By Dal LaMagna
Jan. 6, 2011
From the beginning of Tweezerman, the global beauty tools company I founded that became my big success, I empowered my employees. Early on in my business, I realized that my employees were more important than even the product I was selling.
Here are some best practices I implemented that resulted in an exceptionally loyal and high-performing work force:
Health insurance. As soon as we had three employees, the minimum number of employees at that time required to qualify for company health insurance, we purchased a plan for everyone.
No layoff policy. I instituted a job security policy that made firing someone the absolutely last ditch solution. 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.
Pay for hours worked. Some companies exploit employees by paying them a salary and then having them work more than 40 hours a week to be promoted. During the first few years at Tweezerman, I paid people by the hour. If an employee worked 45 hours, she got paid for 45 hours. Only later, when we got top-level employees with bigger compensation, did we pay salaries. However, the laborers stayed on the hourly rate.
Shared decision making. We established a steering committee of 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.
Financial partnership. 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.
Transparent financials. As partial owners of the company, my employees needed to understand how the numbers worked. So I conducted company-wide meetings where I'd explain the profit and loss statement and our budgeting process.
Open communication. At Tweezerman we 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.
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.
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, empowering your employees makes the best business sense.
Dal LaMagna is the founder of Tweezerman, the global beauty tools company, and author of a new business memoir, Raising Eyebrows: A Failed Entrepreneur Finally Gets It Right (John Wiley, 2010, www.raisingeyebrows.com). He lives in Washington state. His e-mail is dallamagna@gmail.com.