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Why Empowering Your Employees Is a Good Idea
By Dal LaMagna

From the beginning of Tweezerman, the global beauty tools company I founded that became my big success, I was empowering my employees. Long before I became the boss of hundreds, I had been exploited by powerful men whose orbit I had fallen into. Rather than copying their behavior, I promised myself that I would do the opposite when I had employees. I'd empower rather than exploit them.

Many employers underpay and or overwork their employees and take pride in how they are increasing profits for themselves and other shareholders. Early on in my business, I saw this as short-term gains at the expense of long-term rewards. I also saw my employees as more important than even the product I was selling.

Initially my big delivery to employees at Tweezerman was health and job security. As soon as we had three employees, the number required at that time to get company health insurance, we purchased a plan for everyone.

Next, I instituted a job security policy that made firing someone the absolutely last ditch solution. No one person, including me, could fire a person without another employee of the company agreeing. You had to be drunk or drugged on the job, not show up, or get caught stealing to get fired. As we grew and more jobs were created, if an employee couldn't make it in his job, we'd find another job for him to try. We had one woman who cycled through five different jobs before we discovered she was great at handling returns. Once in a while, we rued this policy of not getting rid of incompetent employees quickly and directly. Generally, however, the sense of job security for everyone was worth the occasional deadwood.

One way companies exploit their employees is to pay them a salary, and then a norm is set that they have to work more than 40 hours a week to be promoted. With Tweezerman, during the initial years I paid people by the hour. If any employee worked 45 hours, she got paid for 45 hours. Eventually as we got big and top-level employees with bigger compensation arrived, we did pay these top-tier employees salaries. However, the laborers stayed on the hourly rate.

What really has to happen for employees to be empowered, beyond pay and benefits, is that they need to be involved, given responsibility, and pushed to grow in their job. My sister Teri, who worked with me for years, used to say, "Dal sees in people what they themselves don't see." In other words, I would throw people into a job that they might not feel qualified for. Usually I was right -- they thrived and did a great job. When we hired people, during the interview I'd find out what their dream job was. If a job opened up that fit closer to their dream job, I would offer it to them. We established a steering committee of the all the department heads and met twice a month to discuss the business and make decisions. The committee always comprised an odd number of people so that we could always have a majority decision and get tasks accomplished. The ability to get things done is very motivating.

I considered my employees my partners, and made that their reality. Five percent of our profits were distributed to all employees, excluding me, in January after each year. We had a formula that was considered fair. The theory was that what you earned working for the company is a fair measure of your worth to it. Each employee got a percentage of the total profits pool that was equal to what percentage their earnings were of all employee earnings. From day one, I designed the capital structure of Tweezerman reserving 20 percent of the stock to be owned by my employees. Half of that went to the top managers and the other half, 10 percent, went into an ESOP (Employee Stock Ownership Plan) that involved all the other employees.

As partial owners of the company they needed to understand how the numbers worked, I felt. So I conducted companywide meetings where I'd explain the profit and loss statement and our budgeting process. We also ran Quaker style meetings where everyone sat in a circle facing each other and anyone could take the floor and make a comment, deliver a complaint or compliment, or ask a question.

I was very grateful my employees showed up for work every day and did things I didn't want to do. The way Tweezerman grew to a much bigger size than I was ever interested in being responsible for was because I delegated every operational job to someone else - including President of the company. This position went to one of my first employees, Lisa Bowen, President of Tweezerman.

Because I had empowered employees, 25 years later I owned a company that was dramatically bigger than I ever dreamed. I sold it for much more money than I ever thought possible. My employees shared millions of dollars in capital gains and kept their jobs when I sold the company to the Zwilling J.A. Henckels AG in 2004. My former employees continue to love and respect me.

"Take care of your employees and they will take care of you" has always been one of my mantras. Caring about and for your employees is a necessary foundation for empowering them. Many employees have stressful home lives. It makes an enormous difference to their productivity if work is actually a haven away from their problems at home. If you are a business owner, caring about and empowering your employees makes good business sense.

About the Author:
To find out the surprising effect of 911 on Dal's Tweezerman employees, and to read more about best practices of employee empowerment, read Dal LaMagna's new business memoir, Raising Eyebrows: A Failed Entrepreneur Finally Gets It Right (John Wiley, 2010, www.raisingeyebrows.com).

 

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