management overlooks the differences in corporate culture and the consequent contrariety in personal tastes evident in distinct departments within an organization or at dormitories strewn across expansively "different demographic, psychographic and geographic areas". Current research corroborates that a selection "program targeted at the employee's lifestyle is the most appreciated and cost effective approach. forget who save them something of personal value, nor do they ever forget why it was given.

The problem is that many recognition programs do not offer rewards that employees really want. There is no validation in benchmarking the most popular items in most existing programs because the selections are often obsolete. The most expensive award you can give someone is something they did not want in the first place, have no use for and will not use "(Nicastro, 2002). the things that are considered practically accepted with today's employees are "electronics, fashion jewelry, brand name timepieces and watches, collectibles, sporting goods and lifestyle targeted gifts. The most appreciated awards are items that the recipient would like to own, but has not or can not justify buying for them. "Nicastro (2002) further investigates that in a study of 3000 service recognition programs, it was found out that the rewards that are most aware when they are given on or near the employee's employment anniversary date. The study also disclosed that the "most common complaints by employees is that their anniversary came and went without any recognition. Whenever possible awards should be presented in front of peers, with someone from administration, who is known, recognized and reputable making the presentation. This does not mean you need to have an rewards banquet; a small departmental ceremony with cake and coffee can be just as effective. Recognize the achievement, talk about the recipients achievements, contributions to the company and a short work related anecdote. Make the recipient and the accomplishment special. It's the timeliness, the respect and the special recognition that makes a lasting impression ".

In the article, "Consultant Dispels Myths About Award Programs", Bob Nelson (2001) further elucidates most of recognition programs are outmoded. This Nelson references to the 10-year national study, the Independent National Study of Recognition Policies and Practices, by Perspectives Resources, Inc. This study finds out that the outmoded factors of recognition de motivates rather than motivates the employees as they no longer meet the employees needs and the corporate objectives. "Companies are spending more than $ 500 million annually on service award programs that do not work," says Edward L. Ford, recognition consultant, "and minor changes will not address the problems. taking place in business today, recognition is more important to the morale of employees than ever. It is imperative that companies take a fresh look at what constituents effective recognition – including what the needs of the award recipients are. " Giving insights in to the less important award program as compared to reward program, Nelson assets that organizations are haunted by myths that were prevalent in 60's and 70's. The first one that points out is that "Logo emblems of gold and diamonds make the best award". Where for the myth he gives that the "Corporate emblems are outdated, and 95.8 percent of employees would have had practical merchandise items as awards".

The reason that he points out is that employees are used to these service awards and that these have little bearing as to the impact of the awards. Secondly, with the downsizing culture, employees in this era do not possess any corporate identity, which further yields it insignificant. In a study, that based on the Employee Needs and Benefits Recognition Index (ENRI) only 4.2% of employees choose logo jewelry over merchandise for rewards. The second myth highlighted is "Recognition programs incorporated award choices that employees really want", wherefore, the fact is, "According to the ENRI, 70 percent of employees would choose something other than what they offered." The third myth outbound goes as "A simple change in selection or rewards will substantively improve your recognition program," where the fact "To address employees' changing attitudes, more and more companies are reengineering their recognition policies." Nelson suggests that the reengineering process actually do help companies salvage money "rather than spend more on recognition, while allowing them to provide rewards that employees really want.For example, 117 companies that re-engineered their programs during 1994 and 1995 saved an average of 42.9 percent on their programs, and their average award cost per employee per year dropped from $ 17.66 before reengineering to $ 9.21 afterwards ". The fourth myth is "Companies should reduce or eliminate years of service awards," where as the fact is "Companies should not cut programs at random. them annually. " Nelson asserts that the companies must first "identify which types of awards are most appropriate in your present corporate culture. Employees may like the types or recognition your program offers.

Today, majority of the employee service programs involve giving an employee logo jewelry with a "jewelery sequence" for their consequential years of service in the organization. In spite of the fact that the cost of such programs can cost millions of dollars, unluckily, there are some deadly flaws regarding their effectiveness. For instance, oftentimes an employee's anniversary date goes overlooked, although in the employee's mind the specific anniversary date is important. The faults in the recognition programs can be eliminated theby reducing the company's cost and increasing the effectiveness of the employee recognition programs standardizing the activity of recognizing each employee's anniversary, while consequently giving increased pliancy of choice on the part of the employee of items of similar value . "Each year a new selection of gifts would be made available so that with each significant anniversary, employees have a fresh selection of gifts to choose from" (Sims, 2001).

Thus, the center of the program is on the employee's anniversary, and not on the increased value of a gift he receives. Nelson explains that the companies that have engineered this method have noticed remarkable improvement in their service program in terms of efficiency noted satisfaction and reduced costs. 500 of the Fortune 500 companies have formal Service Recognition Programs as they clearly accept that these programs pay by yielding turnover, improved safety performance and lower unscheduled abseteeism costs. These companies have come to know that the employee turnover is one of the greatest covert costs, where on an average you hire three and retain one each year. The training cost on the average for the newly trained employee comes out to be eight hours, as an example then the it costs at least $ 60 to train a new employee, excluding mistakes and poor quality costs. Resulting, in the actual training cost to be at the amount of $ 180 for one employee that stayed for one year. This amount will build up as you may hire at least 20 employee to keep one for five years costing $ 1,000.

Employee recognition programs save much for the company as no tax is levied on these programs, as tangible gifts above $ 400 contracts 40% tax. Recognition brings in social acclaim for the employee and is something "extra" for the employee.

By far, recognition is the "Number One" reward that employees react to and is far more significant than salary and benefits. Evelyn Clark designs and suggests a new way to recognize the employees' efforts, which is by story telling. Clark asserts that the "managers who consistently tell stories of people" is doing something right "discover that recognition is really a highly valued reward.

– "The employee is pleased that the manager noticed a job well done and took the time to acknowledge it

– Other employees learn more about the behavior that the company values

– Employees are motivated to enhance their performance

– Employees take more pride in their affiliation with the company

– Productivity and profitability increase "

David Saxby narrates, "I'm amazed by the number of companies that spend thousands of dollars to improve their technology, increase their marketing efforts and set up that next killer sales program. in recognizing the most valuable asset they have: their front-line employees. These are the people who interact with the customer every day, handle customer-service conflicts and generate revenue for the company. " According to Saxby, recognition does not only mean honoring the top performers, rather it is regarding recognizing people who better their skills all the time to give improved customer service and sell more product. Saxby points out that recognition does not speak only of money, but it concerns about a mere hand-written thank-you note or an inscription that sits in the entryway for the world to look at. Further, recognition must not be limited to the annual event or the monthly meeting where people are acclaimed for their efforts, but a positive attitude or an improved behavior must be recognized and praised immediately.

Recognition can come in different ways, like reinforcing positive performance, providing incentives and rewards, stimulating with "high-impact" messages, rewarding extra efforts, honoring current employees and personalizing the work experience.

Hiam (2002) suggests, "If you recognize and make a bit of a fuss about the good things employees do, then you will find yourself spending a lot less time worrying about the bad things that they do." They will do less of the negative, and they will strive to do more of the positive things you are recognizing. It is far, far easier to lead people to improved performances by thanking them when they do it right than giving them "grief" when they do it wrong. " Hiam (2002) further incorporates that employers must "praise and recognize" their "star performers", and "recognize good effort, not just results".

"In the business world, the greatest commodity to have is the best and brightest people. This more each day, as employee recognition programs are still used exponentially in these tough economic times. "According to the 2002 Employee Recognition Survey, 84 percent of the 391 responding companies have an employee recognition program. the importance of making sure their top performers are happy. In fact, although the economy has dipped substantively, employee recognition programs are gaining in popularity, as 41 percent of respondents indicate that they are doing more with their recognition programs than they were 12 months ago. More than half (54 percent) of the respondents said that they do not currently have a program indicated that they are considering implem enting one in the next 12 months. Companies hope to achieve a number of things through their recognition programs, but creating a positive work environment is the top reason cited, with 84 percent of responding companies citing this as a goal of their program. Other goals include, reinforcing desired behaviors (76 percent) stimulating high performance (73 percent), increasing morale (69 percent) and supporting organizational mission / values ​​(68 percent). The most popular method of recognizing employees is through gift certificates and cash, with 63 percent and 58 percent of companies reporting that they use these forms of recognition. The most common reason for giving a recognition award is "length of service," (75 percent) followed by "above and beyond" performance (64 percent) ".

Emery (2000) reports that "In today's fiercely competitive labor market, cash is key to attracting skilled technical employees, human resources managers and business experts agree. But spiraling salaries and mammoth bonuses do not bind workers to their employers. is recognition for a job well done. "

Experts maintain that it is not just the money that binds employees to the organization; rather it's the recognition. However, if the rewards are tied to the performance, then only the money matters but does not lessen the importance of recognition programs. Experts further elucidates that the "companies that offer cash bonuses tied to performance are using their money productively, but they need to offer other rewards and make sure those rewards are tailor to the organization and its employees."

Why Good Employees Leave:

– 41% Feelings that opportunities for advancement are limited

– 25% Lack of recognition

– 15% inadequate salary and benefits

– 10% Unhappiness with Management

– 5% Bored with Jobs

– 4% do not know / did not answer

(Source: Robert Half International Inc.)

In a NAER Regional Conference, Empowering Excellence Through Recognition, 2002, following factors were identified as to the significance and materiality of the employee recognition programs. The first factor that was identified was knowing whether the employee wants recognition in private or public keeping in place the cultural norms and etiquette. There was also a suggestion of creating a web site of generic recognition that can be individualized. There must be a cultural promotion of peer to peer recognition so as to make everyone responsible to recognize every other peer. Such sort of employee recognition programs and cultural initiates have no cost at all, and organizations need to worry about the cost that are or need to be incurred. Once embedded in the culture, it's a free ride. Further it can be an easy way to retain and motivate, and may be a part of fun as recognizing for an accomplishment or improved performance may bring in surprises. This would not only make the employee think they are valuable for the company but also ingrain in them a sense of belonging and association with the company. Involving employees in the design and implementation of the employee recognition programs also brings about great sense of value among the employees. It would surely be more fun if the "employees tell YOU what they enjoy".

An employee recognition program must incorporate both the formal and informal awards in the program, if given immediately have great significant value and esteem and pride. A just Thank you card would serve the purpose most often. Other forms of recognition identified in the conference were singing recognition that generates no cost to the company, an on-line thank you where the management gets a copy, meaningful and sincere feelings both by the giver and the presenter, and even more better if the nominator is involved.

But all this recognition efforts comes when the manager is well aware of the beneficial impacts of the employee recognition programs and the positive attitudinal effects it brings about. And training the managers can do this. Which involves cost. Managers must be made aware of how recognition makes people feel through statistics and survey results, and must have a control of recognition, even if they do not have a budget. This is the only short-term cost that is and must be borne by the companies to carry out the recognition culture in the organization, and once ingrained in the company's culture, the managers and the companies need only to harvest the fruit. Thus, concluding, recognition is a mean to set up a high performance team in addition to other methods. Neverheless, it is not a mathematical formula of calculating how much must be spend on employee recognition per person. This would mean recognizing the poor performers too, and that would reduce the impact and the exclusion of the recognition program. Of course, there must be a budget set for the rewards and incentives, but when it comes to the recognition, there, as has been discussed not much investment to be made. Juts make the horse understand how to carry the cart and drink the water from the well. The rest is done automatically. However, the first part is admittedly hard to accomplish, and that depends upon the managers' aptitude and competence. Some are charismatic and needs little training while some need not to train, as they are unchangeable.


Nicastro, Ric. The Best Ways to Motivate And Reward Employees, The Need For Recognition, San Diego Business Journal, reprinted in 2002

Nelson, Bob. Consultant Dispels Myths About Award Programs, 2001 Rewarding Employees Smarter. New Employee Recognition Ideas From Bill Sims! Reprinted with Permission from Bob Nelson, author of the Best Selling Book "1001 Ways to Reward Employees". Topic: RECOGNIZE YEARS OF SERVICE, DO NOT REWARD

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Source by Samreen Soomro

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Guest blog: Share the True Meaning of Christmas With a Company Christmas Party

Christmas is really the most wonderful time of the year. It is a season of giving and good will and people should always remember that. Due to the current economic situation in Ireland, a lot of employers are already thinking about doing without such a party. It is an added expense.

Despite that fact, there are other reasons why they should actually still have a company Christmas party. These are some of those reasons.

Company Benefits

A company Christmas party provides an opportunity for employers to truly thank their employees for a job well done as Christmas is close to the end of the year. Doing just that already provides a lot of long-term benefits for the company.

Being part of a Christmas party and mingling with everyone including the bosses gives employees the feeling that they belong to that particular group. It is a chance for employees to have fun with their colleagues. Other corporate events are held for the same reason.

That gives the company loyal, hardworking, and motivated employees. That results in higher productivity. That also gives the Human Resources department a break from hiring and training new employees as well. It is a win-win for employers and employees.

The True Meaning

The true meaning of Christmas is love. Christians know that the season is a remembrance of that time when God gave his only son. However, one does not really have to be a Christian to celebrate Christmas. So, one’s religious beliefs should not really matter. It continues to be a season for giving and goodwill and anyone can relate to that. In fact, even non-Christians celebrate this season. It became a tradition to do so.

Celebrating a company Christmas bash is a way to give something back to employees. That is part of the true meaning of Christmas. By showing that they appreciate their employees, employers are already doing something out of love. People give gifts during this season for the same reason.

One does not really have to be a Christian to understand the concept of love and acts of love. Ultimately, that is the true meaning of Christmas. That is why even those that have other beliefs still celebrate the occasion in their own way.

Planning Problems

The one tasked with organizing the party may find it difficult to please everyone. People do have different beliefs. Moreover, different people have different lifestyle choices. Recovering alcoholics will not want to be close to the punch table, vegans will not eat anything that does not comply with their strict diet, Jews would prefer to celebrate Hanukkah rather than Christmas, and Muslims will not eat pork. Having that mix of people in the workplace can make organizing an office Christmas bash a horrible experience.

So, call it an end of the year party instead since Christmas is usually a week away from the New Year. It is impossible to please everyone, but do take their preferences into consideration as one plans for an office Christmas party. What matters is that everyone can get together and have a good time during this particular season.

Source by Dean Gammell