Subscribe to Entrepreneur for $5

The Goldilocks Theory of Employee Management

How can you get your employee relationships "just right"? Tips from this experienced business owner will show you the way.

Opinions expressed by Entrepreneur contributors are their own.

It's one of the classic "Goldilocks" problems in running any .

If you push your employees too hard to get results, they resent you. They talk about you behind your back and complain bitterly about working in a "sweatshop environment" where their lives are sacrificed to make you rich. The first chance they get, they bolt to another company, probably one of your competitors. Read any installment of the cartoon strip "," and you'll see exactly what I mean.

Yet if you're too nice to them and bend over backwards trying to make your workplace as happy, nurturing and fun-filled as you possibly can, what happens then? Your employees start thinking you're a "soft touch" and start taking advantage of your good nature. They ask for more and more, even though what you're giving them as compensation is quite generous by industry standards. They start showing up late for work-or not at all-and play to your sympathies when you try to pull them up short or criticize them. They start second-guessing your management decisions, and insist that you justify everything you want or need them to do.

How can you get your "just right"? How can you build a positive, healthy working environment for your employees without giving away the store?

Someone who's wrestled long and hard with this problem is Bob Weiner, founder of Constantine Carpet. Constantine Carpet is a leading manufacturer of commercial and residential carpeting, employing about 270 blue- and white-collar employees in several northern Georgia mills. It's been widely praised in its industry for the "cult-like" positive attitudes its employees bring to their work each day.

Here are some of Weiner's tips on successfully handling employee relations:

You're not "the Boss." "My employees should be thinking of the company and its well-being, and not dealing with me as an individual at all," says Weiner, explaining that today's workers have been taught to question authority at all levels and will resent you presenting yourself as an authority figure. "You can't just tell people to do something because 'I'm the boss', because that won't cut it anymore," says Weiner.

The key, according to Weiner, is to make sure your employees don't see you as someone who is generous or stingy, but rather someone who is smart and able enough to build a successful company and who will make sure that if the company is prosperous, the workers who make a difference will become prosperous as well.

You're not their friend, either. Weiner recalls that when Constantine Carpet was just getting off the ground, "I was very close to certain individuals, and that was sometimes a problem for me, like when I had to fire them." Weiner stresses the importance of setting up policies once a company has grown beyond the startup phase, and letting employees know that their success will depend on their adherence to the policies-and not their personal relationship with you.

Make the company the "third person in the room." "Employees should be thinking of the company's well being, not mine," says Weiner, explaining that he makes a point of telling employees that such-and-such a goal will benefit the company as a whole, and therefore benefit everyone. "You put the company in the room along with you and the employee, and you tell the employee that if that artificial third person is happy, you'll be happy as well," Weiner says.

Establish group incentives, rather than individual incentives. Weiner feels strongly that bonuses and other incentives should be based on the company's performance, not the individual employees' performance. As an example, Weiner cites Constantine Carpet's bonus: "We set output goals for the tufting or the dying operation, and make sure people know if the whole produces more product per employee-hour and meets the quota, then everyone benefits; if the quota is surpassed, everyone in that plant gets a bonus for the week." One of the side benefits of this approach is that all employees are guaranteed to be tough on slackers, whiners and other drags on productivity, knowing that substandard performance will affect them personally.

Be humane. "It gets really hot in Georgia in the summertime," Weiner says, "so I've put fans and coolers all over the place in every one of our plants, as well as 'blow fans' with evaporated water that feel like air conditioning." You should do things like that, Weiner says, without your employees having to ask.

Make your employees "see the logic." Finally, Weiner says that while you shouldn't have to explain yourself constantly to your employees, it's important to make employees see the logic in what you're doing. "If people can see why what you're doing makes sense, if they can see the logic of what you're doing and that it does make business sense and does create value," says Weiner, "they won't view it as an arbitrary 'order from the boss' that has to be challenged."

Or, as said back in 1776 as British forces approached the fledging colonial capital of , "Gentlemen, if we do not hang together in this time of crisis, be assured that we will all hang separately."

is a syndicated columnist, author and host of the TV series MoneyHunt. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. Copyright 2004 Clifford R. Ennico. Distributed by Creators Syndicate Inc.

Entrepreneur Editors' Picks