Hold The Phone

This story appears in the July 1997 issue of Entrepreneur. Subscribe »

Once used almost exclusively by telephone operators, headsets are moving into offices and onto the heads of white-collar workers ranging from secretaries to executives.

Even if you're on the phone as little as two hours a day, you may benefit from switching from a traditional handset to a telephone headset. Headsets improve productivity by freeing up your hands, and they reduce neck and shoulder pain by eliminating the need to cradle a handset between your shoulder and ear.

According to Ron Becht, vice president of product marketing for Hello Direct Inc., a headset manufacturer and marketer in San Jose, California, a person who spends four hours a day on the phone can recoup the cost of a headset in just 12 days based on improved productivity. (Headsets typically cost between $119 and $450 for the cordless variety.) Becht offers the following guidelines for choosing the right headset:

1. Consider your typical phone environment. If it's noisy, you'll probably want a unit that covers both ears.

2. Determine how much weight you're comfortable wearing on your head.

3. If you don't want a band across the top of your head, shop for a model that wraps around your ear.

4. If you need mobility, consider a cordless unit.

Absence Minded

Paying employees who are too sick to work is a compassionate thing to do, but if you want to deduct that expense, your sick pay policy needs to be put in writing.

If you are paying employees who are out sick for a few days, chances are slim that those expenses will come under IRS scrutiny. But if an accident or illness results in an extended absence and payments to the employees become substantial, you need documentation to preserve your tax deduction.

According to John Sawyer, vice president of disability insurance at The Guardian Life Insurance Company of America in New York City, without a written plan, the IRS may consider disabled workers ex-employees and treat payments to them as "ad hoc payments," which are not deductible.

The solution: Write down which employees will receive sick pay, how much and how long they'll collect, and when benefits start. Then notify covered employees in writing.

"The government says you can deduct only reasonable expenses," says Sawyer. "The problem comes when you pay somebody without some sort of document and are audited."

Although the IRS does not specifically require that your sick pay plan be in writing, Sawyer says court cases have turned on the issues of whether there was a written, formal plan and whether employees who were entitled to benefits knew about the plan prior to disability.

Employers who don't offer sick pay to every employee must make sure sick pay is not offered on a discriminatory basis. Having a written plan also reduces your risk of being charged with discrimination. When you develop your plan, Sawyer advises, have it checked out by your attorney and/or tax advisor before implementing it.

Checks And Balances

Processing payroll is a critical function in any organization. But although you are probably quite knowledgeable in your own area of business, you may be overwhelmed by state and federal employment tax laws and other payroll issues. Should you try to figure it out or get someone else to handle it for you?

"If the task is not critical [to your business's mission], outsource it," says Phil Abbenante, sales training manager in the Salt Lake City office of Automatic Data Processing (ADP), an international payroll processing firm. "There's probably a service bureau that can handle it more efficiently and cost you less."

Unless you're a sole proprietorship or partnership with no employees, Abbenante advises considering a payroll service. Compare the cost of outsourcing to that of handling the chore in-house. When shopping for a payroll service, you should:

1. Check out the payroll service company's reputation. Ask for references, including current clients, accountants and bankers.

2. Ask about regulatory compliance. Good services will have brochures and other information indicating their knowledge of government regulations and requirements, such as the Electronic Federal Tax Payment System (EFTPS), and various state requirements--important if you have employees in more than one state.

3. Confirm the service's financial stability. Be sure the company can maintain up-to-date processing abilities and regulatory compliance.

4. Consider the various features and services available. In addition to calculating taxes and preparing checks, payroll services offer a wide range of services, including payroll deductions, direct deposit and automated time clocks, which collect data that is then fed electronically into the payroll system to calculate wages and provide additional labor reports.

You won't find a big difference in rates among payroll services in any given area. Fees are typically based on the number of employees and how often they're paid. "The more frequently you pay your people," Abbenante says, "the higher your service fees."

Instead of a service, you may want to consider purchasing a computer software package to handle payroll. For small operations, this may work. However, software companies generally cannot assist with technical payroll questions, and it will still be your responsibility to keep up with changing regulations.

If you sign up with a payroll service, Abbenante suggests shopping for a new one every three years. You may not need to switch, but it's a good idea to make sure you're still getting the best service for your needs.

Good Influence

It's no coincidence that truly powerful people are very influential. And one characteristic of influential people is that they don't have to bark orders to get others to do things; instead, they use the influence they have likely been accumulating for years to get the results they desire from their employees. Peter Meyer, a principal with the Meyer Group, an executive development consulting firm in Scotts Valley, California, says the key behind influence is to focus on getting it rather than using it. Meyer likens influence to a bank account--you don't wait until you need money to start saving it; rather, you start saving it before you need it. To begin collecting the kind of influence you can use time and time again, Meyer offers the following pointers:

1. Minimize risk for others. "Any time you do something in an organization with more than two people, there is risk," Meyer says. He suggests working with people from two very important directions: One, let them know their jobs will not be in jeopardy if they take a risk and fail; two, give them the support and information they need to reduce the chance of failure.

2. Connect what you want to previous success. When you have helped people who work with you achieve goals that are important to them, they are more likely to willingly support your future endeavors. In larger organizations, Meyer says, this is illustrated by influential people who regularly promote the people who work around them. "The people who work with them get better jobs, better opportunities and career advancement, so when they want something done, it's not hard to get support," Meyer explains. On the other hand, smaller organizations may not have as many career options, so it takes some creativity to use this approach.

3. Make it mutually rewarding. "If I ask you to do something that helps me only, you're going to see that very quickly [and may be reluctant to do it]," says Meyer. "If it helps both of us, you're more likely to want to do it."

4. Listen. Meyer thinks improving your listening skills may be the most powerful way to gain influence over employees in the workplace. "As a rule, people don't listen well, so when somebody does listen, it creates a positive response," he says.

Use these four techniques, Meyer says, and people will do things for you because they want to, not because they have to. Asks Meyer, "Isn't that a better way to manage?"

Invoice Lessons

Your invoices and billing statements can do more than collect money; they can help you grow your business. "You're sending out invoices anyway, so you might as well make them marketing communications tools," says Nancy A. Hillis, vice president of the Economic Development Corp. (EDC) of Utah, a nonprofit job-growth organization in Salt Lake City. "You're billing your customers and giving them important information about how they can more effectively do business with you."

Hillis plans her invoice messages three months in advance, deciding which events and programs to promote during each billing cycle. Computer-generated invoices can include messages about upcoming events, new products and services and seasonal information.

Printing directly on the invoice means your message won't be discarded. Also, because most invoices pass through several hands for approval before they're paid, you can be assured your message will be read by top-level decision makers.

Giving Thanks

How often do you take the time to praise workers for a job well done? According to Rosalind Jeffries, president of Performance Enhancement Group, a management training company in Chevy Chase, Maryland, and author of 101 Recognition Secrets: Tools for Motivating and Recognizing Today's Workforce (Performance Enhancement Group), chances are it's not often enough. "One of the greatest human needs is to be appreciated," Jeffries says--and demonstrating your appreciation regularly reinforces positive behaviors that enhance your operation.

"Organizational excellence is driven by individual excellence," says Jeffries, who recommends incorporating little acts of appreciation into your daily management practices. Her favorite techniques include:

1. Brag time: Allow time during meetings for staff members to brag about an outstanding job an employee did on a specific project.

2. Birthday mail: Have managers and employees sign a card and mail it to the honoree's house before the actual day, instead of presenting the standard card at the monthly or annual office birthday party.

3. Memos: Write employees a personal note of congratulations for excellent performance in a difficult situation. Use traditional paper or e-mail; just be sure it's a format employees can preserve if they want.

4. Notice random acts of kindness: Give recognition to employees who perform good deeds, both on the job and out in the world.

5. Hot chocolate and popsicles: As a general morale booster, provide little perks like hot chocolate on cold winter days or frozen popsicles as a summertime reward.

Keep The Fire Burning

Motivating your sales staff is no doubt one of your loftiest goals as a small-business owner. Here's a bright idea that might help boost your company's sales, especially if you want to keep yourself motivated to sell, too: Put yourself on commission.

If may sound a little self-deprecating, but it's worked for Moira Shanahan, owner of NewsLetters Plus, a Tucker, Georgia, sales communication firm that publishes newsletters and sales materials for corporations the likes of Blue Cross and American Express. In 1991, six years after launching her business, Shanahan decided to restructure her income, making 65 percent of it commission.

Why? "I wanted to be sure my performance was as driven as that of any other salesperson on board," explains Shanahan. "I'm highly motivated by that. Also, that way I'm not pulling more from the company than I generate." As the company grows, her income can grow, but only in relation to the benefit she's brought to the company.

Even if you believe you're giving your business your all, consider changing the way you pay yourself. You just might be surprised at the results.